________________________________________________________________________________
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
IGO CORPORATION
ARI ACQUISITION CORP.
AR INDUSTRIES, INC.
AND
THE SHAREHOLDERS OF AR INDUSTRIES, INC.
DATED AS OF JANUARY 11, 2000
________________________________________________________________________________
TABLE OF CONTENTS
AGREEMENT AND PLAN OF REORGANIZATION
PAGE
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ARTICLE I
THE MERGER...................................................................1
Section 1.1 ACTIONS TO BE TAKEN............................................1
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Section 1.2 COMMON STOCK OF SURVIVING CORPORATION..........................2
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Section 1.3 MERGER CONSIDERATION...........................................2
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Section 1.4 CONVERSION OR CANCELLATION OF ARI CAPITAL STOCK................2
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Section 1.5 NO FRACTIONAL INTERESTS........................................2
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Section 1.6 ARI STOCK OPTIONS..............................................3
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Section 1.7 ISSUANCE AND DELIVERY OF MERGER CONSIDERATION..................3
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Section 1.7 STOCK TRANSFER BOOKS...........................................4
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Section 1.8 FILING OF MERGER DOCUMENTS.....................................4
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF ARI AND THE ARI SHAREHOLDERS..............................................5
Section 2.1 CORPORATE ORGANIZATION.........................................5
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Section 2.2 CAPITAL STRUCTURE..............................................5
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Section 2.3 NO OTHER AGREEMENTS TO SELL ASSETS, MERGE, ETC.................6
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Section 2.4 AUTHORIZATION; EXECUTION AND DELIVERY..........................6
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Section 2.5 GOVERNMENTAL APPROVALS AND FILINGS.............................6
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Section 2.6 NO CONFLICT....................................................7
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Section 2.7 FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED LIABILITIES.......7
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Section 2.8 ABSENCE OF CHANGES.............................................8
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Section 2.9 CONTRACTS AND COMMITMENTS......................................9
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Section 2.10 LEGAL PROCEEDINGS.............................................10
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Section 2.11 ERISA MATTERS.................................................11
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Section 2.12 TAXES.........................................................13
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Section 2.13 INTELLECTUAL PROPERTY.........................................15
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Section 2.14 ENVIRONMENTAL MATTERS.........................................16
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Section 2.15 CERTAIN AGREEMENTS............................................17
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Section 2.16 INTERESTS OF OFFICERS AND DIRECTORS...........................17
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Section 2.17 RESTRICTIONS ON BUSINESS ACTIVITIES...........................17
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Section 2.18 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES;
CONDITION OF EQUIPMENT........................................18
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Section 2.19 COMPLIANCE WITH LAWS..........................................18
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Section 2.20 LABOR MATTERS.................................................18
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Section 2.21 INSURANCE.....................................................19
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Section 2.22 BROKERS.......................................................19
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Section 2.23 DISCLOSURE....................................................20
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Section 2.24 INVESTMENT REPRESENTATIONS....................................20
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Section 2.25 COMPUTER SYSTEMS..............................................20
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
IGO AND SUB.................................................................21
Section 3.1 CORPORATE ORGANIZATION........................................21
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Section 3.2 CAPITAL STRUCTURE.............................................21
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Section 3.3 AUTHORIZATION, EXECUTION AND DELIVERY.........................21
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Section 3.4 GOVERNMENTAL APPROVALS AND FILINGS............................22
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Section 3.5 NO CONFLICT...................................................22
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Section 3.6 REPORTS; ACCURACY OF INFORMATION..............................22
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Section 3.7 LITIGATION....................................................23
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Section 3.8 NO MATERIAL ADVERSE CHANGE....................................23
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Section 3.9 BROKERS.......................................................23
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Section 3.10 DISCLOSURE....................................................23
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Section 3.11 TAX MATTERS...................................................23
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ARTICLE IV
COVENANTS OF THE ARI SHAREHOLDERS...........................................24
Section 4.1 ADVICE OF CHANGES.............................................24
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Section 4.2. STOCK TRANSFER RESTRICTIONS...................................24
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ARTICLE V
COVENANT OF IGO AND SUB.....................................................25
Section 5.1 LISTING APPLICATION...........................................25
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ARTICLE VI
MUTUAL COVENANTS............................................................25
Section 6.1 CONFIDENTIALITY...............................................25
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Section 6.2 EXPENSES......................................................27
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Section 6.3 PUBLIC ANNOUNCEMENTS..........................................27
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Section 6.4 AGREEMENTS TO COOPERATE.......................................27
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ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF
IGO AND SUB.................................................................28
Section 7.1 REPRESENTATIONS AND WARRANTIES................................28
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Section 7.2 PERFORMANCE OF COVENANTS......................................28
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Section 7.3 CERTIFICATE...................................................28
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Section 7.4 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION.............29
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Section 7.5 APPROVALS AND CONSENTS........................................29
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Section 7.6 DISSENTING SHARES.............................................29
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Section 7.7 NO MATERIAL ADVERSE CHANGE....................................29
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Section 7.8 RESIGNATION OF OFFICERS AND DIRECTORS.........................29
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Section 7.9 ..............................................................29
ARI Options and Warrants....................................................29
Section 7.10 ..............................................................29
Non-Competition Agreements..................................................29
Section 7.11 EXCHANGE AND ESCROW AGREEMENT.................................29
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Section 7.12 OPINION OF COUNSEL............................................30
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Section 7.13 INTELLECTUAL PROPERTY.........................................30
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ARTICLE VIII
CONDITIONS TO ARI'S OBLIGATIONS.............................................30
Section 8.1 REPRESENTATIONS AND WARRANTIES................................30
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Section 8.2 PERFORMANCE OF COVENANTS......................................30
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Section 8.3 CERTIFICATE...................................................30
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Section 8.4 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION.............30
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Section 8.5 APPROVALS AND CONSENTS........................................31
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Section 8.6 OPINION OF COUNSEL............................................31
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Section 8.7 EMPLOYMENT AGREEMENTS.........................................31
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Section 8.8 BANK LINE.....................................................31
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ARTICLE IX
CLOSING.....................................................................31
ARTICLE X
INDEMNITY AND ESCROW........................................................31
Section 10.1 INDEMNIFICATION...............................................31
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Section 10.2 ESCROW OF SHARES..............................................32
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Section 10.3 REMEDIES......................................................33
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Section 10.4 TERM OF ESCROW................................................33
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Section 10.5 ARI SHAREHOLDERS' REPRESENTATIVES.............................34
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Section 10.6 MECHANICS OF MAKING CLAIMS....................................34
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Section 10.7 ESCROW AGENT'S DUTIES.........................................35
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ARTICLE XI
TERMINATION.................................................................36
Section 11.1 TERMINATION AND ABANDONMENT...................................36
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Section 11.2 EFFECT OF TERMINATION.........................................37
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ARTICLE XII
MISCELLANEOUS PROVISIONS....................................................37
Section 12.1 TAX MATTERS...................................................37
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Section 12.2 KNOWLEDGE.....................................................39
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Section 12.3 AMENDMENT AND MODIFICATION....................................39
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Section 12.4 WAIVER OF COMPLIANCE..........................................39
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Section 12.5 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................39
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Section 12.6 NOTICES.......................................................39
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Section 12.7 ASSIGNMENT....................................................40
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Section 12.8 GOVERNING LAW.................................................40
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Section 12.9 PARTIES IN INTEREST...........................................41
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Section 12.10 COUNTERPARTS..................................................41
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Section 12.11 HEADINGS AND REFERENCES.......................................41
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Section 12.12 ENTIRE AGREEMENT..............................................41
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Section 12.13 SEVERABILITY..................................................41
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Section 12.14 OTHER REMEDIES................................................41
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Section 12.15 FURTHER ASSURANCES............................................41
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Section 12.16 ABSENCE OF THIRD PARTY BENEFICIARY RIGHTS.....................41
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Section 12.17 MUTUAL DRAFTING...............................................42
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EXHIBITS
Exhibit A Agreement of Merger
Exhibit B Current List of the Names and Addresses of all Holders
of ARI Capital Stock
Exhibit C-1, C-2 Non-Competition Agreement
Exhibit D Exchange and Escrow Agreement
Exhibit E Opinion of AR Industries, Inc. Legal Counsel
Exhibit F Opinion of iGo Corporation Legal Counsel
Exhibit G-1, G-2 Employment Agreements
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "AGREEMENT") is entered
into as of January 11, 2000, among iGo Corporation, a Delaware corporation
("iGO"), ARI Acquisition Corp., a California corporation and a wholly-owned
subsidiary of iGo ("SUB"), AR Industries, Inc., a California corporation ("ARI")
and the shareholders of AR Industries, Inc. (the "ARI SHAREHOLDERS").
RECITALS
A. The Boards of Directors of iGo, Sub and ARI have deemed it advisable
that iGo and ARI combine their operations by a merger of Sub into ARI, under the
terms and conditions hereinafter set forth (the "MERGER").
B. The Boards of Directors of iGo, ARI and Sub, have approved and
adopted this Agreement and the Merger Agreement (as defined below) and intend
that the Merger qualify for federal income tax purposes as a reorganization
within the meaning of Sections 368(a)(1)(A) and (a)(2)(D) of the Internal
Revenue Code of 1986, as amended (the "CODE").
In consideration of the mutual representations, warranties, covenants
and agreements herein contained and subject to the conditions and other terms
herein contained, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 ACTIONS TO BE TAKEN. Upon performance (or waiver) of all
covenants and obligations of the parties contained herein and upon fulfillment
(or waiver) of all conditions to the obligations of the parties contained
herein, at the Effective Time (as defined below) and pursuant to the California
Corporations Code (the "CCC") the following will occur:
(a) ARI will be merged with and into Sub in accordance with
Section 368(a) of the Code. Sub will be the surviving corporation (the
"SURVIVING CORPORATION"), and the separate existence and corporate organization
of ARI will cease, and thereupon ARI and Sub will be a single corporation known
as "AR Industries, Inc.";
(b) Sub, as the Surviving Corporation, will succeed, insofar
as permitted by law, to all rights, assets, liabilities and obligations of ARI
in accordance with the CCC;
(c) the Articles of Incorporation and Bylaws of Sub will be
the Articles of Incorporation and Bylaws of the Surviving Corporation until
amended as provided by law;
(d) The officers and directors of Sub will be the initial
officers and directors of the Surviving Corporation at and after the Effective
Time, each to hold office in accordance with the Articles of Incorporation and
Bylaws of the Surviving Corporation.
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(e) As soon as practicable after each condition to the
obligations of iGo and Sub and ARI hereunder has been satisfied or waived, an
Agreement of Merger, in the form attached hereto as EXHIBIT A and properly
completed and executed in accordance with the CCC (the "MERGER AGREEMENT") will
be filed with the Secretary of State of the State of California, together with
the required officers' certificates. The Merger will become effective at the
time and on the date the Merger Agreement is so filed. The date and time when
the Merger becomes effective is referred to herein as the "EFFECTIVE TIME."
Section 1.2 COMMON STOCK OF SURVIVING CORPORATION. Following the
Effective Time, all issued and outstanding shares of Common Stock of Sub will
continue to be fully paid and nonassessable shares of Common Stock of the
Surviving Corporation. Each certificate of Sub evidencing ownership of any such
shares will continue to evidence ownership of the same number of shares of
Common Stock of the Surviving Corporation.
Section 1.3 MERGER CONSIDERATION. Upon the effectiveness of the Merger,
the ARI Shareholders will collectively be entitled to receive from iGo in
consideration of the cancellation and conversion of all shares of the
outstanding capital stock of ARI (the "ARI CAPITAL STOCK"), an aggregate of (a)
$750,000 in cash (the "MERGER CASH"), and (b) the Merger Securities (subject to
the escrow and holdback described in Sections 1.7(d) and 10.2 below).
Section 1.4 CONVERSION OR CANCELLATION OF ARI CAPITAL STOCK.
(a) The maximum number of shares of Common Stock of iGo,
$0.001 par value per share ("iGO COMMON STOCK") to be issued by iGo in
connection with the Merger (the "MERGER SECURITIES") shall be 279,167.
(b) At the Effective Time, by virtue of the Merger and without
any action on the part of any holder thereof, each share of the capital stock of
ARI, issued and outstanding immediately prior to the Effective Time (other than
any shares cancelled or retired pursuant to Section 1.4(c), the "ARI CAPITAL
STOCK") will cease to be outstanding and will be converted into the right to
receive the number of shares of iGo Common Stock, subject to the provisions of
Article X hereof, as is determined by a ratio (the "EXCHANGE RATIO"), the
numerator of which is the maximum number of Merger Securities and the
denominator of which is equal to the number of shares of ARI Capital Stock
outstanding as of the Effective Time.
(c) Each share of ARI Capital Stock which, immediately prior
to the Effective Time, was issued and held in the treasury of ARI or was issued
and outstanding and held by iGo, Sub, ARI or any subsidiary of ARI will be
cancelled or retired and no issuance of Merger Securities or other payment will
be made with respect thereto.
(d) Notwithstanding anything in this Agreement to the
contrary, there shall be no shares of ARI Capital Stock which constitute
dissenting shares under Section 1300(b) of the CCC.
Section 1.5 NO FRACTIONAL INTERESTS. Neither certificates nor scrip for
fractional interests in the Merger Securities issued pursuant to Section 1.4(b)
hereof will be issued, but in lieu thereof each holder of shares of ARI Capital
Stock who would otherwise have been entitled pursuant to Section 1.4(b) hereof
to a fraction of a share of iGo Common Stock will be paid an amount in cash
equal to such fraction multiplied by $12.00 (the "MERGER PRICE").
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Section 1.6 ARI STOCK OPTIONS. All options, warrants and other rights
to acquire shares of ARI Capital Stock have been fully exercised , cancelled or
otherwise terminated as of the date of this Agreement.
Section 1.7 ISSUANCE AND DELIVERY OF MERGER CONSIDERATION.
(a) At the Closing, iGo shall pay to the ARI Shareholders, via
wire transfer to a single bank account designated by Xxx Xxxxxxx and Xxxxx
Xxxxxx, the Merger Cash. Each ARI Shareholder shall be entitled to its pro rata
percentage (the "PRO RATA PORTION") of the Merger Cash, calculated by dividing
(i) such person's aggregate holdings of ARI Capital Stock immediately prior to
the Effective Time by (ii) all outstanding shares of ARI Capital Stock
outstanding immediately prior to the effective time. Upon delivery of the wire
transfer of the Merger Cash to the designated bank account, neither iGo nor Sub
or ARI shall have any further responsibility for ensuring that any particular
ARI Shareholder receives their Pro Rata Portion of the Merger Cash.
(b) iGo and ARI hereby authorize U.S. Stock Transfer
Corporation to act as Exchange Agent (the "EXCHANGE AGENT") hereunder. As soon
as practicable following the Effective Time, iGo will issue and deliver to the
Exchange Agent certificates ("NEW CERTIFICATES") representing a sufficient
number of shares of iGo Common Stock for issuance pursuant to Sections 1.4(b)
and 1.7(d) hereof.
