AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION
THIS PLAN AND AGREEMENT OF MERGER (hereinafter called the "Agreement"),
dated as of March 1, 2001, is by and between PROVIDENCE CAPITAL V, INC., a
Colorado corporation (hereinafter referred to as "PROVIDENCE" and/or
"SURVIVING CORPORATION"), and GS OPERATIONS CORP., a Georgia corporation
(hereinafter called "GOURMET" and/or "DISAPPEARING CORPORATION"), said
entities being hereafter sometimes collectively referred to as the
"Constituent Corporations."
WITNESSETH:
WHEREAS, PROVIDENCE is a corporation duly organized and existing under the
laws of the State of Colorado, having been incorporated in 1999, and
GOURMET is a corporation duly organized and existing under the laws of the
State of Georgia, having been organized in 2001; and
WHEREAS, the authorized capital stock of PROVIDENCE consists of fifty
million (50,000,000) shares of $.001 par value Common Stock, of which seven
hundred fifty thousand (750,000) shares are outstanding, and fifty million
(50,000,000) shares of Preferred Stock, $.001 par value, of which no shares
are outstanding; and
WHEREAS, the authorized capital stock of GOURMET consists of ten thousand
(10,000) shares of no par value Common Stock, of which one thousand (1,000)
shares are outstanding; and
WHEREAS, the Boards of Directors of the Constituent Corporations deem it
advisable for the general welfare and advantage of the Constituent
Corporations and their respective shareholders that the Constituent
Corporations merge pursuant to this Agreement and pursuant to the
applicable provisions of the laws of the States of Colorado and Georgia;
and
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereby agree, in accordance with
the applicable provisions of the laws of the States of Colorado and
Georgia, that the Constituent Corporations shall merge, to wit: GS
Operations Corp., a Georgia corporation, one of the Constituent
Corporations and which shall cease its existence under the laws of the
State of Georgia pursuant to the Merger (said corporation hereafter being
sometimes called the "Disappearing Corporation"), and the terms and
conditions of the Merger hereby agreed upon (hereafter called the "Merger")
which the parties covenant to observe, keep and perform and the mode of
carrying the same into effect are and shall be as hereafter set forth:
A. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a)(1)(A) of the Internal Revenue
Code of 1986, as amended (the "Code"). For accounting purposes, it is
intended that the Merger be accounted for using purchase accounting;
B. This Agreement has been approved by the respective boards of
directors of PROVIDENCE and GOURMET;
C. PROVIDENCE has 750,000 shares of common stock issued and outstanding
("PROVIDENCE Common Stock"), all such shares being issued under Form
S-8 filed with the Securities and Exchange Commission ("SEC") on
November 30, 2000, constituting all of the outstanding capital stock
of PROVIDENCE. Contemporaneously with the execution and delivery of
this Agreement, the parties are executing and delivering to PROVIDENCE
certain other agreements;
D. PROVIDENCE will issue three million two hundred fifty thousand
(3,250,000) restricted shares of common stock (the "Shares") to allow
for the conversion of the outstanding shares of GOURMET common stock
to be completed on a basis of three thousand two hundred fifty Shares
for each share of GOURMET common stock issued and outstanding as more
fully described in Section 1.4 below. Such Shares will cover all
GOURMET stock, options and warrants issued as of the Closing Date on a
fully diluted basis; and
E. PROVIDENCE shareholders will receive a post-merger, long term warrant
package of seven hundred fifty thousand (750,000) shares of PROVIDENCE
common stock, exercisable as follows:
187,500 shares at $5.00 per share during Year 1;
187,500 shares at $6.00 per share during Year 2;
187,500 shares at $7.00 per share during Year 3; and
187,500 shares at $8.00 per share during Year 4,
and having a sixty (60) month termination date for the entire warrant
package. Each "Year" shall begin on March 1 and end on the last day of
February of the following calendar year, with Year 1 beginning on March 1,
2001.
AGREEMENT
The parties to this Agreement agree that throughout this Agreement those
terms defined in Exhibit A, attached hereto and incorporated herein by
reference, shall have the meanings set forth on Exhibit A. The parties,
intending to be legally bound, hereby agree as follows:
ARTICLE I
DESCRIPTION OF TRANSACTION
1.1 MERGER OF GOURMET INTO PROVIDENCE.
Upon the terms and subject to the conditions set forth in this Agreement,
at the Effective Time, GOURMET shall be merged with and into PROVIDENCE,
and the separate existence of GOURMET shall cease. PROVIDENCE WILL
CONTINUE AS THE SURVIVING CORPORATION IN THE MERGER AND WILL CHANGE ITS
NAME TO "GOURMET STATION, INC."
1.2 EFFECT OF THE MERGER.
The Merger shall have the effects set forth in this Agreement and in the
applicable provisions of the Colorado Business Corporation Act and the
Georgia Business Corporation Code.
1.3 CLOSING; EFFECTIVE TIME.
The consummation of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Xxxxxx & Xxxxxxx, P.C., 0000
Xxxxx Xxxx Xxxxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 at 10:00 a.m. on
____________________, 2001 or at such other time and date as the parties
may agree (the "Scheduled Closing Time"). (The date on which the Closing
actually takes place is referred to in this Agreement as the "Closing
Date.")
Contemporaneously with or within forty-eight (48) hours after the Closing,
a properly executed agreement of merger, together with fully executed
articles of merger (a copy of which is attached hereto as Exhibit A)
conforming to the requirements of Article 7-111 of the Colorado Business
Corporation Act, and Article 14-2-11 of the Georgia Business Corporation
Code shall be filed with the Secretary of State of Colorado (the
"Secretary") and with the Secretary of State of Georgia. The Merger shall
become effective at the time such agreement and articles of merger are
filed with the Secretary (the "Effective Time").
1.4 CONVERSION OF SHARES.
The mode of carrying into effect the Merger provided in this Agreement, and
the manner and basis of converting the shares of the Constituent
Corporations into shares of the Surviving Corporation are as follows:
1:4:1 PROVIDENCE COMMON STOCK.
None of the PROVIDENCE Common Stock shall be converted as a result of the
Merger and all of such shares shall remain issued and outstanding shares of
common stock of the Surviving Corporation as issued under Form S-8 filed
with the SEC on November 30, 2000.
1:4:2 GOURMET COMMON STOCK.
At the Effective Time, each share of common stock of GOURMET issued and
outstanding (the "Gourmet Shares") shall be converted into and become
shares of common stock of the Surviving Corporation by converting each of
the Gourmet Shares into three thousand two hundred fifty (3,250) Shares of
PROVIDENCE. PROVIDENCE will newly issue the Shares to be converted on a
three thousand two hundred fifty (3,250) for one basis with the GOURMET
Shares. Each record holder of outstanding Gourmet Shares shall be issued
Shares upon the ratio set forth above. Upon direction of GOURMET and
receipt by PROVIDENCE of the stock ledger of GOURMET, each Gourmet
Shareholder shall be entitled to receive one or more stock certificates for
the full number of Shares into which the Gourmet Shares shall have been
converted as aforesaid. Upon completion of the Merger, GOURMET
shareholders will own 81.25% of the four million (4,000,000) fully diluted,
common shares of the Surviving Corporation issued and outstanding. All
Shares into which Gourmet Shares are converted as herein provided shall be
fully paid and non-assessable and shall be issued in full satisfaction of
all rights pertaining to such Shares.
1.5 CLOSING OF GOURMET'S TRANSFER BOOKS.
At the Effective Time, holders of certificates representing GOURMET Shares
that were outstanding immediately prior to the Effective Time shall cease
to have any rights as shareholders of GOURMET, and the stock transfer books
of GOURMET shall be closed with respect to all shares of GOURMET common
stock outstanding immediately prior to the Effective Time. As soon as
practicable after the Effective Time, the stock ledger representing GOURMET
Shares issued and outstanding at the time the Merger becomes effective
shall be delivered to the Surviving Corporation, such that certificates for
the Shares may be issued, as above provided to the Gourmet Shareholders.
No further transfer of any such Gourmet Shares shall be made on such stock
transfer books after the Effective Time. If, after the Effective Time, a
valid certificate previously representing any of such shares of GOURMET's
common stock (a "GOURMET Stock Certificate") is presented to PROVIDENCE,
such GOURMET Stock Certificate shall be canceled and shall be exchanged as
provided in Section 1.6.
1.6 EXCHANGE OF CERTIFICATES.
(A) Upon surrender of a GOURMET Stock Certificate to the Surviving
Corporation for exchange, together with such other documents as may be
reasonably required by the Surviving Corporation, the holder of such
GOURMET Stock Certificate shall be entitled to receive in exchange therefor
a certificate representing the number of Shares that such holder has the
right to receive pursuant to the provisions of Section 1.4, and the GOURMET
Stock Certificate so surrendered shall be canceled. Until surrendered as
contemplated by this Section 1.6, each GOURMET Stock Certificate shall be
deemed, from and after the Effective Time, to represent only the right to
receive upon such surrender a certificate representing Shares as
contemplated by Section 1.4. If any GOURMET Stock Certificate shall have
been lost, stolen or destroyed, the Surviving Corporation may, in its
discretion and as a condition precedent to the issuance of any certificate
representing the Surviving Corporation Common Stock, require the owner of
such lost, stolen or destroyed GOURMET Stock Certificate to provide an
appropriate affidavit and to deliver a bond (in such sum as the Surviving
Corporation may reasonably direct) as indemnity against any claim that may
be made against the Surviving Corporation with respect to such GOURMET
Stock Certificate.
(B) No dividends or other distributions declared or made with respect
to the Shares with a record date after the Effective Time shall be paid to
the holder of any unsurrendered GOURMET Stock Certificate with respect to
the Shares represented thereby until such holder surrenders such GOURMET
Stock Certificate in accordance with this Section 1.6 (at which time such
holder shall be entitled to receive all such dividends and distributions).
(C) No fractional shares of the Surviving Corporation Common Stock
shall be issued in connection with the Merger, and no certificates for any
such fractional shares shall be issued. In lieu of such fractional shares,
any holder of capital stock of GOURMET who would otherwise be entitled to
receive a fraction of a share of the Surviving Corporation Common Stock
(after aggregating all fractional shares of the Surviving Corporation
Common Stock issuable to such holder) shall, upon surrender of such
holder's GOURMET Stock Certificate(s), have such fractional interest
rounded up to the nearest whole number.
(D) The Surviving Corporation shall not be liable to any holder or
former holder of common stock of GOURMET for any Shares (or dividends or
distributions with respect thereto), or for any cash amounts, delivered to
any public official pursuant to any applicable abandoned property, escheat
or similar law.
1.7 GOURMET SHAREHOLDER APPROVAL; DISSENTING SHARES.
At the Closing GOURMET shall deliver to Providence a certificate of
each of the shareholders of GOURMET, (the "GOURMET Shareholders") whereby
each agrees and acknowledges the following:
(A) that the terms of the Merger, this Agreement, and all other
agreements contemplated herein are hereby approved, ratified and confirmed
and the officers and Board of Directors of GOURMET are, and each of them
hereby is, authorized and directed, in the name and on behalf of GOURMET,
to consummate the transactions contemplated by this Agreement, on the terms
set forth in such documents and such other agreements, and any amendments
thereto, as the officers executing such agreements may in their discretion
deem reasonable and appropriate; and
(B) that he or she hereby agrees to waive any "appraisal rights"
within the meaning of Section 14-2-1302, ET SEQ. of the Georgia Business
Corporation Act with respect to the Merger.
1.8 GOVERNING LAW; ARTICLES OF INCORPORATION
THE LAWS WHICH ARE TO GOVERN THE SURVIVING CORPORATION ARE THE LAWS OF
THE STATE OF COLORADO. THE ARTICLES OF INCORPORATION OF PROVIDENCE, AS
HERETOFORE AMENDED, SHALL, PRIOR TO THE EFFECTIVE TIME OF THE MERGER, BE
AMENDED TO THE EXTENT SET FORTH IN PARAGRAPH TWO OF THE ARTICLES OF MERGER,
ATTACHED HERETO, TO AMEND THE NAME OF PROVIDENCE CAPITAL V, INC. TO GOURMET
STATION, INC. AS SO AMENDED, SUCH ARTICLES OF INCORPORATION SHALL REMAIN
IN EFFECT THEREAFTER UNTIL THE SAME SHALL BE FURTHER AMENDED OR ALTERED IN
ACCORDANCE WITH THE PROVISIONS THEREOF.
