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EXHIBIT 2.1
AGREEMENT
AND
PLAN OF REORGANIZATION
BY AND AMONG
ADVANTAGE LIFE PRODUCTS, INC.,
ADVANTAGE LIFE ACQUISITION ONE, INC.,
TREASURE ROCKHOUND RANCHES, INC.,
TECHNOLOGY HOLDINGS, INC., THE SOLE SHAREHOLDER OF
TREASURE ROCKHOUND RANCHES, INC.,
CHANNEL AMERICA BROADCASTING, INC., THE SOLE SHAREHOLDER OF
TECHNOLOGY HOLDINGS, INC.,
XXXX XXXXXXXX,
XXXXXX XXXXXX,
VIETRI INVESTMENTS,
AND
ROSCOM LIMITED
Dated: February 21, 1997
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Agreement and Plan of Reorganization ("Agreement"), dated as of
February 21, 1997, by and among Advantage Life Products, Inc., a Florida
corporation ("Advantage Life"); Advantage Life Acquisition One, Inc., a Florida
corporation ("Advantage Life Acquisition"); Treasure Rockhound Ranches, Inc., a
Texas corporation (the "Acquiree"); Technology Holdings, Inc., a Florida
corporation which is the sole shareholder of the Acquiree ("THI"), Channel
America Broadcasting, Inc., a Florida Corporation, the sole shareholder of THI
("CATV"); Xxxx Xxxxxxxx, an individual ("Xxxxxxxx"); Xxxxxx Xxxxxx, an
individual ("Norton"); Vietri Investments, a Foreign Corporation ("Vietri");
and Roscom Limited, a Foreign Corporation ("Roscom") .
BACKGROUND INFORMATION
Advantage Life and Acquiree deem it advisable that Acquiree be merged
into Advantage Life Acquisition pursuant to this Agreement and in accordance
with the applicable statutes of the States of Florida and Texas. Advantage
Life, Acquiree and Advantage Life Acquisition desire to adopt a plan of
reorganization within the meaning of Section 368(a)(2)(D) of the Internal
Revenue Code of 1986, as amended (the "Code").
Pursuant to this reorganization, Advantage Life will issue to THI shares of
Advantage Life's restricted common stock, $.16 par value (the "Advantage Life
Shares"). Advantage Life shall, immediately following the contemplated closing
of this transaction, file an information statement with the Securities and
Exchange Commission ("SEC"), including, but not limited to, registering these
shares with the SEC to have the restrictive legend removed. Upon this
registration statement becoming effective, THI and CATV agree to distribute the
Advantage Life Shares to the CATV Series D Preferred Stockholders, in the form
of a dividend or redemption, as described herein. In conjunction with this
Agreement, immediately prior to the closing of the Agreement, Xxxx Xxxxxxxx,
Xxxxx Xxxxxx, Vietri Investments and Roscom Limited shall return to Advantage
Life 6,700,000 shares of the common stock of Advantage Life currently owned by
them in exchange for the cancellation of the indebtedness that Vietri
Investments, Roscom Limited, Xxxx Xxxxxxxx and Xxxxxx Xxxxxx owe to Advantage
Life.
Accordingly, in consideration of the promises contained herein, Advantage Life,
the Acquiree, Advantage Life Acquisition, THI, CATV, Lipstein, Norton, Vietri,
and Roscom adopt this plan of reorganization and agree as follows:
OPERATIVE PROVISIONS
ARTICLE 1
MERGER
1.1 Transfer of Property and Liabilities. Upon the Effective Date
(as defined in Article 4 hereof) of the merger, the separate existence of
Acquiree shall cease; all of the outstanding shares of stock of Acquiree shall
be exchanged for and converted into shares of the
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common stock of Advantage Life and a promissory note issued by Advantage Life
Acquisition, as hereinafter provided; and upon the filing of a Certificate of
Merger with the Secretary of State of the State of Florida, Advantage Life
Acquisition shall possess all the rights, privileges, immunities, powers and
purposes, and all property, causes of action and every other asset of Acquiree
and shall assume and be liable for all the liabilities, obligations and
penalties of Acquiree, in accordance with Florida law.
1.2 Surviving Corporation. Following the merger, the existence of
Advantage Life Acquisition shall continue unaffected and unimpaired by the
merger, with all the rights, privileges, immunities and powers, and subject to
all the duties, liabilities, of a corporation organized under the laws of
Florida. The Certificate of Incorporation and Bylaws of Advantage Life
Acquisition, as in effect immediately prior to the Effective Date, shall
continue in full force and effect, and, except as provided in Article 1.3,
shall not be changed in any manner by the merger.
1.3 Name. The name of Advantage Life Acquisition shall be changed as
of the Effective Date to "Treasure Rockhound Ranches, Inc."
ARTICLE 2
CONVERSION OF SHARES; NOTES
2.1 Conversion Ratio. As a result of the merger contemplated by this
Agreement, THI will receive (a) 6,000,000 shares of the common capital stock of
Advantage Life (the "Advantage Life Shares"); (b) Advantage Life Acquisition's
secured promissory note for $750,000 (the "Note"); and (c) Advantage Life will
assume certain liabilities of THI as defined elsewhere. In order to effect
such conversion, the shares of Acquiree's common stock issued and outstanding
immediately prior to the Effective Date (the "Acquiree Shares") shall be
converted by the merger into the Advantage Life Shares and the Note. The Note
shall bear interest at an annual rate of 8%. Principal on the Note shall be
due in a single payment three years from the Closing Date, as defined below.
The Note shall be secured by all the assets of Advantage Life Acquisition
following the merger.
2.2 Shares of Advantage Life Acquisition. None of the issued shares
of Advantage Life Acquisition shall be converted as a result of the merger and
all of such shares shall remain issued shares of capital stock of Advantage
Life Acquisition.
2.3 Shares of Acquiree. The shares of Acquiree's common capital stock
issued and outstanding immediately prior to the Effective Date is 3,000,000
common shares which shall, upon the Effective Date, by virtue of the
Reorganization be exchanged for 6,000,000 shares of Advantage Life's
restricted common capital stock and the Note. In conjunction with this
Agreement, THI agrees to issue an irrevocable proxy for the 6,000,000 shares
that it receives to
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Xxxxxxx X. Xxxxxxx, granting Mr. Diamond the right to vote the shares in his
sole discretion, until the shares are distributed to the CATV Series D
Preferred Shareholders.
2.4 Shares of Advantage Life. One the date of the Closing, Advantage
Life represents that 11,598,497 shares of its common stock, $.16 par value, are
issued and outstanding. Advantage Life also represents there are currently no
shares of the Advantage Life's Preferred Stock no par value issued and
outstanding.
2.5 Exchange of Certificates. On the Effective Date, THI, as the sole
holder of Acquiree's common stock, shall surrender the same to Advantage Life.
2.6 Preferred Shares. Advantage Life shall, at the Closing, agree to
sell to Xxxx Xxxxxxxx 5,000,000 shares of nonvoting, non convertible preferred
stock of Advantage Life, in exchange for Xx. Xxxxxxxx'x promissory note(s),
totalling in the original principal amount of $5,000,000, the principal of
which is payable in three equal annual installments beginning one year after
the date of the Agreement. Interest, at an annual rate of 8%, shall be payable
on the outstanding principal balance of the promissory note on a quarterly
basis, and the preferred shares shall be held by Advantage Life as collateral
for the transaction as described elsewhere herein. A complete description of
the preferences and special rights of, and the qualifications, limitations and
restrictions imposed upon the preferred Shares is contained in the Certificate
of Designation, Preferences, Rights and Limitations attached hereto as Exhibit
"A".
2.7 Assets of Acquiree. Prior to the Effective Date, Acquiree will
retain all the assets, properties, business and goodwill of Acquiree of every
kind and description, wherever located, including without limitation, all
property, tangible or intangible, real, personal, or mixed, accounts
receivable, patent rights, trademarks, trade names, bank accounts, cash and
securities, claims and rights under contracts of Acquiree, rights to use its
corporate name and all other names or slogans used by Acquiree in connection
with its business or products and all books and records of Acquiree relating to
its business (collectively referred to as the "Assets"), all as the same shall
exist at the date of this Agreement. Such Assets shall, without limitation,
include all Assets of Acquiree shown on the Interim Balance Sheet referenced in
Section 5.8 below, and all Assets thereafter acquired by Acquiree prior to the
Effective Date, except such of those Assets of Acquiree as (1) may have been
disposed of prior to the Effective Date in the ordinary course of business, and
(2) may have been otherwise disposed of prior to the Closing Date at the
request or with Advantage Life's written consent.