(c) As soon as practicable after the Effective Time, the
Exchange Agent will send written notice to each record holder of certificates
representing shares of ARI Capital Stock converted pursuant to Section 1.4(b)
hereof ("OLD CERTIFICATES") of the manner and basis for exchanging Old
Certificates for New Certificates.
(d) Upon surrender for cancellation to the Exchange Agent of
one or more Old Certificates, accompanied by a duly executed letter of
transmittal in proper form, the Exchange Agent will, as promptly as practicable,
deliver to each holder (other than Xxx Xxxxxxx and Xxxxx Xxxxxx) of such
surrendered Old Certificates, New Certificates representing such holder's Pro
Rata Portion of the Merger Securities to which the holders of ARI Capital Stock
are entitled pursuant to Section 1.4(b) hereof, together with checks for payment
of cash in lieu of fractional interests to be issued in respect of the Old
Certificates. The foregoing sentence shall apply to Xxx Xxxxxxx and Xxxxx Xxxxxx
except that the New Certificates received by them will be decreased to the
extent of their respective proportional interests (as between each of them based
upon their respective holdings of ARI Common Stock immediately prior to the
Closing) in the shares escrowed pursuant to this paragraph and Article X hereof.
iGo will deliver to the Exchange Agent, when required, cash sufficient to settle
the payment for fractional interests. Twenty-Seven Thousand Nine Hundred
Seventeen (27,917) of the number of shares of iGo Common Stock to which Xxx
Xxxxxxx and Xxxxx Xxxxxx are entitled shall be deposited in escrow in accordance
with Article X hereof.
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(e) Until Old Certificates have been surrendered and exchanged
as herein provided for New Certificates, each outstanding Old Certificate will
be deemed for all corporate purposes of iGo, other than the payment of dividends
or any distributions, to evidence ownership of the number of shares of iGo
Common Stock into which the number of shares of ARI Capital Stock shown thereon
have been converted pursuant to Section 1.4(b) hereof. No dividends or other
distributions declared on iGo Common Stock will be paid to persons otherwise
entitled to receive the same until the Old Certificates have been surrendered in
exchange for New Certificates in the manner herein provided, but upon such
surrender, such dividends or other distributions will be paid to such persons in
accordance with the terms of such securities. In no event will the persons
entitled to receive such dividends or other distributions be entitled to receive
interest on such dividends or other distributions. From and after the Effective
Time, iGo will, however, be entitled to treat Old Certificates which have not
yet been surrendered for exchange as evidencing the ownership of the number of
shares of iGo Common Stock into which the shares of ARI Capital Stock
represented by such Old Certificates will have been converted, notwithstanding
any failure to surrender such Old Certificates.
(f) No transfer taxes will be payable by any shareholder of
ARI in connection with the exchange of Old Certificates for New Certificates,
except that if any New Certificate is to be issued in a name other than that in
which the Old Certificate surrendered in exchange therefor is registered, it
will be a condition of such exchange that the person requesting such exchange
will pay to the Exchange Agent any transfer or other taxes required by reason of
the issuance of the New Certificate in a name other than the registered holder
of the Old Certificate, or will establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable.
(g) In the event that the appointment of the Exchange Agent is
terminated, following such termination, Old Certificates will be surrendered to,
and New Certificates delivered by, iGo or its agent. If outstanding Old
Certificates are not surrendered prior to two years after the Effective Time
(or, in any particular case, prior to such earlier date on which dividends or
other distributions, if any, would otherwise escheat to or become the property
of any governmental unit or agency), the amount of dividends and other
distributions, if any, which have become payable and which thereafter become
payable on Merger Securities evidenced by such Old Certificates as provided
herein will, to the extent permitted by applicable law, become the property of
the Surviving Corporation (and, to the extent not in its possession, will be
paid over to it by iGo), free and clear of all claims or interest of any person
previously entitled thereto.
Section 1.8 STOCK TRANSFER BOOKS. At the Effective Time, the stock
transfer books of ARI will be closed and no transfer of ARI Capital Stock will
thereafter be made.
Section 1.9 FILING OF MERGER DOCUMENTS. As soon as practicable after
each other condition to the obligations of iGo and Sub and ARI hereunder has
been satisfied or waived, ARI and Sub will deliver the Merger Agreement for
filing with the Secretary of State of the State of California and iGo and Sub
and ARI will take such other and further actions as may be required by the CCC
in connection with such filing and the consummation of the Merger.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF ARI AND THE ARI SHAREHOLDERS
As of the date hereof, except as disclosed in a document referring
specifically to the relevant subsections of this Article II which is delivered
by ARI to iGo prior to execution of this Agreement (the "ARI DISCLOSURE
SCHEDULE"), ARI and the ARI Shareholders hereby represent and warrant to iGo and
Sub as follows:
Section 2.1 CORPORATE ORGANIZATION.
(a) Each of ARI and its Subsidiaries (as defined below) is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation and has all requisite corporate power and
authority and all necessary governmental authorizations to own, lease and
operate its properties and to conduct its business as it is now being conducted.
A true and complete list of such Subsidiaries is set out in the ARI Disclosure
Schedule, together with the jurisdiction of incorporation of each Subsidiary.
Each of ARI and its Subsidiaries is duly qualified or licensed to do business
and is in good standing as a foreign corporation in each state or other
jurisdiction in which the nature of its business or operations or ownership of
its property requires such qualification or licensing, except where the failure
to be so qualified or licensed would not, individually or in the aggregate,
materially and adversely affect the condition (financial or other), business,
properties, prospects (as currently contemplated), net worth or results of
operations of ARI and its Subsidiaries taken as a whole (collectively, "ARI'S
BUSINESS"). The minute books of ARI and its Subsidiaries, as made available to
iGo, contain complete and accurate records of all corporate action taken by ARI
and its Subsidiaries since their respective dates of incorporation.
(b) ARI has no direct or indirect interest in or loans to any
partnership, corporation, joint venture, business association or other entity
other than ARI's Subsidiaries, all of which are listed in the ARI Disclosure
Schedule. ARI has delivered to iGo complete and correct copies of the Articles
of Incorporation and Bylaws (or other organizational or charter documents) of
ARI and each of its Subsidiaries, in each case as amended to the date hereof. As
used in this Agreement, the term "SUBSIDIARY" means a "subsidiary" as defined in
Rule 1.01 in Regulation S-X promulgated under the Securities Act of 1933, as
amended (the "SECURITIES ACT"). To the extent that ARI has any Subsidiaries, all
representations pertaining to ARI under this Article II shall be interpreted to
refer to ARI and its Subsidiaries unless such representation specifically
provides otherwise.
Section 2.2 CAPITAL STRUCTURE. The authorized capital stock of ARI
consists of 50,000,000 shares of Common Stock, no par value ("ARI COMMON
STOCK"), 1,000,000 shares of Preferred Stock, no par value. There are currently
outstanding 115,115 shares of ARI Common Stock and no shares of Preferred Stock.
All outstanding shares of ARI Capital Stock are validly issued, fully paid and
nonassessable and not subject to preemptive rights created by statute, ARI's
Articles of Incorporation or Bylaws or any agreement to which ARI or any of its
Subsidiaries is a party or by which ARI or any of its Subsidiaries may be bound.
ARI has provided iGo and its legal counsel with a complete and accurate list of
all issuances of Capital Stock by ARI.
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Attached as EXHIBIT B hereto is a current list of the names and addresses of all
holders of ARI Capital Stock, together with the number and type of shares held
by each holder. There are no options, warrants, calls, conversion rights,
commitments or agreements of any character to which ARI or any Subsidiary of ARI
is a party or by which any of them may be bound that do or may obligate ARI or
any Subsidiary of ARI to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of ARI Capital Stock or of the capital
stock of any Subsidiary of ARI or that do or may obligate ARI or any Subsidiary
of ARI to grant, extend or enter into any such option, warrant, call, conversion
right, commitment or agreement. ARI is the owner of all outstanding shares of
capital stock of each of its Subsidiaries and all such shares are duly
authorized, validly issued, fully paid and nonassessable. ARI is not under any
obligation to register under the Securities Act any of its presently outstanding
securities or any securities that may subsequently be issued. There are no
agreements or understandings to which ARI is a party or, to the knowledge of
ARI, any other agreements or understandings, with respect to the transfer or
voting of shares of ARI Capital Stock.
Section 2.3 NO OTHER AGREEMENTS TO SELL ASSETS, MERGE, ETC. Except as
provided hereby, ARI has no legal obligation, absolute or contingent, to any
person or firm to sell assets other than in the ordinary course of business or
to effect any merger, consolidation or reorganization of ARI or to enter into
any agreement with respect thereto.
Section 2.4 AUTHORIZATION; EXECUTION AND DELIVERY. ARI and the ARI
Shareholders have all requisite power and authority (a) to execute and deliver,
as applicable, this Agreement, the Merger Agreement and the agreements attached
as exhibits hereto (the "ARI ANCILLARY AGREEMENTS"), (b) to perform their
respective obligations under this Agreement, the Merger Agreement and the ARI
Ancillary Agreements, and (c) to consummate the transactions contemplated hereby
and thereby. The execution, delivery and performance of this Agreement, the
Merger Agreement and the ARI Ancillary Agreements by ARI and the consummation by
ARI of the transactions contemplated hereby and thereby have been duly approved
and authorized by all requisite corporate action of ARI, including obtaining any
necessary approval of its shareholders. This Agreement has been duly executed
and delivered by ARI and the ARI Shareholders and, and assuming its due
authorization, execution and delivery by iGo and Sub, constitutes the legal,
valid and binding obligation of ARI and the ARI Shareholders, enforceable in
accordance with its terms. The Board of Directors of ARI has unanimously
determined that it is advisable and in the best interest of ARI's shareholders
for ARI to enter into a strategic business combination with iGo upon the terms
and subject to the conditions of this Agreement.
Section 2.5 GOVERNMENTAL APPROVALS AND FILINGS. No approval,
authorization, consent, license, clearance or order of, declaration or
notification to, or filing, registration or compliance with, any governmental or
regulatory authority ("GOVERNMENTAL ENTITY") is required on the part of ARI in
order (a) to permit ARI to perform its obligations under this Agreement or (b)
to prevent the termination of any right, privilege, license or agreement of ARI
or any Subsidiary of ARI, or to prevent any loss to ARI's Business, by reason of
the transactions contemplated by this Agreement, except for the filing of the
Merger Agreement and a Certificate of Satisfaction from the Franchise Tax Board
of the State of California, as required by the CCC.
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Section 2.6 NO CONFLICT. Except for the receipt of any required
approval of the shareholders of ARI as contemplated by Section 1.8(a) hereof,
and compliance with the governmental and regulatory requirements described in
Section 2.5 hereof, neither the execution, delivery and performance of this
Agreement, the Merger Agreement and the ARI Ancillary Agreements by ARI nor the
consummation by ARI of the transactions contemplated hereby and thereby,
including the Subsequent Merger, will (a) conflict with, or result in a breach
of, any of the terms, conditions or provisions of ARI's or any of ARI's
Subsidiaries' Articles of Incor poration or Bylaws (or other organizational or
charter documents), (b) conflict with, result in a breach or violation of, give
rise to a termination right or a default under, result in the acceleration of
performance under (whether or not after the giving of notice or lapse of time or
both), any mortgage, lien, lease, agreement, note, bond, indenture, guarantee or
instrument or any license or franchise granted by or to a third party, in each
case, that is material to ARI's Business or that is referenced in the ARI
Disclosure Schedule, (c) conflict with, or result in a violation of, any
statute, regulation, law, ordinance, writ, injunction, order, judgment or decree
to which ARI or any ARI Subsidiary or any of their assets may be subject, (d)
give rise to a declaration or imposition of any lien, charge, security interest
or encumbrance of any nature whatsoever upon any of the assets of ARI or any ARI
Subsidiary, (e) adversely affect, in any material respect, any franchise,
license, permit or other governmental approval which is material to ARI's
Business or is necessary to enable ARI or any ARI Subsidiary to carry on its
business as presently conducted or is required of any employee or agent of ARI
or any ARI Subsidiary to enable each of them to carry out such person's duties
on behalf of ARI or any ARI Subsidiary or (f) require the consent of any third
party.
Section 2.7 FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED LIABILITIES.
(a) ARI has furnished iGo with the unaudited consolidated
balance sheets of ARI and its Subsidiaries as of November 30, 1999 and the
related audited consolidated statements of operations, cash flows and changes in
shareholders' equity for the year then ended, and the unaudited interim balance
sheet and related consolidated statements of operations, cash flows and changes
in shareholders' equity for the 11-month period ended November 30, 1999
(collectively, the "ARI FINANCIAL STATEMENTS"). The ARI Financial Statements,
including the notes thereto, (i) are in accordance with the respective books of
ARI and the its Subsidiaries; (ii) have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved; (iii) present fairly the consolidated financial position of
ARI and the ARI Subsidiaries as of the respective dates thereof and the
consolidated results of operations and cash flows of ARI for the respective
periods indicated therein; and (iv) do not reflect any material items of
nonrecurring income except as stated therein. Since January 1, 1999 there has
been no change in ARI's accounting principles, methods or policies, except as
described in the notes to the ARI Financial Statements and except that the
unaudited interim financial statements (A) are subject to normal year-end audit
adjustments which are not expected to be material in the aggregate and (B) do
not include footnotes.
(b) ARI has no liabilities of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, which were
not disclosed or provided for in the ARI Financial Statements or the notes
thereto other than obligations not required to be disclosed or provided for
under generally accepted accounting principles and liabilities incurred since
January 1, 1999, which are not individually or in the aggregate, material to
ARI's Business. All reserves set forth on the ARI Financial Statements or the
notes thereto were adequate. There are no loss contingencies (as such term is
used in Statement of Financial Accounting Standards No. 5) which were not
adequately provided for in the ARI Financial Statements or reflected in the
notes thereto.
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(c) The accounts receivable shown on the ARI Financial
Statements at November 30, 1999 are collectible in the ordinary and usual course
of business, and are not subject to any defense or right of set-off that may be
asserted or any claim of set-off that may be made, other than as reflected in
the allowance for doubtful accounts shown on the consolidated balance sheet
contained in the ARI Financial Statements at November 30, 1999. The reserve for
doubtful accounts is adequate, and the values at which accounts receivable are
carried on such November 30, 1999 consolidated balance sheet reflect the
policies of ARI consistent with ARI's past practice and are in accordance with
generally accepted accounting principles applied on a consistent basis.
(d) ARI makes and keeps accurate books and records reflecting
in all material respects its assets and maintains internal accounting controls
which provide reasonable assurance that (i) transactions are executed in
accordance with management's authorization, (ii) transactions are recorded to
permit preparation of ARI's financial statements and to maintain accountability
in all material respects for the assets of ARI, (iii) access to the assets of
ARI is permitted only in accordance with management's authorization, and (iv)
the recorded accountability of the assets of ARI is compared with existing
assets at reasonable intervals.