1.9 BYLAWS
The Bylaws of PROVIDENCE (a copy of which is attached as Exhibit B),
at the Effective Time shall be the Bylaws of the Surviving Corporation
until the same shall be altered or amended in accordance with the
provisions thereof.
1.10 DIRECTORS AND OFFICERS
DIRECTORS. At the Effective Time, the Directors of the Surviving
Corporation shall be as set forth below, until their respective successors
are duly elected and qualified at the next annual meeting of shareholders
of the Surviving Corporation. As of the Effective Time, the current
directors of PROVIDENCE shall resign.
The names and addresses of the Directors of the Surviving Corporation will
be as follows:
NAME ADDRESS POSITION
Xxxxx Xxxxx-Xxxxxx Chairman of the Board
Director
Director
OFFICERS. As of the Effective Time, the current officers of
PROVIDENCE shall resign. The names, titles and addresses of the persons
who, upon the Effective Time, shall constitute the officers of the
Surviving Corporation, and who shall hold office, subject to the Bylaws,
until the first meeting of directors following the next annual meeting of
shareholders, are as follows:
NAME ADDRESS POSITION
Xxxxx Xxxxx-Xxxxxx CEO/President
Xxxxxx Xxxxxxx, III Secretary/Treasurer
Xxxxxxx X. Xxxxxx Marketing/Management Consultant
1.11 TAX CONSEQUENCES. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section
368(a)(1)(A) of the Code. The parties to this Agreement hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the IRS Regulations.
1.12 ACCOUNTING TREATMENT. For accounting purposes, the Merger is intended
to be accounted for as a purchase under GAAP.
1.13 FURTHER ACTION. If, at any time after the Effective Time, any further
action is determined by the Surviving Corporation to be necessary or
desirable to carry out the purposes of this Agreement or to vest the
Surviving Corporation with full right, title and possession of and to all
rights and property of GOURMET, the officers and directors of the Surviving
Corporation shall be fully authorized (in the name of GOURMET and
otherwise) to take such action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF GOURMET AND ITS SHAREHOLDERS
Representations and warranties shall be made by GOURMET and shall survive
the Effective Time for a period of one (1) year. Except as set forth in
the schedule of disclosure to be delivered to PROVIDENCE two (2) Business
Days prior to the Scheduled Closing Date (the "Disclosure Schedule"),
GOURMET hereby represents and warrants as follows:
2.1 ORGANIZATION, STANDING AND QUALIFICATION.
GOURMET is a corporation in existence under the laws of the State of
Georgia, and has all requisite power and authority to own, to lease or to
operate its properties and to carry on its business as it is now being
conducted. Section 2.1 of the Disclosure Schedule shall set forth a true,
complete and correct list of each jurisdiction, foreign or domestic, in
which it (a) owns or leases property, has employees or otherwise conducts
operations and/or (b) is licensed or qualified to do business as a foreign
corporation. GOURMET is duly licensed or qualified to do business as a
foreign corporation in each jurisdiction in which the character of its
properties, owned or leased, or the nature of its activities, makes such
licensing or qualification necessary, except for where the failure to be so
licensed and qualified would not have a material adverse effect on the
business of GOURMET.
2.2 AUTHORITY.
The execution and delivery of this Agreement has been authorized by the
Shareholders of GOURMET, and the completion of these transactions has been
duly and validly authorized by all necessary action on the part of GOURMET.
This Agreement has been duly executed and delivered by GOURMET and,
assuming the due and valid execution and delivery of this Agreement by the
other parties hereto, constitutes the legal, valid and binding obligation
of GOURMET, to the extent applicable, enforceable in accordance with its
terms, all as may be subject to or affected by any bankruptcy,
reorganization, insolvency, moratorium or similar laws of general
application from time to time in effect and relating to or affecting the
rights or remedies of creditors generally.
2.3 NO CONFLICT, BREACH, DEFAULT OR VIOLATION.
Except as set forth in Section 2.3 of the Disclosure Schedule, the
execution and delivery of this Agreement does not, and the completion of
transactions contemplated by this Agreement will not conflict with, result
in a breach of or the acceleration of any obligation under, or constitute a
default or event of default (or event which with notice or lapse of time or
both would constitute a default) under, any provision of any charter,
bylaw, indenture, mortgage, lien, lease, license, agreement, contract,
permit, order, judgment, or, to the best of the GOURMET's knowledge, any
judicial or administrative decree, ordinance or regulation, or any
restriction to which any property of GOURMET is subject or by which GOURMET
is bound, the result of which would have a material adverse effect on the
business of GOURMET.
2.4 APPROVALS.
Except as set forth in Section 2.4 of the Disclosure Schedule, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
agency or instrumentality, domestic or foreign (a "Governmental Entity"),
or third party is required by or with respect to GOURMET in connection with
the execution and delivery by GOURMET of this Agreement, or the completion
of the transactions contemplated hereby, the absence of which would have a
material adverse effect on GOURMET.
2.5 CAPITALIZATION.
The authorized stock of GOURMET consists of ten thousand (10,000) shares of
GOURMET common stock, of which one thousand (1,000) are issued and
outstanding or are reserved for issuance prior to the Closing Date. The
Gourmet Shares are validly issued, fully paid and non-assessable and not
subject to preemptive rights. Section 2.5 of the Disclosure Schedule shall
set forth a true, complete and correct list of (i) the holders of record of
the issued and outstanding GOURMET Shares, and (ii) all claims,
commitments or agreements to which GOURMET is a party or by which it is
bound, obligating GOURMET to issue, deliver or sell, or to cause to be
issued, delivered or sold, additional shares of GOURMET common stock or
obligating GOURMET to grant, extend or enter into any such option, warrant,
call, right or agreement with respect to its Shares. Except as set forth
in Section 2.5 of the Disclosure Schedule, there are, and, as of the
Effective Time there will be, no agreements obligating GOURMET to redeem,
repurchase or otherwise acquire the shares of GOURMET, or any other
securities issued by it, or to register the sale of the GOURMET common
stock under applicable securities laws. Except as set forth in Section 2.5
of the Disclosure Schedule, there are, and, as of the Effective Time there
will be, no agreements or arrangements prohibiting or otherwise restricting
the payment of dividends or distributions to the GOURMET Shareholders by
GOURMET.
2.6 FINANCIAL STATEMENTS.
GOURMET has furnished, or will furnish five (5) Business Days prior to the
Scheduled Closing Date, to PROVIDENCE true, complete and correct copies of
the unaudited balance sheet at December 31, 2000 and the related unaudited
income statement, and statements of operations, cash flows and changes in
members equity for the period then ended for The Gourmet Station, LLC (the
"LLC"), a limited liability company wholly owned by GOURMET (all of these
financial statements being collectively referred to herein as the "Gourmet
Financials"). The Gourmet Financials are in accordance in all material
respects with the books and records of the LLC, have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the financial position of the LLC as
at the date thereof.
2.7 LIABILITIES.
To the best of GOURMET's knowledge, except as set forth in Section 2.7 of
the Disclosure Schedule, neither GOURMET nor the LLC has any liabilities or
obligations, either accrued, absolute, contingent, or otherwise, required
to be but not reflected or reserved against in the Gourmet Financials in
accordance with generally accepted accounting principles, except those
incurred in the ordinary course of business, or those that are not
material, and GOURMET knows of no potential liability that would result in
a material adverse effect on the business of GOURMET or the LLC (Gourmet
and the LLC being collectively referred to as "XX.XXX") are, other than
those (a) reflected or reserved against in the Gourmet Financials, (b)
incurred in the ordinary course of business since December 31, 2000 or (c)
set forth in Section 2.7 of the Disclosure Schedule.
2.8 ADDITIONAL INFORMATION.
Section 2.8 of the Disclosure Schedule shall set forth a true, complete and
correct list, or shall reference an attachment thereto, of the following
items:
2.8.1 REAL PROPERTY.
All real property and structures thereon, presently (i) owned by, or
subject to a contract of purchase and sale or option agreement involving
XX.XXX (collectively, the "Real Property"), (ii) leased by, or subject to a
lease commitment involving, XX.XXX (collectively, the "Leased Property"),
with a description of: (x) the general use to which such real property is
or was put; (y) the general nature and amount of any Encumbrances thereon;
and (z) if leased the name of the lessor and a true, complete and correct
copy of any written agreement pursuant to which such real property is
leased.
2.8.2 MACHINERY AND EQUIPMENT.
All machinery, work product, tools, equipment, furnishings, and fixtures
(excluding such items that had a cost basis of $20,000 or less at the date
of the Disclosure Statement) owned, leased or subject to a contract of
purchase and sale or lease commitment, by XX.XXX with, to the extent
practical, a description with respect to each such of: (i) the serial
number of such item; (ii) the general location at which such item is kept;
(ii) whether such item is owned or leased; (iv) if owned, a general
description of the nature and amount of any Encumbrances thereon; and (v)
if leased, the name of the lessor and a true, complete and correct copy of
any written agreement pursuant to which such item is leased.
2.8.3 RECEIVABLES.
All accounts and notes receivable presently owned by XX.XXX, together with
an appropriate aging schedule, as of December 31, 2000, which list
separately all amounts receivable from the GOURMET Shareholders, director,
officer, employee, or agent of GOURMET, or from any of their respective
Affiliates. Except as set forth on Section 2.8.3 of the Disclosure
Schedule, to the best of GOURMET's knowledge, all accounts and notes
receivable of XX.XXX represent bona fide claims against debtors for
services performed or other charges arising in the ordinary course of
business and are subject to no material defenses, counterclaims or rights
of set-off.
2.8.4 PAYABLES.
All accounts and notes payable owed by XX.XXX, together with an appropriate
aging schedule, as of December 31, 2000, which list separately all such
amounts payable to any GOURMET Shareholder, director, officer, employee, or
agent of GOURMET, to GOURMET Shareholders or to any of their respective
Affiliates. Except as set forth in Section 2.8.4 of the Disclosure
Schedule, to the best of GOURMET's knowledge, all accounts and notes
payable of XX.XXX represent bona fide claims against XX.XXX for services
performed or other charges arising in the ordinary course of business.
2.8.5 CONTRACTS.
All contracts, agreements and commitments of XX.XXX, whether or not made in
the ordinary course of business, including leases under which XX.XXX is
lessor or lessee, which are to be performed in whole or in part after the
Effective Time, and which (i) involve or may involve aggregate payments by
or to XX.XXX of $20,000 or more after the Effective Time, (ii) are not
terminable by XX.XXX without premium or penalty on 60 (or fewer) days'
notice, (iii) purport to prohibit or restrict the ability of XX.XXX to
participate or compete in any material line of business or with any person,
(iv) purport to prohibit or restrict another person's ability to be in the
line of business of XX.XXX or to compete with XX.XXX or (v) are otherwise
material to the business or properties of XX.XXX. To the best of GOURMET's
knowledge, except as set forth on Schedule 2.8.5 of the Disclosure
Schedule, XX.XXX has complied in all material respects with all
commitments, contracts, agreements and obligations pertaining to either
GOURMET or the LLC listed on Section 2.8.5 of the Disclosure Schedule and
neither is nor will be as of the date of the Disclosure Schedule, in
material default under any such contracts and agreements and no notice of
material default has been received, in each case which would have a
material adverse effect on the business of XX.XXX.
