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EXHIBIT 4.b.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 31, 2000
BY AND AMONG
ALLIED CAPITAL CORPORATION,
ALLIED CAPITAL F SUB CORPORATION,
AND
FUTURONICS CORPORATION
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TABLE OF CONTENTS
Page
ARTICLE I THE MERGER; EFFECT OF MERGER..........................................................1
SECTION 1.1 THE MERGER............................................................................1
SECTION 1.2 EFFECTIVE TIME OF THE MERGER..........................................................1
SECTION 1.3 EFFECTS OF MERGER.....................................................................1
ARTICLE II THE SURVIVING CORPORATION.............................................................2
SECTION 2.1 CERTIFICATE OF INCORPORATION..........................................................2
SECTION 2.2 BY-LAWS...............................................................................2
SECTION 2.3 OFFICERS AND DIRECTORS................................................................2
ARTICLE III CONVERSION OF SHARES..................................................................2
SECTION 3.1 CONVERSION OF SHARES..................................................................2
SECTION 3.2 PAYMENT FOR SHARES IN THE MERGER......................................................2
SECTION 3.3 DISSENTING SHARES.....................................................................3
SECTION 3.4 CLOSING OF COMPANY TRANSFER BOOKS.....................................................3
SECTION 3.5 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK...................................4
SECTION 3.6 STOCKHOLDER APPROVAL..................................................................4
SECTION 3.7 EXERCISE AND CONVERSION OF STOCK OPTIONS.............................................4
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................4
SECTION 4.1 EXECUTION AND DELIVERY................................................................5
SECTION 4.2 CONSENTS AND APPROVALS................................................................5
SECTION 4.3 NO BREACH.............................................................................5
SECTION 4.4 ORGANIZATION, STANDING AND AUTHORITY..................................................6
SECTION 4.5 CAPITALIZATION OF THE COMPANY.........................................................6
SECTION 4.6 SUBSIDIARIES..........................................................................7
SECTION 4.7 CORPORATE RECORDS.....................................................................7
SECTION 4.8 ASESETS AND LIABILITIES; FINANCIAL RECORDS............................................7
SECTION 4.9 INFORMATION IN DISCLOSURE SCHEDULE....................................................7
SECTION 4.10 LIABILITIES..........................................................................7
SECTION 4.11 NO COMPANY MATERIAL ADVERSE EFFECT...................................................8
SECTION 4.12 COMPLIANCE WITH LAWS.................................................................8
SECTION 4.13 PERMITS..............................................................................8
SECTION 4.14 ACTIONS AND PROCEEDINGS..............................................................8
SECTION 4.15 CONTRACTS AND OTHER AGREEMENTS.......................................................8
SECTION 4.16 PROPERTY.............................................................................9
SECTION 4.17 INTELLECTUAL PROPERTY................................................................9
SECTION 4.18 BANKING.............................................................................10
SECTION 4.19 LIENS...............................................................................10
SECTION 4.20 OFFICERS, DIRECTORS, EMPLOYEES......................................................10
SECTION 4.21 TRANSACTIONS WITH DIRECTORS, OFFICERS AND AFFILIATES................................10
SECTION 4.22 OPERATIONS OF THE COMPANY...........................................................10
SECTION 4.23 BROKERAGE...........................................................................12
SECTION 4.24 TAXES...............................................................................12
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SECTION 4.25 ENVIRONMENTAL LAWS...................................................................13
SECTION 4.26 COMPANY ACTION.......................................................................14
SECTION 4.27 OPINION OF FINANCIAL ADVISOR.........................................................14
SECTION 4.28 PRIOR ACTIVITIES.....................................................................14
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.....................................14
SECTION 5.1 EXECUTION AND DELIVERY...............................................................14
SECTION 5.2 CONSENTS AND APPROVALS...............................................................15
SECTION 5.3 NO BREACH............................................................................15
SECTION 5.4 SUFFICIENT FUNDS.....................................................................16
SECTION 5.5 ORGANIZATION, STANDING AND AUTHORITY OF PARENT AND SUB...............................16
SECTION 5.6 BROKERAGE............................................................................16
SECTION 5.7 NO MATERIAL ADVERSE CHANGE...........................................................16
SECTION 5.8 SUB ACTION...........................................................................16
SECTION 5.9 COMPLIANCE WITH LAWS.................................................................16
SECTION 5.10 ACTIONS AND PROCEEDINGS..............................................................17
SECTION 5.11 NO PRIOR ACTIVITIES..................................................................17
ARTICLE VI COVENANTS AND AGREEMENTS.............................................................17
SECTION 6.1 CONDUCT OF BUSINESS..................................................................17
SECTION 6.2 LITIGATION INVOLVING THE COMPANY.....................................................18
SECTION 6.3 CONTINUED EFFECTIVENESS OF REPRESENTATIONS AND WARRANTIES
OF THE PARTIES.......................................................................18
SECTION 6.4 CORPORATE EXAMINATIONS AND INVESTIGATIONS; CONFIDENTIALITY...........................19
SECTION 6.5 INDEMNIFICATION OF COMPANY OFFICERS AND DIRECTORS....................................19
SECTION 6.6 PARENT AND SUB APPROVALS.............................................................19
SECTION 6.7 COMPANY APPROVALS....................................................................20
SECTION 6.8 EXPENSES.............................................................................20
SECTION 6.9 ACQUISITION PROPOSALS................................................................22
SECTION 6.10 FURTHER ASSURANCES...................................................................21
SECTION 6.11 UPDATING SCHEDULES...................................................................22
ARTICLE VII CONDITIONS PRECEDENT TO EACH PARTY'S OBLIGATION
TO EFFECT THE MERGER.................................................................22
SECTION 7.1 COMPANY STOCKHOLDER APPROVAL.........................................................23
SECTION 7.2 XXXX-XXXXX-XXXXXX....................................................................23
SECTION 7.3 LITIGATION...........................................................................23
SECTION 7.4 BLC MERGER...........................................................................23
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATION OF PARENT AND SUB TO EFFECT THE MERGER........23
SECTION 8.1 REPRESENTATIONS AND COVENANTS........................................................23
SECTION 8.2 ABSENCE OF MATERIAL ADVERSE CHANGE...................................................24
SECTION 8.3 RECEIPT OF AGREEMENTS................................................................24
SECTION 8.4 EXERCISE OF STOCK OPTIONS............................................................24
SECTION 8.5 CLOSING CONDITIONS...................................................................24
ARTICLE IX CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO EFFECT THE MERGER...........24
SECTION 9.1 REPRESENTATIONS AND COVENANTS........................................................24
SECTION 9.2 ABSENCE OF MATERIAL ADVERSE CHANGE...................................................24
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SECTION 9.3 CLOSING CONDITIONS..................................................................24
ARTICLE X CLOSING.............................................................................25
ARTICLE XI NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES COVENANTS AND AGREEMENTS................25
SECTION 11.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS..........................................................................25
ARTICLE XII TERMINATION OF AGREEMENT............................................................25
SECTION 12.1 TERMINATION.........................................................................25
SECTION 12.2 EFFECT OF TERMINATION...............................................................26
ARTICLE XIII DEFINITIONS.........................................................................26
SECTION 13.1 DEFINITIONS.........................................................................26
ARTICLE XIV MISCELLANEOUS.......................................................................31
SECTION 14.1 PUBLICITY...........................................................................31
SECTION 14.2 PARENT GUARANTY.....................................................................31
SECTION 14.3 NOTICES.............................................................................31
SECTION 14.4 ENTIRE AGREEMENT....................................................................32
SECTION 14.5 WAIVERS AND AMENDMENTS; NON CONTRACTUAL REMEDIES; PRESERVATION
OF REMEDIES; LIABILITY..............................................................32
SECTION 14.6 GOVERNING LAW.......................................................................33
SECTION 14.7 BINDING EFFECT; NO ASSIGNMENT.......................................................33
SECTION 14.8 THIRD PARTY BENEFICIARIES...........................................................33
SECTION 14.9 COUNTERPARTS........................................................................33
SECTION 14.10 EXHIBITS AND SCHEDULES..............................................................33
SECTION 14.11 HEADINGS............................................................................33
SECTION 14.12 SUBMISSION TO JURISDICTION; VENUE...................................................33
SECTION 14.13 SPECIFIC PERFORMANCE................................................................34
SECTION 14.14 SEVERABILITY........................................................................34
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
October 31, 2000, is made by and among Allied Capital Corporation, a Maryland
corporation ("Parent"), Allied Capital F Sub Corporation, a New York corporation
and a wholly owned subsidiary of Parent ("Sub"), and Futuronics Corporation, a
New York corporation (the "Company"). Certain terms used in this Agreement are
defined in Article XIII.
WITNESSETH:
WHEREAS, Parent and Sub desire to effect a business combination by
means of the merger of Sub with and into the Company;
WHEREAS, the Board of Directors of Parent and Sub and the stockholder
of Sub and the Board of Directors of the Company have adopted this Agreement and
the merger of Sub with and into the Company (the "Merger"), upon the terms and
subject to the conditions set forth herein; and
WHEREAS, simultaneously with the execution of this Agreement, the
Named Persons and Parent are entering into a Voting Agreement in the form
attached hereto as Exhibit A (the "Voting Agreement").
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE MERGER; EFFECT OF MERGER
SECTION 1.1 THE MERGER. Upon the terms and subject to the conditions
of this Agreement and in accordance with the applicable provisions of the New
York Business Corporation Law, as amended (the "New York Corporation Law"), Sub
shall be merged with and into the Company and the separate existence of Sub
shall thereupon cease. The name of the Company, as the surviving corporation in
the Merger (the "Surviving Corporation"), may by virtue of the Merger be changed
to such name as Parent, in its sole discretion, may choose.
SECTION 1.2 EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective at such time as a properly executed certificate of merger or other
appropriate document is duly filed with the Secretary of State of New York,
which filing shall be made as soon as practicable following fulfillment or
waiver of the conditions set forth in Articles VII, VIII and IX hereof or such
later time as is specified in such filing (the "Effective Time").
