JUMA TECHNOLOGY CORP. AGREEMENT AND PLAN OF MERGER OF AGN NETWORKS, INC. INTO JUMA ACQUISITION CORP. Dated March 6, 2007
AGREEMENT
AND PLAN OF MERGER
OF
AGN
NETWORKS, INC.
INTO
JUMA ACQUISITION CORP.
Dated
March 6, 2007
TABLE
OF
CONTENTS
Page
SECTION
ONE
|
2
|
||
1.
|
The
Merger
|
2
|
|
1.1.
|
The
Merger
|
2
|
|
1.2.
|
Purchase
Price
|
3
|
|
1.3.
|
Closing;
Effective Time
|
6
|
|
1.4.
|
Effect
of the Merger
|
6
|
|
1.5.
|
Articles
of Incorporation; Bylaws
|
7
|
|
1.6.
|
Directors
and Officers
|
7
|
|
1.7.
|
Effect
on AGN Shares
|
8
|
|
1.8.
|
Surrender
of Certificates
|
8
|
|
1.9.
|
No
Further Ownership Rights in AGN Shares
|
11
|
|
1.10.
|
Merger
Sub Charter Documents
|
12
|
|
1.11.
|
Taking
of Necessary Action; Further Action
|
12
|
|
1.12.
|
Employment
Agreements
|
12
|
|
1.13.
|
Working
Capital Facility
|
12
|
|
SECTION
TWO
|
13
|
||
2.
|
Representations and Warranties of AGN and AGN Shareholders |
13
|
|
2.1.
|
Organization;
Subsidiaries
|
14
|
|
2.2.
|
Articles
of Incorporation and Bylaws
|
14
|
|
2.3.
|
Capital
Structure
|
15
|
|
2.4.
|
Authority
|
15
|
|
2.5.
|
No
Conflicts; Required Filings and Consents.
|
16
|
|
2.6.
|
Financial
Statements
|
17
|
|
2.7.
|
Absence
of Undisclosed Liabilities
|
17
|
|
2.8.
|
Absence
of Certain Changes
|
17
|
|
2.9.
|
Litigation
|
18
|
|
2.10.
|
Restrictions
on Business Activities
|
18
|
|
2.11.
|
Permits;
Company Products; Regulation
|
19
|
|
2.12.
|
Title
to Property
|
19
|
|
2.13.
|
Intellectual
Property
|
20
|
|
2.14.
|
Taxes
|
22
|
|
2.15.
|
Employee
Matters
|
26
|
|
2.16.
|
Material
Contracts
|
26
|
|
2.17.
|
Interested
Party Transactions
|
27
|
|
2.18.
|
Insurance
|
28
|
|
2.19.
|
Compliance
With Laws
|
28
|
|
2.20.
|
Minute
Books
|
28
|
|
2.21.
|
Complete
Copies of Materials
|
29
|
|
2.22.
|
Brokers’
and Finders’ Fees
|
29
|
|
2.23.
|
No
Vote Required
|
29
|
|
2.24.
|
Third
Party Consents
|
29
|
|
2.25.
|
Representations
Complete
|
29
|
i
SECTION
THREE
|
30
|
||
3.
|
Representations and Warranties of Merger Sub and Juma |
30
|
|
3.1.
|
Organization,
Standing and Power
|
30
|
|
3.2.
|
Capital
Structure
|
31
|
|
3.3.
|
Authority
|
32
|
|
3.4.
|
No
Conflict; Required Filings and Consents
|
32
|
|
3.5.
|
SEC
Documents; Financial Statements
|
33
|
|
3.6.
|
Absence
of Undisclosed Liabilities
|
34
|
|
3.7.
|
Absence
of Certain Changes
|
35
|
|
3.8.
|
Litigation
|
35
|
|
3.9.
|
Governmental
Authorization
|
36
|
|
3.10.
|
Compliance
With Laws
|
36
|
|
3.11.
|
Broker’s
and Finders’ Fees
|
37
|
|
3.12.
|
Accounting
and Tax Matters
|
37
|
|
SECTION
FOUR
|
37
|
||
4.
|
Conduct Prior to the Effective Time |
37
|
|
4.1.
|
Conduct
of Business of AGN and Juma
|
37
|
|
4.3.
|
No
Solicitation
|
42
|
|
SECTION
FIVE
|
43
|
||
5.
|
Additional Agreements |
43
|
|
5.1.
|
Best
Efforts and Further Assurances
|
43
|
|
5.2.
|
Consents;
Cooperation
|
44
|
|
5.3.
|
Access
to Information
|
45
|
|
5.4.
|
Confidentiality
|
46
|
|
5.5.
|
Public
Disclosure
|
47
|
|
5.6.
|
State
Statutes
|
47
|
|
5.7.
|
Filings
or Notices Pursuant to Securities Laws
|
48
|
|
5.8.
|
Acquisition
of Juma Common Stock
|
49
|
|
5.9.
|
Merger
Sub Restructuring
|
55
|
|
SECTION
SIX
|
56
|
||
6.
|
Conditions to the Merger |
56
|
|
6.1.
|
Conditions
to Obligations of Each Party to Effect the Merger
|
56
|
|
6.2.
|
Additional
Conditions to Obligations of AGN
|
57
|
|
6.3.
|
Additional
Conditions to the Obligations of Juma
|
59
|
|
SECTION
SEVEN
|
63
|
||
7.
|
Termination,
Amendment and Waiver
|
63
|
|
7.1.
|
Termination
|
63
|
|
7.2.
|
Effect
of Termination
|
64
|
|
7.3.
|
Expenses
and Termination Fees
|
65
|
|
7.4.
|
Amendment
|
65
|
|
7.5.
|
Extension;
Waiver
|
65
|
ii
SECTION
EIGHT
|
66
|
||
8.
|
Indemnification
|
66
|
|
8.1.
|
Survival
of Representations and Warranties
|
66
|
|
8.2.
|
Indemnification
by AGN and AGN Shareholders
|
66
|
|
8.3.
|
Indemnification
by Juma
|
67
|
|
8.4.
|
Exclusive
Contractual Remedy and Limitations
|
68
|
|
SECTION
NINE
|
69
|
||
9.
|
General
Provisions
|
69
|
|
9.1.
|
Survival
of Warranties
|
69
|
|
9.2.
|
Notices
|
69
|
|
9.3.
|
Interpretation
|
71
|
|
9.4.
|
Counterparts
|
71
|
|
9.5.
|
Entire
Agreement; Nonassignability; Parties in Interest
|
72
|
|
9.6.
|
Severability
|
72
|
|
9.7.
|
Remedies
Cumulative
|
73
|
|
9.8.
|
Governing
Law
|
73
|
|
9.9.
|
Rules
of Construction
|
73
|
|
9.10.
|
Amendments
and Waivers
|
73
|
|
9.11.
|
Spin-Off
|
74
|
|
9.12.
|
Attorneys’
Fees
|
74
|
iii
AGREEMENT
AND PLAN OF MERGER
This
AGREEMENT AND PLAN OF MERGER (the “Agreement”) is made and entered into as of
the 6th day of March, 2007, by and among Juma Technology Corp. (“Juma”
or
“Purchaser”),
a
Delaware corporation, Juma Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of Juma (“Merger
Sub”
or
the
“Surviving
Corporation”),
AGN
Networks, Inc., a [Florida] corporation (“AGN”),
and
its holders (the “AGN
Shareholders”).
The
parties hereto are sometime hereinafter collectively referred to as the
“Parties.”
RECITALS
WHEREAS,
Purchaser desires to acquire AGN through the merger of AGN with and into Merger
Sub (the “Merger”),
with
Merger Sub being the surviving corporation of the Merger, pursuant to which
all
AGN Shares (as defined below) of AGN issued and outstanding at the Effective
Time (as defined below), will be converted into the right to receive the Stock
Consideration (as defined below), each as more fully provided
herein;
WHEREAS,
the AGN Shareholders own all of the currently issued and outstanding AGN
Shares;
WHEREAS,
AGN desires to be merged with and into Merger Sub and the AGN Shareholders
shall
be entitled to receive the Stock Consideration in exchange for their AGN
Shares.
WHEREAS,
the respective boards of directors of Juma, Merger Sub and AGN, and the AGN
Shareholders, have determined that the Merger is desirable and in the best
interests of their respective shareholders and, by resolutions duly adopted,
have approved and adopted this Agreement.
WHEREAS,
Juma, Merger Sub and AGN are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by the provisions
of
Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”).
AGREEMENT
The
parties hereby agree as follows:
SECTION
ONE
1. The
Merger
1.1. The
Merger.
At the
Effective Time (as defined below) and subject to and upon the terms and
conditions of this Agreement, the Articles of Merger attached hereto as
Exhibit A (the “Articles of Merger”) and the applicable provisions of the
Delaware General Corporate Law (“DGCL”),
AGN
shall (i) be merged with and into Merger Sub and the separate corporate
existence of AGN shall cease; (ii) the Merger Sub shall continue as the
surviving corporation of the Merger, remaining as a wholly-owned subsidiary
of
Juma; and (iii) Merger Sub shall be operated as a subsidiary and/or division
of
Juma under various agreements and inter-company agreements to be entered into
by
and/or between Merger Sub and Juma. AGN shall tender and exchange all the AGN
Shares to Merger Sub at the price (the “Purchase Price”) set forth in Paragraph
1.2 below.
1.1. Purchase
Price.
In
consideration for all issued and outstanding AGN Shares, Purchaser shall provide
the following:
1
(a) Cash
Consideration.
Juma
has made a loan to AGN in the amount of $250,000 (subject to adjustment at
the
Closing for outstanding accounts payable). If the Merger does not close and
the
concomitant purchase of substantially all of the assets of Avatel Technologies,
Inc. (“ATI”)
by an
affiliate of Juma does not close (the “ATI
Asset Purchase”),
AGN
shall repay Juma such loan within five business days of demand therefor. If
the
Merger does close and the ATI Asset Purchase does close, Juma will forgive
$125,000 of such loan and the remaining $125,000 will be reflected in a
reduction of the purchase price under the ATI Asset Purchase.
Upon
the
Closing Date (as defined below), Juma will issue to each of Xxxxx Xxxxxx and
Xxxxxx Xxxxxxxxx-each an AGN Shareholder-its promissory note evidencing
Purchaser’s obligation to pay to Xx. Xxxxxx and Xx. Xxxxxx Xxxxxxxxx $102,000
and $98,000, respectively. The form of promissory note will provide that the
payment of applicable principal balance will be due and payable 90 days after
the Closing Date and the applicable outstanding principal balance will not
accrue interest. The promissory note will also provide for a default interest
rate of eight percent (8%) per annum and the holder’s right to collect its
reasonable attorneys’ fees in order to enforce its rights under the promissory
note after the occurrence and continuance of an event of default.