Section 2.8 ABSENCE OF CHANGES. Since January 1, 1999, ARI has
conducted its business only in the ordinary course consistent with past practice
and there has or have been no (a) material adverse change in ARI's Business or
any development known to ARI that is reasonably expected to cause a material
adverse change in ARI's Business; (b) damage, destruction or loss (whether or
not covered by insurance) materially and adversely affecting any assets material
to ARI's Business; (c) change by ARI or its Subsidiaries in accounting
principles or methods except insofar as may be required by a change in generally
accepted accounting principles; (d) revaluation by ARI or any of its
Subsidiaries of any of their assets, including, without limitation, writing down
the value of inventory or writing off notes or accounts receivable; (e)
amendments or changes in the Articles of Incorporation or Bylaws of ARI; (f)
capital expenditures by ARI or additions of equipment to existing leases
exceeding $10,000 in the aggregate; (g) destruction, damage to, or loss of any
assets of ARI (whether or not covered by insurance); (h) labor trouble or claim
of wrongful discharge, discrimination or sexual harassment of which ARI has
received written notice or of which ARI is aware, or other unlawful labor
practice or action; (i) declaration, setting aside or payment of a dividend or
other distribution with respect to the shares of capital stock of ARI, or any
direct or indirect redemption, purchase or other acquisition by ARI of any of
its shares of capital stock; (j) increase in the salary or other compensation
payable or to become payable by ARI to any of its officers, directors or
employees, or the declaration, payment or commitment or any obligation of any
kind for the payment by ARI of a bonus or other additional salary or
compensation to any such person; (k) acquisition, sale or transfer of any
material asset of ARI other than in the ordinary course of business; (l)
amendment or termination of any contract, agreement or license to which ARI is a
party; (m) loan by ARI to any person or entity, or guarantee by ARI of any loan,
other than advances to employees for travel and business expenses in the
ordinary course of business and consistent with past practices; (n) waiver or
release of any material right or claim of ARI, including any write-off or other
compromise of any account receivable of ARI; (o) the commencement or notice or
8
threat of commencement of any governmental proceeding against or investigation
of ARI or its affairs; or (p) negotiation or agreement by ARI or the ARI
Shareholders to do any of the things described in the preceding clauses (a)
through (o), other than negotiations with iGo regarding the transactions
contemplated by this Agreement.
Section 2.9 CONTRACTS AND COMMITMENTS.
(a) Neither ARI nor any of its Subsidiaries is a party or
subject to:
(i) Any union contract or collective bargaining agreement
or any employment contract or arrangement, written or oral, providing for future
compensation with any officer, consultant, director or employee which is not
terminable by it or its Subsidiary on 30 days' notice or less without penalty or
obligation to make payments related to such termination, other than (A) (in the
case of employees other than executive officers) such severance agreements as
are not different from standard arrangements offered to employees generally in
the ordinary course of business consistent with ARI's past practices, a
description of which is set forth in the ARI Disclosure Schedule and (B) such
agreements as may be imposed or implied by law;
(ii) Any plans, contracts or arrangements, written or
oral, which collectively require aggregate payments by ARI in excess of $10,000
for bonuses, pensions, deferred compensation, severance pay or benefits,
retirement payments, profit-sharing, or the like;
(iii) Any joint marketing, joint development or joint
venture contract or arrangement or any other agreement which has involved or is
expected to involve a sharing of profits with other persons;
(iv) Any existing OEM agreement, distribution agreement,
volume purchase agreement, or other similar agreement in which the annual amount
involved in 1998 exceeded, or is expected to exceed in 1999 or any subsequent
year, $10,000 or pursuant to which ARI has granted or received most favored
customer provisions or exclusive marketing rights related to any product, group
of products or territory;
(v) Any lease for real or personal property pursuant to
which the amount of payments which ARI is required to make on an annual basis
exceeds $10,000;
(vi) Any agreement, contract, mortgage, indenture, lease,
instrument, license, franchise, permit, concession, arrangement, commitment or
authorization which may be, by its terms, terminated or breached by reason of
the execution of this Agreement, the Merger Agreement or any ARI Ancillary
Agreement, the closing of the Merger, or the consummation of the transactions
contemplated hereby or thereby, including the Subsequent Merger;
(vii) Except for trade indebtedness incurred in the
ordinary course of business, any instrument evidencing or related in any way to
indebtedness in excess of $10,000 incurred in the acquisition of companies or
other entities or indebtedness in excess of $10,000 for borrowed money by way of
direct loan, sale of debt securities, purchase money obligation, conditional
sale, guarantee, indemnification or otherwise;
9
(viii) Any license agreement, either as licensor or
licensee;
(ix) Any contract containing covenants purporting to limit
ARI's freedom or that of any of its Subsidiaries to compete in any line of
business or in any geographic area or with any third party;
(x) Any agreement, contract or commitment relating to
capital expenditures and involving future obligations in excess of $10,000; or
(xi) Any other agreement, contract or commitment which is
material to ARI's Business.
(b) Each agreement, contract, mortgage, indenture, plan,
lease, instrument, permit, concession, franchise, arrangement, license and
commitment listed in the ARI Disclosure Schedule is valid and binding on ARI or
its Subsidiaries, as applicable, and is in full force and effect, and neither
ARI nor any of its Subsidiaries, nor to the knowledge of ARI, any other party
thereto, has breached any material provision of, or is in default under the
terms of, any such agreement, contract, mortgage, indenture, plan, lease,
instrument, permit, concession, franchise, arrangement, license or commitment.
(c) None of the 20 largest customers of ARI or its
Subsidiaries during the twelve months ended November 30, 1999 (determined on the
basis of both revenues and bookings during such period) has materially reduced
or terminated, or has notified ARI in writing that it intends to reduce or
terminate, the amount of its business with ARI or any of its Subsidiaries.
(d) There is no agreement, judgment, injunction, order or
decree binding upon ARI or its Subsidiaries which has or could reasonably be
expected to have the effect of prohibiting or materially impairing any material
current business practice of ARI or its Subsidiaries, any acquisition of
material property by ARI or its Subsidiaries or the conduct of business by ARI
or its Subsidiaries as currently conducted or as proposed to be conducted by ARI
or its Subsidiaries.
Section 2.10 LEGAL PROCEEDINGS. Each of ARI and its Subsidiaries is not
in violation of, and has not received any notice of any violation of (a) any
applicable statute, law, regulation, ordinance, writ, injunction, order,
judgment or decree, the effect of which violation could reasonably, individually
or in the aggregate, be expected to be materially adverse to ARI's Business, or
(b) any provision of the Articles of Incorporation or Bylaws (or other
organizational or charter document) of ARI or any ARI Subsidiary. There is no
order, writ, injunction, judgment or decree outstanding, and no legal,
administrative, arbitration or other proceeding, action, suit or governmental
investigation or inquiry against or relating to ARI or any of ARI's Subsidiaries
or their assets or business ("ARI LEGAL PROCEEDINGS") pending or, to the
knowledge of ARI, threatened and, to the knowledge of ARI, there are no claims
(including unasserted claims as to which there has been a manifestation by a
potential claimant of an awareness of such claim or it is considered probable
that a claim will be asserted and there is a reasonable possibility that the
10
outcome will be unfavorable, all as such terms are used in Statement of
Financial Accounting Standards No. 5), against or relating to ARI or any of
ARI's Subsidiaries or their assets or business, which pending or threatened ARI
Legal Proceedings or claims would reasonably be expected to have, individually
or in the aggregate, a material adverse effect on ARI's Business. There is no
ARI Legal Proceeding which in any manner challenges or seeks to prevent, enjoin,
alter or delay any of the transactions contemplated hereby. There are no
existing liabilities that require ARI or any ARI Subsidiary to indemnify its
officers and directors for acts or omissions by such persons or existing
agreements to provide indemnification for such liabilities. The ARI Disclosure
Schedule sets forth with respect to each ARI Legal Proceeding, to the extent
that the aggregate remedies or damages claimed for each such complaint are
unspecified, involve specific performance or injunctive relief or exceed
$10,000, the forum, the parties thereto, a brief description of the subject
matter thereof and the amount of damages claimed.
Section 2.11 ERISA MATTERS.
(a) Set forth in Section 2.11(a) of the ARI Disclosure
Schedule is a true and complete list of all employees of ARI, including current
wage or salary. In addition, set forth in Section 2.11(a) of the ARI Disclosure
Schedule contains a true and complete list of all oral and written employment
contracts and all development and consulting contracts of ARI. Copies of all
such employment contracts and developer and consulting contracts have been
delivered to iGo. All such contracts are valid and are in full force and effect
in all respects, and neither ARI, nor any other party is in breach or default of
any such contract. ARI has no written or oral agreement or commitment to pay any
person anything of value upon or in connection with the termination of such
person's employment or engagement by ARI.
(b) All past and present directors, officers, employees,
developers and consultants of ARI who have had and who have access to the
Intellectual Property (as defined below) and other proprietary information of
ARI had and have executed and delivered to ARI agreements regarding the
confidentiality and non-disclosure of such Intellectual Property and proprietary
information and the assignment of intellectual property rights to ARI. All such
agreements are valid and remain in full force and effect, and neither ARI, nor
any other party is in breach or default of any such agreement.
(c) ARI has no knowledge of any Company employee that intends
to leave ARI's employ.
(d) To the knowledge of ARI, no employee of ARI is in material
violation of any contract or agreement, or any restrictive covenant, relating to
the right of any such employee to be employed by ARI or with respect to security
clearance, trade secrets or proprietary information of others, and the
employment of any employee of ARI does not subject ARI to any liability to any
third party.
(e) Except for the plans of ARI set forth in Section 2.11(e)
of the ARI Disclosure Schedule (the "PLANS"), neither ARI nor any corporation,
partnership or other trade or business, whether or not incorporated, which is or
has been treated as a single employer or controlled group member with ARI
pursuant to Section 4001 of the Employee Retirement Income Security Act of 1974,
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as amended (together with the rules and regulations promulgated thereunder
("ERISA")) or Code Section 414 (each such entity being referred to herein as an
"ERISA AFFILIATE") maintains or contributes to or has any liability with respect
to any "employee benefit plan" as that term is defined in Section 3(3) of ERISA,
and, or any other bonus, incentive, compensation, profit sharing, stock,
severance, retirement, health, life, disability, group insurance, vacation,
holiday, fringe benefit, employment, stock option, stock purchase, stock
appreciation right, supplemental unemployment, layoff or consulting plan,
agreement, policy or understanding (whether written or oral, qualified or
nonqualified, currently effective or terminated). True and complete copies of
all the Plan documents and summary plan descriptions have been furnished to iGo
(along with all related trust agreements, insurance contracts or other funding
agreements which implement each Plan, and all other documents, records or other
materials related thereto reasonably requested by iGo).
(f) With respect to each Plan, the requirements of ERISA, the
Code (including, without limitation Part 6 of Subtitle B of Title I of ERISA and
Sections 105(h) and 4980B of the Code) and all other applicable laws have been
fulfilled in all respects, and copies of all filings with the Internal Revenue
Service and the Department of Labor or other applicable Governmental Entity for
the three most recent plan years for the Plans have been furnished to iGo. No
written or oral representations have been made to any employee or former
employee of ARI promising or guaranteeing any employer payment or funding for
the continuation of medical, dental, life or disability coverage for any period
of time beyond the end of the current plan year (except to the extent of
coverage required under Section 4980B of the Code).
(g) Neither ARI nor any ERISA Affiliate has ever (i)
maintained or contributed to any plan subject to Section 412 of the Code and
Section 302 of ERISA or (ii) contributed to any "multi-employer plan," as such
term is defined in Section 3(37) of ERISA, and neither ARI nor any ERISA
Affiliate has effected either a "complete withdrawal" or a "partial withdrawal,"
as those terms are defined in Sections 4203 and 4205, respectively, of ERISA,
from any such multi-employer plan.
(h) All bonus, profit sharing, incentive, commission or other
compensation of any kind with respect to work done have been fully accrued on
the Financial Statements.
(i) Each Plan that is an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA) meets the requirements of a "qualified plan"
under Section 401(a) of the Code in form and in operation, and such Plan, and
each trust (if any) forming a part thereof, has received a favorable
determination letter, or a favorable determination letter has been applied for,
from the Internal Revenue Service as to the qualification under the Code of such
Plan and the tax-exempt status of such related trust, and nothing has occurred
since the date of such determination letter, or request therefor, that could
reasonably be expected to adversely affect the qualification of such Plan or the
tax-exempt status of such related trust.
(j) There are no unfunded liabilities existing under any Plan,
and, subject to compliance with applicable notice requirements under ERISA and
state laws, each Plan could be terminated promptly following the Effective Time
with no liability to iGo, ARI, any ERISA Affiliate or any person that is under
common control, or is treated as a single employer, with iGo under Section 414
of the Code or ERISA Section 4001.
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(k) With respect to each Plan (i) there have been no
non-exempt prohibited transactions as defined in Section 406 of ERISA or Section
4975 of the Code, (ii) no fiduciary (as defined in Section 3(21) of ERISA) has
liability for breaching of fiduciary duty or any other failure to act or comply
in connection with the administration or investment of assets in such Plan, and
(iii) no actions, investigations, suits or claims with respect to the assets
thereof (other than routine claims for benefits) are pending or, to the
knowledge of the Shareholders, threatened, and the Shareholders have no
knowledge of any facts that would give rise to or could reasonably be expected
to give rise to any such actions, suits or claims.
Section 2.12 TAXES.
(a) DEFINITIONS. For purposes of this Agreement, the following
definitions shall apply:
(i) The term "TAXES" shall mean all taxes, however
denominated, including any interest, penalties or other additions to tax that
may become payable in respect thereof, imposed by any federal, territorial,
state, local or foreign government or any agency or political subdivision of any
such government, which taxes shall include, without limiting the generality of
the foregoing, all income or profits taxes (including but not limited to,
federal income taxes and state income taxes), payroll and employee withholding
taxes, unemployment insurance, social security taxes, sales and use taxes, ad
valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business
license taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers' compensation, and other
governmental charges, and other obligations of the same or of a similar nature
to any of the foregoing, which are required to be paid, withheld or collected.
(ii) The term "RETURNS" shall mean all reports, estimates,
declarations of estimated tax, information statements and returns relating to,
or required to be filed in connection with, any Taxes, including information
returns or reports with respect to backup withholding and other payments to
third parties.
(iii) The term "CODE" shall mean the Internal Revenue Code
of 1986, as amended.
(b) RETURNS FILED AND TAXES PAID. All Returns required to be
filed by or on behalf of ARI have been duly filed on a timely basis (or requests
for extensions to file ARI's Returns have been timely filed) and such Returns
are true, complete and correct. All Taxes shown to be payable on the Returns or
on subsequent assessments with respect thereto, and all payments of estimated
Taxes required to be made by or on behalf of ARI under Section 6655 of the Code
or comparable provisions of state, local or foreign law, have been paid in full
on a timely basis or have been accrued on the Financial Statements, and no other
Taxes are payable by ARI with respect to items or periods covered by such
Returns (whether or not shown on or reportable on such Returns) or with respect
to any period prior to the date of this Agreement. ARI has withheld and paid
over all Taxes required to have been withheld and paid over, and complied with
all information reporting and backup withholding requirements, including
maintenance of required records with respect thereto, in connection with amounts
paid or owing to any employee, creditor, independent contractor, or other third
party. There are no liens on any of the assets of ARI with respect to Taxes,
13
other than liens for Taxes not yet due and payable or for Taxes that ARI is
contesting in good faith through appropriate proceedings and for which
appropriate reserves have been established. ARI has not been at any time a
member of any partnership or joint venture for a period for which the statue of
limitations for any Tax potentially applicable as a result of such membership
has not expired.