SECTION 1.3 EFFECTS OF MERGER. The Merger shall have the effects set
forth in Section 906 of the New York Corporation Law.
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ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.1 CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of the Company as in effect immediately prior to the Effective
Time shall be the Certificate of Incorporation of the Surviving Corporation, and
thereafter may be amended in accordance with its terms and as provided by the
New York Corporation Law.
SECTION 2.2 BY-LAWS. The by-laws of the Company as in effect
immediately prior to the Effective Time shall be the by-laws of the Surviving
Corporation, and thereafter may be amended in accordance with their terms and as
provided by the New York Corporation Law.
SECTION 2.3 OFFICERS AND DIRECTORS. The officers and the directors of
Sub immediately prior to the Effective Time shall be the officers and directors
of the Surviving Corporation after the Effective Time, in each case until their
respective successors are duly elected and qualified.
ARTICLE III
CONVERSION OF SHARES
SECTION 3.1 CONVERSION OF SHARES. Subject to the provisions of this
Agreement, at the Effective Time, by virtue of the Merger and without any action
on the part of the holders thereof, the shares of the Company and Sub shall be
converted or cancelled, as the case may be, in the following manner:
(a) The aggregate merger consideration for all Company
Common Stock shall be $9,083,284. Each share of Company Common Stock
shall be converted into the right to receive, without interest
thereon, from Parent an amount in cash equal to the aggregate merger
consideration divided by the total number of shares of Company Common
Stock outstanding immediately prior to the Effective Time (the
"Merger Consideration").
(b) Each share of common stock, par value $0.01, of Sub
issued and outstanding immediately prior to the Effective Time shall
be converted into one-tenth of one share of common stock, par value
$0.10 per share, of the Surviving Corporation ("Surviving Corporation
Common Stock").
(c) All shares of Company Common Stock which are held in
the treasury of the Company shall be canceled and shall cease to
exist.
SECTION 3.2 PAYMENT FOR SHARES IN THE MERGER. The manner of making
payment for and conversion of shares of the Company Common Stock in the Merger
shall be as follows:
(a) As soon as practicable after the Effective Time,
Parent shall send or cause to be sent a notice announcing the
consummation of the Merger and summarizing the provisions of Sections
3.1 and 3.2 to each holder of a Certificate which immediately prior
to the Effective
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Time evidenced shares of the Company Common Stock and which was not previously
surrendered.
(b) After the Effective Time, each holder of record of a
Certificate (other than a holder of Dissenting Shares) shall surrender such
Certificate to Parent, together with (i) separate stock transfer powers duly
endorsed by such holder and (ii) a letter of transmittal from such holder.
(c) Upon surrender of a Certificate or Certificates
representing the shares of the Company Common Stock in the manner provided in
Section 3.2(b), each holder shall be entitled to receive from Parent in exchange
therefor a check for the amount of cash into which the holder's shares of the
Company Common Stock previously evidenced by such Certificate(s) was converted
in the Merger pursuant to Section 3.1. Parent or its transfer agent shall issue
such checks as soon as practicable following such surrender.
(d) Each Certificate which immediately prior to the
Effective Time evidenced shares of the Company Common Stock (other than
Dissenting Shares) shall, from and after the Effective Time until such
Certificate is surrendered to Parent or its transfer agent, be deemed, for all
corporate purposes, to evidence the right to receive that amount of cash
described in Section 3.1. Upon receipt of such Certificate by Parent or its
transfer agent, there shall be paid to such holder, without interest, the amount
of any cash payable to such holder pursuant to Section 3.1.
(e) Any holder of the Company Common Stock who has not
exchanged his Certificates for Merger Consideration in accordance with this
subsection within six months after the Effective Time shall have no further
claim upon the transfer agent, and shall thereafter look only to Parent for
payment in respect of his shares of Company Common Stock. Until so surrendered,
Certificates shall represent solely the right to receive the Merger
Consideration. If any Certificates entitled to payment pursuant to Section 3.1
shall not have been surrendered for such payment prior to such date on which any
payment in respect thereof would otherwise escheat to or become the property of
any Governmental Entity, the shares of the Company Common Stock represented
thereby shall, to the extent permitted by applicable law, be deemed to be
canceled and no money or other property will be due to the holder thereof.
SECTION 3.3 DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, each share of Company Common Stock that is issued and
outstanding immediately prior to the Effective Time and that is held by a
stockholder who has properly exercised and perfected appraisal rights under the
provisions of the New York Corporation Law ("Dissenting Shares"), shall not be
converted into or exchangeable for the right to receive the Merger
Consideration, but shall entitle the holder thereof to receive payment therefor
as shall be determined pursuant to the provisions of the New York Corporation
Law; provided, however, that if such holder shall have failed to perfect or
shall have effectively withdrawn or lost his right to appraisal and payment
under the New York Corporation Law, each share of Company Common Stock of such
holder shall thereupon be deemed to have been converted into and to have become
exchangeable for, as of the Effective Time, the right to receive the Merger
Consideration, in accordance with Section 3.1, and such shares shall no longer
be Dissenting Shares.
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SECTION 3.4 CLOSING OF COMPANY TRANSFER BOOKS. Immediately prior to
the Effective Time, the Company Common Stock transfer books shall be closed and
no transfer of Company Common Stock shall thereafter be made. In the event of a
transfer of ownership of Company Common Stock which is not registered in the
transfer records of the Company, the Merger Consideration to be distributed
pursuant to this Agreement may be delivered to a transferee, if a Certificate is
presented to Parent or its transfer agent, accompanied by all documents required
to evidence and effect such transfer and by payment of any applicable stock
transfer taxes. Parent shall be entitled to rely upon the stock transfer books
of the Company to establish the identity of those persons entitled to receive
the Merger Consideration specified in this Agreement for their shares of Company
Common Stock, which books shall be conclusive with respect to the ownership of
such shares. In the event of a dispute with respect to the ownership of any such
shares, Parent shall be entitled to deposit any Merger Consideration represented
thereby in escrow with an independent party and thereafter be relieved with
respect to any claims to such Merger Consideration.
SECTION 3.5 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
Merger Consideration issued upon surrender of a Certificate in accordance with
the terms hereof shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of Company Common Stock represented thereby.
If, after the Effective Time, Certificates are presented to Parent for any
reason, they shall be cancelled and exchanged as provided in this Article 3.
SECTION 3.6 STOCKHOLDER APPROVAL. The Company shall take all action
necessary, in accordance with applicable law and its Certificate of
Incorporation and By-Laws, to convene a special meeting of the holders of
Company Common Stock (the "Company Meeting") as promptly as practicable for the
purpose of considering and taking action upon this Agreement. The Board of
Directors of the Company has adopted the Merger and this Agreement and
recommended that holders of Company Common Stock vote in favor of adopting the
Merger and this Agreement at the Company Meeting. Notwithstanding the foregoing,
nothing in this Section 3.6 shall preclude or limit the Board of Directors of
the Company from complying with its fiduciary duties under applicable law.
SECTION 3.7 EXERCISE OF STOCK OPTIONS. The Company shall use all
reasonable efforts to cause all Company Stock Options to be fully exercised for
the purchase of Company Common Stock prior to the Effective Time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub that, except as
set forth in the disclosure schedule attached hereto (the "Company Disclosure
Schedule"), which Company Disclosure Schedule shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
IV and may be amended from time to time pursuant to the provisions hereof:
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SECTION 4.1 EXECUTION AND DELIVERY. The Company has the corporate
power and authority to enter into this Agreement and each other agreement,
document or instrument contemplated hereby or to be executed in connection
herewith to which the Company is a party (the "Company Documents") and, subject
to approval of this Agreement by the holders of the Company Common Stock, to
carry out its obligations hereunder and thereunder. The execution, delivery and
performance of this Agreement and the Company Documents and the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by the Company's Board of Directors. This Agreement constitutes the
valid and binding obligation of the Company and the Company Documents, when
executed and delivered, will constitute the valid and binding obligations of the
Company, in each case enforceable in accordance with their respective terms,
except as enforcement may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and except that
the availability of equitable remedies, including specific performance, is
subject to the discretion of the court before which any proceeding therefor may
be brought. Except for the approval of the holders of two-thirds of the
outstanding shares of Company Common Stock, no other corporate proceedings on
the part of the Company are necessary after the date of this Agreement to
authorize this Agreement and the Company Documents and the transactions
contemplated hereby and thereby.
SECTION 4.2 CONSENTS AND APPROVALS. The execution and delivery by the
Company of this Agreement and the Company Documents, the performance by the
Company of its obligations hereunder and thereunder, and the consummation by the
Company of the transactions contemplated hereby and thereby, as the case may be,
do not require the Company to obtain any consent, approval or action of, or make
any filing or registration with, or give any notice to, any person or any
Governmental Entity, other than (i) in connection, or in compliance, with the
provisions of the H-S-R Act, if applicable, (ii) in the case of the performance
by the Company of its obligations hereunder and under the Company Documents and
the consummation by the Company of the transactions contemplated hereby and by
the Company Documents, the approval of the holders of the Company Common Stock
as specified in Section 4.1 and (iii) the filing of the Certificate of Merger
with the Secretary of State of New York.