(b) Stock
Issuance to AGN Shareholders.
Upon
Closing Date, Juma shall tender to AGN Shareholders, according to their
respective common stock holdings at the Closing Date, an aggregate of 320,000
shares of restricted Common Stock of Juma (the “Stock
Consideration”).
The
Stock Consideration shall be allocated as set forth in Exhibit
B
hereto.
All Stock Consideration issued hereunder shall be free and clear of all liens
and encumbrances other than carrying a Standard 1933 Act restrictive
legend.
(c) In
the
event that the Stock Consideration has a Fair Market Value (as defined below)
of
less than $640,000 on the first anniversary of the Closing Date (the
“First
Anniversary”),
Juma
will issue to the AGN Shareholders a two (2) year promissory note representing
the difference between the Fair Market Value of the Stock Consideration and
$640,000. Such promissory note shall bear interest, commencing 90 days after
the
issue date of such promissory note, at an annual rate of 7.5% and shall be
payable in one installment of principal and seven equal installments of
principal and accrued interest thereon, the first payment of principal shall
be
due on the first day of the third month following the First Anniversary and
the
seven installments of principal and accrued interest thereon, shall be payable
on the first day of each quarter thereafter until paid in full. Fair Market
Value shall mean the average of the daily closing prices of Juma’s Common Stock
over the 20 trading days ending the day prior to the First
Anniversary.
(d) Repayment
to Avatel.
On
Closing, Juma will pay ATI up to $675,000 which will settle any and all agreed
upon obligations of AGN to Avatel (the “Inter-Company
Indebtedness”).
Such
payment will be made as follows: (i) $200,000 in cash at the Closing and (ii)
Juma will issue to AGN its promissory note for the remainder of the Inter-Company
Indebtedness.
The
promissory note will be in the form described in Section 1.2(a). Unless
otherwise agreed, this
agreed upon amount is only to be used to repay bona fide third party
indebtedness of ATI extant on the Closing Date and shall not be disbursed
without Juma’s prior consent. Provided that they have been properly recorded on
the Balance Sheet and AGN’s books and records, the loans set forth on
Schedule
1(d), shall be deemed to be bona
fide
third party indebtedness of ATI extant on the Closing Date.
2
1.3. Closing;
Effective Time.
The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall
take place on March 6, 2007 or as soon as practicable, (and in no event later
than five business days after the satisfaction or waiver of each of the
conditions set forth in Section 4 below or at such other time as the
parties agree (the “Closing
Date”).
In
connection with the Closing, the Parties shall cause the Merger to be
consummated by filing the Articles of Merger, together with the required
officers’ certificates (to the extent required), with the Secretary of State of
the State of Delaware, in accordance with the relevant provisions of the DGCL
(the time of such filing being the “Effective Time”).
The
Closing shall take place at the offices of Juma, or at such other location
as
the parties agree.
1.4. Effect
of the Merger.
At the
Effective Time, the effect of the Merger shall be as provided in this Agreement,
the Articles of Merger and the applicable provisions of the DGCL. At the
Effective Time, all the property, rights, privileges, powers and franchises
of
AGN shall vest in the Surviving Corporation, and all debts, liabilities and
duties of AGN shall become the debts, liabilities and duties of the Surviving
Corporation.
1.5. Articles
of Incorporation; Bylaws.
(a) At
the Effective Time, the Articles of Incorporation of Merger Sub as in effect
immediately prior to the Effective Time, shall, except that the name of Merger
Sub shall be amended to that of AGN Networks, Inc., be the Articles of
Incorporation of the Surviving Corporation until thereafter amended as provided
by the DGCL and such Articles of Incorporation.
(b) At
the Effective Time, the Bylaws of Merger Sub as in effect immediately prior
to
the Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended as provided by law, the Articles of Incorporation of the
Surviving Corporation and such Bylaws.
1.6. Directors
and Officers.
At the
Effective Time, the officers and directors of AGN immediately prior to the
Effective Time shall resign, and [______________] (the “AGN
Division Director”)
shall
be the director of the Surviving Corporation. The officers of AGN immediately
prior to the Effective Time shall resign, and [___________] shall be the sole
officer of the Surviving Corporation, in each case until their respective
successor(s) is/are duly elected or appointed and qualified.
1.7. Effect
on AGN Shares.
By
virtue of the Merger and without any action on the part of AGN or any of its
respective stockholders, the following shall occur at the Effective
Time:
(a) Conversion
of AGN Shares.
All of
the issued and outstanding shares of AGN (the “AGN
Shares”)
issued
and outstanding immediately prior to the Effective Time shall be converted
and
exchanged for Stock Consideration in the amounts as set forth on Exhibit
B
attached
hereto. All AGN Shares, when so converted, shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and
each
holder of a certificate representing any such AGN Shares shall cease to have
any
rights with respect thereto, except the right to receive the Stock Consideration
therefore upon the surrender of such certificate(s) in accordance with Section
1.8 below, without interest.
(b) Dissenters’
Rights.
[Reserved].
3
1.8. Surrender
of Certificates.
(a) Juma
to Provide Common Stock.
Promptly after the Effective Time, Juma shall make available to AGN Shareholders
for exchange in accordance with this Section 1, through such reasonable
procedures as Juma may adopt, the Stock Consideration.
(b) Exchange
Procedures.
Unless
otherwise agreed, promptly after the Effective Time, the Surviving Corporation
shall cause to be mailed to each holder of record of a certificate or
certificates (the “Certificates”) which immediately prior to the Effective Time
represented outstanding AGN Shares, whose shares were converted into the right
to receive the Stock Consideration pursuant to Section 1.7, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk
of
loss and title to the Certificates shall pass, only upon receipt of the
Certificates by the AGN Shareholders, and shall be in such form and have such
other provisions as Juma may reasonably specify) and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for certificates
representing shares of Juma Common Stock. Upon surrender of a Certificate for
cancellation to the AGN Shareholders or to such other agent or agents as may
be
appointed by Juma, together with such letter of transmittal, duly completed
and
validly executed in accordance with the instructions thereto, the holder of
such
Certificate shall be entitled to receive in exchange therefor a certificate
representing the number of whole shares of Juma Common Stock as indicated on
Exhibit
B
hereto,
and the Certificate so surrendered shall forthwith be cancelled. Until so
surrendered, each Certificate will be deemed from and after the Effective Time,
for all corporate purposes, to evidence the ownership of the number of full
shares of Juma Common Stock into which such shares of AGN Shares shall have
been
so converted.
(c) No
Liability.
Notwithstanding anything to the contrary in this Section 1.8, neither the
Surviving Corporation nor any party hereto shall be liable to any person for
any
amount properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(d) Distributions
With Respect to Unexchanged Shares.
If
applicable, no dividends or other distributions with respect to Juma Common
Stock with a record date after the Effective Time will be paid to the holder
of
any unsurrendered Certificate with respect to the shares of Juma Common Stock
represented thereby until the holder of record of such Certificate shall
surrender such Certificate. Subject to applicable law, following surrender
of
any such Certificate, there shall be paid to the record holder of the
certificates representing whole shares of Juma Common Stock issued in exchange
therefor, without interest, at the time of such surrender, the amount of any
such dividends or other distributions with a record date after the Effective
Time payable (but for the provisions of this Section 1.8(d)) with respect to
such shares of Juma Common Stock.
(e) Transfers
of Ownership.
If any
certificate for shares of Juma Common Stock is to be issued in a name other
than
that in which the Certificate surrendered in exchange therefor is registered,
it
will be a condition of such issuance that the Certificate so surrendered will
be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such exchange will have paid to Juma or any agent designated by
it
any transfer or other taxes required by reason of the issuance of a certificate
for shares of Juma Common Stock in any name other than that of the registered
holder of the Certificate surrendered, or established to the satisfaction of
Juma or any agent designated by it that such tax has been paid or is not
payable. In addition, the transferee of such issuance shall agree to the placing
of any required restrictive legends on the new certificate for such shares
of
Juma Common Stock.
1.9. No
Further Ownership Rights in AGN Shares.
All AGN
Shares issued upon the surrender for exchange of shares of Juma Common Stock
in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such AGN Shares, and there shall be
no
further registration of transfers on the records of the Surviving Corporation
of
AGN Shares that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided
in
this Section 1.9.
4
1.10. Merger
Sub Charter Documents.
At or
prior to the Closing Date, the Articles of Incorporation and By Laws of Merger
Sub shall be amended and restated in the forms of Exhibits C-1 and C-2,
respectively, attached hereto and incorporated herein by reference.
1.11. Taking
of Necessary Action; Further Action.
If at
any time after the Effective Time, any further action is necessary or desirable
to carry out the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of AGN, the officers and directors
of
Juma and Merger Sub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
action, so long as such action is not inconsistent with this
Agreement.
1.12. Employment
Agreements.
Merger
Sub will execute a two (2) year employment agreement with Xxxxxx Xxxxxxxxx
substantially in the form of Exhibit
C
hereto.
1.13. Working
Capital Facility.
From
and after the Effective Date, Juma shall provide Merger Sub with no less than
$500,000 of working capital to fund its operations, subject to a business plan
and model, and use of proceeds for Merger Sub as to be mutually determined
and
agreed upon in good faith by the Parties.
SECTION
TWO
2. Representations
and Warranties of AGN and AGN Shareholders.
In
this
Agreement, any reference to a “Material
Adverse Effect”
with
respect to any entity or group of entities means any event, change or effect
that, when taken individually or together with all other adverse changes and
effects, is or is reasonably likely to be materially adverse to the condition
(financial or otherwise), properties, assets, liabilities, business, operations,
results of operations or prospects of such entity and its subsidiaries, taken
as
a whole, or to prevent or materially delay consummation of the Merger or
otherwise to prevent such entity and its subsidiaries from performing their
obligations under this Agreement.
In
this
Agreement, any reference to a Party’s “knowledge” means such Party’s actual
knowledge after due and diligent inquiry of officers, directors and other
employees of such party reasonably believed to have knowledge of the matter
in
questions.
AGN
and
AGN Shareholders hereby jointly and severally represent and warrant to Merger
Sub and Juma as follows:
2.1. Organization;
Subsidiaries.
(a) AGN
is a corporation duly organized, validly existing and in good standing under
the
laws of its jurisdiction of organization. AGN has the requisite corporate power
and authority and all necessary government approvals to own, lease and operate
its properties and to carry on its business as now being conducted and as
proposed to be conducted, except where the failure to have such power, authority
and governmental approvals would not, individually or in the aggregate, have
a
Material Adverse Effect on AGN. AGN is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature
of
its business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not,
individually or in the aggregate, have a Material Adverse Effect on AGN.