(c) TAX RESERVES. Except for Taxes described on the ARI
Disclosure Schedule, the amount of ARI's liability for unpaid Taxes for all
periods ending on or before the date of this Agreement does not, in the
aggregate, exceed the amount of the current liability accruals for Taxes
(excluding reserves for deferred Taxes) solely with respect to ARI reflected on
the ARI Financial Statements, and the amount of ARI's liability for unpaid Taxes
for all periods ending on or before the Closing Date will not, in the aggregate,
exceed the amount of the current liability accruals for Taxes (excluding
reserves for deferred Taxes) solely with respect to ARI reflected on the balance
sheet as of the Closing Date.
(d) RETURNS FURNISHED. ARI has made available to iGo true and
complete copies of (i) relevant portions of income tax audit reports, statements
of deficiencies, closing or other agreements received by or on behalf of ARI
relating to Taxes, and (ii) all federal and state income or franchise tax
returns and state sales, use and property tax returns for ARI for all periods
ending on and after December 31, 1995. ARI has never been a member of an
affiliated group of corporations filing consolidated returns or a unitary group
of corporations filing combined returns. ARI does no business in and derives no
income from any state other than states for which Returns have been duly filed
and made available to iGo.
(e) TAX DEFICIENCIES; AUDITS; STATUTES OF LIMITATIONS. The
Returns of ARI have never been audited by a government or taxing authority, nor
is any such audit in process, pending or threatened. No deficiencies exist or
have been asserted or are expected to be asserted with respect to Taxes of ARI,
and ARI has not received written notice nor does it expect to receive notice
that it has not filed a Return or paid Taxes required to be filed or paid by it.
ARI is neither a party to any action or proceeding for assessment or collection
of Taxes, nor has such event been asserted or threatened against ARI or any of
its assets. No waiver or extension of any statute of limitations is in effect
with respect to Taxes or Returns of ARI. ARI has disclosed on its federal income
tax returns all positions taken therein that could give rise to a substantial
understatement penalty within the meaning of Code Section 6662.
(f) TAX SHARING AGREEMENTS. ARI is not (nor has it ever been)
a party to any tax sharing agreement.
(g) TAX ELECTIONS AND SPECIAL TAX STATUS. ARI is not a party
to any safe harbor lease within the meaning of Section 168(f)(8) of the Code, as
in effect prior to amendment by the Tax Equity and Fiscal Responsibility Act of
1982. ARI is not, nor has it been, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code, and iGo is
not required to withhold tax by reason of Section 1445 of the Code. ARI is not
is a "consenting corporation" under Section 341(f) of the Code. ARI has not
entered into any compensatory agreements with respect to the performance of
services which payment thereunder would result in a nondeductible expense to ARI
pursuant to Section 280G of the Code or an excise tax to the recipient of such
14
payment pursuant to Section 4999 of the Code. ARI has not participated in an
international boycott as defined in Code Section 999. ARI has not agreed to, nor
is it required to make any adjustment under Code Section 481(a) by reason of, a
change in accounting method, and it does not otherwise have any income
reportable for a period ending after the Closing Date attributable to a
transaction or other event (e.g., an installment sale) occurring prior to the
Closing Date involving in excess of $10,000. ARI is not nor has it been a
"reporting corporation" subject to the information reporting and record
maintenance requirements of Section 6038A and the regulations thereunder.
(h) LIMITATIONS. ARI is not obligated to make any payments and
is not a party to any agreement that under certain circumstances could obligate
it to make any payments that will not be deductible under Code Section 280G. ARI
has no net operating losses or other tax attributes currently subject to
limitation under Code Sections 382, 383, or 384 (or comparable provisions of
state law).
(i) S CORPORATION. ARI has made a valid election to be treated
as an S Corporation for Federal income tax purposes under Subchapter S of the
Code, and has filed a Form 2553 for such purpose with the Internal Revenue
Service which was executed by each of the relevant shareholders of ARI. Before
giving effect to the transactions contemplated by this Agreement (i) ARI's
election to be treated as an S Corporation has not been revoked or terminated
and continues, and will continue, in full force and effect through the Closing
Date, and (ii) no shares of ARI's capital stock have been transferred to or are
owned by any person or entity whose ownership thereof would cause termination of
such election.
Section 2.13 INTELLECTUAL PROPERTY.
(a) ARI owns, or is licensed or otherwise possesses legally
enforceable rights to use all patents, trademarks, trade names, service marks,
copyrights and any applications therefor, technology, know-how and tangible and
intangible proprietary information or material that are used or proposed to be
used in the business of ARI as currently conducted or as proposed to be
conducted that are material to such business or where the failure to have such
right would result or would be expected to result in a material adverse effect
on ARI's Business (the "INTELLECTUAL PROPERTY"). Section 2.13 of the ARI
Disclosure Schedule sets forth all patents, registered and unregistered
trademarks and service marks, registered and unregistered copyrights, trade
names and service marks, and any applications therefor, included in the
Intellectual Property, and specifies the jurisdictions in which each such
Intellectual Property right has been issued or registered or in which an
application for such issuance and registration has been filed, including the
respective registration or application numbers and the names of all registered
owners. Section 2.13 of the ARI Disclosure Schedule also sets forth (i) all
licenses, sublicenses and other agreements to which ARI is a party and pursuant
to which any person is authorized to use any Intellectual Property and (ii) all
licenses, sublicenses and other agreements to which ARI is a party and pursuant
to which ARI is authorized to use any patents, trademarks, trade names, service
marks, copyrights and any applications therefor, technology, know-how and
tangible and intangible proprietary information or material of any third party
(the "THIRD PARTY INTELLECTUAL PROPERTY RIGHTS"), and Section 2.13 of the ARI
Disclosure Schedule includes the identity of all parties to such licenses,
sublicense and other agreements, a description of the nature and subject matter
thereof, the applicable royalty rates and the term thereof.
15
(b) The execution and delivery of this Agreement and the
performance by ARI of its obligations hereunder will not (i) impair ARI's
rights, (ii) alter the rights or obligations of any third party under, or (iii)
violate any license, sublicense or other agreement described or required to be
described on the Disclosure Schedule, nor is ARI currently in violation of any
such license, sublicense or other agreement described or required to be
described on the Disclosure Schedule. No claims with respect to the Intellectual
Property, any trade secret of ARI or any Third Party Intellectual Property
Rights (to the extent arising out of any use, reproduction or distribution of
such Third Party Intellectual Property Rights by or through ARI) have been
asserted or are, to the knowledge of ARI and the ARI Shareholders, threatened by
any person or entity, nor, to the knowledge of ARI and the ARI Shareholders, are
there any valid grounds for any claims (i) to the effect that the manufacture,
sale, licensing or use of any product used, sold or licensed or proposed for
use, sale or license by ARI infringes on any Third Party Intellectual Property
Right or trade secret; (ii) against the use by ARI of any patents, trademarks,
trade names, service marks, copyrights, technology or know-how used in ARI's
business as cur rently conducted or as proposed to be conducted; (iii)
challenging the ownership, validity, enforceability or effectiveness of any
Intellectual Property or any trade secret of ARI or (iv) challenging ARI's
license or legally enforceable right to use any Third Party Intellectual
Property Rights. All patents, registered trademarks, service marks and
copyrights held by ARI are valid and subsisting.
(c) No Intellectual Property or trade secret of ARI or, to
ARI's knowl edge, Third Party Intellectual Property Right to which ARI holds a
license or sublicense is subject to any outstanding order, judgment, decree,
stipulation or agreement restricting in any manner the licensing thereof by ARI.
ARI has not entered into any agreement to indemnify any other person against any
charge of infringement of any Intellectual Property, any trade secret of ARI or
any Third Party Intellectual Property Right.
Section 2.14 ENVIRONMENTAL MATTERS.
(a) No underground storage tanks and no amount of any
substance that has been designated by any Governmental Entity or by applicable
state law to be radioactive, toxic, hazardous or otherwise a danger to health or
the environment, including, without limitation, PCBs, asbestos, petroleum,
urea-formaldehyde and all substances listed as hazardous substances pursuant to
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, or defined as a hazardous waste pursuant to the Untied States
Resource Con servation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to such laws (a "HAZARDOUS MATERIAL"), is present, as a
result of the actions of ARI, or, to the knowledge of ARI, as of result of any
actions of any third party or otherwise, in, on or under any property, including
the land and the improvements, ground water and surface water thereof, that ARI
has at any time owned, operated, occupied or leased.
(b) At no time prior to the Effective Time has ARI
transported, stored, used, manufactured, disposed of, released or exposed its
employees or others to Hazardous Materials in violation of any law in effect on
or before the Effective Time, nor has ARI disposed of, transported, sold or
manufactured any product containing a Hazardous Material (collectively
"HAZARDOUS MATERIALS ACTIVITIES") in violation of any rule, regulation, treaty
or statute promulgated by any Governmental Entity to prohibit, regulate or
control Hazardous Materials or any Hazardous Materials Activities.
16
(c) ARI holds all environmental approvals, permits, licenses,
clear ances and consents (the "ENVIRONMENTAL PERMITS") necessary for the conduct
of ARI's Hazardous Material Activities and other business activities of ARI that
are material to such activities or where the failure to have such Environmental
Permits would result or be expected to result in a material adverse effect on
ARI's Business.
(d) No action, proceeding, revocation proceeding, amendment
proce dure, writ, injunction or claim is pending or, to the knowledge of ARI,
threatened concerning or relating to ARI, any Environmental Permit or any
Hazardous Materials Activity of ARI. ARI is not aware of any fact or
circumstance that could reasonably be expected to involve ARI in any
environmental litigation or impose upon ARI any environmental liability that
would have a material adverse effect on ARI's Business. Section 2.15 CERTAIN
AGREEMENTS. Neither the execution and delivery of this Agreement, the Merger
Agreement and the ARI Ancillary Agreements, nor the consummation of the
transactions contemplated hereby or thereby will (a) result in any payment
(including, without limitation, severance, unemployment compensation, golden
parachute, bonus or otherwise) becoming due to any director or employee of ARI,
under any Plan or otherwise, (b) increase any benefits otherwise payable under
any Plan, or (c) result in the acceleration of the time of payment or vesting of
any such benefits.
Section 2.16 INTERESTS OF OFFICERS AND DIRECTORS. No officer or
director of ARI or any "affiliate" or "associate" (as those terms are defined in
Rule 405 promulgated under the Securities Act) of any such person has had,
either directly or indirectly, a material interest in: (a) any person or entity
which purchases from or sells, licenses or furnishes to ARI or any of its
Subsidiaries any goods, property, technology or intellectual or other property
rights or services; (b) any contract or agreement to which ARI or any of its
Subsidiaries is a party or by which it may be bound or affected; or (c) any
property, real or personal, tangible or intangible, used in or pertaining to
ARI's Business, including any interest in the ARI Intellectual Property Rights.
Section 2.17 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no material
agreement, judgment, injunction, order or decree binding upon ARI or any of its
Subsidiaries which has or could reasonably be expected to have the effect of
prohibiting or materially impairing any business practice of ARI or any of its
Subsidiaries, any acquisition of property by ARI or any of its Subsidiaries or
the conduct of business by ARI or any of its Subsidiaries as currently conducted
or as currently proposed to be conducted by ARI or any of its Subsidiaries.
Section 2.18 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES;
CONDITION OF EQUIPMENT.
(a) The ARI Disclosure Schedule lists all facilities occupied
by ARI or any ARI Subsidiary, and indicates the nature of ARI's or its
Subsidiary's interest in such facilities. ARI and its Subsidiaries have good and
valid title to, or, in the case of leased properties and assets, valid leasehold
interests in, all of their tangible properties and assets, real, personal and
mixed, used in their business, free and clear of any liens, charges, pledges,
security interests or other encumbrances, except as reflected in the ARI
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Financial Statements or except for such imperfections of title and encumbrances,
if any, which are not substantial in character, amount or extent, and which do
not materially detract from the value, or interfere with the present use, of the
property subject thereto or affected thereby.
(b) The equipment owned or leased by ARI or its Subsidiaries
is, taken as a whole, (i) adequate for the conduct of the business of ARI and
its Subsidiaries consistent with their past practice, (ii) suitable for the uses
to which it is currently employed, (iii) in good operat ing condition, (iv)
regularly and properly maintained, (v) not obsolete, dangerous or in need of
renewal or replacement, except for renewal or replacement in the ordinary course
of business, and (vi) free from any defects, except, with respect to clauses
(ii) through (vi) above, as would not have been a material adverse effect on
ARI's Business.
Section 2.19 COMPLIANCE WITH LAWS. ARI has complied, and will be on the
Closing Date in compliance with all applicable, laws, ordinances, regulations
and rules, and all orders, writs, injunctions, awards, judgments and decrees,
applicable to ARI or to the assets, properties and business of ARI (except where
the failure to be in compliance would not have a material adverse effect on
ARI's Business), including, without limitation: (a) all applicable federal and
state securities laws and regulations, (b) all applicable federal, state and
local laws, ordinances and regulations, and all orders, writs, injunctions,
awards, judgments and decrees, pertaining to (i) the sale, licensing, leasing,
ownership or management of ARI's owned, leased or licensed real or personal
property, products, technical data and Intellectual Property, (ii) employment
and employment practices, terms and conditions of employment, and wages and
hours, and (iii) safety, health, fire prevention, environmental protection,
building standards, zoning and other similar matters, and (c) the Export
Administration Act and regulations promulgated thereunder and all other laws,
regulations, rules, orders, writs, injunctions, judgments and decrees applicable
to the export or re-export of controlled commodities or technical data. ARI has
received all material permits and approvals from, and has made all material
filings with, third parties, including government agencies and authorities, that
are necessary in connection with its present business.
Section 2.20 LABOR MATTERS.
(a) ARI and its Subsidiaries are in compliance in all material
respects with all currently applicable laws and regulations respecting
employment, discrimination in employment, terms and conditions of employment and
wages and hours and occupational safety and health and employment practices, and
are not engaged in any unfair labor practice. ARI and each of its Subsidiaries
has complied in all material aspects with all applicable provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and has no
material obligations with respect to any former employees or qualifying
beneficiaries thereunder. Neither ARI nor any of its Subsidiaries has received
any notice from any Governmental Entity, and there has not been asserted before
any Governmental Entity, any claim, action or proceeding to which ARI or any of
its Subsidiaries is a party or involving ARI or any of its Subsidiaries, and
there is neither pending nor, to ARI's knowledge, threatened any investigation
or hearing concerning ARI or any of its Subsidiaries arising out of or based
upon any such laws, regulations or practices. Except as is not material to ARI's
Business, neither ARI nor any ARI Subsidiary has given to or received from, or
anticipates giving to or receiving from, any employee of ARI or any ARI
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Subsidiary notice of termination of employment. The ARI Disclosure Schedule sets
forth the terms pursuant to which all amounts may be payable (whether currently
or in the future) to current or former officers, directors, or employees of ARI
or any ARI Subsidiary as a result of or in connection with the Merger.