SECTION 4.3 NO BREACH. Except as set forth in Section 4.3 of the
Company Disclosure Schedule and for filings, notices, consents and approvals as
may be required by the New York Corporation Law, the execution, delivery and
performance by the Company of this Agreement and the Company Documents and the
consummation by the Company of the transactions contemplated hereby and thereby
in accordance with the terms and conditions hereof and thereof will not (i)
violate any provision of the Certificate of Incorporation or By-Laws of the
Company; (ii) violate, conflict with or result in the breach of any of the terms
of, result in any modification of the effect of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or lapse
of time or both, constitute) a default under, any contract or other agreement or
instrument to which the Company is a party or by or to which the assets or
properties of the Company may be bound or subject; (iii) violate any order,
judgment, injunction, award or decree of any Governmental Entity against, or
binding upon, or any agreement with, or condition imposed by, any Governmental
Entity, binding upon the Company, or upon the securities, assets or business of
the Company; (iv) violate any statute, law or regulation of any jurisdiction as
such statute, law or regulation relates to the Company, or to the securities,
assets or business of the
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Company; (v) result in the creation or imposition of any lien or other
encumbrance or the acceleration of any indebtedness or other obligation of the
Company; or (vi) result in the breach of any of the terms or conditions of,
constitute a default under, or otherwise cause a violation of, any Permit of the
Company; except in the case of (ii) through (vi) above, for violations,
conflicts, breaches, defaults, modifications, impairments, liens or other
encumbrances that would not, individually or in the aggregate, have a material
adverse effect on the management, business, properties, assets, condition
(financial or otherwise), liabilities or operations of the Company taken as a
whole, or adversely affect the consummation of the transactions contemplated
hereby in any material respect, but excluding therefrom any such change, effect,
event, occurrence or state of facts resulting from or arising in connection with
(A) this Agreement, the transactions contemplated hereby or the announcement
thereof or (B) changes or conditions generally affecting the industries in which
the Company operates (a "Company Material Adverse Effect").
SECTION 4.4 ORGANIZATION, STANDING AND AUTHORITY. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of New York and has all requisite corporate power and
authority to own, lease and operate its assets, properties and business and to
carry on its business as now being conducted or currently proposed to be
conducted. The Company is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of such activities make
such qualification necessary, except where the failure to so qualify would not,
individually or in the aggregate, have a Company Material Adverse Effect. The
copies of the Certificate of Incorporation and By-Laws of the Company included
as part of Section 4.4 of the Company Disclosure Schedule constitute accurate
and complete copies of such organizational instruments and accurately reflect
all amendments thereto through the date hereof.
SECTION 4.5 CAPITALIZATION OF THE COMPANY. The authorized capital
stock of the Company consists of 2,000,000 shares of Company Common Stock. As of
the date of this Agreement there were 160,065 shares of Company Common Stock
outstanding and 8,450 shares of Company treasury stock and a list of
certificates representing the Company treasury shares is set forth in Section
4.5 of the Company Disclosure Schedule. As of the date hereof, there are no
bonds, debentures, notes or other indebtedness having the right to vote on any
matters on which the Company's stockholders may vote issued or outstanding.
Section 4.5 of the Company Disclosure Schedule sets forth a true and complete
list as of the date indicated the holders of all outstanding Company Stock
Options, showing as to each such holder the number of Company Stock Options so
held, such holder's mailing address and the date of grant, vesting schedules and
exercise price of all such Company Stock Options. A list of shareholders who
will be parties to the Voting Agreement, together with their respective holdings
of the Company Common Stock, is set forth in Section 4.5 of the Company
Disclosure Schedule. All outstanding shares of the Company Common Stock are duly
authorized and are validly issued, fully paid and nonassessable and free of
preemptive rights, except as otherwise provided pursuant to Section 630 of the
New York Corporation Law. Except as set forth in Section 4.5 of the Company
Disclosure Schedule, there is no (i) outstanding option, warrant, call,
unsatisfied preemptive right or other agreement of any kind binding upon the
Company to purchase or otherwise to receive from the Company any of the
outstanding, authorized but unissued, unauthorized or treasury shares of Company
Common Stock or any other security of the Company, (ii) outstanding
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security of any kind binding upon the Company convertible into any security of
the Company, and (iii) outstanding contract or other agreement binding upon the
Company to purchase, redeem or otherwise acquire any outstanding shares of
Company Common Stock or any other security of the Company.
SECTION 4.6 SUBSIDIARIES. The Company has no Subsidiary.
SECTION 4.7 CORPORATE RECORDS. The Company has heretofore delivered
to Parent true and complete copies of the minute books of the Company for the
five years prior to the date hereof through and including the date hereof, all
as in effect on the date hereof. The minute books of the Company reflect all
actions taken at all meetings and consents in lieu of meetings of stockholders,
and all actions taken at all meetings and consents in lieu of meetings of the
Company's Board of Directors and all committees thereof.
SECTION 4.8 ASSETS AND LIABILITIES; FINANCIAL STATEMENTS. The Company
has delivered to Parent an unaudited balance sheet of the Company as of October
30, 2000 (the "Company Balance Sheet") and an unaudited income statement of the
Company for the period from March 1, 2000 to October 30, 2000 (together with the
Company Balance Sheet, the "Company Financial Statements"). The Company
Financial Statements present fairly, in all material respects, in accordance
with GAAP, the assets and liabilities of the Company as of such date and fairly
presents, in all material respects, the financial position of the Company as of
such date.
SECTION 4.9 INFORMATION IN DISCLOSURE SCHEDULE. None of the
information with respect to the Company to be included in the proxy statement of
the Company (the "Proxy Statement") required to be mailed to the stockholders of
the Company in connection with the Merger will, in the case of the Proxy
Statement or any amendments or supplements thereto, at the time of the mailing
of the Proxy Statement and any amendments or supplements thereto, and at the
time of the Company Meeting, 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, in light of the circumstances under which
they were made, not misleading; provided, however, that this provision shall not
apply to statements or omissions in the Proxy Statement based upon information
furnished by Parent for use therein. The Proxy Statement will comply as to form
in all material respects with the applicable provisions of the New York
Corporation Law. No representation or warranty made by the Company contained in
this Agreement and no statement contained in any certificate delivered pursuant
to Article VII or any exhibit to this Agreement and the Company Disclosure
Schedule, as the same may be amended pursuant to the provisions hereof, contains
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.
SECTION 4.10 LIABILITIES. To the Company's Knowledge, the Company
does not have any direct or indirect liability, contingent or otherwise, that is
required by GAAP to be reflected or reserved for in the Company Financial
Statements (collectively, the "Liabilities"), that was not adequately reflected
or reserved against on the Company Balance Sheet, other than (i) liabilities set
forth in Section 4.10 of the Company Disclosure Schedule, (ii) liabilities
incurred in the
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ordinary course of business since October 30, 2000 consistent with past
practices, or (iii) liabilities permitted by this Agreement to be incurred in
connection with the transactions contemplated by this Agreement.
SECTION 4.11 NO COMPANY MATERIAL ADVERSE EFFECT. Except as disclosed
in Section 4.11 of the Company Disclosure Schedule, since October 30, 2000,
there has not been any change, event, occurrence or state of facts that has
caused, or would reasonably be expected to cause, individually or in the
aggregate, a Company Material Adverse Effect.
SECTION 4.12 COMPLIANCE WITH LAWS. To the Company's Knowledge, except
as disclosed in Section 4.12 of the Company Disclosure Schedule, the Company is
not in violation in any material respect of any applicable order, judgment,
injunction, award or decree, law, ordinance or regulation or any other
requirement of any Governmental Entity applicable to the Company or any of its
businesses. The Company has not received notice that any such material violation
has been alleged or is being investigated. To the Company's Knowledge, the
Company has fewer than 100 shareholders. This Section 4.12 shall not apply to
Taxes.
SECTION 4.13 PERMITS. To the Company's Knowledge, except as set forth
in Section 4.13 of the Company Disclosure Schedule, (i) the Company has obtained
all Permits that are necessary for the ownership and conduct of its businesses
as presently conducted or currently proposed to be conducted, other than any
Permits, the absence of which would not, individually or in the aggregate, have
a Company Material Adverse Effect; (ii) to the Company's Knowledge, such Permits
are in full force and effect and are sufficient for the ownership and conduct of
such businesses as presently conducted or currently proposed to be conducted; no
violations exist or have been recorded in respect of any material Permit; and
(iii) no proceeding is pending or, to the Knowledge of the Company, threatened,
that would suspend, revoke or limit any material Permit.
SECTION 4.14 ACTIONS AND PROCEEDINGS. Except as disclosed in Section
4.14 of the Company Disclosure Schedule, there are no outstanding orders,
judgments, injunctions, awards or decrees of any Governmental Entity against or
involving the Company or any of its directors, officers or employees (in their
capacities as such). Except as disclosed in Section 4.14 of the Company
Disclosure Schedule, as of the date of this Agreement there is no claim, action,
suit, litigation, legal, administrative or arbitration proceeding, whether
formal or informal (including, without limitation, any claim or notice of intent
to institute any matter) (a "Proceeding"), which is pending or, to the Company's
Knowledge, threatened against or involving the Company, or any of its directors,
officers or employees (in their capacities as such) or properties, capital stock
or assets.
SECTION 4.15 CONTRACTS AND OTHER AGREEMENTS. Section 4.15 of the
Company Disclosure Schedule sets forth each contract (including any contract
relating to the Company's mortgage loan assets) to which the Company is a party.
Each such contract and other agreement is valid, in full force and effect and
binding upon the Company, except for failures to be in full force and effect
that would not, individually or in the aggregate, have a Company Material
Adverse Effect and, to the Company's Knowledge, the other parties thereto in
accordance with its terms, and the Company is not in default under any of them,
except for defaults that would
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not, individually or in the aggregate, have a Company Material Adverse Effect,
and the Company has no Knowledge of any threat of cancellation or termination
thereunder, nor will the consummation of the transactions contemplated by this
Agreement result in a default under any such contract or other agreement or the
right to terminate such contract or other agreement, except for cancellations,
terminations, defaults, or rights to terminate that would not, individually or
in the aggregate, have a Company Material Adverse Effect. No Permits or other
documents or agreements with, or issued by or filed with, any person, have been
granted to any other person that provide the right to use any real or tangible
personal property comprising any portion of the assets of the Company except for
grants that would not, individually or in the aggregate, have a Company Material
Adverse Effect. The Company is not a party to any contract, commitment,
arrangement or agreement which would, following the Closing, restrain or
restrict Parent or any affiliate of Parent, from operating the business of the
Company in the manner in which it is currently operated, except for contracts,
commitments, arrangements or agreement that would not, individually or in the
aggregate, have a Company Material Adverse Effect. The mortgage loan included in
the Company's assets complies in all material respects with all applicable laws
and regulations of the State of New York.
SECTION 4.16 PROPERTY. The Company does not own or lease any real
property.