2.8 Redemption Shares. Immediately prior to the closing of the
Agreement, Xxxx Xxxxxxxx, Xxxxx Xxxxxx, Vietri Investments and Roscom Limited
shall return to Advantage Life 6,700,000 shares of the common stock of
Advantage Life currently owned by them in exchange for the cancellation of the
indebtedness that Vietri Investments, Roscom Limited, Xxxx Xxxxxxxx and Xxxxxx
Xxxxxx owe to Advantage Life.
ARTICLE 3
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ADDITIONAL AGREEMENTS
3.1 Employment Agreements. Advantage Life shall, at the Closing,
execute the employment agreements with Xxxxxxx X. Xxxxxxx, and Xxxxxx X.
Xxxxxxxxxxxx copies of which are attached hereto as Composite Schedule 3.1.
3.2 Assumed Liabilities. Advantage Life, shall at the Closing, agree
to assume certain liabilities of THI, (the "Assumed Liabilities") which total
$657,952.00 and are listed on Schedule 3.2 attached hereto.
3.3 Preferred Shares. Advantage Life shall, at the Closing, agree to
sell to Xxxx Xxxxxxxx 5,000,000 shares of nonvoting, non convertible preferred
stock of Advantage Life, (the "Preferred Shares") in exchange for Xx.
Xxxxxxxx'x promissory note(s), in the original principal amount of totalling
$5,000,000, the principal of which is payable in three equal annual
installments beginning one year after the date of the purchase. Interest, at an
annual rate of 8% (the "Xxxxxxxx Note"), shall be payable on the outstanding
principal balance of the promissory note(s) on a quarterly basis, and the
preferred shares shall be held by the Company as collateral for the
transaction. The Stock Purchase Agreement for the Preferred Shares, the
Xxxxxxxx Note and Stock Pledge Agreement for the Preferred Shares are attached
hereto as Composite Schedule 3.3. A complete description of the preferences
and special rights of, and the qualifications, limitations and restrictions
imposed upon the Preferred Shares is contained in the Certificate of
Designation, Preferences, Rights and Limitations attached hereto as Exhibit
"A".
3.4 Share Distribution Agreement. THI shall agree to hold the
6,000,000 shares it receives and will agree not to sell, pledge, hypothecate,
transfer or encumber the shares in any way, other than distribute the shares to
the holders of Channel America Broadcasting, Inc's Series D Preferred Stock in
the form of a dividend or redemption, after a Registration Statement is filed
with the SEC for these shares and this Registration Statement becomes
effective. The Share Distribution Agreement between Advantage Life, THI, and
CATV is attached hereto as Schedule 3.4.
3.5 Irrevocable Proxy for Advantage Life Shares. THI agrees to issue
an irrevocable proxy for the 6,000,000 shares that it receives to Xxxxxxx X.
Xxxxxxx a copy of which is attached as Schedule 3.5, granting Mr. Diamond the
right to vote the shares in his sole discretion, until the Advantage Life
Shares are distributed to the the holders of Channel America Broadcasting,
Inc's Series D Preferred Stock in the form of a dividend or redemption.
3.6 Change in Board of Directors of Advantage Life and Advantage life
Acquisition. At the Closing, the current directors shall appoint Xxxxxxx X.
Xxxxxxx and Xxxxxx X. Xxxxxxxxxxxx as members of the Board of Directors of
Advantage Life and Advantage Life Acquisition and immediately thereafter, Xxxx
Xxxxxxxx and Xxxxxx Xxxxxx resign as officers and directors of both these
companies. Copies of the Meeting of the Board of Directors of Advantage Life
and
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Advantage Life Acquisition and Xx. Xxxxxxxx and Xx. Xxxxxx'x resignations are
attached hereto as Composite Schedule 3.6.
3.7 Resignations of All Other Officers and Employees of Advantage Life
and Advantage Life Acquisition. All other officers and employees of Advantage
Life and Advantage Life Acquisition shall resign on or prior to the
contemplated Closing. Copies of these resignations are attached hereto as
Composite Schedule 3.7.
3.8 Books and Records. THI and CATV shall have delivered to Advantage
Life and Advantage Life Acquisition all of the books and records of Acquiree in
their possession.
ARTICLE 4
CLOSING; CERTIFICATE OF MERGER
4.1 Closing. The Closing contemplated by Section 1.1 shall be held at
the offices of Advantage Life's counsel, Xxxx Xxxx Xxxxxxx Xxxxxx & Xxxx, P.A.,
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000 on February 21, 1996, unless
another place or date is agreed upon in writing by the parties (the "Closing
Date"). At the Closing, all documents called for by this Agreement (the
"Closing Documents") shall be executed by the respective parties. Advantage
Life shall deliver to THI the stock certificate(s) for the Advantage Life
Shares, the Note and an executed Security Agreement in the form of Schedule 4.1
attached hereto. THI shall deliver to Advantage Life Acquisition the stock
certificate for the Acquiree Shares and the books and records of Acquiree.
4.2 Certificate of Merger. After the Closing provided for in Section
4.1 above, the Certificate of Merger executed by the parties at Closing shall
be submitted for filing with the Secretary of State of Florida. The date of
the latter of such filing, or such other date as the parties may agree upon in
writing pursuant to applicable law, shall be the effective date of the Merger
(the "Effective Date").
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
ACQUIREE, THI AND CATV
Acquiree, THI and CATV represent and warrant to Advantage Life and
Advantage Life Acquisition as follows:
5.1 Organization, Power, Standing and Qualification. Acquiree is
a corporation duly organized, validly existing, and in good standing under the
laws in the State of Texas and has full corporate power and authority to carry
on its business as it is now being conducted and to own and operate the
properties and assets now owned and operated by it. Acquiree is duly qualified
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to do business and is in good standing in each and every jurisdiction where the
failure to qualify or to be in good standing would have an adverse effect upon
its financial condition, the conduct of its business or the ownership of its
assets.
5.2 Authority. THI and CATV have the power and authority to
execute, deliver and perform this Agreement; and this Agreement is a valid and
binding obligation of THI and CATV, enforceable in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, or similar laws affecting the enforcement of creditors' rights
generally.
5.3 Validity of Contemplated Transactions; Interference. Other
than as provided in Schedule 5.3, the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby do
not and will not (a) contravene any provision of the Certificate of
Incorporation or Bylaws of Acquiree; (b) violate, be in conflict with,
constitute a default under, cause the acceleration of any payments pursuant to,
or otherwise impair the good standing, validity, or effectiveness of any
material agreement, contract, indenture, lease, or mortgage to which Acquiree
is a party; (c) subject the assets of Acquiree to any indenture, mortgage,
contract, commitment, or agreement, other than this Agreement; (d) reasonably
interfere with any other agreement to which Acquiree is a party; or (e) violate
any material provision of law, rule, regulation, order, permit, or license to
which Acquiree is subject.
5.4 Capitalization of Acquiree. Acquiree's authorized capital
stock consists of 10,000,000 shares of common stock, no par value, 3,000,000 of
which shares are presently outstanding, validly issued, fully paid and
non-assessable. There are no outstanding options, warrants, conversion
privileges, subscriptions, calls, commitments or rights of any character
relating to any authorized but unissued capital stock of Acquiree.
5.5 Subsidiaries. Except as disclosed in Schedule 5.5 hereto,
Acquiree owns no shares of capital stock or other equity interest in any
corporation, partnership, joint venture or other business organization or
enterprise.
5.6 Ownership of Shares. THI and CATV hold all legal and
beneficial ownership of and title to the issued and outstanding shares of the
capital stock of Acquiree and have full authority to vote such shares in favor
of the transactions contemplated by this Agreement.
5.7 Title to Properties. Except as set forth in Schedule 5.7
hereto, Acquiree has good, valid and marketable title to all of its assets,
free and clear of all mortgages, liens, pledges, security interests and other
encumbrances, except (a) mortgages, liens, pledges, security interests, and
other encumbrances reflected in the Interim Financial Statements or the notes
thereto [as such term is defined in Section 5.8 herein], (b) liens for current
taxes not delinquent or being contested in good faith by appropriate
proceedings, (c) liens in connection with workmen's compensation, unemployment
insurance or other social security obligations, (d) deposits or pledges to
secure bids, tenders, contracts (other than contracts for the payment of
money), leases,
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statutory obligations, surety and appeal bonds and other obligations of like
nature arising in the ordinary course of business, (e) mechanic's, workmen's,
materialmen's or other like liens arising in the ordinary course of business
with respect to obligations which are not due or which are being contested in
good faith, and (f) such imperfections of title, lien, easements and
encumbrances, if any, as are not substantial and do not materially detract from
the value, or interfere with the present use, of any of the properties subject
thereto or affected thereby, or otherwise impair the business, operations or
prospects of Acquiree.