(b) Neither ARI nor any ARI Subsidiary is a party to any labor
agreement with respect to its employees with any labor organization, union,
group or association and there are no employee unions (nor any other similar
labor or employee organizations) under local statutes, custom or practice.
Neither ARI nor any ARI Subsidiary has experienced any attempt by organized
labor or its representatives to make ARI conform to demands of organized labor
relating to its employees or to enter into a binding agreement with organized
labor that would cover the employees of ARI or any ARI Subsidiary. To ARI's
knowledge, there is no labor strike or labor disturbance pending or threatened
against ARI nor is any grievance currently being asserted. Neither ARI nor any
ARI Subsidiary has experienced a work stoppage or other labor difficulty.
Section 2.21 INSURANCE. The ARI Disclosure Schedule contains a complete
and accurate list of all policies or binders of fire, liability, title, worker's
compensation, product liability and other forms of insurance maintained by ARI
and the ARI Subsidiaries. Neither ARI nor any ARI Subsidiary is in default under
any of such policies or binders, and neither ARI nor any ARI Subsidiary has
failed to give any notice or to present any claim under any such policy or
binder in a due and timely fashion. There are no facts known to ARI upon which
an insurer might be justified in reducing coverage or increasing premiums on
existing policies or binders. There are no outstanding unpaid claims under any
such policies or binders. All policies and binders provide sufficient coverage
for the risks insured against, are in full force and effect on the date hereof
and shall be kept in full force and effect through the Effective Time.
Section 2.22 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement. In the event that the
preceding sentence is in any way inaccurate, ARI agrees to indemnify and hold
harmless iGo and Sub from any liability for any commission or compensation in
the nature of a finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which ARI or the ARI Shareholders is
responsible.
Section 2.23 DISCLOSURE. No representation or warranty made by ARI in
this Agreement, nor any document, written information, statement, financial
statement, certificate, schedule or exhibit prepared and furnished or to be
prepared and furnished by ARI or its representatives pursuant hereto, contains
or will contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements or facts contained
herein or therein not misleading in light of the circumstances under which they
were furnished. To the knowledge of ARI after reasonable inquiry, there is no
event, fact or condition that has resulted in, or could reasonably be expected
to result in, a material adverse effect on ARI's Business that has not been set
forth in this Agreement or in the ARI Disclosure Schedule. ARI has provided
copies to iGo of all documents and information requested by iGo pursuant to
iGo's diligence requests.
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Section 2.24 INVESTMENT REPRESENTATIONS. In connection with their
receipt of the Merger Securities, the ARI Shareholders each represent as
follows:
(a) The ARI Shareholder is aware of iGo's business affairs and
financial condition, and has acquired sufficient information about iGo
(including that information in iGo's public securities filings) to reach an
informed and knowledgeable decision to acquire the Merger Securities. The ARI
Shareholder is acquiring the Shares for my own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"DISTRIBUTION" thereof for purposes of the Securities Act.
(b) The ARI Shareholder understands that the Merger Securities
have not been registered under the Securities Act or in any state in reliance
upon specific exemptions therefrom, which exemptions depend upon, among other
things, the bona fide nature of my investment intent as expressed herein. The
ARI Shareholder understands that the Company is under no obligation to register
the Merger Securities for resale on the open market.
(c) By reason of the business or financial experience of the
ARI Shareholder or the ARI Shareholder's professional advisors who are
unaffiliated with the Company, the ARI Shareholder has the capacity to protect
his/her/its own interests in the acquisition of the Merger Securities.
Section 2.25 COMPUTER SYSTEMS. The computer systems and associated
peripheral equipment, computer software, technical and other documentation of
ARI and data entered into or created by the foregoing from time to time
constitute or, when installed will constitute, all such items necessary for the
operation of ARI's Business in the manner operated as of the Closing Date. Each
of such items are Year 2000 Compliant. For purposes hereof, "Year 2000
Compliant" means that such systems (a) can process, manipulate and store data
relating to dates after December 31, 1999 as well as dates on or prior thereto;
(b) can interpret and respond to two-digit year date input in a manner that
resolves any ambiguity as to the century in which the year occurs; and (c) will
function accurately and without interruption before, during, and after January
1, 2000, without any adverse change in operations associated with the advent of
the new century. Disaster recovery plans are in effect and are adequate to
ensure that such systems can be replaced or substituted without material
disruption to the business of ARI.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
IGO AND SUB
As of the date hereof, and as of the Closing Date, except as disclosed
in a document referring specifically to the relevant subsections of this Article
III which is delivered by iGo to ARI prior to execution of this Agreement (the
"iGO DISCLOSURE SCHEDULE"), iGo and Sub hereby represent and warrant to ARI and
the ARI Shareholders as follows:
Section 3.1 CORPORATE ORGANIZATION. iGo and Sub are corporations duly
organized, validly existing and in good standing under the laws of the State of
Delaware and the State of California, respectively, and each has all requisite
corporate power and authority and all neces sary governmental authorizations to
own, lease and operate its properties and to conduct its business as it is now
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being conducted. iGo and Sub are duly qualified or licensed to do business and
are in good standing as foreign corporations in each state or other jurisdiction
in which the nature of their respective businesses or operations or ownership of
their property requires such qualification or licensing, except where the
failure to be so qualified or licensed would not, individually or in the
aggregate, materially and adversely affect the condition (financial or other),
business, properties, prospects (as currently contemplated), net worth or
results of operations of iGo and Sub taken as a whole (collectively, "iGO'S
BUSINESS"). iGo has delivered to ARI complete and correct copies of iGo's
Certificate of Incorporation and Bylaws and Sub's Articles of Incorporation and
Bylaws, in each case as amended to the date hereof.
Section 3.2 CAPITAL STRUCTURE. As of the date hereof the authorized
capital stock of iGo consists of 50,000,000 shares of iGo Common Stock, and
5,000,000 shares of Preferred Stock, $0.001 par value ("iGO PREFERRED STOCK").
At the close of business on December 27, 1999, 19,358,450 shares of iGo Common
Stock were outstanding and no shares of iGo Preferred Stock were outstanding.
All outstanding shares of iGo Common Stock are validly issued, fully paid,
nonassessable and free of preemptive rights. The shares of iGo Common Stock
issuable in connection with the Merger are duly authorized and reserved for
issuance and, when issued in accordance with the terms of this Agreement and the
Merger Agreement, will be validly issued, fully paid, nonassessable and free of
preemptive rights. As of the date hereof, the authorized capital stock of Sub
consists of 1,000 shares of Common Stock, no par value, all of which are validly
issued, fully paid and nonassessable and owned by iGo.
Section 3.3 AUTHORIZATION, EXECUTION AND DELIVERY. iGo and Sub each
has all requisite corporate power and authority (a) to execute and deliver this
Agreement, the Merger Agreement and the agreements attached as exhibits hereto
to which iGo or Sub is a party (the "iGO ANCILLARY AGREEMENTS"), (b) to perform
its respective obligations under this Agreement, the Merger Agreement and the
iGo Ancillary Agreements, and (c) to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance of this Agreement,
the Merger Agreement and the iGo Ancillary Agreements by iGo and Sub and the
consummation by iGo and Sub of the transactions contemplated hereby and thereby
have been duly approved and authorized by all requisite corporate action of iGo
and Sub. This Agreement has been duly executed and delivered by iGo and Sub and,
assuming its due authorization, execution and delivery by ARI, constitutes the
legal, valid and binding obligation of each of them, enforceable in accordance
with its terms. The Board of Directors of iGo has determined that it is
advisable and in the best interest of iGo's stockholders for iGo to enter into a
strategic business combination with ARI upon the terms and subject to the
conditions of this Agreement.
Section 3.4 GOVERNMENTAL APPROVALS AND FILINGS. No approval,
authorization, consent, license, clearance or order of, declaration or
notification to, or filing, registration or compliance with, any Governmental
Entity is required on the part of iGo or Sub in order (a) to permit iGo and Sub
to perform their respective obligations under this Agreement or (b) to prevent
the termination of any right, privilege, license or agreement of iGo, or to
prevent any loss to iGo's Business, by reason of the transactions contemplated
by this Agreement, except for (i) the filing of the Merger Agreement and the
Certificate of Satisfaction from the Franchise Tax Board of the State of
California, as required by the CCC, (ii) the registration requirements of the
Securities Act and of state securities or "Blue Sky" laws and (iii) the rules of
the Nasdaq National Market applicable to the iGo Common Stock.
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Section 3.5 NO CONFLICT. Except for compliance with the governmental
and regulatory requirements described in Section 3.4 hereof, neither the
execution, delivery and performance of this Agreement, the Merger Agreement and
the iGo Ancillary Agreements by iGo and Sub nor the consummation by iGo and Sub
of the transactions contemplated hereby and thereby, including the Subsequent
Merger, will (a) conflict with, or result in a breach of, any of the terms,
conditions or provisions of iGo's Certificate of Incorporation, Sub's Articles
of Incorporation, iGo's Bylaws or Sub's Bylaws, (b) conflict with, result in a
breach or violation of, give rise to a termination right or a default under, or
result in the acceleration of performance under (whether or not after the giving
of notice or lapse of time or both), any mortgage, lien, lease, agreement, note,
bond, indenture, guarantee or instrument or any license or franchise granted by
or to third party that is material to iGo's Business, (c) conflict with, or
result in a violation of, any statute, regulation, law, ordinance, writ,
injunction, order, judgment or decree to which iGo or Sub or any of their
respective assets may be subject, which conflict, breach, default or violation
would materially and adversely affect iGo's Business, (d) give rise to a
declaration or imposition of any lien, charge, security interest or encumbrance
of any nature whatsoever upon any of the assets of iGo or Sub, (e) materially
and adversely affect any franchise, license, permit or other governmental
approval which is material to iGo's Business or is necessary to enable iGo or
Sub to carry on their respective businesses as presently conducted or is
required of any employee or agent thereof to enable each of them to carry out
such person's duties on behalf of iGo or Sub, as the case may be, or (f) require
the consent of any third party.
Section 3.6 REPORTS; ACCURACY OF INFORMATION. iGo has previously
delivered to ARI true and complete copies of (a) iGo's final prospectus dated
October 13, 1999, with respect to its initial public offering of securities, as
filed with the Securities Exchange Commission (the "COMMISSION") pursuant to the
Securities Act, and (b) its Form 10-Q for the fiscal quarter ended September 30,
1999, as filed with the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"). As of their respective dates, such
prospectus and report (collectively, the "PUBLIC FILINGS") (i) complied with all
applicable provisions, rules and regulations of federal securities laws and (ii)
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances in which such statements were
made, not misleading.
Section 3.7 LITIGATION. Except as set forth in the Public Filings,
there is no action, suit, proceeding, investigation or claim pending or, to the
knowledge of iGo, threatened against iGo or any its Subsidiaries which could,
individually or in the aggregate, have a material adverse effect on iGo's
Business or which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay any of the transactions contemplated hereby.
Section 3.8 NO MATERIAL ADVERSE CHANGE. Since the date of the balance
sheet included in iGo's most recently filed report on Form 10-Q, iGo has
conducted its business in the ordinary course and there has not occurred: (a)
any material adverse change in the financial condition, liabilities, assets or
business of iGo; (b) any amendment or change in the Articles of Incorporation or
Bylaws of iGo; (c) any damage to, destruction of or loss of any assets of the
iGo (whether or not covered by insurance) that materially and adversely affects
the financial condition or business of iGo; or (d) any sale of a material amount
of property of iGo, except in the ordinary course of business.
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Section 3.9 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement. In the event that the
preceding sentence is in any way inaccurate, iGo agrees to indemnify and hold
harmless ARI and the ARI Shareholders from any liability for any commission or
compensation in the nature of a finder's fee (and the costs and expenses of
defending against such liability or asserted liability) for which iGo or any of
its directors, officers, partners, employees or representatives is responsible.
Section 3.10 DISCLOSURE. No representation or warranty made by iGo and
Sub in this Agreement, nor any document, written information, statement,
financial statement, certificate, schedule or exhibit prepared and furnished or
to be prepared and furnished by iGo and Sub or their representatives pursuant
hereto, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements or
facts contained herein or therein not misleading in light of the circumstances
under which they were furnished. To the knowledge of iGo and Sub after
reasonable inquiry, there is no event, fact or condition that has resulted in,
or could reasonably be expected to result in, a material adverse effect on the
business of iGo and Sub that has not been set forth in this Agreement or in the
iGo Disclosure Schedule. iGo and Sub have provided copies to ARI and the ARI
Shareholders of all documents and information requested by ARI and the ARI
Shareholders pursuant to their diligence requests.
Section 3.11 TAX MATTERS.
(a) Prior to the Merger, iGo will be in control of Surviving
Corporation within the meaning of Section 368(c) of the Code.
(b) Following the Merger, Surviving Corporation will not issue
additional shares of its stock that would result in iGo losing control of
Surviving Corporation within the meaning of Section 368(c) of the Code.
(c) iGo has no plan or intention to reacquire any of its stock
issued in the Merger.
(d) iGo has no plan or intention to liquidate Surviving
Corporation; to merge Surviving Corporation with or into another corporation; to
sell or otherwise dispose of the stock of Surviving Corporation; or to cause
Surviving Corporation to sell or otherwise dispose of any of the assets of ARI
acquired in the transaction, except for dispositions made in the ordinary course
of business or transfers described in Section 368(a)(2)(C) of the Code.
(e) Following the transaction, Surviving Corporation will
continue the historic business of ARI or use a significant portion of ARI's
business assets in a business.
(f) No stock of Surviving Corporation will be issued in the
transactions.
(g) Neither iGo nor Surviving Corporation are investment
companies as defined in Section 368(a)(iii) and (iv) of the Code.
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(h) Neither iGo nor Surviving Corporation will take any action
prior to, in connection with or following the acquisition of ARI as set forth
herein that would disqualify such acquisition as a tax-free reorganization under
Sections 368(a)(1)(A) and (a)(2)(D) of the Code, and agrees to treat the Merger
consistent therewith, including but not limited to, complying with Treasury
Regulation Section 1.368-3.
ARTICLE IV
COVENANTS OF THE ARI SHAREHOLDERS
Section 4.1 ADVICE OF CHANGES. The ARI Shareholders will promptly
advise iGo in writing of (a) any event occurring subsequent to the date of this
Agreement which would render any representation or warranty of ARI or the ARI
Shareholders contained in this Agreement, untrue or inaccurate as of such future
date, or (b) any material adverse change in ARI's Business.