SECTION 4.17 INTELLECTUAL PROPERTY. (a) The Company owns or otherwise
possesses all rights as are necessary to use, all patents (and applications
therefor), patent rights and disclosures, trademarks, trademark rights, service
marks, service xxxx rights, trade names, trade name rights, registered
copyrights (and applications therefore), process know-how, inventions,
discoveries, systems, scientific, technical, engineering and marketing data,
technology, trade secrets software programs and codes (both source and object),
formulae and techniques used in or necessary for the conduct of its business and
other proprietary information except as would not, individually or in the
aggregate, have a Company Material Adverse Effect (collectively, the
"Intellectual Property Rights").
(b) To the Company's Knowledge, the Company has not received notice
or otherwise has reason to know of any conflict or alleged conflict with the
rights of others pertaining to the Intellectual Property Rights. To the
Company's Knowledge, the businesses of the Company as presently conducted do not
infringe upon or violate any intellectual property rights of others. The Company
has the unrestricted right to use, free and clear of any rights or claims of
others, all trade secrets, processes, customer lists and other rights incident
to its businesses as now conducted other than restrictions that would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(c) The Company is not currently obligated or under any existing
liability to make royalty or other payments to any owner of, licensor of, or
other claimant to, any patent, trademark, service names, trade names,
copyrights, or other intangible asset, with respect to the use thereof or in
connection with the conduct of its business as now conducted or otherwise except
for obligations or liabilities that would not, individually or in the aggregate,
have a Company Material Adverse Effect. To the Company's Knowledge, no employee
of the Company has violated any employment agreement or proprietary information
agreement which he had with a previous employer or any patent policy of such
employer, or is a party to or
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threatened by any litigation concerning any patents, trademarks, trade secrets,
service names, trade names, copyrights, licenses and the like except for
violations that would not, individually or in the aggregate, result in a Company
Material Adverse Effect.
SECTION 4.18 BANKING. Section 4.18 of the Company Disclosure Schedule
contains a complete list of all of the bank accounts and lines of credit owned
or used by the Company and the names of all persons with authority to withdraw
funds from, or execute drafts or checks on, each such account.
SECTION 4.19 LIENS. Except as set forth in Section 4.19 of the
Company Disclosure Schedule, the Company has good title to all of its respective
assets and properties, in each case free and clear of any lien or other
encumbrance, except for (i) liens or other encumbrances securing taxes,
assessments, governmental charges or levies, or the claims of materialmen,
carriers, landlords and like persons, all of which are not yet delinquent or
which are being contested in good faith or (ii) liens or other encumbrances of a
character that do not materially detract from the value of the property subject
thereto or impair the use of or the access to the property subject thereto, or
impair the operation of the Company or detract from its business.
SECTION 4.20 OFFICERS, DIRECTORS, EMPLOYEES. Section 4.20 of the
Company Disclosure Schedule sets forth the name of each officer and director of
the Company and the amount of compensation paid during fiscal 2000 and the
amount reasonably expected to be paid during fiscal 2001. The Company does not
have any employees.
SECTION 4.21 TRANSACTIONS WITH DIRECTORS, OFFICERS AND AFFILIATES.
Except as disclosed in Section 4.21 of the Company Disclosure Schedule, since
January 1, 1999, there have been no transactions between the Company and any
director, officer, employee, stockholder or other affiliate of the Company or
loans, guarantees or pledges to, by or for the Company from, to, by or for any
of such persons, and no such loan, guarantee or pledge is currently in effect.
Since January 1, 1999, other than as disclosed in Section 4.21 of the Company
Disclosure Schedule, none of the officers, directors or employees of the
Company, or any spouse or relative of any of such persons, has been a director
or officer of, or has had any direct or indirect interest in, any person or
business enterprise which during such period has been a supplier, customer or
sales agent of the Company or has competed with or been engaged in any business
of the kind being conducted by the Company.
SECTION 4.22 OPERATIONS OF THE COMPANY. Except as disclosed in
Section 4.15 or 4.22 of the Company Disclosure Schedule and except as may result
from the transactions contemplated by this Agreement, since January 1, 2000, the
Company has not:
(i) amended its Certificate of Incorporation or By-laws or
merged with or into or consolidated with any other person,
subdivided or in any way reclassified any shares of its
capital stock or changed or agreed to change in any manner
the rights of its outstanding capital stock or the
character of its business;
(ii) (A) issued or sold or purchased, or issued options or
rights to subscribe to, or entered into any contracts or
commitments to issue or sell or purchase, any shares
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of its capital stock or any of its bonds, notes, debentures
or other evidences of indebtedness or (B) modified the
terms of its options, rights or any contracts or
commitments to issue or sell or purchase any shares of its
capital stock or any of its bonds, notes, debentures or
other evidences of indebtedness;
(iii) made any bonus, or increase in any other direct or indirect
compensation, for or to any of its officers, directors,
agents or other representatives, or commitment or agreement
to make or pay the same;
(iv) except in the ordinary course of business consistent with
past practice, declared or made any Distributions to any
stockholder or made any direct or indirect redemption,
retirement, purchase or other acquisition of any shares of
its capital stock;
(v) made any change in its accounting methods or practices or
made any change in depreciation or amortization policies,
except as required by law or GAAP;
(vi) made any loan or advance to its stockholders or to any of
the directors or officers of the Company, consultants,
agents or other representatives, or otherwise than in the
ordinary course of business made any other loan or advance;
(vii) except in the ordinary course of business consistent with
past practice, (A) entered into any lease; (B) sold,
abandoned or made any other disposition of any of its
assets or properties; (C) granted or suffered any lien or
other encumbrance on any of its assets or properties; (D)
entered into or amended any contract or other agreement to
which it is a party, or by or to which it or its assets or
properties are bound or subject which if existing on the
date hereof would need to be disclosed in Section 4.14 of
the Company Disclosure Schedule;
(viii) made or entered into any agreement to make any acquisition
of all or a substantial part of the assets, properties,
securities or business of any other person;
(ix) paid, directly or indirectly, any of its Liabilities before
the same became due in accordance with its terms or
otherwise than in the ordinary course of business;
(x) terminated or failed to renew, or received any written
threat (that was not subsequently withdrawn) to terminate
or fail to renew, any contract or other agreement that is
or was material to the assets, liabilities, properties,
business, operations, condition (financial or otherwise),
operations or prospects of the Company;
(xi) made any revaluation of any assets or write-down of the
value of any loans or receivables of the Company;
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(xii) except in the ordinary course of business consistent with
past practice, accelerated the collection, or sale to third
parties, of any receivables of the Company, or delayed the
payment of any payables of the Company;
(xiii) entered into any other contract or other agreement or other
transaction which contract, agreement or transaction is not
terminable by the Company upon not more than 30 days'
notice; or
(xiv) suffered any damage, destruction or loss, whether covered
by insurance or not, which has had or could have,
individually or in the aggregate, a Company Material
Adverse Effect.
SECTION 4.23 BROKERAGE. Except for Josephthal & Co., Inc., no broker,
agent or finder has acted, directly or indirectly, for the Company or, to the
Knowledge of the Company, any of the Company stockholders, nor has the Company
or, to the Knowledge of the Company, any of the Company stockholders, incurred
any obligation to pay any brokerage fee, agent's commission or finder's fee or
other commission in connection with the transactions contemplated by this
Agreement. The Company has furnished to Parent a copy of any engagement letter
relating to such broker, agent or finder.
SECTION 4.24 TAXES. (a) Except as set forth in Section 4.24 of the
Company Disclosure Schedule, the Company (i) has duly and timely filed all
material Tax Returns required to be filed (after taking into account all
available extensions), (ii) has timely paid or adequately provided for in
accordance with GAAP all Taxes due in respect of the periods covered by such Tax
Returns, and (iii) has withheld and, if due, paid all Taxes required to have
been withheld and, if due, paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party,
except, in each case, where the failure so to file, pay or provide, or withhold
and pay, would not, individually or in the aggregate, have a Company Material
Adverse Effect.
(b) Except as set forth in Section 4.24 of the Company Disclosure
Schedule, as of the date of this Agreement (i) no material claim for assessment
or collection of Taxes is presently being asserted against the Company, (ii) the
Company is not a party to any pending action, proceeding, or investigation by
any governmental taxing authority relating to a material Tax, and (iii) the
Company does not have Knowledge of any such threatened action, proceeding or
investigation.
(c) Except as set forth in Section 4.24 of the Company Disclosure
Schedule, the Company is not and has not ever been, a party to or bound by any
tax indemnity agreement, tax sharing agreement, tax allocation agreement or
similar allocation agreement or similar contract or arrangement.
(d) Except as set forth in Section 4.24 of the Company Disclosure
Schedule, the Company has not requested any extension of time within which to
file any income Tax Return which return has not since been filed, nor has the
Company waived the running of any statute of limitations with respect to any
such income Taxes.
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(e) The Company has delivered to Parent true and correct copies of
any filed income Tax Returns (including information returns and Forms 1120) of
the Company which refer to any period of time from January 1, 1995, through the
date of this Agreement or to any event which occurred during that period of
time. The Company has not filed an election under Section 341(f) of the Code
that is applicable to the Company or any asset held by the Company. The Company
has not agreed, and is not required, to make any adjustment under Section 481(a)
of the Code by reason of a change in accounting method or otherwise. The Company
is not subject to or a member of any joint venture, partnership or other
arrangement or contract which is treated as a partnership for federal income tax
purposes. Neither the Company nor any of its affiliates has been a United States
real property holding corporation within the meaning of Section 897(c)(2) of the
Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code.
(f) Section 4.24 of the Company Disclosure Schedule lists each state
in which the Company is required to file Tax Returns. No written claim has ever
been made after January 1, 1995 by an authority in a jurisdiction where the
Company does not file Tax Returns that it is or may be subject to taxation by
that jurisdiction.
SECTION 4.25 ENVIRONMENTAL LAWS. Except as set forth in Section 4.25
of the Company Disclosure Schedule:
(a) The Company (i) is in compliance in all material respects with
all Environmental Laws; (ii) has obtained and currently maintain in full force
and effect all Environmental Permits, the failure to obtain or maintain would,
individually or in the aggregate, have a Company Material Adverse Effect; and
(iii) are in compliance with all terms and conditions of such Environmental
Permits except for noncompliances that would not, individually or in the
aggregate, have a Company Material Adverse Effect.