5.8 Financial Statements and Operating Information. Acquiree has
delivered to Advantage Life its unaudited balance sheets as of December 31,
1996 and 1995, and the related statements of income and changes in financial
position for the years ended December 31, 1996 and 1995. In addition, Acquiree
has delivered to Advantage Life its unaudited balance sheet as of January 31,
1997 (the "Interim Balance Sheet") and its related statements of income and
changes in financial position for the one month period then ended (collectively
the "Interim Financial Statements"). The financial statements are, to the best
knowledge of Acquiree, THI and CATV, consistent with the books and records of
Acquiree and present fairly the financial condition and results of operations
as of the respective dates thereof and the respective periods then ended, and
there has been no material change in such financial condition of Acquiree since
January 31, 1997, other than as set forth in Schedule 5.8.
5.9 Absence of Undisclosed Liabilities. Except as provided in
Schedule 5.9, Acquiree has no material liabilities or obligations except for
those (i) reflected on the Interim Balance Sheet; (ii) reflecting contractual
liabilities or obligations incurred in the ordinary course of business that are
not required by generally accepted accounting principles to be reflected in a
balance sheet; (iii) incurred in the ordinary course of business subsequent to
the date of the Interim Balance Sheet and not required to be disclosed pursuant
to the terms of this Agreement; and (iv) specifically disclosed in a schedule
to this Agreement. Except as otherwise provided in this Agreement, the term
"liabilities or obligations" as used in this Agreement shall include any direct
or indirect indebtedness, claim, loss, damage, deficiency (including deferred
income tax and other net tax deficiencies), cost, expense, obligation,
guarantee, or responsibility, whether accrued, absolute, or contingent, known
or unknown, fixed or unfixed, liquidated or unliquidated, secured or unsecured.
5.10 Certain Tax Matters. Acquiree has duly filed all federal,
state, and local tax returns and reports required to be filed by Acquiree for
all periods ending on or prior to January 31, 1997 and all taxes, including
income, gross receipts, and other taxes and any penalties with respect thereto,
shown thereon to be due and payable, have been paid, withheld, or reserved for
or are reflected as a liability in the Interim Balance Sheet. Except as
provided in Schedule 5.10, Acquiree has not entered into any agreements for the
extension of time for the assessment of any tax or tax delinquency, has
received no outstanding or unresolved notices from the Internal Revenue Service
or any taxing body of any proposed examination or of any proposed deficiency or
assessment, and has properly withheld all amounts required by law to be
withheld for income taxes and unemployment taxes, including without limitation
social security and unemployment
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compensation, relating to its employees, and remitted such withheld amounts to
the appropriate taxing authority as required by law. Acquiree has no permanent
establishment located in any tax jurisdiction other than in the United States
and is not liable for the payment of any taxes levied by any foreign tax
jurisdiction.
5.11 Litigation; Compliance with Laws. Except as set forth in
Schedule 5.11 attached hereto, there is no suit, action, claim, arbitration,
administrative or legal or other proceeding, or governmental investigation
pending or, to the knowledge of THI, threatened against or related to Acquiree.
Except as set forth in Schedule 5.11 attached hereto, there has been no failure
to comply with, nor any default under, any law, ordinance, requirement,
regulation, or order applicable to Acquiree or its business operations, nor any
violation of or default with respect to any order, writ, injunction, judgment,
or decree of any court or federal, state or local department, official,
commission, authority, board, bureau, agency, or other instrumentality issued
or pending against Acquiree which in any such case would reasonable be expected
to have a material adverse effect on the financial condition, its business,
results of operations, properties or assets of Acquiree. Except as set forth
in Schedule 5.11 attached hereto, Acquiree has obtained all permits, licenses,
zoning variances, approvals, and other authorization for which the failure to
so obtain would have a material adverse effect of Acquiree's operations. All
such material permits, licenses, approvals and authorizations are currently
valid and in full force and no revocation, cancellation or withdrawal thereof
has been effected or threatened. The execution of this Agreement and the
performance of the transactions contemplated hereby have not and will not
change in any respect, or result in the termination of, any such material
permits, licenses, certificates, zoning variances and authorizations. There
have been no illegal kickbacks, bribes or political contributions made by
Acquiree.
5.12 ERISA Matters. Schedule 5.12 attached hereto contains a
complete and accurate list of all Benefit Plans (as defined in Section 3 of the
Employee Retirement Income Security Act of 1974, as amended) and insurance
policies relating thereto sponsored by Acquiree or to which Acquiree is making
contributions as of the date hereof with respect to employees of Acquiree.
Acquiree has timely paid, or will timely pay as soon as practicable, all
employee benefits due and owing under the Benefit Plans sponsored by Acquiree
in accordance with the terms of each such Benefit Plan.
5.13 Insurance. All inventories, machinery, equipment, buildings,
improvements, and other tangible assets owned or leased by Acquiree are insured
against fire and casualty under the policies and in the amounts and types of
coverage set forth in Schedule 5.13 attached hereto (the "Policies") and
between the date hereof and the Effective Date, Acquiree shall use commercially
reasonable efforts to maintain all of the Policies, or policies which are
substantially equivalent to the Policies. The Policies are outstanding and
duly in force and the premiums thereon fully paid when and as the same are due
and payable. Schedule 5.13 is a true and correct schedule of all policies of
fire, liability, and other forms of insurance, excluding the Benefit Plans
listed in Schedule 5.12 pursuant to which the assets of Acquiree are insured
(whether or not held by Acquiree) or with respect to which Acquiree pays all or
part of the premium.
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5.14 Proprietary Information. Acquiree owns, possesses or lawfully
uses all patents, patent applications, trademarks, trademark applications,
service marks, service xxxx applications, trade names, trade dress, franchises,
copyrights, copyright applications and similar intangible rights used in its
business and trade secrets or other proprietary information similarly used
(collectively, the "Patents and Trademarks"), each item of which is listed in
Schedule 5.14 attached hereto, and those Patents and Trademarks designated on
Schedule 5.14 are owned exclusively by Acquiree, are valid and enforceable, and
none infringe (nor has any claim been made that there is any such infringement)
the patents, trademarks, service marks, trade names, copyrights or similar
intangible rights of others. After due inquiry, to the best of Acquiree's
knowledge, there is no claim against Acquiree or any Shareholder that either is
or may be infringing on or otherwise acting adversely to the rights of any
person under or in respect of any patent, trademark, service xxxx, trade name,
trade dress, copyright, license, franchise, permission, or other intangible
right. Acquiree is not obligated or under any liability to make any payments
by way of royalties, fees, or otherwise to any owner or licensee of, or other
claimant to, any patent, trademark, trade name, trade dress, copyright, or
other intangible asset with respect to the use thereof, in connection with the
conduct of its business or otherwise.
5.15 Labor Disputes. Except as set forth in Schedule 5.15,
Acquiree is not a party to any contract or other agreement with any labor union
nor is Acquiree experiencing or the subject of or, to Acquiree's knowledge,
threatened by, any union organization campaign or any strike, slowdown,
picketing, work stoppage, or other labor disturbance by any labor union or
group of employees.
5.16 Contracts. Except as set forth in Schedule 5.16 or in another
Schedule to this Agreement, Acquiree is not a party to any material contract,
agreement, commitment, lease, indenture, fringe benefit or other plan. For
purposes of this Section 5.16 "material" shall mean any contract, agreement,
commitment, lease, indenture, fringe benefit or other plan entered into which
is not in the ordinary course of business or, if entered into in the ordinary
course of business, which involves a payment, commitment or entitlement in
excess of $40,000. True and correct copies of all of the contracts,
agreements, commitments, leases, indentures, fringe benefits or other plans,
documents and instruments identified in Schedule 5.16, have been supplied to
Advantage Life Acquisition.
5.17 Other Transactions. Acquiree has not, since January 31, 1997,
(a) operated its business except in the ordinary course of business, (b)
incurred any debts, liabilities or obligations except in the ordinary course of
business, (c) discharged or satisfied any liens or encumbrances, or paid any
liens or encumbrances, or paid any material debts, liabilities or obligations,
except in the ordinary course of business, (d) mortgaged, pledged or subjected
to lien or other encumbrance any of its assets, tangible or intangible, except
in the ordinary course of business and except those permitted by Section 5.7
hereof, (e) sold or transferred any of its tangible assets having a book value
of $25,000 or more, or canceled any debts or claims, except,
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in each case, in the ordinary course of business, or (f) suffered any
extraordinary losses or waived any rights of substantial value.