Section 4.2. STOCK TRANSFER RESTRICTIONS. The ARI Shareholders
acknowledge that the Merger Securities will constitute "restricted securities"
under Rule 144 promulgated under the Securities Act. In addition to the
restrictions on transfer imposed by applicable securities laws, each ARI
Shareholder covenants and agrees not to offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "DISPOSITION") any shares of Merger Securities, any options or
warrants to purchase any shares of Merger Securities or any securities
convertible into or exchangeable for shares of Merger Securities (collectively,
"SECURITIES") now owned or hereafter acquired directly by such ARI Shareholder
or with respect to which such ARI Shareholder has or hereafter acquires the
power of disposition, otherwise than (a) as a bona fide gift or gifts, provided
the donee or donees thereof agree in writing to be bound by this restriction,
(b) as a distribution to partners or shareholders of such ARI Shareholder,
provided that the distributees thereof agree in writing to be bound by the terms
of this restriction, (c) pursuant to a transfer to any trust for the direct or
indirect benefit of the ARI Shareholder or the immediate family of the ARI
Shareholder, provided that the trustee of the trust agrees to be bound by the
terms of this restriction, and provided further that any such transfer shall not
involve a disposition for value, or (d) with the prior written consent of iGo,
for a period commencing on the date hereof and continuing until such
restrictions lapse as to any Merger Securities pursuant to the provisions of
this paragraph. The restrictions set fort in this Section 4.2 shall lapse as to
(i) seventy-five percent (75%) of the Merger Securities acquired by such ARI
Shareholder (or permitted transferee thereof) on the date one (1) year following
the Effective Time of the Merger, (ii) as to twelve and one-half percent
(12-1/2%) of the Merger Securities acquired by such ARI Shareholder (or
permitted transferee thereof) on the date eighteen (18) months following the
Effective Time of the Merger, (iii) and as to the remaining twelve and one- half
percent (12-1/2%) of the Merger Securities acquired by such ARI Shareholder (or
permitted transferee thereof) on the date two (2) years following the Effective
Time of the Merger.
The foregoing restriction has been expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition of
Securities during the restricted period, even if such Securities would be
disposed of by someone other than such holder. Such prohibited hedging or other
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transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index) that
included, relates to or derives any significant part of its value from
Securities. The ARI Shareholders also agree and consent to the entry of stop
transfer instructions with iGo's transfer agent and registrar against the
transfer of shares of Securities held by the ARI Shareholders (or their
permitted transferees) except in compliance with the foregoing restrictions..
ARTICLE V
COVENANT OF IGO AND SUB
Section 5.1 LISTING APPLICATION. iGo will prepare and submit to the
Nasdaq National Market an additional listing application covering the Merger
Securities issuable in connection with the Merger and will use its best efforts
to obtain approval for the listing of such securities upon official notice of
issuance.
ARTICLE VI
MUTUAL COVENANTS
Section 6.1 CONFIDENTIALITY.
(a) In connection with the negotiation of this Agreement, the
preparation for the consummation of the transaction contemplated hereby, and the
performance of obligations hereunder, each party hereto acknowledges that it has
had, and will have, access to confidential information relating to the other
party, including, but not limited to, technical, manufacturing or marketing
information, ideas, methods, developments, inventions, improvements, business
plans, trade secrets, scientific or statistical data, diagrams, drawings,
specifications or other proprietary information relating thereto, together with
all analyses, compilations, studies or other documents, records or data prepared
by the parties or their respective representatives which contain or otherwise
reflect or are generated from such information. All such information is herein
referred to as "CONFIDENTIAL INFORMATION"; provided, however, that the term
"Confidential Information" does not include information received by a party in
connection with the transaction contemplated hereby which (i) is or becomes
generally available to the public other than as a result of a disclosure by such
party or its representatives, (ii) was within such party's possession (as
evidenced by duly authenticated writings) prior to its being furnished to such
party by or on behalf of the other party in connection with the transaction
contemplated hereby, provided that the source of such information was not known
by such party to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the other party
or any other person with respect to such information or (iii) becomes available
to such party on a non-confidential basis from a source other than the other
party or any of its representatives, provided that such source is not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the other party or any other person with
respect to such information.
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(b) Nothing in this Section 6.1 is intended to grant any
rights under any patent or copyright of either party, nor shall this Section 6.1
grant any right in or to the other party's Confidential Information. Each party
shall use the other party's Confidential Information solely for the purpose of
consummating the transaction contemplated by this Agreement and shall use
reasonable efforts to treat all Confidential Information as confidential,
preserve the confidentiality thereof and not disclose any Confidential
Information, except to its representatives and affiliates who need to know such
Confidential Information in connection with the transaction contemplated hereby.
Each party shall cause its representatives to comply with the covenants in the
preceding sentence.
(c) All Confidential Information shall remain the property of
the party who originally possessed such information. In the event of the
termination of this Agreement for any reason whatsoever, iGo shall, and shall
cause its representatives to, promptly return to ARI, and ARI shall, and shall
cause its representatives to, promptly return to iGo, all Confidential
Information (including all copies, summaries and extracts thereof and all
analyses, compilations, studies or other documents, records or data which
contain, reflect or are generated from such Confidential Information) furnished
to iGo or ARI, as the case may be, by the other party in connection with the
transactions contemplated hereby.
(d) If a party or any of its representatives or affiliates is
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process) or is otherwise required by opera tion of law
to disclose any Confidential Information, such party shall provide the other
party with prompt written notice of such request or requirement, which notice
shall, if practicable, be at least 48 hours prior to making such disclosure, so
that the other party may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Agreement. If, in the
absence of a protective order or other remedy or the receipt of such a waiver,
such party or any of its representatives are nonetheless, in the opinion of
counsel, legally compelled to disclose Confidential Information, then such party
may disclose that portion or the Confidential Information which such counsel
advises is legally required to be disclosed, provided that such party uses its
reasonable efforts to preserve the confidentiality of the Confidential
Information, whereupon such disclosure shall not constitute a breach of this
Agreement.
(e) Each party agrees that its obligations provided herein are
necessary and reasonable in order to protect the other party and its business,
and each party expressly agrees that monetary damages would be inadequate to
compensate a party for any breach by the other party of its covenants and
agreements set forth herein. Accordingly, each party agrees and acknowledges
that any such breach or threatened breach will cause irreparable injury to the
other party and that, in addition to any other remedies that may be available,
in law, in equity or otherwise, such party shall be entitled to obtain
injunctive relief against the threatened breach of this Agreement or the
continuation of any such breach, without the necessity of proving actual
damages.
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Section 6.2 EXPENSES. In the event the Merger is not consummated, iGo
and ARI will each separately bear its own expenses incurred in connection with
this Agreement or any transaction contemplated hereby. In the event that the
Merger occurs, iGo agrees to pay the expenses, or to permit the Surviving
Corporation to pay such expenses, not to exceed an aggregate of $50,000, of
ARI's legal, accounting and financial advisors and any parties to whom a finders
fee or other type of fee or payment is due as a direct result of the
transactions contemplated by this Agreement. The parties acknowledge that any
excess fees over and above such $50,000 amount will be borne directly by the ARI
Shareholders; PROVIDED that at the request of the ARI Shareholders any such
excess fees will be paid by iGo or the Surviving Corporation and deducted from
the Merger Cash wired to the ARI Shareholders at the Closing.
Section 6.3 PUBLIC ANNOUNCEMENTS. All parties hereto agree to
cooperate in good faith with to any press release or public statement with
respect to the existence of this Agreement or the transactions contemplated
hereby, and further agree not to issue any such press release or public
statement without the prior written consent of iGo (in the case of a publication
proposed by ARI and/or the ARI Shareholders) on the one hand, or the ARI
Shareholders (in the case of a publication proposed by iGo) on the other;
PROVIDED, HOWEVER, that in the case of announcements, statements,
acknowledgments or disclosures which any party is required by law to make, issue
or release, the making, issuing or releasing of any such announcement,
statement, acknowledgment or disclosure by the party so required to do so by law
shall not constitute a breach of this Agreement if such party shall have given,
to the extent reasonably possible, not less than one calendar day prior notice
to the other party, and shall have attempted, to the extent reasonably possible,
to clear such announcement, statement, acknowledgment or disclosure with the
other party. Each party hereto agrees that it will not unreasonably withhold any
such consent or clearance. If, based upon the advice of its outside legal
counsel, iGo believes it to be necessary to meet its public disclosure
obligations or otherwise desirable; the parties will issue a mutually agreed
upon joint press release announcing the execution and delivery of this
Agreement.
Section 6.4 AGREEMENTS TO COOPERATE. Each party hereto will fully
cooperate with the other parties, their counsel and accountants in connection
with any steps required to be taken as part of its obligations under this
Agreement. Each party will use its best efforts to cause all conditions to this
Agreement to be satisfied as promptly as possible and to obtain all consents and
approvals necessary for the due and punctual performance of this Agreement and
for the satisfaction of the conditions hereof. No party will undertake any
course of action inconsistent with this Agreement or which would make any
representations, warranties or agreements made by such party in this Agreement
untrue or any conditions precedent to this Agreement unable to be satisfied at
or prior to the Closing. In case at any time after the Effective Time of the
Merger any further action is reasonably necessary to carry out the purposes of
this Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of ARI and Sub,
the proper officers and directors of each corporation party to this Agreement
shall take all such necessary action.
Section 6.5 TAXES. The parties hereto acknowledge and agree that (a)
the fair market value of the Merger Securities and other cash consideration
received by the ARI Shareholders will be approximately equal to the aggregate
fair market value of the ARI Capital Stock surrendered in the Merger, and (b)
none of the compensation received by any ARI Shareholder (that is also an
27
employee of ARI) after the Merger will be separate consideration for, or
allocable to, any of his or her ARI shares; none of the Merger Securities
received by any ARI Shareholder (that is also an employee of ARI) in the Merger
will be separate consideration for, or allocable to, any employment agreement;
and the compensation paid to any ARI Shareholder (that is also an employee of
ARI) after the Merger pursuant to arrangements entered into after the Merger
will be for services actually rendered and will be commensurate with amounts
paid to third parties bargaining at arm's length for similar services.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF
IGO AND SUB
The obligations of iGo and Sub under this Agreement to consummate the
Merger will be subject to the satisfaction, or to the waiver by them in the
manner contemplated by Section 12.2, on or before the Closing, of the following
conditions:
Section 7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of ARI contained in this Agreement will be true and correct on and as
of the Effective Time, except for changes contemplated by this Agreement and
except for statements which address items only as of a particular date, with the
same force and effect as if made on and as of the Effective Time, except, in all
such cases, for such breaches, inaccuracies or omissions which in the aggregate
do not have a material adverse effect on iGo's Business.
Section 7.2 PERFORMANCE OF COVENANTS. ARI shall have performed and
complied in all material respects with each and every covenant, agreement and
condition required by this Agreement to be performed or complied with by it
prior to or on the Closing.
Section 7.3 CERTIFICATE. iGo shall have received a certificate signed
by the Chief Executive Officer of ARI to the effect that the conditions set
forth in Section 7.1 and 7.2 have been met.
Section 7.4 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. No order
of any court or administrative agency will be in effect which restrains or
prohibits any transaction con templated hereby or which would limit or otherwise
affect in a material respect iGo's ownership of ARI; no suit, action, or
proceeding by any Governmental Entity or other person or entity, or
investigation or inquiry by any Governmental Entity, will be pending or, in the
case of a Governmental Entity, threatened against iGo, Sub or ARI, which
challenges the validity or legality, or seeks to restrain the consummation, of
any transaction contemplated hereby, including the Subsequent Merger, or which
seeks to limit or otherwise affect iGo's ownership of ARI, and no written advice
shall have been received by iGo, Sub, ARI or their respective counsel from any
Governmental Entity, and remain in effect, stating that an action or proceeding
will, if the Merger is consummated or sought to be consummated, be filed seeking
to invalidate or restrain the Merger or limit or otherwise affect iGo's
ownership of ARI and there shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which would (a) make the consummation of the Merger illegal, (b) render
iGo, Sub or ARI unable to consummate the Merger or (c) prohibit iGo's, Sub's or
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ARI's ownership or operation of all or any material portion of the business or
assets of ARI and its Subsidiaries, taken as a whole, as a result of the Merger,
or compel iGo, Sub or ARI to dispose of or hold separate all or any material
portion of the business or assets of ARI and its Subsidiaries, taken as a whole.
Section 7.5 APPROVALS AND CONSENTS. All approvals and authorizations of
the Merger set forth in Articles II or III hereof and in the ARI Disclosure
Schedule shall have been obtained.
Section 7.6 DISSENTING SHARES. There shall be no "dissenting shares"
under Section 1300 of the CCC among the ARI Capital Stock.
Section 7.7 NO MATERIAL ADVERSE CHANGE. There shall have been no
material adverse change in ARI's Business from the date hereof through the
Closing Date.
Section 7.8 RESIGNATION OF OFFICERS AND DIRECTORS. The officers and
directors of ARI in office immediately prior to the Effective Time shall have
resigned as officers and directors of the Surviving Corporation effective as of
the Effective Time.
Section 7.9 ARI OPTIONS AND WARRANTS. All warrants, options or other
rights to purchase shares of ARI Capital Stock shall have terminated by full
exercise, cancellation or other means.
Section 7.10 NON-COMPETITION AGREEMENTS. iGo shall have received at or
prior to the Closing from Xxx Xxxxxxx and Xxxxx Xxxxxx a Non-Competition
Agreement in substantially the form attached hereto as EXHIBITS C-1 AND C-2
executed by such persons.
Section 7.11 EXCHANGE AND ESCROW AGREEMENT. iGo, the Indemnifying ARI
Shareholders (as defined in Section 10.1 (a) below) and U.S. Stock Transfer
Corporation shall have entered into an Exchange and Escrow Agreement
substantially in the form attached hereto as EXHIBIT D (the "EXCHANGE AND ESCROW
AGREEMENT").
Section 7.12 OPINION OF COUNSEL. iGo shall have received from Xxxxxxxxx
Xxxxx Xxxxxxx & Xxxxx, counsel to ARI, an opinion dated the date of the Closing
and addressed to iGo, substantially in the form attached hereto as EXHIBIT E.
Section 7.13 INTELLECTUAL PROPERTY. iGo's counsel shall be satisfied,
in its sole and absolute discretion, that all intellectual property sought by
iGo as part of the transactions contemplated by this Agreement (including,
without limitation, all rights to the "Road Warrior" trademark) shall be
properly vested in ARI immediately prior to the Effective Time.
ARTICLE VIII
CONDITIONS TO ARI'S OBLIGATIONS
The obligations of ARI under this Agreement to consummate the Merger
will be subject to the satisfaction, or to the waiver by ARI in the manner
contemplated by Section 12.2, on or before the Closing, of the following
conditions:
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Section 8.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of iGo and Sub contained in this Agreement will be true and correct
on and as of the Effective Time, with the same force and effect as if made on
and as of the Effective Time.
Section 8.2 PERFORMANCE OF COVENANTS. iGo and Sub shall have performed
and complied in all material respects with each and every covenant, agreement
and condition required by this Agreement to be performed or complied with by
each prior to or at the Closing.
Section 8.3 CERTIFICATE. ARI shall have received a certificate signed
by the Chief Financial Officer of each of iGo and Sub to the effect that the
conditions set forth in Sections 8.1 and 8.2 have been met.