(b) To the Company's Knowledge, no event has occurred which, upon the
passage of time, the giving of notice, or failure to act would reasonably be
expected to give rise to material liability to the Company under any
Environmental Law.
(c) To the Company's Knowledge, no Hazardous Material has been
released, spilled, discharged, dumped, disposed of, or otherwise come to be
located in, at or beneath any properties or assets formerly owned, operated or
otherwise controlled by the Company and used in the conduct of the Company's
businesses (i) in material violation of any Environmental Law, or (ii) in such
manner as would reasonably be expected to cause a material environmental
liability of the Company.
(d) There is no pending or, to the Knowledge of the Company,
threatened, material claim, litigation or administrative proceeding against the
Company arising under any Environmental Law;
(e) The Company has not received any notice, claim, demand, suit or
request for information from any Governmental Entity or private entity with
respect to any liability or alleged liability under any Environmental Law which
is outstanding and if adversely decided
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could reasonably be expected to result in the Company incurring material
liability under Environmental Laws, nor, to the Knowledge of the Company, has
any other entity whose liability therefor, in whole or in part, may be
attributed to the Company, received such notice, claim, demand, suit or request
for information. The Company has not generated, disposed of, or arranged for the
disposal of any Hazardous Material except in material compliance with
Environmental Law.
(f) The Company has not, and, to the Knowledge of the Company, no
other entity whose liability therefor, in whole or in part, may be attributed to
the Company, disposed of any Hazardous material at any location which is
identified on the current or proposed (i) National Priorities List under 40
C.F.R. 000 Xxxxxxxx X or (ii) CERCLIS, in each case except as would not,
individually or in the aggregate, have a Company material Adverse Effect.
SECTION 4.26 COMPANY ACTION. The Board of Directors of the Company
(at a meeting duly called and held) has by the requisite vote of all directors
present (a) determined that the Merger is advisable and fair and in the best
interests of the Company and its stockholders, (b) adopted the Merger and this
Agreement in accordance with the applicable provisions of the New York
Corporation Law and (c) recommended the adoption of this Agreement and the
Merger by the holders of the Company Common Stock and directed that the Merger
be submitted for consideration by the Company's stockholders at the Company
Meeting.
SECTION 4.27 OPINION OF FINANCIAL ADVISOR. The Board of Directors of
the Company has received, on the date of this Agreement, the oral opinion of
Xxxx, Xxxx & Co.,Inc., to be confirmed in writing, to the effect that, as of
such date and subject to the assumptions and qualifications contained therein,
the Merger Consideration is fair to the holders of the Company Common Stock from
a financial point of view. A copy of the written opinion of Xxxx, Xxxx & Co.,
Inc. will be delivered to Parent as soon as practicable after the date of this
Agreement.
SECTION 4.28 PRIOR ACTIVITIES. The Company does not conduct, and
since January 1, 1999 has not conducted, any activities other than those set
forth in Section 4.28 of the Company Disclosure Schedule.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company that, except as
set forth in the disclosure schedule attached hereto (the "Parent Disclosure
Schedule"), which Parent Disclosure Schedule and shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
V:
SECTION 5.1 EXECUTION AND DELIVERY. Each of Parent and Sub has the
corporate power and authority to enter into this Agreement and each other
agreement, document or instrument contemplated hereby or to be delivered in
connection herewith to which such person is a party (the "Parent Documents") and
to carry out its respective obligations hereunder and thereunder. The execution,
delivery and performance by Parent and Sub of this Agreement and the Parent
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Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of Parent and Sub, as applicable (and, in the case of this Agreement,
by the Board of Directors of Sub and by Parent as the sole stockholder of Sub).
This Agreement constitutes the valid and binding obligation of Parent and Sub
and the Parent Documents will constitute the valid and binding obligations of
Parent and Sub, when executed by such person, in each case, enforceable in
accordance with their respective terms, except as enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought. No other corporate
proceedings on the part of Parent or Sub are necessary to authorize this
Agreement or the Parent Documents and the transactions contemplated hereby and
thereby.
SECTION 5.2 CONSENTS AND APPROVALS. The execution and delivery by
Parent and Sub of this Agreement and the Parent Documents to which such person
is a party, the performance by Parent and Sub of their respective obligations
hereunder and thereunder and the consummation by Parent and Sub of the
transactions contemplated hereby and thereby do not require Parent or Sub to
obtain any consent, approval or action of, or make any filing or registration
with or give any notice to, any Governmental Entity, other than (i) in
connection, or in compliance, with the provisions of the H-S-R Act, if
applicable, (ii) the filing of the Certificate of Merger with the Secretary of
State of New York and (iii) as to which the failure to so obtain, file or
register would not have a material adverse effect on the management, business,
properties, assets, condition (financial or otherwise), liabilities, or
operations of Parent and its Subsidiaries, taken as a whole, or adversely affect
the consummation of the transactions contemplated hereby in any material
respect, but excluding therefrom any such change, effect, event, occurrence or
state of facts resulting from or arising in connection with (A) this Agreement,
the transactions contemplated hereby or the announcement thereof or (B) changes
or conditions generally affecting the industries in which Parent or its
Subsidiaries operate (a "Parent Material Adverse Effect").
SECTION 5.3 NO BREACH. Except for filings, notices, consents and
approvals as may be required by New York Corporation Law, the execution,
delivery and performance by Parent and Sub of this Agreement and the Parent
Documents to which either is a party and the consummation of the transactions
contemplated hereby and thereby in accordance with the terms and conditions
hereof and thereof will not (i) violate any provision of the Certificate of
Incorporation or By-Laws of Parent or Sub; (ii) violate, conflict with or result
in the breach of any of the terms of, result in any modification of the effect
of, otherwise give any other contracting party the right to terminate, or
constitute (or with notice or lapse of time or both, constitute) a default
under, any contract or other agreement or instrument to which Parent or any of
its Subsidiaries is a party or by or to which the assets or properties of Parent
or any of its Subsidiaries may be bound or subject; (iii) violate any order,
judgment, injunction, award or decree of any Governmental Entity against, or
binding upon, or any agreement with, or condition imposed by, any Governmental
Entity, binding upon Parent or any of its Subsidiaries, or upon the securities,
assets or business of Parent or any of its Subsidiaries; (iv) violate any
statute, law or regulation of any jurisdiction as such statute, law or
regulation relates to Parent or any of its Subsidiaries, or to the securities,
assets or business of Parent or any of its Subsidiaries; (v) result
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in the creation or imposition of any lien or other encumbrance or the
acceleration of any indebtedness or other obligation of Parent or any of its
Subsidiaries; or (vi) result in the breach of any of the terms or conditions of,
constitute a default under, or otherwise cause an impairment of, any Permit of
Parent or any of its Subsidiaries; except in the case of (ii) through (vi) for
violations, conflicts, breaches, defaults, modifications, impairments, liens or
other encumbrances that would not, individually or in the aggregate, have a
Parent Material Adverse Effect.
SECTION 5.4 SUFFICIENT FUNDS. Parent will have at the time of the
Closing sufficient cash, available lines of credit or other sources of
immediately available funds to enable it to make payment of the aggregate Merger
Consideration.
SECTION 5.5 ORGANIZATION, STANDING AND AUTHORITY OF PARENT AND SUB.
Each of Parent and Sub is a corporation duly organized, validly existing and in
good standing under the laws of Maryland (in the case of Parent) or New York (in
the case of Sub), and has all requisite power and authority to own, lease and
operate its assets, properties and businesses and to carry on its businesses as
now being conducted or currently proposed to be conducted. Parent is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or held under
lease or the nature of such activities make such qualification necessary, except
where the failure to so qualify would not, individually or in the aggregate,
have a Parent Material Adverse Effect. Sub has not engaged in any business
(other than certain organizational matters) since the date of its incorporation.
The copies of the Certificate of Incorporation and By-Laws of Parent and Sub
included as part of Section 5.5 of the Parent Disclosure Schedule constitute
accurate and complete copies of such organizational instruments and accurately
reflect all amendments thereto through the date hereof.
SECTION 5.6 BROKERAGE. No broker, agent or finder has acted, directly
or indirectly, for Parent or Sub, nor have Parent and Sub incurred any
obligation to pay any brokerage fees, agent's commissions or finder's fee or
commission in connection with the transactions contemplated by this Agreement.
SECTION 5.7 NO MATERIAL ADVERSE CHANGE. Since January 1, 2000, there
has not been any change, event, occurrence or state of facts that has caused or
would reasonably be expected to cause a Parent Material Adverse Effect.
SECTION 5.8 SUB ACTION. The Board of Directors of Sub (at a meeting
duly called and held) has by the requisite vote of all directors present adopted
the Merger in accordance with the provisions of the New York Corporation Law.
The sole stockholder of Sub has taken all actions necessary to adopt the Merger.
SECTION 5.9 COMPLIANCE WITH LAWS. To Parent's Knowledge, Parent is
not in violation of any applicable order, judgment, injunction, award or decree,
law, ordinance or regulation or any other requirement of any Governmental Entity
applicable to Parent or any of its businesses; Parent has not received notice
that any such material violation has been alleged or is being investigated.
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SECTION 5.10 ACTIONS AND PROCEEDINGS. There are no outstanding
orders, judgments, injunctions, awards or decrees of any Governmental Entity
against or involving Parent or any of its directors, officers or employees (in
their capacities as such). Except as disclosed in Parent SEC Documents, as of
the date of this Agreement there is no Proceeding which is pending or, to
Parent's Knowledge, threatened against or involving Parent, any of its
Subsidiaries, or any of their directors, officers or employees (in their
capacities as such) or properties, capital stock or assets, except where the
failure of any of the foregoing to be true does not individually or in the
aggregate have a Parent Material Adverse Effect.
SECTION 5.11 NO PRIOR ACTIVITIES. Except for obligations incurred in
connection with its incorporation or organization or the negotiation and
consummation of this Agreement and the transactions contemplated hereby, Sub has
neither incurred any obligation or liability nor engaged in any business or
activity of any type or kind or entered into any agreement or arrangement with
any person.