5
2.2. Articles
of Incorporation and Bylaws.
AGN has
delivered to Merger Sub and Juma a true and correct copy of the Articles of
Incorporation and Bylaws or other charter documents of AGN as amended to date.
AGN is not in violation of any of the provisions of its Articles of
Incorporation or Bylaws or equivalent organizational documents.
2.3. Capital
Structure.
The
authorized capital stock of AGN consists of 10,000 shares of Common Stock,
par
value $.01 per share, of which [________] shares are presently issued and
outstanding as of the date of this Agreement. There are no other outstanding
shares of capital stock or voting securities, nor are there any options or
securities convertible into capital stock, nor outstanding commitments to issue
any shares of capital stock or voting securities. All outstanding AGN Shares
are
duly authorized, validly issued, fully paid and non-assessable and are free
of
any liens or encumbrances other than any liens or encumbrances created by or
imposed upon the holders thereof, and are not subject to preemptive rights
or
rights of first refusal created by statute, the Articles of Incorporation or
Bylaws of AGN or any agreement to which AGN is a party or by which it is bound.
All outstanding AGN Shares were issued in compliance with all applicable federal
and state securities laws.
2.4. Authority.
AGN has
all requisite corporate power and authority to enter into this Agreement and
to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by AGN and all AGN Shareholders and assuming due
authorization, execution and delivery by Merger Sub and Juma, constitutes the
valid and binding obligation of AGN enforceable against AGN in accordance with
its terms.
2.5. No
Conflicts; Required Filings and Consents.
(a) The
execution and delivery of this Agreement by AGN does not, and the consummation
of the transactions contemplated hereby will not, conflict with, or result
in
any violation of, or default under (with or without notice or lapse of time,
or
both), or give rise to a right of termination, cancellation or acceleration
of
any obligation or loss of any benefit under (i) any provision of the
Articles of Incorporation or Bylaws of AGN, or (ii) any material mortgage,
indenture, lease, contract or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule
or
regulation applicable to AGN or any of its properties or assets.
(b) No
consent, approval, order or authorization of, or registration, declaration
or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality (“Governmental
Entity”)
is
required by or with respect to AGN in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby,
except for (i) the filing of the Articles of Merger, together with the
required officers’ certificates, as provided in Section 1.2, (ii) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”),
the
Securities Act of 1933, as amended (the “Securities
Act”),
applicable state securities laws and the securities laws of any foreign country;
and (iii) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse
Effect on AGN and would not prevent, or materially alter or delay any of the
transactions contemplated by this Agreement.
6
2.6. Financial
Statements.
AGN has
provided to Juma and/or Merger Sub, a true, correct and complete copy of AGN’s
audited financial statements for the fiscal years ended December 31, 2005,
and
for December 31, 2006, (collectively, the “Financial
Statements”).
2.7. Absence
of Undisclosed Liabilities.
AGN has
no material obligations or liabilities of any nature (matured or unmatured,
fixed or contingent) other than (i) those set forth or adequately provided
for in the Balance Sheet on the Financial Statements, (the “Balance Sheet”);
(ii) those incurred in the ordinary course of business and not required to
be set forth in the AGN Balance Sheet under generally accepted accounting
principles; (iii) those incurred in the ordinary course of business since
the date of the AGN Balance Sheet and consistent with past practice; and
(iv) those incurred in connection with the execution of this
Agreement.
2.8. Absence
of Certain Changes.
Since
December 31, 2006 (the “Balance Sheet Date”) there has not been, occurred or
arisen any material change in AGN’s business or corporate operations or its
financial condition.
2.9. Litigation.
There
is no private or governmental action, suit, proceeding, claim, arbitration
or
investigation pending before any agency, court or tribunal, foreign or domestic,
or, to the knowledge of AGN, threatened against AGN or any of its properties
or
any of its officers or directors (in their capacities as such) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on AGN. There is no judgment, decree or order against
AGN and/or any of its subsidiaries or, to the best knowledge of AGN, any of
its
directors or officers (in their capacities as such), that could prevent, enjoin,
or materially alter or delay any of the transactions contemplated by this
Agreement, or that could reasonably be expected to have a Material Adverse
Effect on AGN.
2.10. Restrictions
on Business Activities.
There
is no agreement, judgment, injunction, order or decree binding upon AGN that
has
or could reasonably be expected to have the effect of prohibiting or materially
impairing any current or future business practice of AGN, any acquisition of
property by AGN or the overall conduct of business by AGN as currently conducted
or as proposed to be conducted by AGN. AGN has not entered into any agreement
under which AGN is restricted from selling, licensing or otherwise distributing
any of its products to any class of customers, in any geographic area, during
any period of time or in any segment of the market.
2.11. Permits;
Company Products; Regulation.
(a) AGN
is in possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
necessary for AGN, to own, lease and operate its properties or to carry on
its
business as it is now being conducted (the “AGN
Authorizations”).
(b) AGN
has obtained, in all countries where either AGN is marketing or has marketed
its
products, all applicable licenses, registrations, approvals, clearances and
authorizations required by local, state or federal agencies in such countries
regulating the safety, effectiveness and market clearance of the products
currently or previously marketed by AGN in such countries, except for any such
failures as would not, individually or in the aggregate, have a Material Adverse
Effect on AGN.
2.12. Title
to Property.
(a) AGN
has good and marketable title to all of its respective properties, interests
in
properties and assets, real and personal, reflected in the AGN Balance Sheet
or
acquired after the AGN Balance Sheet Date (except properties, interests in
properties and assets sold or otherwise disposed of since the AGN Balance Sheet
Date in the ordinary course of business), or with respect to leased properties
and assets, valid leasehold interests in, free and clear of all mortgages,
liens, pledges, charges or encumbrances of any kind or character, except
(i) the lien of current taxes not yet due and payable, (ii) such
imperfections of title, liens and easements as do not and will not materially
detract from or interfere with the use of the properties subject thereto or
affected thereby, or otherwise materially impair business operations involving
such properties, and (iii) liens securing debt which is reflected on the
AGN Balance Sheet.
7
(b) All
equipment (the “Equipment”)
owned
or leased by AGN, and such Equipment is, taken as a whole, (i) adequate for
the conduct of AGN’s business, consistent with its past practice, and
(ii) in good operating condition (except for ordinary wear and
tear).
2.13. Intellectual
Property.
(a) AGN
owns, or is licensed or otherwise possesses legally enforceable rights to use
all patents, patent rights, trademarks, trademark rights, trade names, domain
names, trade name rights, service marks, copyrights, and any applications for
any of the foregoing, maskworks, net lists, schematics, industrial models,
inventions, technology, know-how, trade secrets, inventory, ideas, algorithms,
processes, computer software programs or applications (in both source code
and
object code form), and tangible or intangible proprietary information or
material (“Intellectual
Property”)
that
are used or proposed to be used in AGN’s business as currently conducted or as
proposed to be conducted by AGN, except to the extent that the failure to have
such rights have not had and could not reasonably be expected to have a Material
Adverse Effect on AGN.
(b) There
is no material unauthorized use, disclosure, infringement or misappropriation
of
any Intellectual Property rights of AGN, any trade secret material to AGN or
any
Intellectual Property right of any third party to the extent licensed by or
through AGN, by any third party, including any employee or former employee
of
AGN. AGN has not entered into any agreement to indemnify any other person
against any charge of infringement of any Intellectual Property, other than
indemnification provisions contained in purchase orders arising in the ordinary
course of business.
(c) AGN
is not or will not be as a result of the execution and delivery of this
Agreement or the performance of its obligations under this Agreement, in breach
of any license, sublicense or other agreement relating to the Intellectual
Property or Third Party Intellectual Property Rights, the breach of which would
have a Material Adverse Effect on AGN.
2.14. Taxes.
(a) For
purposes of this Section 2.14 and other provisions of this Agreement relating
to
Taxes, 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, (A) 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, state and foreign income taxes), payroll and
employee withholding taxes, unemployment insurance contributions, social
security taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise
taxes, gross receipts taxes, withholding taxes, business license taxes,
occupation taxes, real and personal property taxes, stamp taxes, environmental
taxes, transfer taxes, workers’ compensation, Pension Benefit Guaranty
Corporation premiums 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, (B) any liability for the payment of
amounts referred to in (A) as a result of being a member of any affiliated,
consolidated, combined or unitary group, or (C) any liability for amounts
referred to in (A) or (B) as a result of any obligations to indemnify another
person.
8
(ii) The
term “Returns”
shall
mean all reports, estimates, declarations of estimated tax, information
statements and returns required to be filed in connection with any Taxes,
including information returns with respect to backup withholding and other
payments to third parties.
(b) All
Returns required to be filed by or on behalf of AGN have been duly filed on
a
timely basis and such Returns are true, complete and correct. All Taxes shown
to
be payable on such Returns or on subsequent assessments with respect thereto,
and all payments of estimated Taxes required to be made by or on behalf of
AGN
under Section 6655 of the Code or comparable provisions of state, local or
foreign law, have been paid in full on a timely basis, and no other Taxes are
payable by AGN with respect to items or periods covered by such Returns (whether
or not shown on or reportable on such Returns). AGN has withheld and paid over
all Taxes required to have been withheld and paid over, and complied with all
information reporting and backup withholding in connection with amounts paid
or
owing to any employee, creditor, independent contractor, or other third party.
AGN has received, from each employee who holds stock that is subject to a
substantial risk of forfeiture as of the date hereof, a copy of the election(s)
made under Section 83(b) of the Code with respect to all such shares, and such
elections were validly made and filed with the Internal Revenue Service in
a
timely fashion. There are no liens on any of the assets of AGN with respect
to
Taxes, other than liens for Taxes not yet due and payable or for Taxes that
AGN
is contesting in good faith through appropriate proceedings. AGN has not been
at
any time a member of an affiliated group of corporations filing consolidated,
combined or unitary income or franchise tax returns for a period for which
the
statute of limitations for any Tax potentially applicable as a result of such
shareholdership has not expired.
(c) The
amount of AGN’s liabilities for unpaid Taxes for all periods through the date of
the Financial Statements do not, in the aggregate, exceed the amount of the
current liability accruals for Taxes reflected on the Financial Statements,
and
the Financial Statements properly accrue in accordance with generally accepted
accounting principles (“GAAP”)
all
liabilities for Taxes of AGN payable after the date of the Financial Statements
attributable to transactions and events occurring prior to such date. No
liability for Taxes of AGN has been incurred or material amount of taxable
income has been realized (or prior to and including the Effective Time will
be
incurred or realized) since such date other than in the ordinary course of
business.