5.18 Product Liability Insurance Claims. Acquiree is identified as
an insured party under all policies of insurance relating to product liability
listed on Schedule 5.18 for and against any claim for product liability on an
occurrence basis for events occurring prior to the Closing Date.
5.19 Bank Accounts. Schedule 5.19. hereto lists the names and
addresses of every bank and other financial institution in which Acquiree
maintains an account (whether checking, savings or otherwise), lock box or safe
deposit box, and the account numbers and names of persons having signing
authority or other access thereto.
5.20 No Changes. Except as provided in Schedule 5.20, since
January 31, 1997 there has not been:
a. Any change in the financial or other condition,
assets, liabilities or business of Acquiree, except changes described
in Schedule 5.20 hereto, none of which individually or in the
aggregate has been materially adverse to Acquiree;
b. Any damage, destruction or loss (whether or not
covered by insurance) or any condemnation by governmental authorities
which has or would reasonably have an adverse affect the business or
assets of Acquiree to a material degree;
c. Any strike, lockout, labor trouble or any similar
event or condition of any character adversely affecting the business of
Acquiree;
d. Except as disclosed in writing to Advantage Life
Acquisition from time to time, any declaration, setting aside or
payment of any dividend or other distribution in respect of any of the
shares of capital stock of Acquiree or any direct or indirect
redemption, purchase or other acquisition of the shares of capital
stock of Acquiree or any direct or indirect payment or incurring of
management fees or other transactions between THI and Acquiree; or
e. Any increase in the compensation payable or to become
payable by Acquiree to any of its officers, employees or agents, or
any known payment or arrangement made to or with any thereof, except
in the ordinary course of business as disclosed to Advantage Life
Acquisition.
5.21 Compensation Arrangements. Acquiree has delivered to
Advantage Life Acquisition a true and correct list showing the names
(except for persons specifically excluded from such list as stated
thereon) of all officers, employees and agents performing services for
Acquiree in connection with its business and the rate of hourly,
monthly or annual compensation
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(as the case may be), any accrued sick leave or vacation and any bonus or
similar arrangement with any of them, all as of January 31, 1997.
5.22 Veracity of Statements. To the knowledge of Acquiree and THI,
no representation or warranty by Acquiree or THI contained in this Agreement
and no statement contained in any certificate, schedule or other instrument
furnished to Advantage Life Acquisition pursuant hereto or in connection with
the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary to make it not
misleading.
5.23 Copies of Articles and Bylaws and Stock Records. A copy of
Acquiree's Certificate of Incorporation (certified by the Secretary of State of
Texas), Bylaws and stock records (certified by the Secretary of Acquiree) has
been delivered to Advantage Life Acquisition and each is correct and in effect
as at the date of this Agreement. Such books and records have been regularly
and properly kept and are complete, accurate and legally sufficient under
applicable law.
5.24 Condition of Tangible Assets. All material tangible portions
of Acquiree's assets are in a condition sufficient for Acquiree's operations.
5.25 Directors and Officers. Acquiree has delivered to Advantage
Life Acquisition a true and complete list as of the date of this Agreement
showing the names of Acquiree's directors and officers, each of whom has been
duly elected and/or appointed.
5.26 Accounts Receivable. The accounts receivable of Acquiree
reflected on the Interim Balance Sheet and those acquired and accrued
thereafter through the date of this Agreement are valid and bona fide accounts
receivable, created in the ordinary course of business, and, except as provided
in Schedule 5.26, the allowance for doubtful accounts with respect thereto has
been prepared in accordance with generally accepted accounting principles. No
part of such accounts receivable is contingent upon performance by Acquiree of
any obligation, other than any warranty obligation, and no agreements for
deductions or discounts have been made with respect to any part of such
receivables.
5.27 Inventories. All material portions of the inventories of
Acquiree are fit for their intended use and the net finished goods portion
thereof is saleable in the ordinary course of business, and the provision for
slow and obsolete inventories has been made in accordance with generally
accepted accounting principles.
5.28 Environmental Matters.
a. Schedule 5.28 attached hereto sets forth:
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(1) all facts regarding hazardous substances,
hazardous wastes and constituents used,
handled, stored or disposed of on the Premises (as
herein defined) by Acquiree, and to the knowledge of
Acquiree of all predecessors in interest and all
prior occupants of the Premises, where such use,
handling, storage or disposal may reasonably be
expected to cause an adverse effect on the business,
assets, or the financial condition of Acquiree;
(2) all reports, studies or documents regarding
releases of hazardous substances and hazardous
wastes and constituents in, on, under or above the
Premises filed with any governmental agency by
Acquiree, and to the knowledge of Acquiree by all
predecessors in interest and all prior occupants of
the Premises; and
(3) all studies or reports authorized by
Acquiree, and to the knowledge of Acquiree by all
predecessors in interest and all prior occupants of
the Premises regarding environmental conditions of
the Premises.
b. Except as set forth in Schedule 5.28 attached hereto,
Acquiree is not aware of, nor has received notice of any past or present
events, conditions, circumstances, activities, practices, incidents, actions or
plans which may reasonably be expected to interfere with or adversely affect
its business, its assets or the financial condition of Acquiree or prevent
compliance or continued compliance with Environmental Laws (as herein defined),
or may reasonably be expected to give rise to any liability, or otherwise form
the basis of any claim, action, demand, suit, proceeding, hearing, study or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling, or the
emission, discharge, release or threatened release into the environment, of any
hazardous substance or hazardous wastes or constituents by Acquiree, all
predecessors in interest and all prior occupants of the Premises.
c. Acquiree has used due diligence to discover the
existence of the information to be disclosed as itemized in Paragraphs (a) and
(b).
d. (1) Advantage Life Acquisition reserves
the right prior to closing, but is not hereby
obligated, to undertake an investigation of the Premises and
Acquiree shall, cooperate in providing reasonable access to
the Premises and any documents deemed by Advantage Life
Acquisition necessary for such investigation; provided,
however, that such investigation shall not interfere with or
cause any damage to the business or the assets of Acquiree.
All fees, costs and expenses in connection with such
investigation shall be paid by Advantage Life Acquisition.
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(2) If Advantage Life Acquisition discovers
that any of the representations or warranties of
Acquiree or THI contained in Section 5.28(a) of this
Agreement are inaccurate in any material respect and
that, except as previously disclosed by Acquiree to
Advantage Life Acquisition hazardous wastes,
hazardous substances or constituents, are present in,
on, under or above the Premises, the presence of
which has or may reasonably be expected to have a
material adverse effect on the business, the assets
or the financial condition of Acquiree, upon notice
to Acquiree to that effect Advantage Life Acquisition
may terminate this Agreement and shall have no
further obligations under this Agreement.
e. For purposes of Section 5.28 of this Agreement:
(1) The Terms "hazardous substance" has the
definition set forth in 42 USC Section 9601(1);
(2) The term "hazardous wastes and/or
constituents" has the definition set forth in 42 USC
Section 6903(5) and 40 CFR part 261;
(3) The term "Environmental Laws" means the
collective federal, state, and local statutes,
rules, regulations, ordinances and laws relating to
environmental conditions or hazardous substances as
currently in effect, including but not limited to the
Solid Waste Disposal Act, 42 USC Section Section
6901-6991i; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), 42
USC Section Section 9601-9675, as amended by the
Superfund Amendments and Reauthorization Act of 1986
("XXXX"); the Hazardous Materials Transportation Act,
49 USC Section 6901 et seq.; the Federal Water
Pollution Control Act, 33 USC Section 1251 et seq.;
the Clean Air Act, 42 USC Section 7401 et seq.; the
Toxic Substance Control Act, 15 USC Section Section
2601-2629; the Safe Drinking Water Act, 42 USC
Section Section 300f-300j, all as amended; all
similar state statutes and local ordinances; and the
regulations, orders, judicial and administrative
decisions presently in effect thereunder; and
(4) The term "Premises" shall mean all of the
leasehold interests held by or property owned
by Acquiree, together with any improvements thereon
located at or any other property where the business
is or had been operated (the "Premises").