ARTICLE VI
COVENANTS AND AGREEMENTS
Each of Parent, Sub and the Company (as applicable) covenant and
agree as follows:
SECTION 6.1 CONDUCT OF BUSINESS. (a) Prior to the Effective Time,
except as set forth in Section 6.1 of the Company Disclosure Schedule or unless
Parent shall otherwise agree in writing:
(i) The Company shall carry on its business in the usual,
regular and ordinary course in substantially the same manner as
heretofore conducted, and shall use its reasonable efforts to enforce
its mortgage receivable shown on the Company Balance Sheet, preserve
intact its present business organizations, keep available the
services of its present officers and preserve its relationships with
customers, suppliers and others having business dealings with it to
the end that its goodwill and ongoing businesses shall be unimpaired
at the Effective Time, except such impairment as would not,
individually or in the aggregate, have a Company Material Adverse
Effect. The Company shall (i) maintain its books, accounts and
records in the usual manner consistent with prior practices; (ii)
comply in all material respects with all laws, ordinances and
regulations of Governmental Entities applicable to the Company; (iii)
maintain and keep its properties and equipment in good repair,
working order and condition, ordinary wear and tear excepted; and
(iv) perform in all material respects its obligations under all
contracts and commitments to which it is a party or by which it is
bound, in each case other than where the failure to so maintain,
comply or perform, either individually or in the aggregate, would,
individually or in the aggregate, result in a Company Material
Adverse Effect.
(ii) Notwithstanding Section 6.1(a)(i) the Company shall
not undertake any of the actions specified in Section 4.22 (without
giving any effect to the "in the ordinary
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course of business" or "in the ordinary course of business consistent
with past practice" exceptions contained in Section 4.22(iv), (vi),
(vii), (ix) and (xii)) and the Company shall not incur any expenses,
except as listed in Section 6.1(a)(ii) of the Company Disclosure
Schedule.
(b) The Company shall not dispose of any of the BLC Shares and shall
not engage in any business conduct other than holding the BLC Shares and
maintaining its assets as listed on Section 4.8 of the Company Disclosure
Schedule.
(c) Prior to the Effective Time, unless the Company shall otherwise
consent in writing (which shall not be unreasonably withheld), Parent shall in
all material respects carry on its respective businesses in the usual, regular
and ordinary course consistent with past practice.
SECTION 6.2 LITIGATION INVOLVING THE COMPANY. Prior to the Closing
Date, the Company shall notify Parent of any actions or proceedings of the type
required to be described in Sections 4.14, 4.24 or 4.25 that are threatened or
commenced against the Company, or against any officer or director, property or
asset of the Company, or with respect to the Company's affairs, promptly upon
the Company becoming aware thereof, and of any requests of the Company or, to
the Knowledge of the Company, any Company stockholder, for additional
information or documentary materials by any Governmental Entity in connection
with the transactions contemplated hereby promptly upon the Company becoming
aware thereof. As to compliance with such requests for such information, the
Company shall consult with and obtain the consent of Parent, which consent shall
not be withheld unreasonably; provided that such consent shall be unnecessary
where such information is required by law to be provided.
SECTION 6.3 CONTINUED EFFECTIVENESS OF REPRESENTATIONS AND WARRANTIES
OF THE PARTIES. From the date hereof through the Closing Date, (a) the Company
shall use all reasonable efforts to conduct its affairs in such a manner so
that, except as otherwise contemplated or permitted by this Agreement, the
representations and warranties of the Company contained in Article IV shall
continue to be true and correct in all material respects (or in all respects in
the case of any representation or warranty which refers to a Company Material
Adverse Effect or otherwise includes a concept of materiality) on and as of the
Closing Date as if made on and as of the Closing Date, except that any such
representations and warranties that are given as of a particular date and relate
solely to a particular date or period shall be true and correct in all material
respects (or in all respects in the case of any representation or warranty which
refers to a Company Material Adverse Effect or otherwise includes a concept of
materiality) as of such date or period; (b) Parent and Sub shall use their
respective reasonable efforts to conduct their affairs in such a manner so that,
except as otherwise contemplated or permitted by this Agreement, the
representations and warranties contained in Article V shall continue to be true
and correct in all material respects (or in all respects in the case of any
representation or warranty which refers to a Parent Material Adverse Effect or
otherwise includes a concept of materiality) on and as of the Closing Date as if
made on and as of the Closing Date, except that any such representations and
warranties that are given as of a particular date and relate solely to a
particular date or period shall be true and correct in all material respects (or
in all respects in the case of any representation or warranty which refers to a
Parent Material Adverse Effect or otherwise includes a concept of materiality)
as of such date or period;
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(c) the Company shall promptly notify Parent and Sub of any event, condition or
circumstance occurring from the date hereof through the Closing Date of which
the Company becomes aware that would cause any material revisions to the Company
Disclosure Schedule provided by the Company pursuant to this Agreement, or that
would constitute a violation or breach of this Agreement by the Company; and (d)
Parent and Sub shall promptly notify the Company of any event, condition or
circumstance occurring from the date hereof through the Closing Date of which it
becomes aware that would cause any material revisions to the Parent Disclosure
Schedule provided by Parent or Sub pursuant to this Agreement, or that would
constitute a violation or breach of this Agreement by Parent or Sub. No such
notification shall be deemed an amendment to the Disclosure Schedules to this
Agreement, except as otherwise provided by this Agreement.
SECTION 6.4 CORPORATE EXAMINATIONS AND INVESTIGATIONS;
CONFIDENTIALITY. (a) The Company shall cooperate with Parent as Parent shall
reasonably request in connection with the Parent's due diligence review of the
Company, to the extent necessary to confirm the accuracy of the Company's
representations and warranties. Notwithstanding the foregoing, Parent will not
contact, in connection with the transactions contemplated by the Agreement, any
customers or suppliers of the Company without obtaining the prior consent of the
Company, which consent shall not be unreasonably withheld.
(b) If this Agreement terminates, the parties hereto and their
respective affiliates shall keep confidential and shall not use or retain in any
manner any information or documents obtained from any other party concerning its
assets, liabilities, properties, business or operations, unless readily
ascertainable from public or published information or trade sources or already
known or subsequently developed by it independently of any investigation of any
other party, or received from a third party not under an obligation to such
other party to keep such information confidential.
SECTION 6.5 INDEMNIFICATION OF COMPANY OFFICERS AND DIRECTORS. (a)
Parent agrees, for a period of six years following the Effective Time, not to
amend the indemnification provisions set forth in the Certificate of
Incorporation or By-Laws of the Surviving Corporation in a manner that would
adversely affect the rights of the Company's officers, directors and employees
to indemnification thereunder and agrees to cause the Surviving Corporation to
fulfill and honor such obligations to the maximum extent permitted by law;
provided, however, that nothing in this Section 6.5 shall prevent Parent from
effecting any merger, reorganization or consolidation of the Surviving
Corporation, provided that, Parent agrees to satisfy any amounts that would have
been payable by the Surviving Corporation (or any successor) and that were not
otherwise paid pursuant to the indemnification provisions set forth in the
Certificate of Incorporation or By-Laws of the Surviving Corporation for a
period commencing at the Effective Time and continuing six years thereafter.
(b) Parent covenants and agrees not to xxx any person in his or her
capacity as a director or officer or former director or officer of the Company
for any act or omission prior to the Effective Time, provided that this Section
6.5(b) shall not apply to any claim against such person for acts or omissions
constituting fraud.
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SECTION 6.6 PARENT AND SUB APPROVALS. Parent and Sub shall take all
reasonable steps necessary or appropriate to obtain as promptly as practicable
all necessary approvals, authorizations and consents of any person or
Governmental Entity required to be obtained by Parent and Sub to consummate the
transactions contemplated hereby, and will cooperate with the Company in seeking
to obtain all such approvals, authorizations and consents. Parent and Sub shall
use all reasonable efforts to provide such information to such persons, bodies
and authorities as such persons, bodies or authorities or the Company may
reasonably request.
SECTION 6.7 COMPANY APPROVALS. The Company shall take all reasonable
steps necessary or appropriate to obtain as promptly as practicable all
necessary approvals, authorizations and consents of any third party or
Governmental Entity required to be obtained by the Company to consummate the
transactions contemplated hereby and will cooperate with Parent in seeking to
obtain all such approvals, authorizations and consents. The Company shall use
all reasonable efforts to provide such information to such persons, bodies and
authorities as such persons, bodies and authorities or Parent may reasonably
request.
SECTION 6.8 EXPENSES. Except as otherwise specifically provided
herein, Parent, Sub and the Company shall bear their respective expenses
incurred in connection with the preparation, execution and performance of this
Agreement and the transactions contemplated hereby, including, without
limitation, all fees and expenses of investment bankers, agents,
representatives, counsel and accountants. In any action, suit or proceeding
under or to enforce any provision of this Agreement, the prevailing party shall
be entitled to recover its reasonable attorney's fees and other out-of-pocket
expenses from the losing party.