(d) Merger
Sub and Juma have been furnished by AGN with 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 AGN
relating to Taxes, and (ii) all federal, state and foreign income or
franchise tax returns and state sales and use tax Returns for or including
AGN
and any of its subsidiaries for all periods since AGN’s inception.
(e) No
audit of the Returns of or including AGN by a government or taxing authority
is
in process, threatened or, to AGN’s knowledge, pending (either in writing or
orally, formally or informally). No deficiencies exist or have been asserted
(either in writing or orally, formally or informally) or are expected to be
asserted with respect to Taxes of AGN, and AGN has not received notice (either
in writing or orally, formally or informally) nor does it expect to receive
notice that it has not filed a Return or paid Taxes required to be filed or
paid. AGN is not a party to any action or proceeding for assessment or
collection of Taxes, nor has such event been asserted or threatened (either
in
writing or orally, formally or informally) against AGN or any of its assets.
No
waiver or extension of any statute of limitations is in effect with respect
to
Taxes or Returns of AGN. AGN has disclosed on its federal and state income
and
franchise tax returns all positions taken therein that could give rise to a
substantial understatement penalty within the meaning of Code Section 6662
or
comparable provisions of applicable state tax laws.
9
2.15. Employee
Matters.
AGN is
in compliance in all material respects with all currently applicable federal,
state, local and foreign laws and regulations respecting employment,
discrimination in employment, terms and conditions of employment, wages, hours
and occupational safety and health and employment practices, and is not engaged
in any unfair labor practice. There are no pending claims against AGN under
any
workers compensation plan or policy or for long term disability. AGN has no
material obligations under COBRA or any similar state law with respect to any
former employees or qualifying beneficiaries thereunder.
2.16. Material
Contracts.
(a) Juma
and/or Merger Sub have been provided by AGN with a list of all contracts and
agreements to which AGN is a party and that are material to the business,
results of operations, or condition (financial or otherwise), of AGN taken
as a
whole (such contracts, agreements and arrangements are hereinafter referred
to
as “Material
Contracts”).
(b) Except
as would not, individually or in the aggregate, have a Material Adverse Effect
on AGN, each AGN license, each Material Contract is a legal, valid and binding
agreement, and none of the AGN licenses or Material Contracts is in default
by
its terms or has been cancelled by the other party; AGN is not in receipt of
any
claim of default under any such agreement; and AGN does not anticipate any
termination or change to, or receipt of a proposal with respect to, any such
agreement as a result of the Merger or otherwise. AGN has furnished Juma with
true and complete copies of all such agreements together with all amendments,
waivers or other changes thereto.
2.17. Interested
Party Transactions.
Except
as set forth in Schedule 2.17, AGN is not indebted to any director, officer,
employee or agent of AGN (except for amounts due as normal salaries and bonuses
and in reimbursement of ordinary expenses), and no such person is indebted
to
AGN. To AGN’s knowledge, none of AGN’s officers or directors, or any
shareholders of their immediate families, are, directly or indirectly, indebted
to AGN (other than in connection with purchases of the AGN Stock) or have any
direct or indirect ownership interest in any firm or corporation with which
AGN
is affiliated or with which AGN has a business relationship, or any firm or
corporation which competes with AGN except that officers, directors and/or
equity holders of AGN may own stock in (but not exceeding two percent of the
outstanding capital stock of) any publicly traded companies that may compete
with AGN. To AGN’s knowledge, none of AGN’s officers or directors or any
shareholders of their immediate families are, directly or indirectly, interested
in any material contract with AGN. AGN is not a guarantor or indemnitor of
any
indebtedness of any other person, firm or corporation. Anything herein to the
contrary notwithstanding, neither AGN nor any of its affiliates shall engage
in
any interested party transactions prior to the Effective Time without Juma’s
prior written consent.
2.18. Insurance.
AGN has
policies of insurance and bonds of the type and in amounts customarily carried
by persons conducting businesses or owning assets similar to those of AGN.
There
is no material claim pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies or bonds. All premiums due and payable under all such policies and
bonds have been paid and AGN is otherwise in compliance with the terms of such
policies and bonds.
10
2.19. Compliance
With Laws.
AGN has
complied with, is not in violation of, and has not received any notices of
violation with respect to, any federal, state, local or foreign statute, law
or
regulation with respect to the conduct of its business, or the ownership or
operation of its business, except for such violations or failures to comply
as
could not reasonably be expected to have a Material Adverse Effect on
AGN.
2.20. Minute
Books.
The
minute book of AGN made available to Merger Sub and Juma contains a complete
summary of all meetings of directors and stockholders or actions by written
consent since the time of incorporation of AGN through the date of this
Agreement, and reflects all transactions referred to in such minutes accurately
in all material respects.
2.21. Complete
Copies of Materials.
AGN has
delivered or made available true and copies of each document that has been
requested by Merger Sub and/or Juma or their counsel in connection with their
legal and accounting review of AGN.
2.22. Brokers’
and Finders’ Fees.
AGN has
not incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finders’ fees or agents’ commissions or investment bankers’ fees or
any similar charges in connection with this Agreement or any transaction
contemplated hereby.
2.23. No
Vote Required.
Upon
the execution of this Agreement by all AGN Shareholders, no other vote of the
holders of AGN Shares is necessary to approve this Agreement and the
transactions contemplated hereby.
2.24. Third
Party Consents.
No
consent or approval is needed from any third party in order to effect the
Merger, this Agreement or any of the transactions contemplated
hereby.
2.25. Representations
Complete.
None of
the representations or warranties made by AGN herein or in any schedule or
exhibit hereto, or certificate(s) furnished by AGN pursuant to this Agreement,
when all such documents are read together in their entirety, contains or will
contain at the Effective Time any untrue statement of a material fact, or omits
or will omit at the Effective Time to state any material fact necessary in
order
to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
SECTION
THREE
3. Representations
and Warranties of Merger Sub and Juma.
Except
as
disclosed in a document dated as of the date of this Agreement and delivered
by
Merger Sub and Juma to AGN prior to the execution and delivery of this Agreement
and referring to the representations and warranties in this Agreement (the
“Merger
Sub/Juma Disclosure Schedule”),
Merger Sub and Juma hereby represent and warrant to AGN and AGN Shareholders
as
follows:
3.1. Organization,
Standing and Power.
Both
Merger Sub and Juma are a corporations duly organized, validly existing and
in
good standing under the laws of their jurisdictions of organization. Both Merger
Sub and Juma have the corporate power to own their properties and to carry
on
their businesses as now being conducted and as proposed to be conducted and
are
duly qualified to do business and are in good standing in each jurisdiction
in
which the failure to be so qualified and in good standing would have a Material
Adverse Effect on Merger Sub and/or Juma. Merger Sub and Juma have delivered
true and correct copies of their Articles of Incorporation and Bylaws or other
charter documents, as applicable, of Merger Sub and Juma, each as amended to
date, to AGN. Neither Merger Sub or Juma nor any of its subsidiaries is in
violation of any material provisions of their Articles of Incorporation or
Bylaws or equivalent organizational documents.
11
3.2. Capital
Structure.
The
authorized capital stock of Merger Sub consists of 3,000 shares of Common Stock,
no-par value, of which one hundred (100) shares were issued and outstanding
to
Juma as of the close of business on February 27, 2007. The authorized capital
stock of Juma consists of 900,000,000 shares of Common Stock, $0.001 par value,
of which 41,535,000
shares
were issued and outstanding as of the close of business on February 27, 2007.
Other than as contemplated under this Agreement, and as set forth on Schedule
3.2, there are no options, warrants, calls, rights, commitments or agreements
of
any character to which Merger Sub and/or Juma is a party or by which either
of
them is bound obligating Merger Sub and/or Juma to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of the capital stock of Merger Sub and/or Juma or
obligating Merger Sub and/or Juma to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. The shares of Juma Common
Stock to be issued to the AGN Shareholders pursuant to the Merger will be duly
authorized, validly issued, fully paid, and non-assessable.
3.3. Authority.
Merger
Sub and Juma have all requisite corporate power and authority to enter into
this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Merger Sub and Juma (other than, with respect to the Merger,
the
filing and recordation of appropriate merger documents as required by Delaware
law). This Agreement has been duly executed and delivered by Merger Sub and
Juma
and constitutes the valid and binding obligations of Juma.
3.4. No
Conflict; Required Filings and Consents.
(a) The
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration
of
any obligation or loss of a benefit under (i) any provision of the Articles
of Incorporation or Bylaws of Merger Sub and/or Juma, as amended, or
(ii) any material mortgage, indenture, lease, contract or other agreement
or instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Juma or its properties
or assets.
(b) No
consent, approval, order or authorization of, or registration, declaration
or
filing with, any Governmental Entity, is required by or with respect to Juma
in
connection with the execution and delivery of this Agreement by Merger Sub
and/or Juma or the consummation by Merger Sub and/or Juma of the transactions
contemplated hereby, except for (i) the filing of appropriate merger
documents as required by the DGCL, (ii) the filing of a Form 8-K with the
SEC within four days after the Closing Date, (iii) the filing with the SEC
of a notice on Form D and any other filings as may be required under applicable
state securities laws and the securities laws of any foreign country, and
(iv) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse
Effect on Merger Sub and/or Juma and would not prevent, materially alter or
delay any the transactions contemplated by this Merger.
12
3.5. SEC
Documents; Financial Statements.
(a) The
financial statements of Juma, including the notes thereto, included in the
Merger Sub/Juma SEC Documents (the “Juma
Financial Statements”)
were
complete and correct in all material respects as of their respective filing
dates, complied as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto as of their respective dates, and have been prepared in
accordance with United States generally accepted accounting principles applied
on a basis consistent throughout the periods indicated. The Juma Financial
Statements fairly present the consolidated financial condition and operating
results of Juma and its subsidiaries at the dates and during the periods
indicated therein. There has been no change in Juma accounting policies except
as described in the notes to the Juma Financial Statements.
3.6. Absence
of Undisclosed Liabilities.
Other
than as set forth on Schedule 3.6 attached hereto, Merger Sub and/or Juma have
no material obligations or liabilities of any nature (matured or unmatured,
fixed or contingent) other than (i) those set forth or adequately provided
for in the Balance Sheet included in Juma’s report on Form 8-K heretofore made
available to AGN for the period ended December 31, 2006 (the “Juma
Balance Sheet”),
(ii) those incurred in the ordinary course of business and not required to
be set forth in the Juma Balance Sheet under United States generally accepted
accounting principles, and (iii) those incurred in the ordinary course of
business since the Juma Balance Sheet Date and consistent with past
practice.