5.29 Acquisition of Advantage Life Shares for Investment. THI is
acquiring the common stock of Advantage Life for investment purposes, for its
own account and not with a view to the resale or distribution thereof in
violation of any state or federal securities laws. THI
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shall not sell, transfer, pledge or hypothecate any of the Advantage Life
Shares in the absence of registration under or pursuit to an applicable
exception from, federal and all applicable security law.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF ADVANTAGE LIFE AND ADVANTAGE LIFE ACQUISITION
Advantage Life and Advantage Life Acquisition, jointly and severally,
represent and warrant to Acquiree, THI and CATV as follows:
6.1 Organization, Power, Standing and Qualification. Advantage
Life is a corporation duly organized, validly existing and in good standing
under the laws in the State of Delaware and has full corporate power and
authority to carry on its business as it is now being conducted and to own and
operate the properties and assets now owned and operated by it. Advantage Life
Acquisition is a corporation duly organized, validly existing and in good
standing under the laws in the State of Florida and has full corporate power
and authority to carry on its business as it is now being conducted and to own
and operate the properties and assets now owned and operated by it. Advantage
Life and Advantage Life Acquisition are duly qualified to do business and are
in good standing in each and every jurisdiction where the failure to qualify or
to be in good standing would have an adverse effect upon their financial
condition, the conduct of their business or the ownership of their assets.
6.2 Authority. Advantage Life and Advantage Life Acquisition have
the power and authority to execute, deliver and perform this Agreement; and
this Agreement is a valid and binding obligation of Advantage Life and
Advantage Life Acquisition, enforceable in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, or similar laws affecting the enforcement of creditors' rights
generally.
6.3 Validity of Contemplated Transactions; Interference. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby do not and will not (a) contravene any
provision of the Certificate of Incorporation or Bylaws of either Advantage
Life or Advantage Life Acquisition; (b) violate, be in conflict with,
constitute a default under, cause the acceleration of any payments pursuant to,
or otherwise impair the good standing, validity, or effectiveness of any
material agreement, contract, indenture, lease, or mortgage to which Advantage
Life or Advantage Life Acquisition is a party; (c) subject the assets of
Advantage Life or Advantage Life Acquisition to any indenture, mortgage,
contract, commitment, or agreement, other than this Agreement; (d) reasonably
interfere with any other agreement to which Advantage Life or Advantage Life
Acquisition is a party; or (e) violate any material provision of law, rule,
regulation, order, permit, or license to which Advantage Life or Advantage Life
Acquisition are subject.
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6.4 Capitalization of Advantage Life, Inc. Advantage Life's
authorized capital stock consists of 25,000,000 shares of common stock, $.16
par value, 11,598,497 of which shares are presently outstanding, validly
issued, fully paid and non-assessable. Advantage Life Acquisition's authorized
capital stock consists of 10,000,000 shares of common stock, $.0001 par value,
3,000,000 of which shares are presently outstanding, validly issued, fully paid
and non-assessable.
6.5 Subsidiaries. Except as disclosed in Schedule 6.5 hereto,
Advantage Life and Advantage Life Acquisition own no shares of capital stock or
other equity interest in any corporation, partnership, joint venture or other
business organization or enterprise.
6.6 Financial Statements. Advantage Life has delivered to
Acquiree and THI its balance sheets for each of the last two full fiscal years
ending before the date of this Agreement as well as its statement of income and
loss for the same periods. In addition Advantage Life, Inc. has delivered to
Acquiree and THI its balance sheets for the period ending October 31, 1996 (the
"Advantage Life Interim Balance Sheet") which has been prepared in accordance
with the applicable books and records of Advantage Life and presents fairly the
financial condition of Advantage Life as of October 31, 1996, and there has
been no material change in such financial condition of Advantage Life since
October 31, 1996.
6.7 Absence of Undisclosed Liabilities. Advantage Life has no
liabilities or obligations except for those (i) reflected on the Advantage Life
Interim Balance Sheet; (ii) reflecting contractual liabilities or obligations
incurred in the ordinary course of business that are not required by generally
accepted accounting principles to be reflected in a balance sheet; (iii)
incurred in the ordinary course of business subsequent to the date of the
Advantage Life Interim Balance Sheet and not required to be disclosed pursuant
to the terms of this Agreement; and (iv) specifically disclosed in Schedule 6.7
attached hereto. Except as otherwise provided in this Agreement, the term
"liabilities or obligations" as used in this Agreement shall include any direct
or indirect indebtedness, claim, loss, damage, deficiency (including deferred
income tax and other net tax deficiencies), cost, expense, obligation,
guarantee, or responsibility, whether accrued, absolute, or contingent, known
or unknown, fixed or unfixed, liquidated or unliquidated, secured or unsecured.
6.8 Certain Tax Matters. Advantage Life has duly filed all
federal, state, and local tax returns and reports required to be filed by
Advantage Life for all periods ending on or prior to July 31, 1996 and all
taxes, including income, gross receipts, and other taxes and any penalties with
respect thereto, shown thereon to be due and payable, have been paid, withheld,
or reserved for or are reflected as a liability in the Advantage Life Interim
Balance Sheet. The returns and reports are, to the best knowledge of Advantage
Life, correct and complete. Advantage Life has not entered into any agreements
for the extension of time for the assessment of any tax or tax delinquency, has
received no outstanding or unresolved notices from the Internal Revenue Service
or any taxing body of any proposed examination or of any proposed deficiency or
assessment, and has properly withheld all amounts required by law to be
withheld for income
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taxes and unemployment taxes, including without limitation social security and
unemployment compensation, relating to its employees, and remitted such
withheld amounts to the appropriate taxing authority as required by law.
Advantage Life does not have a permanent establishment located in any tax
jurisdiction other than in the United States and is not liable for the payment
of any taxes levied by any foreign tax jurisdiction.
6.9 Litigation; Compliance with Laws. Except as set forth in
Schedule 6.9 attached hereto, there is no suit, action, claim, arbitration,
administrative or legal or other proceeding, or governmental investigation
pending or, to the knowledge of Advantage Life threatened against or related to
Advantage Life. Except as set forth in Schedule 6.9 attached hereto, there has
been no failure to comply with, nor any default under, any law, ordinance,
requirement, regulation, or order applicable to Advantage Life or its business
operations, nor any violation of or default with respect to any order, writ,
injunction, judgment, or decree of any court or federal, state or local
department, official, commission, authority, board, bureau, agency, or other
instrumentality issued or pending against Advantage Life which might have a
material adverse effect on the financial condition, its business, results of
operations, properties or assets of Advantage Life. Except as set forth in
Schedule 6.9 attached hereto, Advantage Life has obtained all permits,
licenses, zoning variances, approvals, and other authorization necessary for
the operation of its business. All such permits, licenses, approvals and
authorizations are currently valid and in full force and no revocation,
cancellation or withdrawal thereof has been effected or threatened. The
execution of this Agreement and the performance of the transactions
contemplated hereby have not and will not change in any respect, or result in
the termination of, any such material permits, licenses, certificates, zoning
variances and authorizations. There have been no illegal kickbacks, bribes or
political contributions made by Advantage Life.
6.10 No Changes. Since January 31, 1997 there has not been:
a. Any change in the financial or other condition,
assets, liabilities or business of Advantage Life, except changes described in
Schedule 6.10 hereto, none of which individually or in the aggregate has been
materially adverse to Advantage Life;
b. Any damage, destruction or loss (whether or not
covered by insurance) or any condemnation by governmental authorities which has
or may adversely affect the business or assets of Advantage Life to a material
degree;
c. Any strike, lockout, labor trouble or any similar
event or condition of any character adversely affecting the business of
Advantage Life;
d. Except as disclosed in writing to THI from time to
time, any declaration, setting aside or payment of any dividend or other
distribution in respect of any of Advantage Life's shares or any direct or
indirect redemption, purchase or other acquisition of Advantage Life's shares
or any direct or indirect payment or incurring of
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management fees or other transactions between the shareholders
of Advantage Life and Advantage Life; or
e. Any increase in the compensation payable or to become
payable by Advantage Life to any of its officers, employees or
agents, or any known payment or arrangement made to or with any
thereof, except in the ordinary course of business as disclosed to
THI.
6.11 Veracity of Statements. No representation or warranty by
Advantage Life or Advantage Life Acquisition contained in this Agreement and no
statement contained in any certificate, schedule or other instrument furnished
to THI pursuant hereto or in connection with the transactions contemplated
hereby contains any untrue statement of a material fact or omits to state a
material fact necessary to make it not misleading.
6.12 Copies of Articles of Incorporation, Bylaws and Stock Records.
A copy of Advantage Life's Certificate of Incorporation, Bylaws and stock
records (certified by the Secretary of Advantage Life) has been delivered to
THI and each is correct and in effect as at the date of this Agreement. A copy
of Advantage Life Acquisition's Certificate of Incorporation, Bylaws and stock
records (certified by the Secretary of Advantage Life Acquisition) has been
delivered to Acquiree and THI and each is correct and in effect as at the date
of this Agreement. Such books and records have been regularly and properly
kept and are complete, accurate and legally sufficient under applicable law.