2.8.6 LICENSES; PERMITS.
All approvals, authorizations, consents, licenses, orders, franchises,
rights, registrations and permits of any type held by XX.XXX, which
together constitute all material approvals, authorizations, consents,
licenses, orders, franchises, rights, registrations and permits (the
"Permits") required to operate its business as presently conducted are, to
the best of GOURMET's knowledge, except as set forth on Section 2.8.6 of
the Disclosure Schedule, currently in full force and effect and XX.XXX are
in compliance therewith, except to the extent noncompliance would not have
a material adverse effect on the business of XX.XXX. Except as set forth in
Section 2.8.6 of the Disclosure Schedule, the execution and delivery of
this Agreement and the completion of the transactions contemplated hereby
will not result in any revocation, cancellation, suspension or modification
of any such approval, authorization, consent, license, order, franchise,
right, registration or permit, which revocation, cancellation, suspension
or modification would have a material adverse effect on the business of
XX.XXX.
2.8.7 EMPLOYMENT AGREEMENTS.
All oral or written employment or consulting agreements to which either
XX.XXX is a party or by which XX.XXX is bound, including, without
limitation, all oral or written employment or consulting agreements or any
other arrangements with any person which provide for the payment of any
consideration by GOURMET or the LLC to such person as a result of the
termination of such person's employment with GOURMET or the LLC, or on the
completion of the transactions contemplated hereby.
2.8.8 INSURANCE POLICIES.
All (i) policies of property, fire and casualty, product liability,
worker's compensation, professional liability and title insurance and other
forms of insurance, under which XX.XXX is insured, and (ii) bonds issued or
posted by any person which respect to any operation or other activities of
XX.XXX.
2.8.9 TRANSACTIONS WITH MANAGEMENT.
All material contracts, leases and commitments by and between XX.XXX and
any of its Shareholders, managers, Shareholders, employees, or agents, or
any Affiliate of any such person. Except as set forth in Section 2.9 of
the Disclosure Schedule, none of the officers, Shareholders, or employees
of GOURMET owns, leases or licenses any interest in any asset used by
GOURMET in its business, other than solely by and through ownership of the
Gourmet Shares.
2.8.10 ASSUMED NAMES.
All assumed or fictitious names under which XX.XXX engages in or conducts
any business.
2.9 LITIGATION.
Except as shall be set forth in Section 2.9 of the Disclosure Schedule,
there is no material suit, action, proceeding or investigation pending or,
to the best knowledge of GOURMET, threatened against or affecting XX.XXX
(or any of its officers or directors in connection with the business of
XX.XXX), nor is there any outstanding judgment, order, writ, injunction or
decree against XX.XXX.
2.10 ABSENCE OF CERTAIN CHANGES.
Except as shall be set forth in Section 2.10 of the Disclosure Schedule, to
the best of GOURMET's knowledge, since December 31, 2000, there has not
been: (i) any material adverse change in the financial condition, assets,
liabilities (contingent or otherwise), income or business of the LLC; (ii)
any damage, destruction or loss (whether or not covered by insurance)
materially and adversely affecting the properties or business of XX.XXX;
(iii) any declaration or payment of any dividend or distribution in respect
of the Gourmet Shares or any direct or indirect redemption, purchase or
other acquisition of any of the Gourmet Shares; (iv) any increase in the
compensation, bonus, sales commissions or fee arrangement payable or to
become payable by Gourmet to any of its Shareholders, managers, employees,
consultants or agents other than raises or increases in compensation
consistent with prior policy that are not in excess of five percent of the
individual's annual compensation or hourly rate; (v) the creation of any
material Encumbrance on any of the assets of GOURMET, or the amendment,
modification or extension of any existing material Encumbrance on any such
asset other than any such creation, amendment, modification or extension
effected (A) in the ordinary course of business, (B) as required in
connection with the Merger, (C) in connection with the transfer of those
certain assets set forth on Section 2.10 of the Disclosure Schedule; or (D)
for current taxes or assessments which are not yet due, or being
contemplated in good faith by appropriate proceedings; (vi) any sale,
assignment, transfer, conveyance, lease, hypothecation, abandonment or
other disposition of or agreement to sell, assign, transfer, convey, lease,
hypothecate, abandon or otherwise dispose of, any of the material assets of
GOURMET, other that (A) assets sold in the ordinary course of business; (B)
the assets set forth on Section 2.10 of the Disclosure Schedule; or (C) any
assets which are scrapped as obsolete in conformance with customary
procedure.
2.11 TITLE TO ASSETS; ENCUMBRANCES.
2.11.1 Except as shall be set forth in Section 2.11 of the Disclosure
Schedule, XX.XXX owns its material assets, whether real, personal or
intangible, free and clear of all Encumbrances, except for (i) liens for
current taxes and assessments not yet due, or being contested in good faith
by appropriate proceedings, (ii) mechanic's liens arising under the
operation of law or for actions contested in good faith or for which
payment arrangements have been made, (iii) liens granted or incurred by
XX.XXX in the ordinary course of its business or in connection with the
financing of office space, furniture and equipment in the ordinary course
of its business, (iv) easements, covenants, restrictions and other
exception to title of record (which do not materially and adversely affect
the operation of XX.XXX), (v) Encumbrances otherwise described in Section
2.11 of the Disclosure Schedule, or (vi) Encumbrances reflected on the
balance sheet at December 31, 2000 of the LLC;
2.11.2 Except as shall be set forth on Section 2.11 of the Disclosure
Schedule, there are no parties in possession of any of the material assets
of XX.XXX other than XX.XXX, other than personal property held by third
parties in the reasonable and ordinary course of business. Subject to the
Encumbrances set forth in Section 2.11 of the Disclosure Schedule or
described in Section 2.11.1, XX.XXX enjoys full, free and exclusive use and
quiet enjoyment of its material assets and its rights pertaining thereto.
Subject to the Encumbrances set forth in Section 2.11 of the Disclosure
Schedule or described in Section 2.11.1, XX.XXX enjoys peaceful and
undisturbed possession under all leases under which it is lessee.
2.12 CONDITION OF ASSETS.
Except as set forth in Section 2.12 of the Disclosure Schedule, to the best
of GOURMET's knowledge, each of the buildings, structures, equipment or
other items of tangible personal property of XX.XXX with a cost basis of at
least $20,000 is in working order and repair, ordinary wear and tear
excepted.
2.13 TAXES AND RETURNS.
2.13.1 Except as set forth on Section 2.13 of the Disclosure Schedule, each
of GOURMET and the LLC have (i) filed all material Tax Returns and reports
required to be filed by them prior to the Effective Time and (ii) paid all
material taxes which it has incurred and which have become due and payable,
except such as are being or may be contested in good faith by appropriate
proceedings or relate to the fiscal year ended December 31, 2000. Except
as set forth on Section 2.13 of the Disclosure Schedule, no deficiencies
for any taxes have been proposed, asserted, or formally assessed against
XX.XXX, and no requests for waivers of the time to assess any such tax are
pending. The Gourmet Financials reflect an adequate accrual, based on the
facts and circumstances existing as of the date hereof, for all material
taxes payable by GOURMET (whether or not shown on any return) through the
date thereof. Section 2.13 of the Disclosure Schedule shall include true,
complete and correct copies of all Tax Returns and reports filed by the LLC
since January 1, 2000.
2.13.2 For the purposes of this Agreement, the term "tax" (including, with
correlative meaning, the terms "taxes" and "taxable") shall include all
federal, state, local and foreign income, profits, franchise, gross
receipt, payroll, estimated sales, employment, use, property, withholding,
excise and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with respect to
such amounts.
2.14 EMPLOYMENT PRACTICES.
Except as set forth in Section 2.14 of the Disclosure Schedule, to the best
of XX.XXX's knowledge, XX.XXX has complied with the Occupational Safety and
Health Act and all other laws relating to equal employment of labor
including, without limitation, laws relating to equal employment
opportunity and employment discriminations, employment of illegal aliens,
wages, hours and collective bargaining, the violation or failure to comply
with which would have a material adverse effect on the business of XX.XXX.
Notwithstanding anything herein to the contrary, and except as set forth in
Section 2.14 of the Disclosure Schedule, XX.XXX has complied with all laws
relating to the collection and payment of social security and withholding
taxes, or both, and similar taxes except where the failure to comply with
such laws would not have a material adverse effect on the business of
XX.XXX. Except as set forth in Section 2.14 of the Disclosure Schedule,
XX.XXX is not liable for any arrearage of wages or any taxes or penalties
for failure to comply with any of the foregoing, which would have a
material adverse effect on the business of XX.XXX.
2.15 COMPLIANCE WITH LAW.
Except as set forth in Section 2.15 or any other Section of the Disclosure
Schedule, to the best knowledge of XX.XXX, XX.XXX is in compliance with and
is not in violation of or in default with respect to, or in alleged
violation of or alleged default with respect to: (a) any applicable law,
rule, regulation or statute applicable to the operations of XX.XXX, or (b)
any order, permit, certificate, writ, judgment, injunction, decree,
determination, award or other decision of any court or any Government
Entity to which XX.XXX is a party or by which XX.XXX is bound, which
violation or default or alleged violation or default would materially and
adversely affect the business of XX.XXX.
2.16 ENVIRONMENTAL REQUIREMENTS AND HEALTH AND SAFETY REQUIREMENTS.
To the best of GOURMET's knowledge, Section 2.16 of the Disclosure Schedule
sets forth true, correct and complete copies of all material claims and
complaints, or reports or other documents related to such material claims
or complaints, in the files of GOURMET made by or against XX.XXX during the
past three years pursuant to environmental requirements or health or safety
requirements (other than those documents which GOURMET has determined, in
good faith and after consultation with counsel, should remain protected by
the attorney-client privilege). At present, to the best of GOURMET's
knowledge, none of the operations of XX.XXX is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging
or addressing a material violation of or a material liability under any
environmental requirement or any health and safety requirement, except as
set forth in Section 2.16 of the Disclosure Schedule.
2.17 BOOKS AND RECORDS.
All the shareholder records and minute books of GOURMET shall be delivered
to or made available upon request for inspection by PROVIDENCE not later
than two (2) Business Days prior to the Scheduled Closing Date. To the
best of GOURMET's knowledge, such shareholder records and minute books are
true and correct in all material respects.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PROVIDENCE
Representations and warranties shall be made by PROVIDENCE and shall
survive the Effective Time for a period of one (1) year. PROVIDENCE
represents and warrants to GOURMET as follows:
3.1 ORGANIZATION AND STANDING.
PROVIDENCE is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado and is duly authorized,
qualified and in good standing under all applicable laws, regulations,
ordinances and orders of public authorities and has all requisite corporate
power and authority to own, lease and operate its properties and to carry
on its business as it is now being conducted, except where the failure to
be so authorized, qualified or licensed would not have a material adverse
effect on the business of PROVIDENCE taken as a whole. PROVIDENCE is duly
licensed or qualified to do business as a foreign corporation in each
jurisdiction in which the character of its properties, owned or leased, or
the nature of their activities, makes such licensing or qualification
necessary, except for where the failure to be so licensed and qualified
would not have a material adverse effect on the business of PROVIDENCE.
A true and correct copy of the Articles of Incorporation (certified by the
Secretary of State of the State of Colorado) is attached hereto as Exhibit
C.
3.2 AUTHORITY.
PROVIDENCE has the necessary corporate power and authority to enter into
this Agreement, as well as the Transaction Documents more fully defined in
Section 6.4, and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Transaction
Documents, and the completion of the transactions contemplated hereby and
thereby have been duly authorized by corporate action of the part of the
Board of Directors of PROVIDENCE , and subject to the convening of a
shareholder's meeting pursuant to Article 7-111-101-109 of the Colorado
Business Corporation Act in order to approve this Agreement and the
Transaction Documents, no further corporate proceedings on the part of
PROVIDENCE will be necessary. When issued pursuant to this Agreement, the
Shares to be issued to GOURMET Shareholders on the Effective Time will be
duly authorized, validly issued, fully paid and non-assessable, and the
Shares to be issued to GOURMET Shareholders on the Effective Time shall be
legally equivalent in all respects to the PROVIDENCE Common Stock issued
and outstanding as of the date hereof. This Agreement has been executed
and delivered by PROVIDENCE and constitutes the legal, valid and binding
obligation of PROVIDENCE, enforceable in accordance with its terms. As of
the Effective Time, each of the Transaction Documents will constitute a
legal, valid and binding obligation of PROVIDENCE , each enforceable in
accordance with its terms.