SECTION 6.9 ACQUISITION PROPOSALS. (a) The Company agrees that
neither it, nor any of its officers and directors of any of shall, and that it
shall direct and use its reasonable efforts to cause its employees, agents and
representatives (including any investment banker, attorney or accountant
retained by it) not to, directly or indirectly, initiate, solicit or encourage
any inquiries or the making of any proposal or offer with respect to a merger,
reorganization, share exchange, consolidation or similar transaction, or any
purchase of all or 10% or more of the assets or any equity securities of the
Company (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal"), it being understood that any such activities engaged in
prior to the date of this Agreement do not violate this Section 6.9. The Company
further agrees that from and after the date hereof neither it nor any of its
officers and directors shall, and that it shall direct and use its reasonable
efforts to cause its employees, agents and representatives (including any
investment banker, attorney or accountant retained by them or any of their
Subsidiaries) not to, directly or indirectly, knowingly engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Acquisition Proposal, or
otherwise knowingly facilitate any effort or attempt to make or implement an
Acquisition Proposal; provided, however, that nothing contained in this
Agreement shall prevent the Company or its Board of Directors from (A) complying
with Rules 14d-9 and 14e-2 promulgated under the Exchange Act with regard to an
Acquisition Proposal; (B) providing information in response to a request
therefor by a Person who has made a bona fide written Acquisition Proposal that
was not solicited in violation of this Section 6.9(a) if the Board of Directors
receives from the Person so requesting such information an executed
confidentiality agreement on terms substantially similar to those contained in
the Confidentiality
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Agreement; (C) engaging in any negotiations or discussions with any person who
has made an unsolicited bona fide written Acquisition Proposal that was not
solicited in violation of this Section 6.9(a); or (D) recommending such an
Acquisition Proposal to the shareholders of the Company, if and only to the
extent that, (i) in each such case referred to in clause (B), (C) or (D) above,
the Board of Directors of the Company determines in good faith after
consultation with outside legal counsel that such action is consistent with its
directors' fiduciary duties under applicable law and (ii) in each case referred
to in clause (C) or (D) above, the Board of Directors of the Company determines
in good faith (after consultation with its financial advisor) that such
Acquisition Proposal would, if consummated, result in a transaction or a
combination of transactions more favorable to the Company's shareholders from a
financial point of view than the transactions contemplated by this Agreement
(any such more favorable Acquisition Proposal being referred to in this
Agreement as a "Superior Proposal"). The Company agrees that it will immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal. The Company agrees that it will take the necessary steps
to promptly inform the individuals or entities referred to in the first sentence
hereof of the obligations undertaken in this Section 6.9. The Company agrees
that it will notify Parent by the end of the next business day following receipt
if any such inquiries, proposals or offers relating to an Acquisition Proposal
are received by, any such information is requested from, or any such discussions
or negotiations are sought to be initiated or continued with, any of its
representatives indicating, in connection with such notice, the name of such
person (unless disclosure of such name is precluded by the terms of the proposed
offer in question) and the material terms and conditions of any proposals or
offers and thereafter shall keep Parent informed, on a current basis, on the
status and terms of any such proposals or offers and the status of any such
discussions or negotiations. The Company also agrees that it will promptly
request each Person that has heretofore executed a confidentiality agreement in
connection with its consideration of acquiring it or any of its Subsidiaries to
return or destroy all confidential information heretofore furnished to such
Person by or on behalf of it.
(b) Notwithstanding anything in this Section 6.9 to the contrary, if,
at any time prior to obtaining the Company stockholders' approval of the Merger,
the Company's Board of Directors determines in good faith, on the basis of the
advice of its financial advisors and outside counsel, in response to an
Acquisition Proposal that did not result from a breach of Section 6.9(a), that
such proposal is a Superior Proposal, the Company or its Board of Directors may
terminate this Agreement if, and only if, the Company shall substantially
concurrently with such termination enter into a definitive agreement containing
the terms of a Superior Proposal; provided, however, that the Company shall not
terminate this Agreement pursuant to this sentence, and any purported
termination pursuant to this sentence shall be void and of no force or effect,
unless the Company shall have complied with all the provisions of this Section
6.9, including the notification provisions in this Section 6.9; provided
further, however, that the Company shall not exercise its right to terminate
this Agreement pursuant to this Section 6.9 until after five Business Days
following Parent's receipt of written notice (a "Notice of Superior Proposal")
advising Parent that the Company's Board of Directors has received such a
Superior Proposal and that such Board of Directors will, subject to any action
taken by Parent pursuant to this sentence, cause the Company to accept such
Superior Proposal, specifying the material terms and conditions of such Superior
Proposal and (unless disclosure of such name is precluded by the terms of the
proposal or offer in question) identifying the person making such Superior
Proposal
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(it being understood and agreed that any amendment to the price or any other
material term of such a Superior Proposal shall require an additional Notice of
Superior Proposal and a new five Business Day period).
SECTION 6.10 FURTHER ASSURANCES. (a) Each of Parent, Sub and the
Company shall execute such documents and other papers and take such further
actions as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby. Each of Parent, Sub and the
Company shall use all reasonable efforts to cause all actions to effectuate the
Closing for which such party is responsible under this Agreement to be taken as
promptly as practicable, including using all reasonable efforts to obtain all
necessary waivers, consents and approvals (including, but not limited to, if
applicable, filings under the H-S-R Act and with all applicable Governmental
Entities) and to lift any injunction or other legal bar to the Merger (and, in
each case, to proceed with the Merger as expeditiously as possible).
Notwithstanding the foregoing, there shall be no action required to be taken and
no action will be taken in order to consummate and make effective the
transactions contemplated by this Agreement if such action, either alone or
together with another action, would result in a Company Material Adverse Effect
or a Parent Material Adverse Effect.
(b) In case at any time after the Effective Time any further action
is necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Parent and the Surviving Corporation shall
take all such necessary action.
SECTION 6.11 UPDATING SCHEDULES. In connection with the Closing,
Parent, Sub and the Company will, promptly upon becoming aware of any fact
requiring supplementation or amendment of the Schedules, supplement or amend the
various Schedules to this Agreement to reflect any matter which, if existing,
occurring or known on the date of this Agreement, would have been required to be
set forth or described in such Schedules which was or has been rendered
inaccurate thereby. No such supplement or amendment to the Schedules shall have
any effect for the purpose of determining satisfaction of the conditions set
forth in Articles VII, VIII and IX hereof, or the compliance by any party hereto
with its covenants and agreements set forth herein.
SECTION 6.12 COMPANY BALANCE SHEETS. Prior to Closing, the Company
shall deliver to Parent an unaudited balance sheet of the Company prepared in
accordance with GAAP as of the second Business Day immediately preceding the
Closing Date and an income statement prepared in accordance with GAAP for the
period from March 1, 2000 to such date.
ARTICLE VII
CONDITIONS PRECEDENT TO EACH PARTY'S OBLIGATION
TO EFFECT THE MERGER
The respective obligations of each party to effect the Merger shall
be subject to the satisfaction on or prior to the Closing of the following
conditions, any one or more of which may be waived by them, to the extent
permitted by law:
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SECTION 7.1 COMPANY STOCKHOLDER APPROVAL. This Agreement and the
transactions contemplated hereby shall have been approved and adopted by the
requisite vote of the Company's stockholders.
SECTION 7.2 XXXX-XXXXX-XXXXXX. If applicable, all applicable waiting
periods with respect to any "Notification and Report Form For Certain Mergers
and Acquisitions" required to be filed by Parent, the Company or any of their
"ultimate parent entities" in compliance with the H-S-R Act in connection with
the transactions contemplated hereby shall have passed, or early termination of
such waiting periods shall have been granted.
SECTION 7.3 LITIGATION. No action, suit or proceeding shall have been
instituted and be continuing or be threatened by any Governmental Entity to
restrain, modify or prevent the carrying out of the transactions contemplated
hereby and 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 or
limiting or restricting Parent's conduct or operation of the business of the
Company after the Merger shall have been issued.
SECTION 7.4 BLC MERGER. All the conditions precedent to the BLC
Merger (other than the consummation of the Merger) shall have been satisfied or
waived in connection with the terms of the BLC Merger Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF
PARENT AND SUB TO EFFECT THE MERGER
The obligation of Parent and Sub to effect the Merger shall be
subject to the satisfaction on or prior to the Closing of the following
additional conditions, any one or more of which may be waived by them, to the
extent permitted by law:
SECTION 8.1 REPRESENTATIONS AND COVENANTS. The representations and
warranties of the Company contained in this Agreement (including those contained
in the Company Disclosure Schedule, as the same may be amended from time to time
pursuant to the provisions hereof) shall be true and correct on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date, (except that any such representations and warranties that are
given as of a particular date and relate solely to a particular date or period
shall be true and correct as of such date or period), except where the failure
of such representations and warranties to be true and correct (without giving
effect to any materiality or Company Material Adverse Effect limitations
therein) would not have, and could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. The Company
and the Company stockholders who are parties to the Voting Agreement, shall have
performed and complied, respectively, in all material respects with all
covenants and agreements required by this Agreement and the Voting Agreement to
be performed or complied with by the Company or such Company stockholders on or
prior to the Closing Date. The Company shall have delivered to Parent and Sub
certificates, dated the Closing Date, and signed by an Executive Officer of the
Company to the foregoing effect.
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SECTION 8.2 ABSENCE OF MATERIAL ADVERSE CHANGE. Since the date
hereof, there shall not have been any change, event, occurrence or state of
facts that has caused or would reasonably be expected to cause a Company
Material Adverse Effect.
SECTION 8.3 RECEIPT OF AGREEMENTS. On the date hereof, Parent shall
have received executed originals of the Voting Agreement.
SECTION 8.4 EXERCISE OF STOCK OPTIONS. All Company Stock Options
shall have been fully exercised for the purchase of Company Common Stock.
SECTION 8.5 CLOSING CONDITIONS. Documentation or other information
shall have been received in a form reasonably satisfactory to Parent and Sub
which evidences that the conditions set forth in this Article VIII have been
satisfied.
ARTICLE IX
CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO
EFFECT THE MERGER
The obligation of the Company to effect the Merger shall be subject
to the satisfaction on or prior to the Closing of the following additional
conditions, any one or more of which may be waived by the Company, to the extent
permitted by law:
SECTION 9.1 REPRESENTATIONS AND COVENANTS. The representations and
warranties of Parent and Sub contained in this Agreement (including those
contained in the Parent Disclosure Schedule, as the same may be amended from
time to time pursuant to the provisions hereof) shall be true and correct on and
as of the Closing Date with the same force and effect as though made on and as
of the Closing Date, (except that any such representations and warranties that
are given as of a particular date and relate solely to a particular date or
period shall be true and correct as of such date or period), except where the
failure of such representations and warranties to be true and correct (without
giving effect to any materiality or Parent Material Adverse Effect limitations
therein) would not have, and could not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect. Parent and
Sub shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or complied
with by Parent or Sub on or prior to the Closing Date. Parent and Sub shall have
delivered to the Company certificates of an Executive Officer of Parent and Sub,
dated the Closing Date, to the foregoing effect.