6.13 Directors and Officers. Schedule 6.13 attached hereto is a
true and complete list as of the date of this Agreement showing the names of
Advantage Life's and Advantage Life Acquisition's directors and officers, each
of whom has been duly elected.
6.14 ERISA Matters. Advantage Life has no Benefit Plans (as
defined in Section 3 of the Employee Retirement Income Security Act of 1974, as
amended).
ARTICLE 7
ACTIVITIES PRIOR TO THE CLOSING DATE BY ACQUIREE AND THI
7.1 Operation of Business. Acquiree and THI hereby agrees that
from and after the date hereof to the Effective Date, except as otherwise
contemplated by this Agreement or with Advantage Life's express written
consent, Acquiree and THI shall conduct its business solely in the ordinary
course and Acquiree shall:
a. Not amend Acquiree's Certificate of Incorporation or
Bylaws except as may be necessary to carry out this Agreement
or as required by law;
b. Not change Acquiree's corporate name or consent to
the use thereof by any other corporation;
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c. Not pay or agree to pay to any employee, officer, or
director of Acquiree, without the consent of Advantage Life,
compensation that is in excess of the current compensation level of
such employee, officer, or director except in the ordinary course of
business as disclosed from time to time to Advantage Life;
d. Not make any changes in Acquiree's management without
the consent of Advantage Life;
e. Not merge or consolidate Acquiree with any other
corporation or allow it to acquire or agree to acquire or be
acquired by any corporation, association, partnership, joint venture,
or other entity;
f. Not sell, transfer, or otherwise dispose of any
material assets without the prior written consent of Advantage
Life, except in the ordinary course of business;
g. Not create, incur, assume, or guarantee any
indebtedness for money borrowed except in the ordinary course
of business; create or suffer to exist any mortgage, lien, or other
encumbrance on any of its properties or assets, real or personal,
except those in existence on the date hereof or permitted by Section
5.7; or increase the amount of any indebtedness outstanding under any
loan agreement, mortgage, or other borrowing arrangement in existence
on the date hereof;
h. Cause Acquiree to pay when due in accordance with
historical practice all accounts payable and trade obligations
of Acquiree;
i. Maintain all material tangible portions of the assets
of Acquiree in good operating repair, order, and condition,
reasonable wear and tear excepted, and notify Advantage Life
immediately upon any loss of, damage to, or destruction of any
material tangible portion of the assets;
j. Use their best efforts to maintain in full force and
effect insurance coverage of the types and in the amounts set
forth in Schedule 5.13 attached hereto and apply the proceeds received
under any insurance policy or as a result of any loss or destruction
of or damage to any assets to the repair or replacement of such
assets;
k. Maintain in full force and effect all material
agreements, contracts, leases, licenses, permits,
authorizations, and approvals necessary for or related to the
operation of the business of Acquiree in all respects and in all
places as the business is now conducted;
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l. Use its best efforts to preserve Acquiree's business
organization intact, to keep available the services of its
present employees and to preserve the good will of its customers and
others having business relations with it;
m. Timely pay in accordance with the terms of each
Benefit Plan all bona fide claims for Benefits thereunder; and
n. Promptly advise Advantage Life in writing of the
commencement of, and of any known threat to commence any, suit,
claim, action, arbitration, legal or administrative proceeding,
governmental investigation, or tax audit against Acquiree.
7.2 Access to Information. Acquiree shall provide Advantage Life
and its accountants, counsel and other representatives, during normal business
hours and upon reasonable notice, access to the properties of Acquiree,
including books, records, equipment, real estate, contracts, and other assets,
and upon reasonable notice shall provide an opportunity to discuss the business
and assets with its officers, employees, and independent accountants,
customers, suppliers and sales representatives and furnish to Advantage Life
and its representatives copies of such documents, records, and information with
respect to the affairs of Acquiree as Advantage Life or its representatives may
reasonably request and Advantage Life shall afford such information
confidential treatment.
7.3 Labor Disputes. Between the date hereof and the Effective
Date, Acquiree shall promptly advise Advantage Life of any actual or threatened
union organization campaign, strike, slowdown, work stoppage, or other labor
disturbance ("Labor Dispute") by any labor union or group of employees against
Acquiree, and Acquiree shall use its best efforts to resolve any and all Labor
Disputes to the mutual satisfaction of Advantage Life and Acquiree.
7.4 Best Efforts. Subject to the other provisions of this
Agreement, Acquiree shall use its best efforts to cause the conditions listed
in Article 9.1 hereof to be satisfied on the Effective Date.
ARTICLE 8
ACTIVITIES PRIOR TO CLOSING DATE OF ADVANTAGE LIFE
8.1 Operation of Business. Advantage Life hereby agrees that from
and after the date hereof to the Effective Date, except as otherwise
contemplated by this Agreement or with Acquiree's express written consent,
Advantage Life shall conduct its business solely in the ordinary course and
Advantage Life shall:
a. Not amend Advantage Life's Certificate of
Incorporation or Bylaws except as may be necessary to carry out
this Agreement or as required by law;
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b. Not merge or consolidate Advantage Life, or any
subsidiary, with another entity, acquire another entity or
agree to be acquired by any other entity;
c. Not sell, transfer, or otherwise dispose of any
material assets without the prior written consent of Acquiree,
except in the ordinary course of business; and
d. Maintain in full force and effect all material
agreements, contracts, leases, licenses, permits,
authorizations, and approvals necessary for or related to the
operation of the business of Advantage Life in all respects and in all
places as the business is now conducted.
8.2 Best Efforts. Subject to the other conditions of this
Agreement, Advantage Life shall use its best efforts to cause the conditions
listed in Article 9.2 hereof to be satisfied on the Closing Date.
ARTICLE 9
CONDITIONS PRECEDENT TO THE CLOSING
9.1 Obligation of Advantage Life to Close. The obligation of
Advantage Life to consummate the merger on the Effective Date shall be subject
to the satisfaction or the waiver by Advantage Life of the following conditions
on or prior to the Closing Date:
a. Representations and Warranties; Compliance with
Agreement. The representations and warranties of Acquiree and
THI set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the
Effective Date as though made on and as of the Effective Date, and
Acquiree and THI shall have performed all covenants and agreements to
be performed by either of them under this Agreement on or prior to the
Effective Date, and Acquiree and THI shall have delivered to Advantage
Life certificates to such effect dated the Effective Date signed by
THI and by Acquiree, which certificates shall be in the form attached
hereto as Schedule 9.1(a);
b. Litigation Affecting Closing. On the Effective Date,
no proceeding shall be pending or threatened before any court
or governmental agency in which it is sought to restrain or prohibit
or to obtain damages or other relief in connection with this Agreement
or the consummation of the transactions contemplated hereby, and no
investigation that might eventuate in any such suit, action or
proceeding shall be pending or threatened;
c. Required Consents. The holders of any single debt
obligation of Acquiree exceeding $250,000, the lessors of any
material real or property or assets leased by Acquiree, the parties
(other than Acquiree) to any other material contract, commitment or
agreement to which Acquiree is a party, any governmental agency or
body or any other
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individual or entity which owns or has authority to grant any
franchise, license, permit, easement, right or other authorization
necessary for the business of Acquiree and any governmental body or
regulatory agency having jurisdiction over Acquiree, to the extent
that their consent or approval is required under the pertinent debt,
lease, contract, commitment or agreement or other document or
instrument or under applicable laws, rules or regulations for the
consummation of the merger contemplated hereby in the manner herein
provided, shall have granted such consent or approval;
d. No Material Damage to Business. The assets shall not
have been and shall not be threatened to be materially
adversely affected in any way as a result of fire, explosion,
earthquake, disaster, accident, labor dispute, any action by any
governmental authority, flood, drought, embargo, riot, civil
disturbance, uprising, activity of armed forces or act of God or
public enemy.