3.3 NO CONFLICT, DEFAULT, BREACH OR VIOLATION.
The execution and delivery of this Agreement does not, and the completion
of the transactions contemplated hereby and thereby will not, conflict with
or result in a breach of or the acceleration of any obligation under, or
constitute a default or event of default (or event which with notice or
lapse of time or both would constitute a default) under, any provision of
any charter, bylaw, indenture, mortgage, lien, lease, agreement, contract,
order, judgment, or, to the best knowledge of PROVIDENCE, any judicial or
administrative decree, ordinance or regulation, permit, license, franchise
or any restriction to which any property of PROVIDENCE or any of its
subsidiaries is subject or by which PROVIDENCE or any of its subsidiaries
is bound, the effect of which would be materially adverse to PROVIDENCE and
its subsidiaries taken as a whole. Neither PROVIDENCE nor any of its
subsidiaries is alleged to be in violation or default or under any
applicable law, statute, order, rule or regulation promulgated or judgment
entered by any Governmental Body, relating to or affecting the operation,
conduct or ownership of the property or business of PROVIDENCE or such
subsidiaries, which violation or default or alleged violation or default
would have a material, adverse effect, on PROVIDENCE and its subsidiaries
taken as a whole.
3.4 APPROVALS.
Except for usual and customary compliance with the Securities Act, the
securities or blue sky laws of various states, no consent, approval, order
or authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other governmental agency or
instrumentality, domestic or foreign (a "Governmental Entity"), or third
party is required by or with respect to PROVIDENCE in connection with the
execution and delivery by PROVIDENCE of this Agreement, or the completion
of the transactions contemplated hereby, the absence of which would have a
material adverse effect on PROVIDENCE.
3.5 SEC DOCUMENTS; FILINGS; FINANCIAL STATEMENTS.
3.5.1 PROVIDENCE has delivered to GOURMET accurate and complete copies
(excluding copies of exhibits) of each report, registration statement (on a
form other than Form S-8) and definitive information statement filed by
PROVIDENCE with the SEC between November 1, 1999 and the date of this
Agreement (the "PROVIDENCE SEC Documents"). As of the time it was filed
with the SEC (or, if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing): (i) each of the
PROVIDENCE SEC Documents complied in all material respects with the
applicable requirements of the Securities Act or the Exchange Act (as the
case may be); and (ii) none of the PROVIDENCE 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 the light of the circumstances under which they were made, not
misleading.
3.5.2 The consolidated financial statements contained in the PROVIDENCE SEC
Documents: (i) complied as to form in all material respects with the
published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered, except as may be indicated in the notes to such
financial statements and (in the case of unaudited statements) as permitted
by Form 10-QSB of the SEC, and except that unaudited financial statements
may not contain footnotes and are subject to year-end audit adjustments;
and (iii) fairly present the consolidated financial position of PROVIDENCE
and its subsidiaries as of the respective dates thereof and the
consolidated results of operations of PROVIDENCE and its subsidiaries for
the periods covered thereby.
3.6 INFORMATION SUPPLIED.
To the best knowledge of PROVIDENCE, no written statement, certificate,
schedule, list or other written information furnished by or on behalf of
PROVIDENCE to GOURMET on or prior to the date hereof in connection herewith
contains (after giving effect to any correction thereof furnished to
GOURMET in writing prior to the date hereof) any untrue statement of a
material fact or omits or will omit to state a material fact required to be
stated herein or therein or necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading.
3.7 CAPITALIZATION OF PROVIDENCE.
As of the date hereof, the authorized capital stock of PROVIDENCE consists
of fifty million (50,000,000) shares of common stock, $.001 par value, of
which seven hundred fifty thousand (750,000) shares of common stock are
issued and outstanding, all such shares being issued under Form S-8 filed
with the SEC on November 30, 2000, and fifty million (50,000,000) shares of
PROVIDENCE Preferred Stock, $.001 par value, of which none are issued and
outstanding. All of the issued and outstanding shares of capital stock of
PROVIDENCE have been duly and validly authorized and validly issued and are
fully paid and non-assessable. As of the date hereof, except as disclosed
herein, there are no authorized or outstanding subscriptions, options,
conversion rights, warrants or other agreements, securities or commitments
of any nature whatsoever (whether oral or written and whether firm or
conditional) obligating PROVIDENCE or any of its subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, to any person
any shares of PROVIDENCE common stock or any other shares of the capital
stock of PROVIDENCE or any shares of the capital stock of any of its
subsidiaries, or any securities convertible into or exchangeable for any
such shares, or obligating any such person to grant, extend or enter into
any such agreement or commitment. There are no agreements obligating
PROVIDENCE to redeem, repurchase or otherwise acquire the capital stock of
PROVIDENCE, or any other securities issued by it, or to register the sale
of the capital stock of PROVIDENCE under applicable securities laws. There
are no agreements or arrangements prohibiting or otherwise restricting the
payment of dividends or distributions to the PROVIDENCE Shareholders by
PROVIDENCE.
3.8 TITLE TO ASSETS; ENCUMBRANCES.
3.8.1 PROVIDENCE owns its assets, whether real, personal or intangible,
free and clear of all Encumbrances, except (i) liens for current taxes and
assessments not yet due or being contested in good faith by appropriate
proceedings, (ii) mechanic's liens arising under the operation of law or
for actions contested in good faith or for which payment arrangements have
been made, (iii) liens granted or incurred by PROVIDENCE in the ordinary
course of its business or in connection with the financing of office space,
furniture and equipment in the ordinary course of its business, (iv)
easements, covenants, restrictions and other exceptions to title of record
which do not materially and adversely affect the operations of PROVIDENCE,
(v) such Encumbrances as do not secure indebtedness in excess of $10,000,
which in the aggregate do not secure indebtedness in excess of $10,000, or
(vi) Encumbrances reflected in the SEC Documents;
3.8.2 Except as set forth in the Form 10-KSB for the period ended December
31, 1999 ("Form 10-K"), there are no parties in possession of any of the
assets of PROVIDENCE other than PROVIDENCE, other than personal property
held by third parties in the reasonable and ordinary course of business.
Except as set forth in the Form 10-K, PROVIDENCE enjoys full, free and
exclusive use and quiet enjoyment of its assets and all rights pertaining
thereto, and PROVIDENCE enjoys peaceful and undisturbed possession under
all leases under which it is lessee.
3.9 SUBSIDIARIES.
PROVIDENCE has no subsidiaries.
3.10 LITIGATION.
Except as set forth in the Form 10-K, there is no suit, action, proceeding
or investigation pending or, to the best knowledge of PROVIDENCE,
threatened against or affecting PROVIDENCE (or any of its officers or
directors in connection with the business of PROVIDENCE), nor is there any
outstanding judgment, order, writ, injunction or decree against PROVIDENCE,
which suit, action, proceeding or investigation had or could reasonably be
expected to have a material adverse effect on PROVIDENCE. Except as set
forth in the SEC Documents, to the best knowledge of PROVIDENCE: (i) there
are no facts upon which any action, suit or proceeding could be brought
against PROVIDENCE that would have a material adverse effect on PROVIDENCE;
and (ii) PROVIDENCE is not subject to any court order, writ, injunction,
decree, settlement agreement or judgment that contains or orders any
ongoing obligations, whether prohibitory or mandatory in nature, on the
part of PROVIDENCE.
3.11 ENVIRONMENTAL REQUIREMENTS AND HEALTH AND SAFETY REQUIREMENTS.
There are no claims, complaints or reports made by or against PROVIDENCE
during the past three years pursuant to environmental requirements or
health or safety requirements. At present, to the best of PROVIDENCE's
knowledge, none of the operations of PROVIDENCE is subject to any judicial
or administrative proceeding, order, judgment, decree or settlement
alleging or addressing a material violation of or a material liability
under any environmental requirement or any health and safety requirement.
3.12 ABSENCE OF UNDISCLOSED LIABILITIES.
PROVIDENCE has no liabilities or obligations, either accrued, absolute,
contingent, or otherwise, required to be but not reflected or reserved
against in the PROVIDENCE Financials in accordance with generally accepted
accounting principles, except those incurred in the ordinary course of
business, and PROVIDENCE knows of no potential liability that would result
in material adverse effect on the value or business of PROVIDENCE.
3.13 FINANCIAL STATEMENTS.
PROVIDENCE has furnished to GOURMET true, complete and correct copies of
the financial statements of PROVIDENCE, at and for the fiscal year ended
December 31, 2000 (these financial statements being collectively referred
to herein as the "PROVIDENCE Financials"). The PROVIDENCE Financials will
be in accordance with the books and records of PROVIDENCE, comply as to
form in all material respects with applicable accounting requirements, have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the financial position
of PROVIDENCE as at the date thereof. Since December 31, 2000, there has
not been, occurred or arisen (a) any material adverse change in the
business or the consolidated financial condition of PROVIDENCE, from that
shown on the aforementioned balance sheet as of December 31, 2000, or (b)
any event, condition or state of facts of any character which, to the best
of the knowledge of PROVIDENCE, materially and adversely affects, or
threatens to materially and adversely affect, the business or results of
operations or financial condition of PROVIDENCE.
3.14 CONTRACTS.
There are no contracts, agreements, benefit plans, insurance policies,
collective bargaining agreements and commitments of PROVIDENCE, whether or
not made in the ordinary course of business, including leases under which
PROVIDENCE is lessor or lessee, which are to be performed in whole or in
part after the Effective Time, other than an agreement with Xxxxxx and
Xxxxxxx, P.C. referred to in Section 6.9 of this Agreement.
3.15 TAXES AND RETURNS.
3.15.1 PROVIDENCE has (i) filed all Tax Returns and reports required to be
filed by it and (ii) paid all taxes, assessments and governmental charges
and penalties which it has incurred and which have become due and payable,
except such as are being or may be contested in good faith by appropriate
proceedings or relate to the fiscal year ended December 31, 2000.
PROVIDENCE is not delinquent in the payment of any material tax, assessment
or governmental charge, and no deficiencies for any taxes have been
proposed, asserted, or formally assessed against PROVIDENCE, and no
requests for waivers of the time to assess any such tax are pending. The
PROVIDENCE Financials reflect an adequate accrual, based on the facts and
circumstances existing as of the date hereof, for all material taxes
payable by PROVIDENCE (whether or not shown in any return) through the date
thereof. All Tax Returns and taxes for periods after December 31, 1999
have or will be filed and paid by PROVIDENCE on a timely basis, unless said
taxes are being contested in good faith by appropriate proceedings.
3.15.2 For the purposes of this Agreement, the term "tax" (including, with
correlative meaning, the terms "taxes" and "taxable") shall include all
federal, state, local and foreign income, profits, franchise, gross
receipt, payroll, estimated sales, employment, use, property, withholding,
excise and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with respect to
such amounts.
3.16 COMPLIANCE WITH LAW.
To the best knowledge of PROVIDENCE, PROVIDENCE is in compliance with and
is not in violation of or in default with respect to, or in alleged
violation of or alleged default with respect to: (a) any applicable law,
rule, regulation or statute applicable to the operations of PROVIDENCE, or
(b) any order, permit, certificate, writ, judgment, injunction, decree,
determination, award or other decision of any court or any Government
Entity to which PROVIDENCE is a party or by which PROVIDENCE is bound,
which violation or default or alleged violation or default would materially
and adversely affect the business, operations, affairs, prospects,
properties, assets, profits or condition of PROVIDENCE. To the best
knowledge of PROVIDENCE, PROVIDENCE is not delinquent with respect to (a)
any report required to be filed with any Governmental Entity or (b) the
preparation and delivery of any reports required by private agreements to
which PROVIDENCE is a party, which delinquency might materially and
adversely affect the business, operations, affairs, prospects, properties,
assets, profits, conditions of PROVIDENCE .
3.17 INTELLECTUAL PROPERTY
PROVIDENCE has no letters of patent, patent applications, inventions upon
which patent applications have not yet been filed, trade names, trademarks,
trademark registrations and applications, copyrights, copyright
registrations and applications, both domestic and foreign, presently owned,
possessed, used or held by PROVIDENCE.