3.7. Absence
of Certain Changes.
Since
December 31, 2006 (the “Juma
Balance Sheet Date”),
Juma
has conducted its business in the ordinary course in a manner consistent with
past practice and there has not occurred: (i) any change, event or
condition (whether or not covered by insurance) that has resulted in, or might
reasonably be expected to result in, a Material Adverse Effect to Juma;
(ii) any declaration, setting aside, or payment of a dividend or other
distribution with respect to the shares of Juma, or any direct or indirect
redemption, purchase or other acquisition by Juma of any of its shares of
capital stock; (iii) any material amendment or change to Juma’s Articles of
Incorporation or Bylaws; or (iv) any negotiation or agreement by Juma to do
any of the things described in the preceding clauses (i) through (iii) (other
than negotiations with AGN and its representatives regarding the transactions
contemplated by this Agreement).
3.8. Litigation.
There
is no private or governmental action, suit, proceeding, claim, arbitration
or
investigation pending before any agency, court or tribunal, foreign or domestic,
or, to the knowledge of Merger Sub and/or Juma or any of their subsidiaries,
threatened against Merger Sub and/or Juma or any of their subsidiaries or any
of
their respective properties or any of their respective officers or directors
(in
their capacities as such) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on Juma. There is
no
judgment, decree or order against Merger Sub and/or Juma or any of their
subsidiaries or, to the knowledge of Juma or any of its subsidiaries, any of
their respective directors or officers (in their capacities as such) that could
prevent, enjoin, or materially alter or delay any of the transactions
contemplated by this Agreement, or that could reasonably be expected to have
a
Material Adverse Effect on Juma.
3.9. Governmental
Authorization.
Each of
Merger Sub and/or Juma and their subsidiaries has obtained each federal, state,
county, local or foreign governmental consent, license, permit, grant, or other
authorization of a Governmental Entity that is required for the operation of
Juma’s or any of its subsidiaries’ business (“Juma
Authorizations”),
and
all of such Juma Authorizations are in full force and effect, except where
the
failure to obtain or have any of such Juma Authorizations could not reasonably
be expected to have a Material Adverse Effect on Juma.
13
3.10. Compliance
With Laws.
Each of
Merger Sub and/or Juma and their subsidiaries have complied with, are not in
violation of, and have not received any notices of violation with respect to,
any federal, state, local or foreign statute, law or regulation with respect
to
the conduct of their businesses, or the ownership or operation of their
business, except for such violations or failures to comply as could not
reasonably be expected to have a Material Adverse Effect on Merger Sub and/or
Juma.
3.11. Broker’s
and Finders’ Fees.
Merger
Sub and/or Juma have not incurred, nor will they incur, directly or indirectly,
any liability for brokerage or finders’ fees or agents’ commissions or
investment bankers’ fees or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
3.12. Accounting
and Tax Matters.
[Reserved].
SECTION
FOUR
4. Conduct
Prior to the Effective Time.
4.1. Conduct
of Business of AGN and Juma.
During
the period from the date of this Agreement and continuing until the earlier
of
the termination of this Agreement or the Effective Time, each of AGN, Merger
Sub
and Juma agrees (except to the extent expressly contemplated by this Agreement
or as consented to in writing by the other parties), to carry on its and its
subsidiaries’ business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, to pay and to cause
its
subsidiaries to pay debts and Taxes when, to pay or perform other obligations
when due, and to use all reasonable efforts consistent with past practice and
policies to preserve intact its and its subsidiaries’ present business
organization, keep available the services of its and its subsidiaries’ present
officers and key employees and preserve its and its subsidiaries’ relationships
with customers, suppliers, distributors, licensors, licensees, and others having
business dealings with it or its subsidiaries, to the end that its and its
subsidiaries’ goodwill and ongoing businesses shall be unimpaired at the
Effective Time. Each of AGN, Merger Sub and Juma agrees to promptly notify
the
other of any event or occurrence not in the ordinary course of its or its
subsidiaries’ business, and of any event that could have a Material Adverse
Effect. Without limiting the foregoing, except as expressly contemplated by
this
Agreement, neither AGN, Merger Sub nor Juma shall do, cause or permit any of
the
following, or allow, cause or permit any of its subsidiaries to do, cause or
permit any of the following, without the prior written consent of the
other:
(a) Charter
Documents.
Cause
or permit any amendments to their Articles of Incorporation or
Bylaws;
(b) Dividends;
Changes in Capital Stock.
Declare
or pay any dividends on or make any other distributions (whether in cash, stock
or property) in respect of any of its capital stock, or (except in the case
of
Juma’s recapitalization of its shares as set forth in Section 5.12(a) hereof)
split, combine or reclassify any of its capital stock or issue or authorize
the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or repurchase or otherwise acquire, directly
or
indirectly, any shares of its capital stock except from former employees,
directors and consultants in accordance with agreements providing for the
repurchase of shares in connection with any termination of service to it or
its
subsidiaries;
(c) Stock
Option Plans, Etc.
Approve
and adopt any stock plans or stock option plans;
14
(d) Extraordinary
Transactions.
Enter
into any transactions that involve any corporate reorganization, change of
control, acquisition, merger, undertaking of liability in excess of $10,000,
sale of assets over $10,000, sale of equity in excess of value of $50,000,
or
other transaction or event which could substantially effect the viability or
integrity of AGN (“Extraordinary Transactions”); or
(e) Other.
Take,
or agree in writing or otherwise to take, any of the actions described in
Sections 4.1(a) through (d) above, or any action which would make any of
its representations or warranties contained in this Agreement untrue or
incorrect or prevent it from performing or cause it not to perform its covenants
hereunder.
4.2. Conduct
of Business of AGN.
During
the period from the date of this Agreement and continuing until the earlier
of
the termination of this Agreement or the Effective Time, except as expressly
contemplated by this Agreement, AGN shall not do, cause or permit any of the
following, without the prior written consent of Merger Sub and
Juma:
(a) Material
Contracts.
Enter
into any material contract or commitment, or violate, amend or otherwise modify
or waive or terminate any of the terms of any of its Material Contracts, other
than in the ordinary course of business consistent with past
practice;
(b) Issuance
of Securities.
Issue,
deliver or sell or authorize or propose the issuance, delivery or sale of,
or
purchase or propose the purchase of, any shares of its AGN Shares or securities
convertible into, or subscriptions, rights, warrants or options to acquire,
or
other agreements or commitments of any character obligating it to issue any
such
shares or other convertible securities;
(c) Intellectual
Property.
Transfer to any person or entity any rights to its Intellectual
Property;
(d) Exclusive
Rights.
Enter
into or amend any agreements pursuant to which any other party is granted
exclusive marketing or other exclusive rights of any type or scope with respect
to any of its products or technology;
(e) Dispositions.
Sell,
lease, license or otherwise dispose of or encumber any of its properties or
assets which are material, individually or in the aggregate, to its business,
taken as a whole, except in the ordinary course of business consistent with
past
practice;
(f) Indebtedness.
Incur
any indebtedness for borrowed money or guarantee any such indebtedness or issue
or sell any debt securities or guarantee any debt securities of
others;
(g) Insurance.
Materially reduce the amount of any material insurance coverage provided by
existing insurance policies;
(h) Termination
or Waiver.
Terminate or waive any right of substantial value, other than in the ordinary
course of business;
(i) Employee
Benefit Plans; New Hires; Pay Increases.
Adopt
any employee benefit or stock purchase or option plan, or hire any new director
level or officer level employee, pay any special bonus or special remuneration
to any employee or director, or increase the salaries or wage rates of its
employees;
15
(j) Taxes.
Other
than in the ordinary course of business, make or change any material election
in
respect of Taxes, adopt or change any accounting method in respect of Taxes,
file any material Tax Return or any amendment to a material Tax Return, enter
into any closing agreement, settle any claim or assessment in respect of Taxes,
or consent to any extension or waiver of the limitation period applicable to
any
claim or assessment in respect of Taxes;
(k) Revaluation.
Revalue
any of its assets, including without limitation writing down the value of
inventory or writing off notes or accounts receivable other than in the ordinary
course of business;
(l) Liability
Limit.
Upon
closing, AGN shall maintain contingent and/or historical liabilities including
any and all accounts payable and other accrued liabilities not to exceed $50,000
(“Liability
Limit”).
The
Liability Limit does not include recurring monthly expenses and/or ongoing
overhead incurred from the date of Closing. Merger Sub and/or Juma shall not
accept any form of historical liability of AGN in excess of the Liability Limit;
or
(m) Other.
Take or
agree in writing or otherwise to take, any of the actions described in Sections
4.2(a) through (l) above, or any action which would make any of its
representations or warranties contained in this Agreement untrue or incorrect
or
prevent it from performing or cause it not to perform its covenants
hereunder.
4.3. No
Solicitation.
AGN and
its officers, directors, employees or other agents of AGN will not, directly
or
indirectly, (i) take any action to solicit, initiate or encourage any Takeover
Proposal (as defined below) or (ii) engage in negotiations with, or disclose
any
nonpublic information relating to AGN to, or afford access to the properties,
books or records of AGN to, any person that has advised AGN that it may be
considering making, or that has made, a Takeover Proposal. AGN will promptly
notify Merger Sub and Juma after receipt of any Takeover Proposal or any notice
that any person is considering making a Takeover Proposal or any request for
nonpublic information relating to AGN or for access to the properties, books
or
records of AGN by any person that has advised AGN that it may be considering
making, or that has made, a Takeover Proposal and will keep Juma fully informed
of the status and details of any such Takeover Proposal notice or request.
For
purposes of this Agreement, “Takeover Proposal” means any offer or proposal for,
or any indication of interest in, a merger or other business combination
involving AGN or the acquisition of any significant equity interest in, or
a
significant portion of the assets of AGN, other than the transactions
contemplated by this Agreement.
SECTION
FIVE
5. Additional
Agreements.
5.1. Best
Efforts and Further Assurances.
Each of
the Parties to this Agreement shall use its best efforts to effectuate the
transactions contemplated hereby and to fulfill and cause to be fulfilled the
conditions to closing under this Agreement. Each party hereto, at the reasonable
request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary
or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
16
5.2. Consents;
Cooperation.
(a) Each
of Merger Sub, Juma and AGN shall use their reasonable best efforts to promptly
(i) obtain from any Governmental Entity any consents, licenses, permits,
waivers, approvals, authorizations or orders required to be obtained or made
by
Merger Sub, Juma or AGN in connection with the authorization, execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereunder, and (ii) make all necessary filings, and thereafter make any other
required submissions, with respect to this Agreement and the Merger required
under the Securities Act and the Exchange Act and any other applicable federal,
state or foreign securities laws.