9.2 Obligation of Acquiree and THI to Close. The obligation of
Acquiree and THI to consummate the merger on the Effective Date shall be
subject to the satisfaction of the following conditions on or prior to the
Effective Date:
a. Representations and Warranties; Compliance with
Agreement. The representations and warranties of Advantage
Life and Advantage Life Acquisition set forth in this Agreement shall
be true and correct in all material respects as of the date of this
Agreement and as of the Effective Date as though made on and as of the
Effective Date, and Advantage Life and Advantage Life Acquisition
shall have performed all covenants and agreements to be performed by
either of them under this Agreement on or prior to the Effective Date,
and Advantage Life and Advantage Life Acquisition shall have delivered
to Acquiree certificates to such effect dated the Effective Date and
signed by Advantage Life and Advantage Life Acquisition, which
certificates shall be in the form attached hereto as Schedule 9.2(a);
or
b. Litigation Affecting Closing. On the Effective Date,
no proceeding shall be pending or threatened before any court
or governmental agency in which it is sought to restrain or prohibit
or to obtain damages or other relief in connection with this Agreement
or the consummation of the transaction contemplated hereby, and no
investigation that might eventuate in any such suit, action or
proceeding shall be pending or threatened.
c. No Material Damage to Business. The assets of
Advantage Life shall not have been and shall not be threatened
to be materially adversely affected in any way as a result of fire,
explosion, earthquake, disaster, accident, labor dispute, any action
by any governmental authority, flood, drought, embargo, riot, civil
disturbance, uprising, activity of armed forces or act of God or
public enemy.
ARTICLE 10
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INDEMNIFICATION
10.1 By Acquiree, THI and CATV. From and after the Effective Date,
Acquiree, THI and CATV, jointly and severally, shall indemnify and hold
harmless Advantage Life and Advantage Life Acquisition from and against (i) any
and all damages, losses, obligations, deficiencies, liabilities, claims,
encumbrances, penalties, costs, and expenses, including reasonable attorneys'
fees (together, a "Loss"), and which Advantage Life or Advantage Life
Acquisition may suffer or incur, resulting from, related to, or arising out of
any misrepresentation, breach of warranty, or nonfulfillment of any of the
covenants or agreements of Acquiree or THI in this Agreement or from any
misrepresentation in or omission from any schedule to this Agreement, and (ii)
any and all actions, suits, investigations, proceedings, demands, assessments,
audits, judgments and claims (including employment-related claims) arising out
of any of the foregoing; provided, however, that before Advantage Life or
Advantage Life Acquisition may assert a claim for indemnity under this Article,
Advantage Life must give or cause to be given written notice of such claim to
THI and Acquiree as provided in Section 10.4.
10.2 By Advantage Life and Advantage Life Acquisition. From and
after the Effective Date, Advantage Life and Advantage Life Acquisition,
jointly and severally, shall indemnify and hold harmless THI from and against
(i) any and all Loss which THI may suffer or incur, resulting from, related to,
or arising out of any misrepresentation, breach of warranty, or nonfulfillment
of any of the covenants or agreements of Advantage Life or Advantage Life
Acquisition in this Agreement or from any misrepresentation in or omission from
any certificate or document furnished or to be furnished to THI hereunder and
(ii) any and all actions, suits, investigations, proceedings, demands,
assessments, audits, judgments, and claims (including employment-related
claims) arising out of any of the foregoing; provided, however, that before THI
may assert a claim for indemnity under this Section, THI must give or cause to
be given written notice of such claim to Advantage Life and Advantage Life
Acquisition as provided in Article 10.4.
10.3 Limitation of Indemnity. Notwithstanding any provisions
herein to the contrary:
a. Neither party shall be liable to the other party for
any misrepresentation, the breach of any warranty or the
failure to fulfill any covenant or agreement herein if such other
party shall have had "actual knowledge" of the facts upon which such
misrepresentation, breach or failure to fulfill is based at or prior
to the Effective Date. For purposes of this Section 10.3(a) "actual
knowledge" on the part of Advantage Life, Advantage Life Acquisition
or Acquiree, respectively, shall mean the actual knowledge of one or
more of its executive employees; and
b. The liability of either party computed otherwise in
accordance with this Article 10 shall be limited to the
after-tax consequence to the indemnified party (or the affiliated
group of which such indemnified party is a member) of any such damage,
loss,
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liability, deficiency cost or expense suffered or incurred by such
indemnified party and shall be computed after giving effect to the
recovery, if any, by the indemnified party of any applicable insurance
proceeds, the pursuit of which shall be mandatory by the indemnified
party.
10.4 Notice. Promptly after acquiring knowledge of any Loss or
action, suit, investigation, proceeding, demand, assessment, audit, judgment,
or claim against which THI have indemnified Advantage Life and Advantage Life
Acquisition or against which Advantage Life and Advantage Life Acquisition have
indemnified THI, or as to which any party may be liable, THI, Acquiree,
Advantage Life Acquisition or Advantage Life, as the case may be, shall give to
the other party written notice thereof. Each indemnifying party shall, at its
own expense, promptly defend, contest or otherwise protect against any Loss or
action, suit, investigation, proceeding, demand, assessment, audit, judgment,
or claim against which it or he has indemnified an indemnified party, and each
indemnified party shall receive from the other party all necessary and
reasonable cooperation in said defense including, but not limited to, the
services of employees of the other party who are familiar with the transactions
out of which any such Loss or action, suit, investigation, proceeding, demand,
assessment, audit, judgment, or claim may have arisen. The indemnifying party
shall have the right to control the defense of any such proceeding unless
relieved of its or his liability hereunder with respect to such defense by the
indemnified party. The indemnifying party shall have the right, at its or his
option, and, unless so relieved, to compromise or defend, at its or his own
expense by its or his own counsel, any such matter involving the asserted
liability of the indemnified party. In the event that the indemnifying party
shall undertake to compromise or defend any such asserted liability, it or he
shall promptly notify the indemnified party of its or his intention to do so.
In the event that an indemnifying party, after written notice from an
indemnified party, fails to take timely action to defend the same, the
indemnified party shall have the right to defend the same by counsel of its or
his own choosing, but at the cost and expense of the indemnifying party.
10.5 Money Damages. If the Losses indemnified against pursuant to
the provisions of Articles 10.1 and 10.2 hereof can be compensated by the
payment of money to the other party, the indemnifying party shall, within 21
days after receipt of a written notice of a claim pursuant to Article 10.4
deliver to the other party either: (i) the amount of such claim by check or by
wire transfer to the bank account of that party's choosing, or (ii) a written
notice stating that it or he objects to the validity of such claim and setting
forth in reasonable detail the grounds on which it or he is contesting the
validity of the claim.
ARTICLE 11
SURVIVAL OF REPRESENTATIONS,
WARRANTIES, GUARANTEES, AND COVENANTS
11.1 Date Certain For Survival. All representations and warranties
made by THI, Advantage Life, Advantage Life Acquisition or Acquiree in this
Agreement or pursuant hereto
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shall survive the closing hereunder for a period ending on the first
anniversary of the Effective Date.
ARTICLE 12
CONDUCT OF ACQUIREE, THI, ADVANTAGE
LIFE AND ADVANTAGE LIFE ACQUISITION AFTER THE MERGER
12.1 Additional Actions and Cooperation. After the Effective Date,
at the request of either party and at the requesting party's expense, but
without additional consideration, the other party shall execute and deliver
from time to time such further instruments of assignment, conveyance and
transfer, shall cooperate in the conduct of litigation and the processing and
collection of insurance claims, and shall take such other actions as may
reasonably be required to convey and deliver more effectively to Advantage Life
Acquisition the assets of Acquiree Shares or to confirm and perfect the
shareholder interest in the common stock of Advantage Life, and otherwise to
accomplish the orderly transfer to Advantage Life of the assets and business of
Acquiree as contemplated by this Agreement.
12.2 Audit Access. Advantage Life Acquisition will preserve the
books, records, reports, documents and lists obtained by it pursuant to this
Agreement for a period of at least seven years from the Effective Date, will
not thereafter destroy or otherwise dispose of such records without giving THI
notice and the opportunity to take possession thereof, and, while in possession
of such records, will permit representatives of THI to have access at
reasonable times to such books, records, reports, documents and files, to make
such copies therefrom as such representatives reasonably request. Advantage
Life Acquisition shall, subject to applicable law and regulation, and the terms
of any confidentiality agreement, hold in confidence any nonpublic information
concerning Acquiree obtained hereunder.
12.3 Insurance. On and after the Effective Date Advantage Life
shall cause Acquiree to maintain liability insurance coverage customary for the
business engaged in by Acquiree and Advantage Life Acquisition shall use its
best efforts for a period of three years from the Effective Date to cause THI
to be named as an additional insured thereon. On the Effective Date, Advantage
Life Acquisition shall inform Acquiree as to the name of the insurer and terms
of the policy providing such coverage, including the amount of any deductible,
and shall inform THI promptly upon any change in the insurer or the terms of
such policy.