3.18 BROKERS' OR FINDERS' FEES
No agent, broker, person or firm acting on behalf of PROVIDENCE or under
its authority is or will be entitled to any commission, broker, finder, or
financial advisory fees from any of the parties hereto in connection with
any of the transactions contemplated herein.
ARTICLE IV
OBLIGATIONS PENDING EFFECTIVE TIME
4.1 AGREEMENTS OF GOURMET.
GOURMET agrees that from the date hereof to and through the Effective Time,
GOURMET will:
4.1.1 CORPORATE APPROVALS.
Use its best efforts for the purpose of authorizing and obtaining the
consent of the GOURMET Shareholders to this Agreement and the merger
contemplated hereby.
4.1.2 MAINTENANCE OF PRESENT BUSINESS.
Except as contemplated by this Agreement, GOURMET shall operate its and the
LLC's business only in the usual, regular, and ordinary manner so as to
maintain the goodwill they now enjoy and, to the extent consistent with
such operation, use all reasonable efforts to preserve intact its present
business organization, keep available the services of its present officers
and employees, and preserve its relationship with all material customers,
suppliers, jobbers, distributors, and others having business dealings with
it. If GOURMET proposes to secure a waiver of this covenant from PROVIDENCE
with respect to a particular transaction, GOURMET shall be deemed in
compliance with this covenant if the President of PROVIDENCE or his
successor does not deliver to GOURMET his objection in writing to any
action described in such waiver request within 72 hours of receiving notice
of such waiver request from GOURMET.
4.1.3 MAINTENANCE OF PROPERTIES.
At its expense, maintain all of its property and assets in customary (for
GOURMET) repair, order, and condition, reasonable wear and use and damage
by fire or unavoidable casualty excepted.
4.1.4 MAINTENANCE OF BOOKS AND RECORDS.
Maintain its books of account and records in the usual, regular, and
ordinary manner, in accordance with generally accepted accounting
principles applied on a consistent basis.
4.1.5 COMPLIANCE WITH LAW.
Continue to conduct its activities in a manner consistent with its current
understanding of the laws applicable to it, unless and until it receives
written notice from a Governmental Body that it is not in compliance with a
particular law or laws, at which time GOURMET will modify its conduct to
comply with such law or laws.
4.1.6 INSPECTION.
Allow PROVIDENCE, its directors, officers and authorized representatives,
during normal business hours, to inspect its records and to consult with
its Shareholders, employees, attorneys, and agents for the purpose of
determining the accuracy of the representations and warranties made, and
the compliance with covenants contained, in this Agreement. PROVIDENCE
agrees that it and its officers and representatives shall hold all data and
information obtained with respect to the other parties hereto in strict
confidence, and further agrees that it will not use such data or
information or disclose the same to others, except to the extent such date
or information either is, or becomes, published or a matter of public
knowledge.
PROVIDENCE and GOURMET agree that they will not issue any press release or
other disclosure of this Agreement without the prior approval of the other,
which shall not be unreasonably withheld, unless, in the good faith opinion
of counsel, such disclosure is required by law and time does not permit the
obtaining of such consent or such consent is withheld.
In the event of a breach or threatened breach by PROVIDENCE or its officers
or representatives of the provision of this Section, GOURMET shall be
entitled, in addition to any other available remedy, to an injunction
restraining any disclosure by PROVIDENCE, or its officers or
representatives of any of such confidential information.
4.1.7 PROHIBITION OF CERTAIN CONTRACTS.
Not enter into any contracts outside of the ordinary course of business
without the prior written consent of PROVIDENCE, which consent will not be
unreasonably withheld. If GOURMET proposes to secure a waiver of this
covenant from PROVIDENCE with respect to a particular transaction, GOURMET
shall be deemed in compliance with this covenant if the President of
PROVIDENCE or his successor does not deliver to GOURMET his objection in
writing to any action described in such waiver request within 72 hours of
receiving notice of such waiver request from GOURMET.
4.1.8 PROHIBITION OF LOANS.
Not incur any borrowings other than the bridge loan of up to Five Hundred
Thousand Dollars ($500,000) contemplated to be made by, or arranged by,
Xxxxxxx Xxxx and Company, LLC (the "Bridge Loan"), except in the usual and
ordinary course of business, without the prior written consent of
PROVIDENCE, which consent will not be unreasonably withheld.
4.1.9 PROHIBITION OF CERTAIN COMMITMENTS.
Not enter into a commitment for expenditures or incur any liability other
than the Bridge Loan exceeding $25,000, in the aggregate, except (i) as may
be necessary or desirable for the maintenance of existing facilities,
machinery and equipment in the ordinary course of business or in connection
with measures taken to effect the Merger, as described herein, (ii) as in
otherwise consented to in writing by PROVIDENCE, or (iii) as may otherwise
be in the ordinary course of business.
4.1.10 DISPOSAL OF ASSETS.
The company shall not sell, dispose of, or encumber, any property or
assets, except (i) in the usual and ordinary course of business; or (ii) as
is otherwise consented to in writing by PROVIDENCE or authorized hereunder.
4.1.11 MAINTENANCE OF INSURANCE.
Keep in full force and effect present insurance policies or other
comparable coverage on all its properties.
4.1.12 NO AMENDMENT TO ARTICLES OF INCORPORATION.
Not amend its articles of incorporation or merge or consolidate with or
into any other corporation or change in any manner the rights of its
Gourmet Shares or the character of its business.
4.1.13 NO ISSUANCE, SALE, OR PURCHASE OF SECURITIES.
Except as contemplated by this Agreement or subject to an agreement
described herein or in the Disclosure Schedule, not issue or sell, or issue
options or rights to subscribe to, or enter into any contract or commitment
to issue or sell (upon conversion or otherwise), any Gourmet Shares, or
subdivide or in any way reclassify any Gourmet Shares, or acquire, or agree
to acquire, any Gourmet Shares.
4.1.14 PROHIBITION OF DIVIDENDS.
Not declare or pay any dividend on Gourmet Shares or make any other
distribution of assets to the Shareholders of GOURMET, except for salaries
and reimbursement of expenses.
4.1.15 NOTICE OF MATERIAL DEVELOPMENTS.
Promptly notify PROVIDENCE in writing of any material adverse change in, or
any changes which in the aggregate would likely result in a material
adverse change in, the business, properties, condition (financial or
otherwise) or results of operations of GOURMET, whether or not occurring in
the usual and ordinary course of its business, but only to the extent
GOURMET has actual knowledge of any such changes.
4.2 AGREEMENTS OF PROVIDENCE.
PROVIDENCE agrees that from the date hereof to the Effective Time, it will:
4.2.1 CORPORATE APPROVALS.
Call and hold a meeting of its Shareholders to approve the Merger and
transactions contemplated herein, and its board of directors for the
purpose of authorizing and obtaining the consent of PROVIDENCE and its
stockholders to this Agreement and the Merger contemplated hereby.
4.2.2 MAINTENANCE OF PRESENT BUSINESS.
Except as contemplated by this Agreement, operate no business.
4.2.3 MAINTENANCE OF BOOKS AND RECORDS.
Maintain the books of account and records of PROVIDENCE in the usual,
regular, and ordinary manner, in accordance with generally accepted
accounting principles applied on a consistent basis.
4.2.4 COMPLIANCE WITH LAW.
Continue to conduct its activities in a manner consistent with PROVIDENCE's
current understanding of the laws applicable to PROVIDENCE, unless and
until PROVIDENCE receives written notice from a Government Body that it is
not in compliance with a particular law or laws, at which time PROVIDENCE
will cause such actions to be taken as a necessary to comply with such law
or laws.
4.2.5 INSPECTION.
Allow GOURMET and its directors officers and authorized representatives,
during normal business hours, to inspect its records and to consult with
its officers, employees, attorneys, and agents for the purpose of
determining the accuracy of the representations and warranties made, and
the compliance with covenants contained, in this Agreement. GOURMET agrees
that it and its officers and representatives shall hold all data and
information obtained with respect to the other parties hereto in strict
confidence, and each further agrees that it will not use such data or
information or disclose the same to others, except to the extent such data
or information either is, or becomes, published or a matter of public
knowledge. In the event of a breach or threatened breach by GOURMET or its
officers or representatives of the provisions of this Section, PROVIDENCE
shall be entitled, in addition to any other available remedy, to an
injunction restraining any disclosure by GOURMET or its officers or
representatives of any of such confidential information.
4.2.6 PROHIBITION OF CONTRACTS.
Except as contemplated by this Agreement, PROVIDENCE shall not enter into
any contract.
4.2.7 PROHIBITION OF INDEBTEDNESS.
PROVIDENCE shall not incur any indebtedness of any kind or nature.
4.2.8 DISPOSAL OF ASSETS.
PROVIDENCE shall not dispose of any assets.
4.2.9 MAINTENANCE OF INSURANCE.
Keep in full force and effect present insurance policies or other
comparable coverage on all of the assets of PROVIDENCE.
4.2.10 NO AMENDMENTS TO ARTICLES OF INCORPORATION.
Not amend its Articles of Incorporation, or merge into any other
corporation.
4.2.11 NOTICE OF MATERIAL DEVELOPMENTS.
Promptly notify GOURMET in writing of any material adverse change in, or
any changes which in the aggregate would likely result in a material
adverse change in, the business, properties, condition (financial or
otherwise), results of operations or prospects of PROVIDENCE, whether or
not occurring in the usual and ordinary course of business, but only to the
extent PROVIDENCE has actual knowledge of any such changes.
4.2.12 PERFORMANCE OF CONTRACTS.
Perform or cause to be performed all material obligations of PROVIDENCE
under agreements relating to or affecting its assets, properties or rights.
ARTICLE V
ADDITIONAL COVENANTS OF THE PARTIES
5.1 FILINGS AND CONSENTS.
As promptly as practicable after the execution of this Agreement, each
party to this Agreement (a) shall make all filings (if any) and give all
notices (if any) required to be made and given by such party in connection
with the Merger and (b) shall use all commercially reasonable efforts to
obtain all Consents (if any) required to be obtained (pursuant to any
applicable Legal Requirement or Contract, or otherwise) by such party in
connection with the Merger and the other transactions contemplated by this
Agreement. PROVIDENCE shall (upon request) promptly deliver to GOURMET a
copy of each such filing made, each such notice given and each such Consent
obtained by PROVIDENCE during the period prior to Closing.
5.2 PUBLIC ANNOUNCEMENTS.
After the date hereof, each party shall not (and each party shall not
permit any of its Representatives to) issue any press release or make any
public statement regarding this Agreement or the Merger, or regarding any
of the other transactions contemplated by this Agreement, without the other
party's prior written consent.
5.3 BEST EFFORTS.
During the period prior to Closing, PROVIDENCE and GOURMET shall use their
best efforts to cause the conditions set forth in Article 6 to be satisfied
on a timely basis.
5.4 EMPLOYMENT AND CONSULTING AGREEMENTS.
Omitted.
5.5 FIRPTA MATTERS.
Omitted.
5.6 INVESTMENT REPRESENTATION LETTER.
At the Closing, each of the GOURMET Shareholders shall execute and deliver
to GOURMET an investment representation letter in the form attached hereto
at Exhibit D (an "Investment Representation Letter").
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF
PROVIDENCE AND GOURMET
The obligations of PROVIDENCE and GOURMET to effect the Merger and
otherwise consummate the transactions contemplated by this Agreement are
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
6.1 ACCURACY OF REPRESENTATIONS.
Each of the representations and warranties made by PROVIDENCE and GOURMET
in this Agreement and in each of the Transaction Documents and instruments
delivered to PROVIDENCE and GOURMET in connection with the transactions
contemplated by this Agreement shall have been accurate in all material
respects as of the date of this Agreement, and shall be accurate in all
material respects as of the Closing Date as if made at the Closing Date.
6.2 PERFORMANCE OF COVENANTS.
All of the covenants and obligations that PROVIDENCE and GOURMET are
required to comply with or to perform at or prior to the Closing shall have
been complied with and performed in all respects.