Section 8.4 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. No order
of any court or administrative agency will be in effect which restrains or
prohibits any transaction contemplated hereby or which would limit or otherwise
affect in a material respect iGo's ownership of ARI; no suit, action or
proceeding by any Governmental Entity or other person or entity or investigation
by any Governmental Entity, will be pending or, in the case of a Governmental
Entity, threatened against iGo, Sub or ARI, which challenges the validity or
legality, or seeks to restrain the consummation, of any transaction contemplated
hereby, including the Subsequent Merger, or which seeks to limit or otherwise
affect iGo's ownership of ARI; and no written advice shall have been received by
iGo, Sub, ARI or their respective counsel from any Governmental Entity, and
remain in effect, stating that an action or proceeding will, if the Merger is
consummated or sought to be consummated, be filed seeking to invalidate or
restrain the Merger or limit or otherwise affect iGo's ownership of ARI and
there shall not be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger, which would (a)
make the consummation of the Merger illegal or (b) render iGo, Sub or ARI unable
to consummate the Merger.
Section 8.5 APPROVALS AND CONSENTS. All approvals and authorizations of
the Merger set forth in Articles II or III hereof and in the ARI Disclosure
Schedule shall have been obtained.
Section 8.6 OPINION OF COUNSEL. ARI shall have received from Xxxx Xxxx
Peek Xxxxxxxx Xxxxxx and Xxxxxxxx, Professional Corporation, counsel to iGo and
Sub, an opinion dated the date of the Closing and addressed to ARI,
substantially in the form attached hereto as EXHIBIT F.
Section 8.7 EMPLOYMENT AGREEMENTS. iGo shall have caused ARI to deliver
at or prior to the Closing duly executed Employment Agreements in the
substantially the forms attached hereto as EXHIBITS G-1, G-2 with Xxx Xxxxxxx
and Xxxxx Xxxxxx.
Section 8.8 BANK LINE. iGo shall have paid or made binding arrangements
to pay in full ARI's Accounts Receivable loan and long term note dated August 8,
1997 between ARI and the Bank of Xxxxx Xxxxx; PROVIDED that iGo shall not be
responsible for payment of any balance under such loan in excess of $531,142.15.
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ARTICLE IX
CLOSING
Unless this Agreement shall have been terminated and the Merger shall
have been abandoned pursuant to a provision of Article XI hereof, a closing (the
"CLOSING") will be held, as soon as practicable after the satisfaction or waiver
of the conditions set forth in Articles VII and VIII, at the offices of Xxxx
Xxxx Peek Xxxxxxxx Xxxxxx and Xxxxxxxx, Professional Corporation, 000 Xxxx
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxx, Xxxxxx 00000, or such other location as iGo
and ARI shall mutually agree upon. At the date of the Closing (the "CLOSING
DATE"), the documents referred to in Articles VII and VIII will be exchanged by
the parties and, immediately thereafter, the Merger Agreement will be filed by
ARI and Sub with the Secretary of State of the State of California.
ARTICLE X
INDEMNITY AND ESCROW
Section 10.1 INDEMNIFICATION.
(a) INDEMNIFICATION BY ARI SHAREHOLDERS.
(i) Subject to the provisions of this Article X, from and
after the Effective Time, Xxx Xxxxxxx and Xxxxx Xxxxxx (the "Indemnifying ARI
Shareholders") shall indemnify and hold harmless iGo, iGo's Subsidiaries
(including the Subsidiaries of ARI) and the Surviving Corporation and their
respective affiliates, officers, directors, employees, representatives and
agents (collectively, the "ARI INDEMNIFIED PARTIES") from and against any
claims, losses, liabilities, damages, arbitration or any legal actions
(including, without limitation, interest, penalties and reasonably incurred
costs, expenses and legal fees and expenses) (collectively, "LOSSES") arising
from or in connection with any breach of a representation, warranty, covenant or
agreement of ARI contained in this Agreement, including any Exhibits or
Schedules attached hereto, the Merger Agreement or the ARI Ancillary Agreements.
The aggregate amount of liability of the Indemnifying ARI Shareholders pursuant
to this Section 10.1(a) shall not exceed $3,075,000.00; no Indemnifying ARI
Shareholder shall be responsible for more than his or her pro rata portion of
such amount based upon the relative holdings of ARI Common Stock by the
Indemnifying ARI Shareholders immediately prior to the Closing.
(ii) The Indemnifying ARI Shareholders shall not be
obligated to indemnify the iGo Indemnified Parties pursuant to this Article X
with respect to any Losses pursuant to Section 10.1(a) until and solely to the
extent that the aggregate amount of such Losses exceeds forty-one thousand
dollars ($41,000) (the "BASKET AMOUNT"), whereupon the Indemnifying ARI
Shareholders shall be obligated to indemnify the iGo Indemnified Parties for all
of such Losses in excess of such Basket Amount.
(iii) Notwithstanding anything herein to the contrary, the
Indemnifying ARI Shareholders shall not be required to indemnify the iGo
Indemnified Parties for any Losses which are not the subject of a notice
delivered in accordance with Section 10.6 below within eighteen (18) months
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following the Closing Date, or, in the case of Section 2.14 (Environmental
Matters) within sixty (60) months following the Closing Date and in the case of
Section 2.12 (Taxes) within the applicable statutory period of limitations plus
sixty (60) days; PROVIDED that the foregoing time limitations shall not apply to
breaches of the representations set forth in Section 2.2 (Capital Structure) of
this Agreement, which shall not be subject to any time limitation on claims.
(b) INDEMNIFICATION BY IGO.
(i) Subject to the provisions of this Article X, from and
after the Effective Time, iGo shall indemnify and hold harmless the ARI
Shareholders from and against any claims, losses, liabilities, damages,
arbitration or any legal actions (including, without limitation, interest,
penalties and reasonably incurred costs, expenses and legal fees and expenses)
(collectively, "LOSSES") arising from or in connection with any breach of a
representation, warranty, covenant or agreement of iGo or Sub contained in this
Agreement, including any Exhibits or Schedules attached hereto, the Merger
Agreement or the iGo Ancillary Agreements. The aggregate amount of liability of
iGo pursuant to this Section 10.1(b) shall not exceed $3,075,000.00.
(ii) iGo shall not be obligated to indemnify the ARI
Shareholders pursuant to this Article X with respect to any Losses pursuant to
Section 10.1(b) until and solely to the extent that the aggregate amount of such
Losses exceeds the Basket Amount, whereupon iGo shall be obligated to indemnify
the ARI Shareholders for all of such Losses in excess of such Basket Amount.
(iii) Notwithstanding anything herein to the contrary, iGo
shall not be required to indemnify the ARI Shareholders for any losses arising
from or in connection with any breach of a representation, warranty, covenant or
agreement of iGo contained in this Agreement, including any Exhibits or
Schedules attached hereto, the Merger Agreement or the iGo Ancillary Agreements,
which are not the subject of a written notice delivered in accordance with
Section 10.6 below within eighteen (18) months following the Closing Date;
PROVIDED that the foregoing time limitations shall not apply to breaches of the
representations set forth in Section 3.2 (Capital Structure) of this Agreement,
which shall not be subject to any time limitation on claims.
Section 10.2 ESCROW OF SHARES. As of the Effective Time, iGo shall
deposit Twenty-Seven Thousand Nine Hundred Seventeen (27,917) shares of the
Merger Securities to which the Indemnifying ARI Shareholders are otherwise
entitled (the "ESCROW FUND") with U.S. Stock Transfer Corporation, as escrow
agent (the "ESCROW AGENT"), to be held and distributed in accordance with the
terms of this Agreement and the Exchange and Escrow Agreement. The Escrow Fund
will be registered in the name of a nominee and will be maintained at the
offices of the Escrow Agent. The Escrow Fund will be governed by the terms set
forth herein and in the Exchange and Escrow Agreement and maintained at iGo's
sole cost and expense. The shares of iGo Common Stock deposited in the Escrow
Fund shall be referred to as "ESCROW SHARES." The obligation of iGo to issue the
Escrow Shares otherwise issuable upon the Merger shall be subject to reduction
to satisfy the Indemnifying ARI Shareholders' obligations under this Article X.
Claims for Losses made by iGo or any other Indemnified Party that (a) are
accepted as valid by the Indemnifying ARI Shareholders, or (b) are determined to
be valid through court proceedings or which otherwise are allowed as described
32
in this Article X, shall reduce the number of Escrow Shares issuable to the
Indemnifying ARI Shareholders by the number of Escrow Shares (rounded to the
closest whole number) equal to the amount of such Losses divided by the Merger
Price for purposes of Section 1.4(a) above. As to each Indemnifying ARI
Shareholder, any such reduction shall be made based upon the relative holdings
of ARI Common Stock by the Indemnifying ARI Shareholders immediately prior to
the Closing. The interest of each ARI Shareholder in the Escrow Shares shall not
be assignable or transferable in any manner except by operation of law, by will
or by the laws of descent until such Escrow Shares are issued to the ARI
Shareholders.
Section 10.3 REMEDIES. Other than with respect to fraud or intentional
misrepresentation or actions for injunctive or declaratory relief, the parties
agree that the potential remedies available to the parties for breaches of the
representations, warranties or covenants contained in this Agreement shall be
limited to the provisions of this Article X. ARI and the ARI Shareholders
acknowledge and agree that the remedies available to iGo and the Surviving
Corporation under this Article X shall not be limited (either by time or amount)
to proceeding against the Escrow Fund.
Section 10.4 TERM OF ESCROW.
(a) ESCROW SHARES. The Escrow Agent shall deliver the Escrow
Shares, after giving effect to the reductions in or holdbacks of the number of
Escrow Shares deliverable to iGo as described in Section 10.2 above or Section
10.4(b) below, to the Indemnifying ARI Shareholders promptly following the date
one (1) year following the Closing Date (the "ESCROW EXPIRATION DATE"). The
period commencing upon the Closing Date and ending upon the Escrow Expiration
Date shall be referred to as the "ESCROW HOLDBACK PERIOD" for the Escrow Fund.
(b) EXTENSION OF ESCROW. Notwithstanding Section 10.4(a), to
the extent iGo has made a claim which is being disputed by the Indemnifying ARI
Shareholders in accordance with Section 10.7 below on the Escrow Expiration
Date, the Escrow Agent shall withhold the issuance of and maintain in the Escrow
Fund such number of Escrow Shares as is reasonably necessary in the opinion of
the Escrow Agent to satisfy such claim and upon resolution of such claim such
withheld Escrow Shares, after giving effect to any appropriate further reduction
under Section 10.2, shall be transferred by the Escrow Agent into the respective
names of the Indemnifying ARI Shareholders. The period during which any escrow
of Escrow Shares existed under this Agreement is referred to herein as the
"ESCROW PERIOD." Upon expiration of the Escrow Period, the Escrow Fund shall
terminate and the Escrow Agent shall deliver to each Indemnifying ARI
Shareholder his pro rata portion of the Escrow Shares remaining in the Escrow
Fund based upon the relative holdings of ARI Common Stock by the Indemnifying
ARI Shareholders immediately prior to the Closing.
(c) PROTECTION OF ESCROW FUND. The Escrow Agent shall hold and
safeguard the Escrow Fund during the Escrow Period, shall treat such fund as a
trust fund in accordance with the terms of this Agreement and the Exchange and
Escrow Agreement and not as the property of iGo and shall hold and dispose of
the Escrow Fund only in accordance with the terms hereof and thereof.
(d) DISTRIBUTIONS; VOTING.
33
(i) Any shares of iGo Common Stock or other equity
securities issued or distributed by iGo (including shares issued upon a stock
split) ("NEW SHARES") in respect of shares of iGo Common Stock in the Escrow
Fund which have not been released from such Escrow Fund shall be added to the
Escrow Fund and become a part thereof. New Shares issued in respect of shares of
iGo Common Stock which have been released from the Escrow Fund shall not be
added to the Escrow Fund, but shall be distributed to the holders thereof. When
and if cash dividends on shares of iGo Common Stock in the Escrow Fund shall be
declared and paid, they shall not be added to the Escrow Fund but shall be paid
to those on whose behalf such shares of iGo Common Stock are held who, prior to
the Merger, held ARI Capital Stock.
(ii) Each Indemnifying ARI Shareholder shall have
proportional voting rights with respect to the shares of iGo Common Stock
contributed to the Escrow Fund on behalf of such shareholder (and on any voting
securities added to the Escrow Fund in respect of such shares of iGo Common
Stock) so long as such shares of iGo Common Stock or other voting securities are
held in the Escrow Fund.
Section 10.5 [Intentionally Left Blank]
Section 10.6 MECHANICS OF MAKING CLAIMS.
(a) In the event that any written claim or demand for which
any Indemnified Party is entitled to indemnification is sought against iGo or
sought to be collected from iGo or any other Indemnified Party by a third party,
promptly after the assertion of any such claim or demand, or otherwise promptly
upon discovery of any other Loss for which iGo or any other Indemnified Party
seeks indemnification, iGo or such other Indemnified Party shall notify the
Escrow Agent (if during the Escrow Period) and the Indemnifying ARI Shareholders
of such claim, demand or Loss; PROVIDED, HOWEVER, that the failure promptly to
give such notice shall not affect the Indemnified Parties' rights hereunder
except to the extent that such failure shall adversely affect the Indemnifying
ARI Shareholders or their rights hereunder. Notices of indemnity claims made
following the Escrow Period need only be delivered to the Indemnifying ARI
Shareholders. The asserting Indemnified Party shall advise the Indemnifying ARI
Shareholders of all material facts relating to such assertion within the
knowledge of such Indemnified Party, and shall afford the Indemnifying ARI
Shareholders, in the event that they do not assume such defense pursuant to
Section 10.6(d) below, the opportunity to participate, at their own expense, in
the defense against such claims for liability, provided that iGo shall control
such defense.
(b) If such claim is made during the Escrow Period, on the
date 15 business days following the receipt by the Escrow Agent and the
Indemnifying ARI Shareholders of written notice from any Indemnified Party of a
claim of indemnification pursuant to this Article X, including a brief
description of the facts upon which such claim is based and the amount of the
losses with respect to such claim, the Escrow Agent shall, subject to the
provisions of Section 10.6(c), deliver to iGo or such other Indemnified Party
out of the Escrow Fund, as promptly as possible, that number of Escrow Shares
(rounded to the closest whole number) equal to the amount of such losses divided
by the Merger Price for purposes of Section 1.4(a) above.
34
(c) During the Escrow Period, if the Indemnifying ARI
Shareholders shall, in good faith, notify iGo and the Escrow Agent in writing
within such 15 business day period of their objection to a claim of
indemnification, the Escrow Shares shall not be delivered to the Indemnified
Party until the rights of the Indemnifying ARI Shareholders and such Indemnified
Party with respect thereto have been agreed upon between the Indemnifying ARI
Shareholders and such Indemnified Party or until such rights are finally
determined by a court of competent jurisdiction (to whose personal jurisdiction
each party hereby consents). The Escrow Agent shall be entitled to act in
accordance with such determination and to make or withhold payments out of the
Escrow Fund in accordance therewith. The costs and expenses (including
reasonable counsel fees) of any such court proceeding shall be borne by the
party against whom the award is rendered or, in the case of an award of a
portion of the amount claimed, will be shared equally by the Indemnified Party
and the Indemnifying ARI Shareholders.