ARTICLE 13
BROKERAGE; EXPENSES
None of the parties has employed or will employ any broker, agent,
finder, or consultant (collectively, "Broker") or has incurred or will incur
any liability for any brokerage fees, commissions, finders' fees, or other
fees, in connection with the negotiation or consummation of
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the transactions contemplated by this Agreement, except as herein set forth on
Schedule 13.1 hereto. THI is responsible for and hereby indemnify and hold
Advantage Life and Advantage Life Acquisition harmless against and in respect
of any claim for brokerage fees, commissions, or other finders' fees or
commissions of any such Broker employed by THI or Acquiree and any additional
such claims incurred by THI or Acquiree relative to this Agreement and the
transactions contemplated hereby and any attorney fees incurred by any of these
parties in relation to any such claim by a Broker. Similarly, Advantage Life
and Advantage Life Acquisition are responsible for and hereby indemnify and
hold THI harmless against and in respect of any claim for brokerage fees,
commissions, or other finders' fees or commissions of any such Broker employed
by Advantage Life or Advantage Life Acquisition and any additional such claims
incurred by Advantage Life or Advantage Life Acquisition relative to this
Agreement and the transactions contemplated hereby and any attorney fees
incurred by Advantage Life in relation to any such claim by a Broker. Except
as otherwise expressly provided in this Agreement, Acquiree shall bear the
expenses of Acquiree and THI in connection with this Agreement or the
transactions contemplated hereby, including without limitation, any brokerage
commission. Advantage Life and Advantage Life Acquisition shall bear their
respective expenses incurred in connection with this Agreement or the
transactions contemplated hereby.
ARTICLE 14
TERMINATION
14.1 Events of Termination. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated by written notice of
termination at any time before the Effective Date only as follows:
a. By mutual consent of Acquiree and Advantage Life
within 7 days of the date of this Agreement;
b. Provided that neither Advantage Life nor Advantage
Life Acquisition are not in material default hereunder, by
Advantage Life upon three days' written notice to Acquiree and THI, if
all of the conditions precedent set forth in Article 9.1 hereof have
not been met; or
c. Provided that Acquiree and THI are not in material
default hereunder, by Acquiree or THI upon three days' written
notice to Advantage Life if all of the conditions precedent set forth
in Article 9.2 hereof have not been met.
ARTICLE 15
CORPORATE NAMES
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Advantage Life Acquisition shall have the exclusive right to use the
corporate name "Camper Ranch Club of America" after the Effective Date and THI
shall retain no rights therein.
ARTICLE 16
GENERAL
16.1 Entire Agreement; Amendments. This Agreement constitutes the
entire understanding among the parties with respect to the subject matter
contained herein and supersedes any prior understandings and agreements among
them respecting such subject matter. This Agreement may be amended,
supplemented, and terminated only by a written instrument duly executed by all
of the parties.
16.2 Headings. The headings in this Agreement are for convenience
of reference only and shall not affect its interpretation.
16.3 Gender; Number. Words of gender may be read as masculine,
feminine, or neuter, as required by context. Words of number may be read as
singular or plural, as required by context.
16.4 Exhibits and Schedules. Each Exhibit and Schedule referred to
herein is incorporated into this Agreement by such reference.
16.5 Severability. If any provision of this Agreement is held
illegal, invalid, or unenforceable, such illegality, invalidity, or
unenforceability will not affect any other provision hereof. This Agreement
shall, in such circumstances, be deemed modified to the extent necessary to
render enforceable the provisions hereof.
16.6 Notices. All notices and other communications hereunder shall
be in writing and shall be given to the person by sending a copy thereof by
certified mail or by telecopy. Notice shall be deemed to have been given to
the person entitled thereto when deposited in the United States mail or when
transmitted.
If to Advantage Life or Advantage Life Acquisition, to:
Xx. Xxxx Xxxxxxxx
Advantage Life, Inc.
00000 Xxxxx Xxxx Xxxxx Xxxxxxx, Xxx. 000
Xxxxx, Xxxxxxx 00000
With a copy to:
Xxxx X. Xxxxxxxx, Esq.
Xxxx Xxxx Xxxxxxx Xxxxxx Xxxx, P.A.
000 X. Xxxxxxxx Xx.
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Xxxxx, Xxxxxxx 00000
If to Acquiree:
Treasure Rockhound Ranches, Inc.
0000 X. Xxxxxxx Xxx.. Xxxxx 0
Xxxxxxxx, Xxxxxxx 00000
With a copy to:
Technology Holdings, Inc.
0000 X. Xxxxxxx Xxx.. Xxxxx 0
Xxxxxxxx, Xxxxxxx 00000
Notice of any change in any such address shall also be given in the manner set
forth above. Whenever the giving of notice is required, the giving of such
notice may be waived by the party entitled to receive such notice.
16.7 Waiver. The failure of any party to insist upon strict
performance of any of the terms or conditions of this Agreement will not
constitute a waiver of any of its rights hereunder.
16.8 Assignment. No party may assign any of its rights or delegate
any of its obligations hereunder without the prior written consent of the other
parties.
16.9 Successors and Assigns. This Agreement binds, inures to the
benefit of, and is enforceable by the successors and assigns of the parties,
and does not confer any rights on any other persons or entities.
16.10 Governing Law; Jurisdiction. The parties agree that,
irrespective of any wording that might be construed to be in conflict with this
paragraph, this Agreement is one for performance in Florida. The parties to
this Agreement agree that they waive any objection, constitutional, statutory
or otherwise, to a Florida court's taking jurisdiction of any dispute between
them. By entering into this agreement, the parties, and each of them
understand that they might be called upon to answer a claim asserted in a
Florida court. This Agreement shall be construed and enforced in accordance
with law of the State of Florida. Venue for any such action shall be deemed
proper in Hillsborough County, Florida.
16.11 No Benefit to Others. The representations, warranties,
covenants and agreements contained in this Agreement are for the sole benefit
of the parties hereto and their successors and assigns, and they shall not be
construed as conferring and are not intended to confer any rights on any other
persons.
16.12 Publicity. Prior to the Effective Date, all notices to third
parties and all other publicity relating to the transactions contemplated by
this Agreement shall be jointly planned, coordinated and agreed to by THI and
Advantage Life. Except as may be required by law, prior to the Effective Date
none of the parties hereto shall act unilaterally in this regard without the
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prior approval of THI and Advantage Life; provided, however, that such approval
shall not be unreasonably withheld.
16.13 Counterparts. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. The execution of this Agreement by any party hereto will not become
effective until counterparts hereof have been executed by all the parties
hereto. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
16.14 Limitations Upon Consent: Whenever, under the terms of this
Agreement, the parties hereto are called upon to give their written consent,
such written consent will not be unreasonably withheld.
16.15 Form of Consent: All consents of any kind required under this
Agreement shall be in writing. Whenever, under the terms of this Agreement,
Advantage Life, and/or Acquiree are authorized to give consent, such consent
may be given and shall be conclusively evidenced by the Chairman of the Board
of Directors or the president of each respective corporation giving such
consent.
16.16 Attorneys' Fees and Court Actions: If a legal action is
initiated by any party to this Agreement against another, arising out of or
relating to the alleged performance or non-performance of any right or
obligation established hereunder, or any dispute concerning the same, any and
all fees, costs and expenses reasonably incurred by each successful party or
his or its legal counsel in investigating, preparing for, prosecuting,
defending against, or providing evidence, producing documents or taking any
other action in respect of, such action shall be the joint and several
obligation of and shall be paid or reimbursed by the unsuccessful party.
16.17 Binding Effect: This Agreement shall inure to the benefit of
and be binding upon Advantage Life and Acquiree, and their successors or
assigns, including but not limited to any corporation or other business entity
which may acquire all or substantially all of Advantage Life's and/or
Acquiree's assets and business, or with, or into which Acquiree and/or any
Acquiree subsidiary may be consolidated or merged, and upon the executors,
administrators and legal representatives thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
ADVANTAGE LIFE PRODUCTS, INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------
Xxxx X. Xxxxxxxx, President
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ADVANTAGE LIFE ACQUISITION ONE, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxx, President
TREASURE ROCKHOUND RANCHES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx, President
TECHNOLOGY HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx , President
CHANNEL AMERICA BROADCASTING, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx, Authorized
Representative
XXXX XXXXXXXX, AN INDIVIDUAL
/s/ Xxxx X. Xxxxxxxx
----------------------------------------
XXXXXX XXXXXX, AN INDIVIDUAL
/s/ Xxxxxx Xxxxxx
----------------------------------------
VIETRI INVESTMENTS, INC.
By:
-------------------------------------
, President
-------------------
ROSCOM LIMITED
By:
-------------------------------------
, President
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