6.3 CONSENTS.
All Consents required to be obtained in connection with the Merger and the
other transactions contemplated by this Agreement shall have been obtained
and shall be in full force and effect.
6.4 AGREEMENTS AND DOCUMENTS.
PROVIDENCE and GOURMET shall have agreed to terms and received the
following documents (herein referred to as "Transaction Documents"), each
of which will be in full force and effect as of the Effective Time:
(i) Articles of Merger
(ii) A Disclosure Schedule executed by GOURMET;
(iii)Investment Representation Letters executed by each of the
GOURMET Shareholders;
(i) Legal Opinion of Xxxxxx & Xxxxxxx, P.C., dated as of the Closing
Date, outstanding in the form attached hereto at Exhibit E;
(v) A certificate executed by both parties and containing the
representation and warranty of each party that each of the
representations and warranties set forth in Articles II and III
is accurate in all respects as of the Closing Date as if made on
the Closing Date and that the conditions set forth in Section 6
have been duly satisfied (the "Closing Certificate");
(vi) Written resignations of all officers and directors of PROVIDENCE,
effective as of the Effective Time;
(vii)Agreement with Xxxxxxx Xxxx and Company, LLC to provide investment
banking services for two years after the Effective Time; and
(viii)Agreement with Emerging Securities Group, Inc. to provide NASD
regulatory, public relations and investor relations services for
one year after the Effective Time.
6.5 OMITTED
6.6 NO RESTRAINTS.
No temporary restraining order, preliminary or permanent injunction or
other order preventing the consummation of Merger shall have been issued by
any court of competent jurisdiction and remain in effect, and there shall
not be any Legal Requirement enacted or deemed applicable to the Merger
that makes consummation of the Merger illegal.
6.7 NO LEGAL PROCEEDINGS.
No Person shall have commenced or threatened to commence any Legal
Proceeding challenging or seeking the recovery of a material amount of
damages in connection with the Merger or seeking to prohibit or limit the
exercise by PROVIDENCE of any material right pertaining to its ownership of
the assets of GOURMET.
6.8 EMPLOYEES.
No more than one of the individuals identified on Exhibit F shall have
ceased to be employed by, or expressed an intention to terminate their
employment with, GOURMET.
6.9 LEGAL SERVICES
Xxxx X. Xxxxxxxx, Of Counsel to Xxxxxx & Xxxxxxx, P.C., shall provide legal
services, without additional consideration, with respect to the SEC filings
listed below, and any amendments thereto, by the Surviving Corporation
after the Effective Time:
(i) Form 8-K regarding the Merger;
(ii) Initial Form 13-Ds for all persons reporting under Section
13 of the Exchange Act;
(iii)Initial Form 3's for all persons reporting under Section 16
of the Exchange Act;
(iv) Form 10-QSQ and 10KSB for first reporting year following the
Effective Time; and
(v) Form SB-2, or similar registration statement, filed for
establishing trading in the common stock of the Surviving
Corporation.
6.10 BALANCE SHEET
The balance sheet of PROVIDENCE shall show no liabilities.
ARTICLE VII
TERMINATION
7.1 TERMINATION EVENTS.
This Agreement may be terminated prior to the Closing:
(A) by PROVIDENCE if PROVIDENCE reasonably determines that the timely
satisfaction of any condition set forth in Article VI has become impossible
(other than as a result of any failure on the part of PROVIDENCE to comply
with or perform any covenant or obligation of PROVIDENCE set forth in this
Agreement);
(B) by GOURMET if GOURMET reasonably determines that the timely
satisfaction of any condition set forth in Article VI has become impossible
(other than as a result of any failure on the part of GOURMET to comply
with or perform any covenant or obligation set forth in this Agreement or
in any other agreement or instrument delivered to PROVIDENCE);
(C) by PROVIDENCE at or after the Scheduled Closing Time if any condition
set forth in Article VI has not been satisfied by the Scheduled Closing
Time;
(D) by GOURMET at or after the Scheduled Closing Time if any condition set
forth in Article VI has not been satisfied by the Scheduled Closing Time;
(E) by PROVIDENCE if the Closing has not taken place on or before May 31,
2001 (other than as a result of any failure on the part of PROVIDENCE to
comply with or perform any covenant or obligation of PROVIDENCE set forth
in this Agreement);
(F) by GOURMET if the Closing has not taken place on or before May 31,
2001 (other than as a result of the failure on the part of GOURMET to
comply with or perform any covenant or obligation set forth in this
Agreement or in any other agreement or instrument delivered to PROVIDENCE);
or
(G) by the mutual consent of PROVIDENCE and GOURMET.
7.2 TERMINATION PROCEDURES.
If PROVIDENCE wishes to terminate this Agreement pursuant to Section
7.1(a), Section 7.1(c) or Section 7.1(e), PROVIDENCE shall deliver to
GOURMET a written notice stating that PROVIDENCE is terminating this
Agreement and setting forth a brief description of the basis on which
PROVIDENCE is terminating this Agreement. If GOURMET wishes to terminate
this Agreement pursuant to Section 7.1(b), Section 7.1(d) or Section
7.1(f), GOURMET shall deliver to PROVIDENCE a written notice stating that
GOURMET is terminating this Agreement and setting forth a brief description
of the basis on which GOURMET is terminating this Agreement.
7.3 EFFECT OF TERMINATION.
If this Agreement is terminated pursuant to Section 7.1, all further
obligations of the parties under this Agreement shall terminate; PROVIDED,
HOWEVER, that: (a) neither GOURMET nor PROVIDENCE shall be relieved of any
obligation or liability arising from any prior breach by such party of any
provision of this Agreement; (b) the parties shall, in all events, remain
bound by and continue to be subject to the provisions set forth in Article
IX; and (c) PROVIDENCE and GOURMET shall, in all events, remain bound by
and continue to be subject to Sections 4.1.6 and 5.2.
ARTICLE VIII
INDEMNIFICATION
8.1 SURVIVAL OF REPRESENTATIONS, ETC.
(A) The representations and warranties made by PROVIDENCE, and GOURMET
(including the representations and warranties set forth in Articles II and
III, shall survive the Effective Time for a period of one (1) year,
PROVIDED, HOWEVER, that if, at any time prior to the first annual
anniversary of the Closing Date, any Indemnitee (acting in good faith)
delivers to either party a written notice alleging the existence of an
inaccuracy in or a breach of any of the representations and warranties made
by either party (and setting forth in reasonable detail the basis for such
Indemnitee's belief that such an inaccuracy or breach may exist) and
asserting a claim for recovery under Section 8.2 based on such alleged
inaccuracy or breach, then the claim asserted in such notice shall survive
the first anniversary of the Closing until such time as such claim is fully
and finally resolved.
(B) The representations, warranties, covenants and obligations of
PROVIDENCE, and GOURMET, and the rights and remedies that may be exercised
by either party, shall not be limited or otherwise affected by or as a
result of any information furnished to, or any investigation made by or
knowledge of either party or any of their Representatives.
(C) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty
made by PROVIDENCE or GOURMET in this Agreement.
8.2 CROSS INDEMNIFICATION.
From and after the Effective Time (but subject to Section 8.1(a)),
PROVIDENCE and GOURMET shall hold harmless and indemnify each other from
and against, and shall compensate and reimburse the other party for, any
Damages which are directly or indirectly suffered or incurred by either
party or to which either party may otherwise become subject (regardless of
whether or not such Damages relate to any third-party claim) and which
arise from or as a result of, or are directly or indirectly connected with:
(i) any inaccuracy in or breach of any representation or warranty set forth
in Articles II and III (without giving effect to any Material Adverse
Effect or other materiality qualification or any similar qualification
contained or incorporated directly or indirectly in such representation or
warranty, but giving effect to any update to the Disclosure Schedule
delivered by PROVIDENCE and GOURMET prior to the Closing); (ii) any breach
of any covenant or obligation of PROVIDENCE or GOURMET (including the
covenants set forth in Articles IV and V); or (iii) any Legal Proceeding
relating to any inaccuracy or breach of the type referred to in clause
"(i)" or "(ii)" above (including any Legal Proceeding commenced by any
Indemnitee for the purpose of enforcing any of its rights under this
Article VIII).
8.3 THRESHOLD.
Neither party shall be required to make any indemnification payment
pursuant to Section 8.2(a) for any inaccuracy in or breach of any of their
representations and warranties set forth in Articles II and III until such
time as the total amount of all Damages (including the Damages arising from
such inaccuracy or breach and all other Damages arising from any other
inaccuracies in or breaches of any representations or warranties) that have
been directly or indirectly suffered or incurred by the other party,
exceeds $100,000 in the aggregate. If the total amount of such Damages
exceeds $100,000, then the Indemnitee shall be entitled to be indemnified
against and compensated and reimbursed for all of such Damages, including
claims for Damages included in the initial $100,000.
8.4 SATISFACTION OF INDEMNIFICATION CLAIM.
In the event either party had any liability (for indemnification or
otherwise) to the other party under this Section 8, the indemnifying party
shall satisfy such liability first, by delivering to such Indemnitee the
number of Shares of PROVIDENCE determined by dividing (a) the aggregate
dollar amount of such liability by (b) the average closing price of
PROVIDENCE as reported for the ten trading days preceding the date such
liability is satisfied, and second, to the extent Shares of PROVIDENCE are
not available to satisfy in full such liability, then such difference shall
be paid in cash.
8.5 NO CONTRIBUTION.
PROVIDENCE and GOURMET waive, acknowledge and agree that they shall not
have and shall not exercise or assert (or attempt to exercise or assert),
any right of contribution, right of indemnity or other right or remedy
against each other in connection with any third party indemnification
obligation or any other liability to which either party may become subject
under or in connection with this Agreement.
8.6 INTEREST.
Any party who is required to hold harmless, indemnify, compensate or
reimburse any Indemnitee pursuant to this Section 8 with respect to any
Damages shall also be liable to such Indemnitee for interest on the amount
of such Damages (for the period commencing as of the date on which
indemnifying party first received notice of a claim for recovery by such
Indemnitee and ending on the date on which the liability of such
indemnifying party to such Indemnitee is fully satisfied by such
indemnifying party) at a floating rate equal to the rate of interest
publicly announced by Bank of America, N.T. & S.A. from time to time as its
prime, base or reference rate.
8.7 DEFENSE OF THIRD PARTY CLAIMS.
In the event of the assertion or commencement by any Person of any claim or
Legal Proceeding (whether against PROVIDENCE, or GOURMET) with respect to
which either party may become obligated to hold harmless, indemnify,
compensate or reimburse any third party Indemnitee pursuant to this Section
8, such party shall have the right, at its election, to proceed with the
defense of such claim or Legal Proceeding on its own.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 FURTHER ASSURANCES.
Each party hereto shall execute and cause to be delivered to each other
party hereto such instruments and other documents, and shall take such
other actions, as such other party may reasonably request (prior to, at or
after the Closing) for the purpose of carrying out or evidencing any of the
transactions contemplated by this Agreement.
9.2 FEES AND EXPENSES.
If the Merger is not consummated for any reason whatsoever, each party to
this Agreement shall bear and pay all fees, costs and expenses (including
legal fees and accounting fees) ("Fees and Expenses") that have been
incurred or that are incurred by such party in connection with the
transactions contemplated by this Agreement. If the Merger is consummated,
GOURMET shall pay all Fees and Expenses of PROVIDENCE.
9.3 ATTORNEYS' FEES.
If any action or proceeding relating to this Agreement or the enforcement
of any provision of this Agreement is brought against any party hereto, the
prevailing party shall be entitled to recover reasonable attorneys' fees,
costs and disbursements (in addition to any other relief to which the
prevailing party may be entitled).
9.4 NOTICES.
All notices and other communications required or permitted under this
Agreement and the transactions contemplated hereby shall be in writing and
shall be deemed to have been duly given, made and received on the date when
delivered by hand delivery with receipt acknowledged, or upon the next
Business Day following receipt of facsimile transmission, or upon the fifth
day after deposit in the United States mail, registered or certified with
postage prepaid, return receipt requested, addressed as set forth below:
(A) If to PROVIDENCE:
0000 Xxxxx Xxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy (not constituting notice) to:
Xxxxxx & Xxxxxxx, P.C.