(b) From
the date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, each party shall promptly notify the other party
in writing of any pending or, to the knowledge of such party, threatened action,
proceeding or other event that may cause a Material Adverse Effect.
5.3. Access
to Information.
(a) AGN
shall afford Merger Sub and/or Juma and their accountants, counsel and other
representatives, reasonable access during normal business hours during the
period prior to the Effective Time to (i) all of AGN’s properties, books,
contracts, commitments and records, and (ii) all other information
concerning the business, properties and personnel of AGN as Juma may reasonably
request. AGN agrees to provide to Merger Sub, Juma and their accountants,
counsel and other representatives copies of internal financial statements
promptly upon request. Juma shall afford AGN and its accountants, counsel and
other representatives, reasonable access during normal business hours during
the
period prior to the Effective Time to (x) all of Juma’s and any Juma
subsidiaries’ properties, books, contracts, commitments and records, and
(y) all other information concerning the business, properties and personnel
of Juma and any of its subsidiaries, as AGN may reasonably request. Juma agrees
to provide to AGN and its accountants, counsel and other representatives copies
of internal financial statements promptly upon request.
(b) Subject
to compliance with applicable law, from the date hereof until the Effective
Time, each of Merger Sub, Juma and AGN shall confer on a regular and frequent
basis with one or more representatives of the other party to report operational
matters of materiality and the general status of ongoing
operations.
(c) No
information or knowledge obtained in any investigation pursuant to this
Section 5.3 shall affect or be deemed to modify any representation or
warranty contained herein or the conditions to the obligations of the parties
to
consummate the Merger.
5.4. Confidentiality.
The
information received in accordance with Section 5.3 shall be deemed to be
“Confidential
Information.”
Each
of Merger Sub, Juma and AGN and each AGN Shareholder agrees that it will treat
in confidence all documents, materials, and other Confidential Information
that
it shall have obtained regarding any other party during the course of the
negotiations leading to the consummation of the transactions contemplated hereby
(whether obtained before or after the date of this Agreement), the investigation
provided for herein, and the preparation of this Agreement and other related
documents. Such documents, materials, and other Confidential Information shall
not be communicated to any third person (other than to its respective counsel,
accountants, financial advisors, or lenders) and shall not be used for any
purpose to the detriment of any other party. No party shall use any Confidential
Information in any manner whatsoever except solely for the purpose of evaluating
a possible business relationship as contemplated by this Agreement. No party
and
no representative of a party will, during the term of this Agreement or at
any
time during the two years thereafter, irrespective of the time, manner, or
cause
of termination of this Agreement, use, disclose, copy, or assist any other
person in the use, disclosure, or copying of any documents, materials, or other
Confidential Information of any other party hereto.
17
5.5. Public
Disclosure.
Unless
otherwise permitted by this Agreement, Merger Sub, Juma and AGN shall consult
with each other before issuing any press release or otherwise making any public
statement or making any other public (or non-confidential) disclosure (whether
or not in response to an inquiry) regarding the terms of this Agreement and
the
transactions contemplated hereby, and neither shall issue any such press release
or make any such statement or disclosure without the prior approval of the
other
(which approval shall not be unreasonably withheld), except as may be required
by law.
5.6. State
Statutes.
If any
state takeover law shall become applicable to the transactions contemplated
by
this Agreement, Juma and its Board of Directors or AGN and its Board of
Directors, as the case may be, shall use their reasonable best efforts to grant
such approvals and take such actions as are necessary so that the transactions
contemplated by this Agreement may be consummated as promptly as practicable
on
the terms contemplated by this Agreement and otherwise to minimize the effects
of such state takeover law on the transactions contemplated by this
Agreement.
5.7. Filings
or Notices Pursuant to Securities Laws.
(a) Merger
Sub and/or Juma shall prepare and file with the SEC a notice on Form D and
such
other notices or applications as Merger Sub and/or Juma may deem appropriate
under state securities laws in connection with the transactions contemplated
by
this Agreement. AGN, each AGN Shareholder, Merger Sub, and Juma shall take
any
action required to be taken under any applicable federal or state securities
laws in connection with the issuance of the Stock Consideration. AGN and each
AGN Shareholder shall furnish, or cause such part to furnish, to Merger Sub
and/or Juma all information concerning AGN and the AGN Shareholders as Merger
Sub and/or Juma may reasonably request in connection with such
actions.
(b) The
information supplied by any party for inclusion in the notices or other filings
in accordance with this Section 5.7 shall not, at the time filed, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading. If at any time prior to the Closing any event or circumstance
relating to any party or any party’s affiliates, or its or their respective
officers or directors, is discovered by any party that should be set forth
in a
supplement or amendment to any notices or other filings in accordance with
this
Section 5.7, such party shall promptly inform each other party thereof in
writing. All documents that such party is responsible for filing with the SEC
or
any state authority in connection with the transactions contemplated herein
shall comply as to form in all material respects with the applicable
requirements of the Securities Act and the rules and regulations thereunder,
the
Exchange Act and the rules and regulations thereunder, state securities laws,
and other applicable state laws
5.8. Acquisition
of Juma Common Stock.
The
consummation of this Agreement and the transactions contemplated herein,
including the issuance of the Juma Common Stock to the AGN Shareholders as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act and applicable state securities Laws. Such transactions shall
be
consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes that depend, among other items, on the
circumstances under which the AGN Shareholders acquire such securities
comprising the Merger Consideration.
18
(a) In
order to provide documentation for reliance upon exemptions from the
registration and prospectus delivery requirements for the issuance of Juma
Common Stock in the Merger, each AGN Shareholder hereby makes the following
representations and warranties:
(i) Such
AGN Shareholder acknowledges that neither the SEC nor the securities commission
of any state or other federal agency has made any determination as to the merits
of acquiring the Juma Common Stock, and that the transactions contemplated
herein involve certain risks.
(ii) Such
AGN Shareholder has received and read this Agreement and understands the risk
related to the consummation of the transactions herein
contemplated.
(iii) Such
AGN Shareholder has such knowledge and experience in business and financial
matters that such AGN Shareholder is capable of evaluating the Merger and Juma
and its business operations.
(iv) Such
AGN Shareholder has been provided with a copy of the Agreement and the related
disclosure schedules of the parties hereto plus all materials and information
requested by each or his or her representative, including any information
requested to verify any information furnished (to the extent such information
is
available or can be obtained without unreasonable effort or expense), and each
has been provided the opportunity for direct communication with Juma and its
representatives regarding the transactions contemplated hereby.
(v) All
information that each AGN Shareholder has provided to Merger Sub and/or Juma
or
its agents or representatives concerning suitability to hold shares in Juma
following the transactions contemplated hereby is complete, accurate, and
correct.
(vi) Such
AGN Shareholder has not offered or sold any interest in this Agreement and
has
no present intention of dividing the Juma Common Stock to be received or the
rights under this Agreement with others or of reselling or otherwise disposing
of any portion of such stock or rights, either currently or after the passage
of
a fixed or determinable period of time or on the occurrence or nonoccurrence
of
any predetermined event or circumstance.
(vii) Such
AGN Shareholder was at no time solicited by any leaflet, public promotional
meeting, circular, newspaper or magazine article, radio or television
advertisement, or any other form of general advertising or solicitation in
connection with the offer, sale, or purchase of the Juma Common Stock through
this Agreement.
(viii) As
a result of the Merger, such AGN Shareholder believes that its financial
prospects resulting from its ownership in Juma will not be materially less
favorable than his or her retained ownership in AGN. Each AGN Shareholder
anticipates no need in the foreseeable future to sell the Juma Common Stock
to
be acquired pursuant hereto. Each is able to bear the economic risks of this
investment, and consequently, without limiting the generality of the foregoing,
is able to hold the Juma Common Stock to be received for an indefinite period.
(ix) Such
AGN Shareholder understands that the Juma Common Stock has not been registered,
but is being acquired by reason of a specific exemption under the Securities
Act
as well as under certain state securities Laws for transactions by an issuer
not
involving any public offering and that any disposition of the Juma Common Stock
may, under certain circumstances, be inconsistent with this exemption and may
make the holder who disposes of such stock an “underwriter” within the meaning
of the Securities Act. It is understood that the definition of “underwriter”
focuses upon the concept of “distribution” and that any subsequent disposition
of the subject Juma Common Stock can only be effected in transactions that
are
not considered distributions.
19
(x) Such
AGN Shareholder acknowledges that the shares of Juma Common Stock must be held
and may not be sold, transferred, or otherwise disposed of for value unless
they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Juma is under no obligation to register the Juma
Common Stock under the Securities Act. If Rule 144 is available (and no
assurance is given that it will be except as expressly set forth in this
Agreement), after one year and prior to two years following the Effective Date,
only routine sales of such Juma Common Stock in limited amounts can be made
in
reliance upon Rule 144 in accordance with the terms and conditions of that
rule.
Juma is under no obligation to the AGN Shareholders to make Rule 144 available,
except as may be expressly agreed to by it in writing in this Agreement, and
in
the event Rule 144 is not available, compliance with Regulation A or some other
disclosure exemption may be required before such persons can sell, transfer,
or
otherwise dispose of such Juma Common Stock without registration under the
Securities Act. Juma’s registrar and transfer agent will maintain a
stop-transfer order against the registration of transfer of the Juma Common
Stock, and the certificate representing the Juma Common Stock will bear a legend
in substantially the following form so restricting the sale of such
securities:
The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), and are “restricted
securities” within the meaning of Rule 144 promulgated under the Securities Act.
The securities have been acquired for investment and may not be sold or
transferred without complying with Rule 144 in the absence of an effective
registration or other compliance under the Securities Act.
(xi) Such
AGN Shareholder acknowledges that Juma may refuse to register transfer shares
of
the Juma Common Stock in the absence of compliance with Rule 144 unless the
holder furnishes the issuer with a “no-action” or interpretive letter from the
SEC or an opinion of counsel reasonably acceptable to Juma stating that the
transfer is proper. Further, unless such letter or opinion states that the
shares of Juma Common Stock are free of any restrictions under the Securities
Act, Juma may refuse to transfer the Juma Common Stock to any transferee that
does not furnish in writing to Juma the same representations and agree to the
same conditions respecting such Juma Common Stock as set forth herein. Juma
may
also refuse to transfer the Juma Common Stock if any circumstances are present
reasonably indicating that the transferee’s representations are not
accurate.