(d) iGo shall have the right (i) to defend, settle or
compromise any claim or liability subject to indemnification under this Article
X, and (ii) to be indemnified from and against all Losses resulting therefrom,
UNLESS the Indemnifying ARI Shareholders, within 30 business days after
receiving such notice of the claim or liability in accordance with Section
10.6(a) notify iGo in writing that they intend to assume the defense against
such claim or liability and in fact promptly do so. In the event that the
Indemnifying ARI Shareholders assume the defense of any such claim, the
Indemnified Party may retain separate counsel at its sole cost and expense
(except that the Indemnifying ARI Shareholders shall be responsible for the fees
and expenses of one separate co-counsel for the Indemnified Party to the extent
the Indemnified Party is advised in writing by its counsel that the counsel the
Indemnifying ARI Shareholders have selected has a conflict of interest) and
participate in the defense in a non-controlling manner.
(e) Except as otherwise provided in Section 10.6(d), the
Indemnifying ARI Shareholders shall not be liable under this Article X for any
settlement effected without the prior consent of the Indemnifying ARI
Shareholders (which consent may not be unreasonably withheld) of any claim,
liability or proceeding for which indemnity may be sought hereunder. In the
event that the Indemnifying ARI Shareholders assume the defense of any claim,
liability or proceeding pursuant to Section 10.6(d), the Indemnifying ARI
Shareholders may not settle any such claim liability or proceeding without the
prior consent of iGo (which consent may not be unreasonably withheld).
Section 10.7 ESCROW AGENT'S DUTIES.
(a) The Escrow Agent shall be obligated only for the
performance of such duties as are specifically set forth herein, and as set
forth in any additional written escrow instructions which the Escrow Agent may
receive after the date of this Agreement which are signed by an officer of iGo
and by each of the Indemnifying ARI Shareholders, and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
believed to be genuine and to have been signed or presented by the proper party
or parties. The Escrow Agent shall not be liable for any act done or omitted
hereunder as Escrow Agent while acting in good faith and in the exercise of
reasonable judgment, and any act done or omitted pursuant to the advice of
counsel shall be conclusive evidence of such good faith.
35
(b) The Escrow Agent is hereby expressly authorized to
disregard any and all warnings given by any of the parties hereto or by any
other person, excepting only orders or process of courts of law, and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree of any court, the Escrow Agent shall not be liable to any of the
parties hereto or to any other person by reason of such compliance,
notwithstanding any such order, judgment or decree being subsequently reversed,
modified, annulled, set aside, vacated or found to have been entered without
jurisdiction.
(c) The Escrow Agent shall not be liable in any respect on
account of the identity, authority or rights of the parties executing or
delivering or purporting to execute or deliver this Agreement or any documents
or papers deposited or called for hereunder.
(d) The Escrow Agent shall not be liable for the expiration of
any rights under any statute of limitations with respect to this Agreement or
any documents deposited with the Escrow Agent.
(e) The Escrow Agent may resign at any time upon giving at
least 30 days written notice to iGo and the Indemnifying ARI Shareholders
pursuant to the provisions of this Agreement; provided, however, that no such
resignation shall become effective until the appointment of a successor escrow
agent which shall be accomplished as follows: iGo and the Indemnifying ARI
Shareholders shall use their best efforts to mutually agree upon a successor
agent within 30 days after receiving such notice. If the parties fail to agree
upon a successor transfer agent within such time, iGo shall have the right to
appoint a successor escrow agent authorized to do business in California. The
successor escrow agent selected in the preceding manner shall execute and
deliver an instrument accepting such appointment and it shall thereupon be
deemed the Escrow Agent hereunder and it shall without further acts be vested
with all the estates, properties, rights, powers, and duties of the predecessor
Escrow Agent as if originally named as Escrow Agent. Thereafter, the predecessor
Escrow Agent shall be discharged for any further duties and liabilities under
this Agreement.
ARTICLE XI
TERMINATION
Section 11.1 TERMINATION AND ABANDONMENT. This Agreement may be
terminated and the Merger may be abandoned before the Effective Time,
notwithstanding any approval and adoption of this Agreement by the shareholders
of ARI or by iGo in its capacity as sole stockholder of Sub:
(a) by the mutual written consent of the Boards of Directors
of iGo and ARI;
(b) by iGo or by ARI at any time after February 28, 2000 (or
such later date as shall have been agreed to in writing by them, acting through
their respective Boards of Directors) if the Merger for any reason has not by
such date become effective; PROVIDED, HOWEVER, that this provision shall not be
available to any party whose willful failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before such date;
36
(c) by either iGo or ARI if a permanent injunction or other
order by any federal or state court would make illegal or otherwise restrain or
prohibit the consummation of the Merger shall have been issued and shall have
become final and nonappealable; or
(d) by iGo if there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on
the part of ARI and such breach has not been cured within five business days
after written notice from iGo to ARI (PROVIDED, that iGo is not in material
breach of the terms of this Agreement; and PROVIDED FURTHER, that no cure period
shall be required for a breach which by its nature cannot be cured); or
(e) by ARI if there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on
the part of iGo or Sub and such breach has not been cured within five business
days after written notice from ARI to iGo or Sub (PROVIDED, that ARI is not in
material breach of the terms of this Agreement; and PROVIDED FURTHER, that no
cure period shall be required for a breach which by its nature cannot be cured).
If this Agreement is terminated in accordance with this Section 11.1, the Merger
will be abandoned without further action by iGo, Sub or ARI.
Section 11.2 EFFECT OF TERMINATION. In the event of termination and
abandonment of the Merger pursuant to Section 11.1, none of iGo, Sub, or ARI
shall have any liability or further obligation to any of the others except as
provided in Sections 6.1 and 6.2 and except for any breach of this Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1 TAX MATTERS. The following provisions shall govern the
allocation of responsibility as between iGo and Surviving Corporation, and ARI
for certain tax matters following the Closing Date:
(a) TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE. The ARI
Shareholders shall prepare or cause to be prepared and file or cause to be filed
all Returns for ARI for all periods ending on or prior to the Closing Date that
are required to be filed by ARI on or after the Closing Date. iGo and Surviving
Corporation shall cooperate with the ARI Shareholders as necessary with respect
to the preparation and filing of such Returns. iGo shall be provided with a copy
of such final return of ARI prior to its filing and shall, upon receipt thereof,
have a period of no less than fifteen (15) days to inspect such final return and
provide comments, if any, to ARI regarding same.
(b) TAX PERIODS BEGINNING BEFORE AND ENDING AFTER THE CLOSING
DATE. iGo shall prepare or cause to be prepared and file or cause to be filed
any ARI Returns for Tax periods that begin on or after the Closing Date and end
after the Closing Date that are required to be filed by ARI.
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(c) REFUNDS AND TAX BENEFITS. Any tax refunds that are
received by iGo or Surviving Corporation, and any amounts credited against Tax
to which iGo or Surviving Corporation, or ARI become entitled, that relate to
ARI Taxes for Tax periods or portions thereof ending on or before the Closing
Date shall be for the account of the ARI Shareholders, and iGo shall pay over to
the ARI Shareholders any such refund or the amount of any such credit within
fifteen (15) days after receipt. In addition, to the extent that a claim for
refund or a proceeding results in a payment or credit against an ARI Tax by a
taxing authority to iGo or Surviving Corporation of any amount accrued on the
ARI Financial Statements, iGo or Surviving Corporation shall pay such amount to
the ARI Shareholders within fifteen (15) days after receipt.
(d) COOPERATION ON TAX MATTERS.
(i) iGo, Surviving Corporation, ARI and the ARI
Shareholders shall cooperate fully, as and to the extent reasonably requested by
the other party, in connection with the filing of Returns pursuant to this
Section and any audit, litigation or other proceeding with respect to Taxes.
Such cooperation shall include the retention and (upon the other party's
request) the provision of records and information which are reasonably relevant
to any such audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and explanation
of any material provided hereunder. iGo and Surviving Corporation agree (A) to
retain all books and records with respect to Tax matters pertinent to ARI
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified by iGo or
ARI, any extensions thereof) of the respective taxable periods, and to abide by
all record retention agreements entered into with any taxing authority, and (B)
to provide the ARI Shareholders reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the ARI Shareholders
so request, iGo and Surviving Corporation, as the case may be, shall allow the
ARI Shareholders to make an inspection of such books and records at a time
agreeable to iGo.
(ii) iGo and Surviving Corporation further agree, upon
request, to use their commercially reasonable efforts to obtain any certificate
or other document from any governmental authority or any other person as may be
necessary to mitigate, reduce or eliminate any Tax that could be imposed on ARI
or the ARI Shareholders (including, but not limited to, with respect to the
transactions contemplated hereby).
(iii) iGo and Surviving Corporation further agree, upon
request, to provide the ARI Shareholders with all information that either party
may be required to report pursuant to Section 6043 of the Code and all Treasury
Department Regulations promulgated thereunder.
Section 12.2 KNOWLEDGE. References to a parties "knowledge" in Articles
II and III above shall be interpreted to refer to the actual collective
knowledge of such party and such party's officers, directors, managers and
supervisors, and in the case of ARI shall also be deemed to include the actual
knowledge of each ARI Shareholder.
Section 12.3 AMENDMENT AND MODIFICATION. To the fullest extent provided
by applicable law, this Agreement may be amended, modified and supplemented with
respect to any of the terms contained herein by mutual consent of the respective
Boards of Directors of iGo, Sub and ARI or by their respective officers duly
authorized by such Boards of Directors by an appropriate written instrument
executed at any time prior to the Effective Time.
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Section 12.4 WAIVER OF COMPLIANCE. To the fullest extent permitted by
law, each of iGo, Sub and ARI, pursuant to action by its respective Board of
Directors, or its respective officers duly authorized by its Board of Directors,
or the ARI Shareholders acting on behalf of the ARI Shareholders, may by an
instrument in writing extend the time for or waive the performance of any of the
obligations of the others or waive compliance by the others with any of the
covenants, or waive any of the conditions to its obligations, contained herein.
No such extension of time or waiver will operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
Section 12.5 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
respective representations and warranties of each party hereto contained herein
will not be deemed to be waived or otherwise affected by any investigation made
by the other party hereto. Such representations and warranties will be
extinguished by and will not survive the Effective Time, except with respect to
the remedies set forth in Article X and except for remedies that may be
available for fraud.
Section 12.6 NOTICES. All notices, requests, demands and other
communications required or permitted hereunder will be in writing and will be
deemed to have been duly given when delivered by hand or when mailed by
registered or certified mail, postage prepaid, or when given by facsimile
transmission (promptly confirmed in writing), as follows:
(a) If to iGo or Sub:
iGo Corporation
0000 Xxxxxxx Xxxxx
Xxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxx Xxxx Peek Xxxxxxxx Xxxxxx and Xxxxxxxx
000 X. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
or to such other person as iGo or Sub designates in writing delivered to ARI in
the manner provided in this Section 12.5;
(b) If to ARI or the ARI Shareholders:
AR Industries, Inc.
0000 Xxxxx Xxxxxxx
Xxxxx Xxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxx Xxxxxxx
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with copies to:
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxx Xxxxx, Esq.
or to such other person as ARI or the ARI Shareholders designate in writing,
delivered to iGo in the manner provided in this Section 12.5.
Section 12.7 ASSIGNMENT. This Agreement and all of the provisions
hereof will be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations here under may be assigned by
any of the parties hereto without the prior written consent of the other
parties.
Section 12.8 GOVERNING LAW. This Agreement and the legal relations
between the parties hereto will be governed by and construed in accordance with
the laws of the State of Nevada, without giving effect to the choice of law
principles thereof; PROVIDED, HOWEVER, that the law governing the fiduciary
duties of each party hereto and their respective boards of directors and the law
governing any other matters of internal corporate governance of any of iGo, Sub
or ARI shall be the law of their respective jurisdictions of incorporation.
Section 12.9 PARTIES IN INTEREST. Nothing expressed or implied in this
Agreement is intended or will be construed to confer upon or give to any person,
firm or corporation other than the parties hereto any rights or remedies under
or by reason of this Agreement or any transaction contemplated hereby, except as
specifically provided in this Agreement.
Section 12.10 COUNTERPARTS. This Agreement may be executed in two or
more counterparts and by the different parties hereto on separate counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
Section 12.11 HEADINGS AND REFERENCES. The headings of the sections and
articles of this Agreement are inserted for convenience of reference only and
will not by themselves determine the interpretation of this Agreement. All
references herein to sections and articles are to sections and articles of this
Agreement, unless otherwise indicated.
Section 12.12 ENTIRE AGREEMENT. This Agreement, including the ARI
Disclosure Schedule and the iGo Disclosure Schedule, the schedules and exhibits
and other documents referred to herein which form a part hereof, contains the
entire understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, representations,
40
warranties, covenants, or undertakings with respect to the subject matter
contained herein, other than those expressly set forth or referred to herein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
Section 12.13 SEVERABILITY. If any provision of this Agreement, or the
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto. The parties further agree to replace such
invalid or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of the invalid and unenforceable provision.
Section 12.14 OTHER REMEDIES. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby or by law
or equity on such party, and the exercise of any one remedy will not preclude
the exercise of any other.
Section 12.15 FURTHER ASSURANCES. Each party agrees to cooperate fully
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.
Section 12.16 ABSENCE OF THIRD PARTY BENEFICIARY RIGHTS. No provision
of this Agreement is intended, nor will be interpreted, to provide to create any
third party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder, employee, partner or any party hereto or any
other person or entity unless specifically provided otherwise herein, and,
except as so provided, all provisions hereof will be personal solely between the
parties to this Agreement.
Section 12.17 MUTUAL DRAFTING. This Agreement is the joint product of
iGo and ARI, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of iGo and ARI, and shall not be
construed for or against any party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Reorganization to be duly executed as of the date and year first written
above.
IGO CORPORATION AR INDUSTRIES, INC.
By: /S/ XXXX XXXXXXX By: /S/ R.E. HOSILYK
------------------------------------- --------------------------
Xxxx Xxxxxxx, Chief Financial Officer Xxx X. Hoslilyk, President
ARI ACQUISITION CORP.
By: /S/ XXXX XXXXXXX
-------------------------------------
Xxxx Xxxxxxx, Chief Financial Officer
ARI SHAREHOLDERS:
/S/ XXXXX XXXXXX /S/ XXXXXXX X. XXXXXXX
-------------------------------- --------------------------------
Xxxxx Xxxxxx Xxxxxxx Xxxxxxx
/S/ XXXXXX XXXXXXXXXXX /S/ R.E. HOSILYK
-------------------------------- --------------------------------
Xxxxxx Xxxxxxxxxxx Xxx X. Xxxxxxx
/S/ XXXX XXXXXXX /S/ XXXXX XXXXX
-------------------------------- --------------------------------
Xxxx Xxxxxxx Xxxxx Xxxxx
/S/ XXXXX XXXXXX /S/ XXXX X. XXXXX
-------------------------------- --------------------------------
Xxxxx Xxxxxx Xxxx Xxxxx
/S/ XXXX XXXXXXX /S/ XXXXX XXXXXXX
-------------------------------- --------------------------------
Xxxx Xxxxxxx Xxxxx Xxxxxxx
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