0000 Xxxxx Xxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
(B) If to GOURMET:
Xx. Xxxxx Xxxxx-Xxxxxx
GS Operations Corp.
0000 Xxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
ATTENTION: XXXXX XXXXX-XXXXXX
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
WITH A COPY (NOT CONSTITUTING NOTICE) TO:
XXXXX & XXXXXXX, LLC
000 XXXXXXX XXXXX
XXXXXXXX 0, XXXXX 000
XXXXXXX, XXXXXXX 00000
ATTENTION: XXXXXX XXXXXXX, III
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
9.5 CONFIDENTIALITY.
Without limiting the generality of anything contained in Section 5.2, on
and at all times after the Closing Date, each party shall keep
confidential, and shall not use or disclose to any other Person, any non-
public document or other non-public information in such party's possession
that relates to the business of GOURMET or PROVIDENCE.
9.6 TIME OF THE ESSENCE.
Time is of the essence of this Agreement.
9.7 HEADINGS.
The bolded headings contained in this Agreement are for convenience of
reference only, shall not be deemed to be a part of this Agreement and
shall not be referred to in connection with the construction or
interpretation of this Agreement.
9.8 COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall
constitute one agreement.
9.9 GOVERNING LAW.
This Agreement shall be construed in accordance with, and governed in all
respects by, the internal laws of the State of Colorado and (without giving
effect to principles of conflicts of laws).
9.10 SUCCESSORS AND ASSIGNS.
The rights and obligations of PROVIDENCE or GOURMET may not be assigned
without the prior written consent of both parties. Subject to the
foregoing, the provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
9.11 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE.
The rights and remedies of the parties hereto shall be cumulative (and not
alternative). The parties to this Agreement agree that, in the event of
any breach or threatened breach by any party to this Agreement of any
covenant, obligation or other provision set forth in this Agreement for the
benefit of any other party to this Agreement, such other party shall be
entitled (in addition to any other remedy that may be available to it) to
(a) a decree or order of specific performance or mandamus to enforce the
observance and performance of such covenant, obligation or other provision,
and (b) an injunction restraining such breach or threatened breach.
9.12 WAIVER.
(A) No failure on the part of any Person to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or
remedy; and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other or further exercise thereof or
of any other power, right, privilege or remedy.
(B) No Person shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have
any effect except in the specific instance in which it is given.
9.13 AMENDMENTS.
This Agreement may not be amended, modified, altered or supplemented other
than by means of a written instrument duly executed and delivered on behalf
of all of the parties hereto.
9.14 SEVERABILITY.
In the event that any provision of this Agreement, or the application of
any such provision to any Person or set of circumstances, shall be
determined to be invalid, unlawful, void or unenforceable to any extent,
the remainder of this Agreement, and the application of such provision to
Persons or circumstances other than those as to which it is determined to
be invalid, unlawful, void or unenforceable, shall not be impaired or
otherwise affected and shall continue to be valid and enforceable to the
fullest extent permitted by law.
9.15 ENTIRE AGREEMENT.
This Agreement and the other agreements referred to herein set forth the
entire understanding of the parties hereto relating to the subject matter
hereof and thereof and supersede all prior agreements and understandings
among or between any of the parties relating to the subject matter hereof
and thereof.
9.16 CONSTRUCTION.
(A) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender
shall include the masculine and neuter genders; and the neuter gender shall
include the masculine and feminine genders.
(B) The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.
(C) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."
(D) Except as otherwise indicated, all references in this Agreement to
"Sections" and "Appendix" are intended to refer to Sections of this
Agreement and Appendices to this Agreement.
IN WITNESS WHEREOF, PROVIDENCE and GOURMET have signed this Agreement as of
the date first written above.
PROVIDENCE CAPITAL V, INC.
A COLORADO CORPORATION
By: _____________________________________
Xxxxxxx Xxxxxx, Jr., President
GS OPERATIONS CORP.
A GEORGIA CORPORATION
By: _____________________________________
XXXXX XXXXX-XXXXXX,
President
Xxxx X. Xxxxxxxx, Of Counsel to
Xxxxxx & Xxxxxxx, P.C., enters into this Agreement
for purposes of evidencing its consent to and
agreement with Section 6.9.
Date: , 2001
By:
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this EXHIBIT A):
"AFFILIATE" means, with respect to any specified Person, any other Person
in which the specified Person has a direct or indirect interest (except
through ownership of less than 5% of the outstanding shares of any entity
whose securities are listed on a national securities exchange or traded in
the national over-the-counter market).
"AGREEMENT" shall have the meaning specified in the preamble to the
Agreement.
"PROVIDENCE" shall have the meaning specified in the preamble to the
Agreement.
"PROVIDENCE COMMON STOCK" shall have the meaning specified in the Recitals
to the Agreement.
"PROVIDENCE SEC DOCUMENTS" shall have the meaning specified in Section
3.5.1 of the Agreement.
"BUSINESS DAY" means a day, other than a Saturday or a Sunday, or a federal
holiday upon which offices of the federal government are not open for
business.
"CLOSING" and "CLOSING DATE" shall have the meanings specified in Section
1.3 of the Agreement.
"CODE" shall have the meaning specified in the Recitals to the Agreement.
"GOURMET" shall have the meaning specified in the preamble to the
Agreement.
"GOURMET FINANCIALS" shall have the meaning specified in Section 2.6 of the
Agreement.
"GOURMET SHARES" shall have the meaning specified in Section 1:4:2 of the
Agreement.
"GOURMET STOCK CERTIFICATE" shall have the meaning specified in Section 1.5
of the Agreement.
"CONSENT" means any approval, consent, ratification, permission, waiver or
authorization (including any Governmental Authorization).
"CONTRACT" means any written, oral or other agreement, contract,
subcontract, lease, understanding, instrument, note, warranty, insurance
policy, benefit plan or legally binding commitment or undertaking of any
nature.
"DAMAGES" shall include any loss, damage, injury, decline in value, lost
opportunity, liability, claim, demand, settlement, judgment, award, fine,
penalty, Tax, fee (including reasonable attorneys' fees), charge, cost
(including costs of investigation) or expense of any nature.
"DISCLOSURE SCHEDULE" means the schedule (dated as of the date of the
Agreement) delivered to PROVIDENCE on behalf of GOURMET and the
Stockholders.
"EFFECTIVE TIME" shall have the meaning specified in Section 1.3 of the
Agreement.
"ENCUMBRANCE" means any lien, pledge, hypothecation, charge, mortgage,
security interest, encumbrance, claim, infringement, interference, option,
right of first refusal, preemptive right, community property interest or
restriction of any nature (including any restriction on the voting of any
security, any restriction on the transfer of any security or other asset,
any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FEES AND EXPENSES" shall have the meaning specified in Section 9.2 of the
Agreement.
"GAAP" means generally accepted accounting principles.
"GOVERNMENTAL AUTHORIZATION" means any: (a) permit, license, certificate,
franchise, permission, clearance, registration, qualification or
authorization issued, granted, given or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement; or (b) right under any Contract with any Governmental Body.
"GOVERNMENTAL BODY" means any: (a) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, local, municipal, foreign or other government;
or (c) governmental or quasi-governmental authority of any nature
(including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or Entity and any court
or other tribunal).
"INDEMNITEES" means the following Persons: (a) PROVIDENCE or GOURMET; (b)
PROVIDENCE or GOURMET's current and future Affiliates; (c) the respective
Representatives of the Persons referred to in clauses "(a)" and "(b)"
above; and (d) the respective successors and assigns of the Persons
referred to in clauses "(a)", "(b)" and "(c)" above; PROVIDED, HOWEVER,
that the Stockholders shall not be deemed to be "Indemnitees."
"INVESTMENT REPRESENTATION LETTER" shall have the meaning specified in
Section 5.6 of the Agreement.
"IRS" means the Internal Revenue Service.
"LEGAL PROCEEDING" means any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding), hearing, inquiry, audit, examination or
investigation commenced, brought, conducted or heard by or before, or
otherwise involving, any court or other Governmental Body or any arbitrator
or arbitration panel.
"LEGAL REQUIREMENT" means any federal, state, local, municipal, foreign or
other law, statute, constitution, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, ruling or requirement
issued, enacted, adopted, promulgated, implemented or otherwise put into
effect by or under the authority of any Governmental Body.
"MATERIAL ADVERSE EFFECT" means a violation or other matter will be deemed
to have a "Material Adverse Effect" on GOURMET if such violation or other
matter (considered together with all other matters that would constitute
exceptions to the representations and warranties set forth in the Agreement
but for the presence of "Material Adverse Effect" or other materiality
qualifications, or any similar qualifications, in such representations and
warranties) would have a material adverse effect on GOURMET's business,
condition, assets, liabilities, operations, financial performance or
prospects.
"MERGER" shall have the meaning specified in the recitals to the Agreement.
"PERSON" means any: (I) individual, (II) corporation (including any non-
profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including any
limited liability company or joint stock company), firm or other
enterprise, association, organization or entity (collectively, an
"Entity"), or (III) Governmental Body.
"REPRESENTATIVES" means officers, directors, employees, agents, attorneys,
accountants, advisors and representatives.
"SCHEDULED CLOSING TIME" shall have the meaning specified in Section 1.3 of
the Agreement.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" shall have the meaning specified in the Recitals to the Agreement.
"SHAREHOLDERS" shall mean those owning issued and outstanding stock of the
corporation referred to in the context such terms is used..
"TAX" means any tax (including any income tax, franchise tax, capital gains
tax, gross receipts tax, value-added tax, surtax, excise tax, ad valorem
tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty
(including any customs duty), deficiency or fee, and any related charge or
amount (including any fine, penalty or interest), imposed, assessed or
collected by or under the authority of any Governmental Body.
"TAX RETURN" means any return (including any information return), report,
statement, declaration, estimate, schedule, notice, notification, form,
election, certificate or other document or information filed with or
submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection or payment of any Tax or in connection with the administration,
implementation or enforcement of or compliance with any Legal Requirement
relating to any Tax.
AGREEMENT AND PLAN OF MERGER
AND REORGANIZATION
among:
PROVIDENCE CAPITAL V, INC.,
a Colorado corporation;
GS OPERATIONS CORP.,
a Georgia corporation;
___________________________
Dated as of March 1, 2001
___________________________
EXHIBITS
EXHIBIT DOCUMENT
(I) Articles of Merger
(II) a Disclosure Schedule to be executed by
PROVIDENCE and GOURMET; at closing
(III) Investment Representation Letters to be
executed by each of the GOURMET Shareholders; at
closing
(IV) Legal Opinion of Xxxxxx & Xxxxxxx, P.C.,
dated as of the Closing Date, substantially in the
forms attached hereto at Exhibit I;
(V) Certificate of Board of Directors GOURMET.
(VI) Certificate of Board of Directors PROVIDENCE.