(b) Such
AGN Shareholder shall execute and deliver to Merger Sub and/or Juma, at or
prior
to the Closing, such further letters of representation, acknowledgment,
suitability, or the like, as Merger Sub and/or Juma and its counsel may
reasonably request in connection with reliance on exemptions from registration
under such securities Laws.
(c) Each
Party acknowledges that the basis for relying on exemptions from registration
or
qualifications are factual, depending on the conduct of the various parties,
and
that no legal opinion or other assurance will be required or given to the effect
that the transactions contemplated hereby are in fact exempt from registration
or qualification.
(d) So
long as the original holders of the Stock Consideration are subject to Rule
144,
Juma will use its commercially reasonable efforts to maintain its status as
a
public company under the Securities Act and to make, in a timely manner, the
filings and reports required by the Exchange Act.
20
5.9. Merger
Sub Restructuring.
At or
prior to the Closing, Merger Sub shall:
(a) consent
to the election as directors of the following persons, each to assume office
at
the Closing and to serve until the next annual meeting of stockholders and
until
his successor is elected and
qualified:
[___________]
(b) obtain
the approval of the foregoing by the stockholders of Merger Sub in the manner
required by the DGCL and Merger Sub’s certificate of incorporation and bylaws.
SECTION
SIX
6. Conditions
to the Merger.
6.1. Conditions
to Obligations of Each Party to Effect the Merger.
The
respective obligations of each party to this Agreement to consummate and effect
this Agreement and the transactions contemplated hereby shall be subject to
the
satisfaction on or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, by agreement of all the
parties hereto:
(a) Stockholder
Approval. [Reserved].
(b) No
Injunctions or Restraints; Illegality. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint or prohibition
preventing the consummation of the Merger shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any
of
the foregoing be pending; nor shall there be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to
the
Merger, which makes the consummation of the Merger illegal. In the event an
injunction or other order shall have been issued, each party agrees to use
its
reasonable diligent efforts to have such injunction or other order
lifted.
(c) Governmental
Approval. Merger Sub, Juma and AGN shall have timely obtained from each
Governmental Entity all approvals, waivers and consents, if any, necessary
for
consummation of or in connection with the Merger and the several transactions
contemplated hereby, including, without limitation, such approvals, waivers
and
consents as may be required under the Securities Act and under any state
securities laws.
(d) Approval
of Form 8-K. Merger Sub, Juma and AGN have approved the Form 8-K to be filed
with the SEC within four (4) days of the Effective Time.
6.2. Additional
Conditions to Obligations of AGN.
The
obligations of AGN to consummate and effect this Agreement and the transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Effective Time of each of the following conditions, any of which may be waived,
in writing, by AGN:
21
(a) Representations,
Warranties and Covenants
(i) Each of the representations and warranties of Juma in this Agreement
that is expressly qualified by a reference to materiality shall be true in
all
respects as so qualified, and each of the representations and warranties of
Merger Sub and/or Juma in this Agreement that is not so qualified shall be
true
and correct in all material respects, on and as of the Effective Time as though
such representation or warranty had been made on and as of such time (except
that those representations and warranties which address matters only as of
a
particular date shall remain true and correct as of such date), and
(ii) Merger Sub and Juma shall have performed and complied in all material
respects with all covenants, obligations and conditions of this Agreement
required to be performed and complied with by them as of the Effective
Time.
(b) Certificates
of Merger Sub and Juma.
(i) Compliance
Certificates of Merger Sub and Juma.
AGN
shall have been provided with certificates executed on behalf of Merger Sub
and
Juma by their Presidents to the effect that, as of the Effective Time, each
of
the conditions set forth in Section 6.2(a) above and (d) below has been
satisfied with respect to Merger Sub and Juma.
(ii) Certificate
of Secretary of Merger Sub and Juma.
AGN
shall have been provided with certificates executed by the Secretaries of Merger
Sub and Juma certifying:
(A) Resolutions
duly adopted by the Board of Directors and consent of the holders of a majority
of outstanding shares of Merger Sub and Juma previously authorizing the
execution of this Agreement and the execution, performance and delivery of
all
agreements, documents and transactions contemplated hereby; and
(B) The
incumbency of the officers of Merger Sub and Juma executing this Agreement
and
all agreements and documents contemplated hereby.
(c) No
Material Adverse Changes.
No
material adverse change shall have occurred in the condition (financial or
otherwise), properties, assets (including intangible assets), liabilities,
business, operations, results of operations or prospects of Juma, taken as
a
whole.
(d) Good
Standing.
AGN
shall have received a certificate or certificates of the Secretary of State
of
the State of Delaware certifying as of a date no more than ten (10) business
days prior to the Effective Time that Merger Sub and Juma are, as of such date,
in good standing and authorized to transact business as a domestic
corporation.
6.3. Additional
Conditions to the Obligations of Juma.
The
obligations of Merger Sub and Juma to consummate and effect this Agreement
and
the transactions contemplated hereby shall be subject to the satisfaction at
or
prior to the Effective Time of each of the following conditions, any of which
may be waived, in writing, by Juma:
(a) Representations,
Warranties and Covenants.
(i) Each of the representations and warranties of AGN and the AGN
Shareholders in this Agreement that is expressly qualified by a reference to
materiality shall be true in all respects as so qualified, and each of the
representations and warranties of AGN and the AGN Shareholders in this Agreement
that is not so qualified shall be true and correct in all material respects,
on
and as of the Effective Time as though such representation or warranty had
been
made on and as of such time (except that those representations and warranties
which address matters only as of a particular date shall remain true and correct
as of such date), and (ii) AGN and the AGN Shareholders shall have
performed and complied in all material respects with all covenants, obligations
and conditions of this Agreement required to be performed and complied with
by
it as of the Effective Time.
22
(b) No
Material Adverse Changes.
No
material adverse change shall have occurred in the condition (financial or
otherwise), properties, assets (including intangible assets), liabilities,
business, operations, results of operations or prospects of AGN, taken as a
whole.
(c) Certificates
of AGN.
(i) Compliance
Certificate of AGN.
Juma
shall have been provided with a certificate executed on behalf of AGN by its
President to the effect that, as of the Effective Time, each of the conditions
set forth in Section 6.3(a) and (b) above has been satisfied.
(ii) Certificate
of Secretary of AGN.
Juma
shall have been provided with a certificate executed by the Secretary of AGN
certifying:
(A) Resolutions
duly adopted by the Board of Directors and the AGN Shareholders authorizing
the
execution of this Agreement and the execution, performance and delivery of
all
agreements, documents and transactions contemplated hereby;
(B) The
Articles of Incorporation and Bylaws of AGN, as in effect immediately prior
to
the Effective Time, including all amendments thereto; and
(C) the
incumbency of the officers of AGN executing this Agreement and all agreements
and documents contemplated hereby.
(d) Third
Party Consents.
Merger
Sub and/or Juma shall have been furnished with evidence satisfactory to it
that
AGN has obtained those consents, waivers, approvals or authorizations of those
Governmental Entities and third parties whose consent or approval are required
in connection with the Merger as set forth in Sections 5.2(a).
(e) Injunctions
or Restraints on Merger and Conduct of Business.
No
proceeding brought by any administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking to
prevent the consummation of the Merger shall be pending. In addition, no
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal or regulatory
restraint provision limiting or restricting Juma’s conduct or operation of the
business of AGN, following the Merger shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
Governmental Entity, domestic or foreign, seeking the foregoing be
pending.
(f) Resignation
of Directors and Officers.
Merger
Sub and/or Juma shall have received letters of resignation from each of its
directors and officers immediately prior to the Effective Time, which
resignations in each case shall be effective as of the Effective
Time.
SECTION
SEVEN
7. Termination,
Amendment and Waiver.
7.1. Termination.
At any
time prior to the Effective Time, this Agreement may be terminated and the
Merger may be abandoned:
23
(a) by
mutual consent duly authorized by the Boards of Directors of each of Merger
Sub,
Juma and AGN;
(b) by
either Merger Sub, Juma or AGN, if, without fault of the terminating party,
(i) the
Effective Time shall not have occurred on or before midnight [________, 2007]
(or such later date as may be agreed upon in writing by the parties);
or
(ii) there
shall be any applicable federal or state law that makes consummation of the
Merger illegal or otherwise prohibited or if any court of competent jurisdiction
or governmental entity shall have issued an order, decree, ruling or taken
any
other action restraining, enjoining or otherwise prohibiting the Merger and
such
order, decree, ruling or other action shall have become final and nonappealable;
(c) by
Merger Sub and/or Juma, if AGN or any of the AGN Shareholders shall materially
breach any of its representations, warranties or obligations hereunder and
such
breach shall not have been cured within ten calendar business days of receipt
by
AGN of written notice of such breach, provided that Merger Sub and/or Juma
is
not in material breach of any of their representations, warranties or
obligations hereunder, and provided further, that no cure period shall be
required for a breach which by its nature cannot be cured;
(d) by
AGN, if Merger Sub and/or Juma shall materially breach any of its
representations, warranties or obligations hereunder and such breach shall
not
have been cured within ten calendar days following receipt by Merger Sub and/or
Juma of written notice of such breach, provided that neither AGN nor any of
the
AGN Shareholders is not in material breach of any of its representations,
warranties or obligations hereunder, and provided further, that no cure period
shall be required for a breach which by its nature cannot be cured.
7.2. Effect
of Termination.
In the
event of termination of this Agreement as provided in Section 7.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Merger Sub, Juma or AGN or their respective officers,
directors, stockholders or affiliates, except to the extent that such
termination results from the breach by a party hereto of any of its
representations, warranties or covenants set forth in this Agreement; provided
that, the provisions of Section 5.4 (Confidentiality), Section 7.3 (Expenses
and
Termination Fees) and this Section 7.2 shall remain in full force and effect
and
survive any termination of this Agreement.
7.3. Expenses
and Termination Fees.
Whether
or not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated including, without
limitation, filing fees and the fees and expenses of advisors, accountants,
legal counsel and financial printers, shall be paid by the party incurring
such
expense. Notwithstanding the foregoing, Juma shall be obligated to pay or
reimburse AGN at the Closing for the actual and reasonable fees of AGN’s
independent accountant incurred in connection with the preparation of the
Financial Statements described in Section 2.6.
7.4. Amendment.
The
Boards of Directors of Merger Sub, Juma and AGN and the AGN Shareholders may
cause this Agreement to be amended at any time by execution of an instrument
in
writing signed on behalf of each of the parties.
24
7.5. Extension;
Waiver.