TABLE OF CONTENTS
SECTION 1. Description of Transaction 1
1.1 Merger of GOURMET into PROVIDENCE 1
1.2 Effect of the Merger 1
1.3 Closing; Effective Time 1
1.4 Conversion of Shares 2
1.5 Piggy Back Registration Rights 4
1.6 Closing of GOURMET's Transfer Books 5
1.7 Exchange of Certificates 6
1.8 Stockholder Approval; Dissenting Shares 7
1.10 Tax Consequences 7
1.11 Accounting Treatment 7
1.12 Further Action 7
SECTION 2. Representations and Warranties of GOURMET 7
2.1 Due Organization; Good Standing; No Subsidiaries 7
2.2 Certificate of Incorporation and Bylaws; Records 8
2.3 Capitalization; Title to Shares 8
2.4 Financial Statements 8
2.5 Absence of Changes 9
2.6 Title to Assets 10
2.7 Bank Accounts; Receivables 11
2.8 Equipment; Leasehold 11
2.9 Proprietary Assets 11
2.10 Contracts 13
2.11 Liabilities 15
2.12 Compliance with Legal Requirements 15
2.13 Governmental Authorizations 15
2.14 Tax Matters 15
2.15 Employee and Labor Matters; Benefit Plans 16
2.16 Environmental Matters 18
2.17 Insurance
2.18 Related Party Transactions 19
2.19 Legal Proceedings; Orders 19
2.20 Clients
2.21 Material Relationships 20
2.22 Sales Policies; Warranties 20
2.23 Brokers and Finders 20
2.24 Authority; Binding Nature of Agreement 20
2.25 Non-Contravention; Consents 20
2.26 Database Backup 21
2.27 Full Disclosure 21
SECTION 3. Representations and Warranties of
PROVIDENCE 21
3.1 SEC Filings; Financial Statements 21
3.2 Authority; Binding Nature of Agreement 22
3.3 Valid Issuance 22
SECTION 4. Certain Covenants of GOURMET
and the Stockholders 22
4.1 Access and Investigation 22
4.2 Operation of GOURMET's Business 22
4.3 Notification; Updates to Disclosure Schedule 24
4.4 No Negotiation 25
SECTION 5. Additional Covenants of the Parties 25
5.1 Filings and Consents 25
5.2 Public Announcements 25
5.3 Best Efforts 26
5.4 Employment and Noncompetition Agreements 26
5.5 FIRPTA Matters 26
5.6 Release 26
5.7 Investment Representation Letter 26
5.8 Proprietary Information Agreement 26
SECTION 6. Conditions Precedent to Obligations of
PROVIDENCE 27
6.1 Accuracy of Representations 27
6.2 Performance of Covenants 27
6.3 Consents 27
6.4 Agreements and Documents 27
6.5 FIRPTA Compliance 28
6.6 No Restraints 28
6.7 No Legal Proceedings 28
6.8 Employees 28
6.9 Stockholder Approval 28
SECTION 7. Termination 29
7.1 Termination Events 29
7.2 Termination Procedures 30
7.3 Effect of Termination 30
7.4 Termination Fee 30
SECTION 8. Indemnification, Etc. 30
8.1 Survival of Representations, Etc. 30
8.2 Indemnification by Principal Stockholders 31
8.3 Threshold; Ceiling 31
8.4 Satisfaction of Indemnification Claim 32
8.5 No Contribution 32
8.6 Interest 32
8.7 Defense of Third Party Claims 32
8.8 Exercise of Remedies by Indemnitees Other Than
PROVIDENCE 33
SECTION 9. Miscellaneous Provisions 33
9.1 Stockholders' Agent 33
9.2 Further Assurances 33
9.3 Fees and Expenses 33
9.4 Attorneys' Fees 33
9.5 Notices 34
9.6 Confidentiality 35
9.7 Time of the Essence 35
9.8 Headings 35
9.9 Counterparts 35
9.10 Governing Law 35
9.11 Successors and Assigns 35
9.12 Remedies Cumulative; Specific Performance 35
9.13 Waiver 36
9.14 Amendments 36
9.15 Severability 36
9.16 Entire Agreement 36
9.17 Construction 36
An extra section break has been inserted above this paragraph. Do not
delete this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following
the Table of Contents/Authorities.
APPENDIX I
ARTICLES OF MERGER
(To be completed prior to the Closing Date)
APPENDIX II
DISCLOSURE SCHEDULE
APPENDIX III
GOURMET INVESTMENT REPRESENTATION LETTER
(To be distributed to GOURMET Shareholders prior to the Closing Date)
APPENDIX IV
LEGAL OPINION
March 1, 2001
CONFIDENTIAL
The Board of Directors
GS OPERATIONS CORP.
Re: Plan and Agreement of Merger dated March 1, 2001 between
PROVIDENCE CAPITAL V, INC., and GS OPERATIONS CORP.
Ladies and Gentlemen:
We render herewith our opinion as to certain matters pursuant to the Plan
and Agreement of Merger dated March 1, 2001 (the "Plan"), made by and among
") PROVIDENCE CAPITAL V, INC. a Colorado corporation ("PROVIDENCE" or the
"Surviving Corporation, and GS Operations Corp., a corporation (the
"Disappearing Corporation"), involved in the Section 4(2), 4(6) or
Regulation D private placement of common shares of PROVIDENCE (the
"Shares"), conducted in compliance with the Securities Act of 1933 (the
"Act").
In rendering our opinion, we have examined and relied upon the following:
(a) The Articles of Incorporation of the Surviving Corporation filed with
the State of Colorado;
(b) The materials contained in the Plan, Disclosure Schedules and
Certificates of the Board of Directors (the "Confidential Documents")
concerning the transactions contemplated thereby and the Acquisition by the
Surviving Corporation of all of the issued and outstanding common shares of
the Disappearing Corporation (the "Surrendered Shares");
(c) The Certificate of Good Standing dated ________________, attached
hereto as Exhibit "A" (the "Company's Certificate").
The opinions expressed in subparagraphs three, four, six, seven and nine
below, as to factual matters, are given in reliance upon the Company's
Securities Certificates and the Certificate of the Board of Directors,
attached hereto as Exhibit "B", confirming the fully diluted capitalization
of the Surviving Corporation and all of its subsidiaries;
Page 2
The Board of Directors
March 1, 2001
________________________
(d) Such other documents and instruments as we have deemed necessary in
order to enable us to render the opinions expressed herein.
For the purposes of rendering this opinion, we have assumed that no person
or entity has engaged in fraud or misrepresentation regarding the
inducement relating to, or the execution or delivery of, the documents
reviewed. Furthermore, we express no opinion as to the validity of any of
the assumptions, form, or content of any financial or statistical data
contained in the Confidential Documents. We do not assume any obligation
to advise officers, directors, their advisors or representatives of the
parties to the Plan, beyond the opinions specifically expressed herein.
The terms used in this opinion shall have the meaning ascribed to them in
the Plan and other documents relied upon in rendering our opinion. As used
in paragraphs five and nine hereof the phrase "of which we have knowledge"
means that such knowledge is based solely upon conversations with
representatives of the Surviving Corporation and a review of our own files.
Based upon the foregoing assumptions, our review of the above documents and
our reliance, as to factual matters, upon the representations in the
Company's Board of Director Certificates, and subject to the qualifications
listed herein, we are of the opinion that:
1. The Surviving Corporation is a duly organized and validly existing
corporation under the laws of the State of Colorado, and upon the filing of
required state documents with the appropriate authorities, is fully
authorized to transact the business in which it is engaged in accordance
with the Plan and as described in the Confidential Documents.
2. The Plan has been duly authorized, executed and delivered and is a
valid and binding agreement of the Surviving Corporation, having adequate
authorization and having taken all action necessary to authorize the
indemnification provisions contained therein; provided, however, that no
opinion is rendered as to the validity or enforceability of such
indemnification provisions insofar as they are or may be held to be
violative of public policy (under either state or federal law) against such
types of provisions in the context of the offer, offer for sale, or sale of
securities.
3. The Shares, when transferred, will be validly and legally issued under
the laws of the State of Colorado. The Shares, when transferred, will be
fully paid and non-assessable.
4. The Shares, when transferred, will conform in all material respects to
all statements concerning them contained in the Confidential Documents.
5. The consummation of the transactions discussed in the Confidential
Documents by the Surviving Corporation will not result in any breach of any
of the terms of, or constitute a default under, any mortgage, loan
commitment, indenture, deed of trust, agreement or other instrument to
which it is a party and of which we have knowledge, or violate, insofar as
it is directed to the Surviving Corporation, any order of any court or any
federal or state regulatory body or administrative agency having
jurisdiction over it or over its property and of which we have knowledge.
Page 3
The Board of Directors
March 31, 2001
_________________________
6. To the best of our knowledge after making reasonable inquiry, there is
not in existence, pending or threatened any action, suit or proceeding to
which the Surviving Corporation is a party, except as set forth in the
Confidential Documents, before any court or governmental agency or body,
which might, if decided adversely, materially affect the subject matter of
the Plan or the financial condition, business or prospects of the Surviving
Corporation.
7. The Surviving Corporation has full power and authority to own its
properties and conduct its business as described in the Confidential
Documents.
8. The disclosures contained in the Confidential Documents, taken
together with GS Operations Corp.'s offer to the Surviving Corporation to
provide access to additional information, are sufficient to satisfy the
"information requirements" of the registration exemptions under the
Securities Act of 1933, as amended, assuming the receipt by the Surviving
Corporation of a copy of the Confidential Documents.
9. Based upon the Surviving Corporation's Certificate, we are unaware of
any legal or governmental proceedings required to be described in the
Confidential Documents which are not described therein or any contracts or
documents of any character required to be described in the Confidential
Documents which are not described as required.
Nothing herein shall constitute an opinion as to the laws of any state or
jurisdiction other than the laws of the State of Colorado and federal law
regardless of the selected choice of law stated in any document discussed
in this letter.
Our opinion is limited to the specific opinions expressed above. No other
opinions are intended to be inferred therefrom. This opinion is addressed
to and is for the benefit solely of the Board of Directors, and no other
person or persons shall be furnished a copy of this opinion or are entitled
to rely on the contents herein without our express written consent;
provided, however, that counsel to GS Operations Corp. shall be entitled to
rely on this opinion. In the event that any of the facts are different
from those which have been furnished to us and upon which we have relied,
the conclusions as set forth above cannot be relied upon.
The opinions contained in this letter are rendered as of the date hereof,
and we undertake no, and hereby disclaim any, obligation to advise you of
any changes in or any new developments which might affect any matters or
opinions set forth herein.
Very truly yours,
Xxxxxx & Xxxxxxx, P.C.
JRS/ac
cc: Xxxxxxx Xxxxxx, Jr.
Xxxx X. Xxxxxxxx
APPENDIX VIII
CERTIFICATE OF BOARD OF DIRECTORS
CAPITALIZATION OF GS OPERATIONS CORP.
CERTIFICATE
THE BOARD OF DIRECTORS
OF
GS OPERATIONS CORP.
Pursuant to the provisions of the Statutes ("C.S.") and the General
Corporation Law, as amended, the following individuals represent that the
following Section of the Plan and Agreement of Merger Plan and Agreement of
Merger dated March 31, 2001 (the "Plan"), made by and among PROVIDENCE
CAPITAL V, INC., a Colorado corporation ("PROVIDENCE"), and GS Operations
Corp., a Georgia corporation (the "Disappearing Corporation"), is an
accurate representation as of the date of execution of the Plan:
2.5 CAPITALIZATION.
The authorized stock of GOURMET consists of ten thousand (10,000) shares of
GOURMET Common Stock, of which one thousand (1,000) are issued and
outstanding or are reserved for issuance prior to the Closing Date. The
Gourmet Shares are validly issued, fully paid and non-assessable and not
subject to preemptive rights. Section 2.5 of the Disclosure Schedule shall
set forth a true, complete and correct list of (i) the holders of record of
the issued and outstanding GOURMET Shares, and (ii) all claims,
commitments or agreements to which GOURMET is a party or by which it is
bound, obligating GOURMET to issue, deliver or sell, or to cause to be
issued, delivered or sold, additional shares of GOURMET Common stock or
obligating GOURMET to grant, extend or enter into any such option, warrant,
call, right or agreement with respect to its Shares. Except as set forth
in Section 2.5 of the Disclosure Schedule, there are, and, as of the
Effective Time there will be, no agreements obligating GOURMET to redeem,
repurchase or otherwise acquire the shares of GOURMET, or any other
securities issued by it, or to register the sale of the GOURMET Common
stock under applicable securities laws. Except as set forth in Section 2.5
of the Disclosure Schedule, there are, and, as of the Effective Time there
will be, no agreements or arrangements prohibiting or otherwise restricting
the payment of dividends or distributions to the GOURMET Shareholders by
GOURMET.
THE BOARD OF DIRECTORS OF
GS OPERATIONS CORP.
XXXXX XXXXX-XXXXXX, Chairman
XXXXXXX X. XXXXXX, Director
XXXXXX XXXXXXX, III, Director
______________________________________
DATED: March _____, 2001.