At any
time prior to the Effective Time any party may, to the extent legally allowed,
(i) extend the time for the performance of any of the obligations or other
acts of the other parties, (ii) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto, and (iii) waive compliance with any of
the agreements or conditions for the benefit of such party contained herein.
Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such
party.
SECTION
EIGHT
8. Indemnification.
8.1. Survival
of Representations and Warranties.
All
covenants to be performed prior to the Effective Time, and all representations
and warranties in this Agreement or in any instrument delivered pursuant to
this
Agreement shall survive the consummation of the Merger and continue until the
second anniversary of the Effective Time (the “Indemnification
Termination Date”);
provided that if any claims for indemnification have been asserted with respect
to any such representations and warranties prior to the Indemnification
Termination Date, the representations and warranties on which any such claims
are based shall continue in effect until final resolution of any claims. All
covenants to be performed after the Effective Time shall continue
indefinitely.
8.2. Indemnification
by AGN and AGN Shareholders.
Subject
to the limitations set forth in this Section 8, from and after the Effective
Time, AGN and the AGN Shareholders shall protect, defend, indemnify and hold
harmless Juma and the Merger Sub and its respective parent corporation,
affiliates, officers, directors, employees, representatives and agents (Juma,
Merger Sub and each of the foregoing persons or entities is hereinafter referred
to individually as an “Merger Sub Indemnified Person” and collectively as
“Merger
Sub Indemnified Persons”)
from
and against any and all losses, costs, damages, liabilities, fees (including
without limitation attorneys’ fees) and expenses (collectively, the
“Merger
Sub Damages”),
that
any of the Merger Sub Indemnified Persons by reason of or in connection with
any
claim, demand, action or cause of action alleging misrepresentation, breach
of,
or default in connection with, any of the representations, warranties, covenants
or agreements of AGN and the AGN Shareholders contained in this Agreement,
including any exhibits or schedules attached hereto, and the Certificate of
Merger, which becomes known to Merger Sub and/or Juma prior to the
Indemnification Termination Date. Damages in each case shall be net of the
amount of any insurance proceeds and indemnity and contribution actually
recovered by Juma or the Merger Sub.
8.3. Indemnification
by Juma.
Subject
to the limitations set forth in this Section 8, from and after the Effective
Time, Juma shall protect, defend, indemnify and hold harmless AGN and the AGN
Shareholders and their respective affiliates, officers, directors, employees,
representatives and agents (AGN, AGN Shareholders and each of the foregoing
persons or entities is hereinafter referred to individually as an “AGN
Indemnified Person” and collectively as “AGN
Indemnified Persons”)
from
and against any and all losses, costs, damages, liabilities, fees (including
without limitation attorneys’ fees) and expenses (collectively, the
“AGN
Damages”),
that
any of the AGN Indemnified Persons by reason of or in connection with any claim,
demand, action or cause of action alleging misrepresentation, breach of, or
default in connection with, any of the representations, warranties, covenants
or
agreements of Juma contained in this Agreement, including any exhibits or
schedules attached hereto, and the Certificate of Merger, which becomes known
to
AGN or the AGN Shareholders prior to the Indemnification Termination Date.
Damages in each case shall be net of the amount of any insurance proceeds and
indemnity and contribution actually recovered by AGN or the AGN
Shareholders.
25
8.4. Exclusive
Contractual Remedy and Limitations.
Merger
Sub, Juma, the AGN Shareholders and AGN each acknowledge that Merger Sub Damages
or AGN Damages, if any, may relate to unresolved contingencies existing at
the
Effective Time, which if resolved at the Effective Time would have led to a
reevaluation of the total consideration the Parties would have agreed to
transfer in connection with the Merger. The maximum liability of AGN and the
AGN
Shareholders for any breach of a representation, warranty or covenant of AGN
or
the AGN Shareholders and the maximum liability of Merger Sub and Juma
collectively, for any breach of a representation, warranty or covenant of Merger
Sub or Juma shall be limited to the consideration paid to AGN, the AGN
Shareholders, and to or on behalf of another affiliate of AGN; provided,
however, that nothing herein shall limit the liability: (i) of AGN, AGN
Shareholders, Juma, or Merger Sub, as applicable, for any breach of
representation, warranty or covenant if the Merger does not close, and
(ii) of any officer, director or Member of AGN, Juma, or Merger Sub, as
applicable for such person’s or entity’s fraud or intentional
misrepresentation.
SECTION
NINE
9. General
Provisions.
9.1. Survival
of Warranties.
The
representations, warranties and agreements set forth in this Agreement or in
any
instrument delivered pursuant to this Agreement shall survive the Effective
Time
of the Merger and (except to the extent that survival is necessary to effectuate
the intent of such provisions) shall terminate on the second anniversary of
the
Effective Time of the Merger, provided that representations, warranties and
agreements relating to Taxes shall terminate on the date which is thirty (30)
days after expiration of all applicable statutes of limitations relating to
such
Taxes.
9.2. Notices.
Any
notice required or permitted by this Agreement shall be in writing and shall
be
deemed sufficient upon receipt, when delivered personally or by courier,
overnight delivery service or confirmed facsimile, or 48 hours after being
deposited in the regular mail as certified or registered mail (airmail if sent
internationally) with postage prepaid, if such notice is addressed to the party
to be notified at such party’s address or facsimile number as set forth below,
or as subsequently modified by written notice:
(a) | if to Merger Sub and/or Juma, to: |
Juma Technology Corp. | |
000 Xxxxxx Xxxxxx | |
Xxxxxxxxxxx, Xxx Xxxx 00000 |
(b) | with a copy to: |
Xxxxxxx Xxxxxx LLP: | |
000 Xxxxxxxxx Xxxxxx | |
Xxx Xxxx, Xxx Xxxx, 00000 | |
Attention Xxxxxx X. Xxxxxx, Esq. |
26
(c) | if to AGN and/or the AGN Shareholders, to: |
[___________] | |
[___________], Inc. |
9.3. Interpretation.
When a
reference is made in this Agreement to Exhibits or Schedules, such reference
shall be to an Exhibit or Schedule to this Agreement unless otherwise indicated.
The words “include,” “includes” and “including” when used herein shall be deemed
in each case to be followed by the words “without limitation.” The phrase “made
available” in this Agreement shall mean that the information referred to has
been made available if requested by the party to whom such information is to
be
made available. The phrases “the date of this Agreement,” “the date hereof,” and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to the date first above written. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
9.4. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall constitute one
instrument.
9.5. Entire
Agreement; Nonassignability; Parties in Interest.
This
Agreement and the documents and instruments and other agreements specifically
referred to herein or delivered pursuant hereto, including the Exhibits, the
Schedules (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and shall survive any termination of this Agreement or
the
Closing, in accordance with its terms; (b) are not intended to confer upon
any other person any rights or remedies hereunder; and (c) shall not be assigned
by operation of law or otherwise except as otherwise specifically
provided.
9.6. Severability.
If one
or more provisions of this Agreement are held to be unenforceable under
applicable law, the parties agree to renegotiate such provision in good faith,
in order to maintain the economic position enjoyed by each party as close as
possible to that under the provision rendered unenforceable. In the event that
the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this
Agreement, (ii) the balance of the Agreement shall be interpreted as if
such provision were so excluded and (iii) the balance of the Agreement
shall be enforceable in accordance with its terms.
9.7. Remedies
Cumulative.
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 upon such party, and the exercise
by a party of any one remedy will not preclude the exercise of any other
remedy.
9.8. Governing
Law.
This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the State of New York, without giving effect
to
principles of conflicts of law.
27
9.10. Amendments
and Waivers.
Any
term of this Agreement may be amended or waived only with the written consent
of
the parties or their respective successors and assigns. Any amendment or waiver
effected in accordance with this Section 9.10 shall be binding upon the
parties and their respective successors and assigns.
9.11. Spin-Off.
In the
event that Juma consummates within three years of the Effective Date a spin-off
of Merger Sub to the public shareholders of Juma, each
of
Messrs
Xxxxxx and Xxxxxxxxx shall be entitled to receive a payment ("Claw
Back Payment”)
calculated as follows: the product of (A) three and one-half percent (3.5%)
and
(B) the net proceeds from the Spin-Off. Messrs Xxxxxx and Xxxxxxxxx shall be
paid the Claw Back Payment within 30 days of the issuance of Juma’s audited
financial statements applicable to the period encompassing the
Spin-Off.
9.12. Attorneys’
Fees.
In the
event that any proceeding has been commenced to interpret, construe, or enforce
this Agreement, the prevailing party shall be entitled to seek its reasonable
attorneys’ fees.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
[SIGNATURE
PAGES TO FOLLOW]
28
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
JUMA TECHNOLOGY CORP. | ||
|
|
|
By: | ||
Name: |
||
Title |
MERGER SUB | ||
|
|
|
By: | ||
Name: |
||
Title |
AGN NETWORK, INC. | ||
|
|
|
By: | ||
Name: |
||
Title |
AGN Shareholders | ||
Xxxxx Xxxxxx |
||
Xxxxxx Xxxxxxxxx |
||
Xxxxxxxx Xxxxxxxx |
||
Xxxxxxx X. Xxxxxxxx, Xx. |
||
Xxxxxx X. Xxxxxxxx, III |
||
Xxxxxx X. Xxxxxx |
EXHIBITS
Exhibit A
-
|
Articles
of Merger
|
|
Exhibit B
-
|
Merger
Consideration
|
|
Exhibit
C-1 -
|
Amended
and Restated Articles of Incorporation for Merger Sub
|
|
Exhibit
C-2 -
|
Amended
and Restated By Laws for Merger Sub
|
|
Exhibit
X -
|
Xxxxxxxxx
Employment Agreement
|
EXHIBIT
A
ARTICLES
OF MERGER
EXHIBIT
B
MERGER
CONSIDERATION
Name
And Address
|
Number
Of Juma Shares
|
Percentage
of Merger Consideration
|
Xxxxx
Xxxxxx
|
51,000
|
15.94
|
Xxxxxx
Xxxxxxxxx
|
49,000
|
15.30
|
Xxxxxxxx
Xxxxxxxx
|
137,500
|
42.96
|
Xxxxxxx
X. Xxxxxxxx, Xx.
|
27,500
|
8.60
|
Xxxxxx
X. Xxxxxxxx, III
|
27,500
|
8.60
|
Xxxxxx
X. Xxxxxx
|
27,500
|
8.60
|
Total
|
320,000
|
EXHIBIT C-1
ARTICLES
OF INCORPORATION
EXHIBIT C-2
BYLAWS
EXHIBIT
X
XXXXXXXXX
EMPLOYMENT AGREEMENT
Schedule
1.2(d)
Description
|
Amount
|