SECTION 9.2 ABSENCE OF MATERIAL ADVERSE CHANGE. Since the date
hereof, there shall not have been any change, event, occurrence or state of
facts that has caused or would reasonably be expected to cause a Parent Material
Adverse Effect.
SECTION 9.3 CLOSING CONDITIONS. Documentation or other information
shall have been received in a form reasonably satisfactory to the Company which
evidences that the conditions set forth in this Article IX have been satisfied.
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ARTICLE X
CLOSING
The closing (the "Closing") of the transactions contemplated by this
Agreement shall take place at the offices of Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP,
0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, at 10:00 a.m. local time
on the Closing Date or at such other time and place as the parties may mutually
agree.
ARTICLE XI
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS
SECTION 11.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS. Notwithstanding any right of Parent and Sub to investigate fully
the affairs of the Company, or any right of the Company to investigate fully the
accuracy of the representations and warranties of Parent and Sub, and
notwithstanding any knowledge of facts determined or determinable by Parent, Sub
or the Company, as the case may be, pursuant to such investigation or right of
investigation, Parent, Sub and the Company, as the case may be, have the right
to rely fully upon the representations, warranties, covenants and agreements of
the Company, Parent and Sub, as the case may be, contained in this Agreement. No
representations, warranties, covenants or agreements in this Agreement, except
the covenants and agreements contained in Articles III, XIII and XIV and Section
6.8, shall survive the Effective Time.
ARTICLE XII
TERMINATION OF AGREEMENT
SECTION 12.1 TERMINATION. This Agreement may be terminated prior to
the Closing as follows:
(a) by either Parent or the Company if the Merger shall not have been
consummated on or before April 30, 2001 or if the BLC Merger Agreement shall
have been terminated;
(b) by the Company if any of the conditions specified in Article VII
or IX have not been met or waived by the Company at such time as any such
condition is no longer capable of satisfaction;
(c) by Parent if any of the conditions specified in Article VII or
VIII have not been met or waived by Parent at such time as any such condition is
no longer capable of satisfaction;
(d) by Parent if the Company or the Company stockholders who are
parties to the Voting Agreement shall have breached any of their respective
obligations under Article VI of
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this Agreement or the Voting Agreement in any material respect and such breach
continues for a period of ten days after the receipt of notice of the breach
from Parent;
(e) by the Company if Parent or Sub shall have breached any of their
respective obligations under Article VI of this Agreement in any material
respect and such breach continues for a period of ten days after the receipt of
notice of the breach from the Company;
(f) by the Company if its Board of Directors, in the exercise of its
fiduciary duties, accepts an Acquisition Proposal in accordance with Section
6.9;
(g) at any time on or prior to the Closing Date, by mutual written
consent of Parent, Sub and the Company.
SECTION 12.2 EFFECT OF TERMINATION. If this Agreement is terminated
and the transactions contemplated hereby are not consummated as described above,
this Agreement shall become void and be of no further force and effect and there
shall be no obligation on the part of Parent, Sub or the Company, except for the
provisions of this Agreement relating to the obligations of parties under
Sections 6.4(b), 6.8 and 12.1 and Articles XIII and XIV. None of the parties
hereto shall have any liability in respect to a termination of this Agreement
prior to Closing, except to the extent that termination results from the
intentional, willful or knowing violation of the representations, warranties,
covenants or agreements of such party under this Agreement.
ARTICLE XIII
DEFINITIONS
SECTION 13.1 DEFINITIONS. The following terms when used in this
Agreement shall have the following meanings:
"Acquisition Proposal" has the meaning set forth in Section 6.9.
"affiliate" (or "affiliates" as the context may require), with respect to any
person, means any other person controlling, controlled by or under common
control with such person.
"Agreement" has the meaning set forth in the preamble.
"BLC" means BLC Financial Services, Inc., a Delaware corporation.
"BLC Merger" means the merger of Allied Capital B Sub Corporation, a Delaware
corporation, with and into BLC upon the terms and subject to the conditions set
forth in the BLC Merger Agreement.
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"BLC Merger Agreement" means the Agreement and Plan of Merger, dated as of even
date herewith, by and among Parent, Allied Capital B Sub Corporation, a Delaware
corporation and BLC.
"BLC Shares" means the common stock of BLC, having a par value of $.01 (one
cent) per share.
"Business Day" means any day other than a Saturday or a Sunday, or a day on
which banking institutions in the State of New York are obligated by law or
executive order to close.
"CERCLA" shall mean the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. (S)(S) 9601 et seq. as amended.
"Certificates" means the certificates representing shares of the Company Common
Stock.
"Closing" has the meaning set forth in Article X.
"Closing Date" means (a) the day on which the last of all conditions to the
consummation of the transactions contemplated hereby (other than conditions
which contemplate only delivery or filing of one or more documents
contemporaneously with the Closing) have been satisfied or waived, or (b) such
other date as the parties hereto agree in writing.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the preamble.
"Company Balance Sheet" has the meaning provided in Section 4.8.
"Company Common Stock" means, the common stock of the Company, having a par
value of $0.10 per share.
"Company Disclosure Schedule" has the meaning set forth in the preamble to
Article IV.
"Company Documents" has the meaning set forth in Section 4.1.
"Company Financial Statements" has the meaning set forth in Section 4.8.
"Company Material Adverse Effect" has the meaning set forth in Section 4.3.
"Company Meeting" has the meaning set forth in Section 3.6.
"Company Stock Option" means any option for the purchase of Company Common
Stock.
"Confidentiality Agreement" means the Mutual Nondisclosure Agreement dated as of
August 3, 2000, between Parent and BLC.
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"contracts and other agreements" mean all contracts, agreements, supply
agreements, undertakings, indentures, notes, bonds, loans, instruments, leases,
mortgages, commitments or other binding arrangements.
"Dissenting Shares" shall have the meaning set forth in Section 3.3.
"Distribution" means any distribution of cash, securities or property on or in
respect of the Company Common Stock whether as a dividend or otherwise.
"Effective Time" has the meaning set forth in Section 1.2.
"Environmental Laws" means all applicable federal, state, and local laws,
ordinances, rules, regulations, codes, duties under the common law or orders,
including, without limitation, any requirements imposed under any Permits,
licenses, judgments, decrees, agreements or recorded covenants, conditions,
restrictions or easements, the purpose of which is to protect the environment.
"Environmental Permits" shall mean all Permits, licenses, approvals,
authorizations, consents or registrations required under applicable
Environmental Laws in connection with the ownership, use and/or operation by the
Company of its properties.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
regulations and rulings issued thereunder.
"Executive Officers" means, as to Parent and the Company, respectively, its
chairman of the board, its president, any vice president (executive, senior or
other), secretary, treasurer or chief financial officer, if any, or any other
officer or employee having supervisory responsibility for a principal business
function.
"Family Member" means, with respect to any person, a parent, spouse, sibling or
lineal descendent of such person.
"FTC" means the Federal Trade Commission or any successor agency or department.
"GAAP" means generally accepted accounting principles in the United States of
America from time to time in effect.
"Governmental Entities" means (a) any international, foreign, federal, state,
county, local or municipal government or administrative agency or political
subdivision thereof, (b) any governmental agency, authority, board, bureau,
commission, department or instrumentality, (c) any court or administrative
tribunal, (d) any non-governmental agency, tribunal or entity that is vested by
a governmental agency with applicable jurisdiction, or (e) any arbitration
tribunal or other non-governmental authority with applicable jurisdiction.
"Hazardous Materials" means (i) any substance or material regulated or
identified as hazardous, toxic, pollutant or contaminant under Environmental
Laws, including gasoline, diesel fuel or
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other petroleum hydrocarbons, PCBs or asbestos; or (ii) any pollutant, toxic
substance, or contaminant.
"H-S-R Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
"Intellectual Property Rights" has the meaning set forth in Section 4.17(a).
"IRS" means the Internal Revenue Service or any successor agency or department.
"Knowledge of Company" or "of which Company is aware" or words of similar import
shall be deemed to mean the actual knowledge of the following individuals:
Xxxxxx X. Xxxxxxxxxxxx, Xxxxx Xxxxxxxxxxxx, Xxxxx Xxxxxx and Xxxxxxx Xxxxxx.
"Knowledge of Parent" or "of which Parent is aware" or words of similar import
shall be deemed to mean the actual knowledge of the following individuals:
Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxxx and Xxxxx X. Roll.
"Justice" means the Antitrust Division of the Department of Justice or any
successor agency or department.
"Liabilities" has the meaning set forth in Section 4.10.
"lien or other encumbrance" (or "liens or other encumbrances" or "liens or other
encumbrance" or "lien or other encumbrances" as the context may require or any
similar formulation) means any lien, claim, pledge, mortgage, assessment,
security interest, charge, option, right of first refusal, easement, servitude,
adverse claim, transfer restriction under any stockholder or similar agreement
or other encumbrance of any kind.
"Merger" has the meaning set forth in the recitals.
"Merger Consideration" has the meaning set forth in Section 3.1(a).
"Named Persons" means each of Xxxxx Xxxxxxxxxxxx, Xxxxx X. Xxxxxx, Xxxxxxx
Xxxxxx and Xxxxx Xxxxxx.
"New York Corporation Law" has the meaning set forth in Section 1.1.
"1940 Act" shall mean the Investment Company Act of 1940, as amended, and the
regulations and rulings issued thereunder.
"Notice of Superior Proposal" has the meaning set forth in Section 6.9(b).
"Parent" has the meaning set forth in the preamble.
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"Parent SEC Documents" means all forms, reports, schedules, statements, exhibits
and other documents filed by Parent with the SEC.
"Parent Disclosure Schedule" has the meaning set forth in the preamble to
Article V.
"Parent Documents" has the meaning set forth in Section 5.1.
"Parent Material Adverse Effect" has the meaning set forth in Section 5.2.
"Permits" (or "Permit" as the context may require) mean all licenses, permits,
certificates, certificates of occupancy, orders, approvals, registrations,
authorizations and qualifications with and under all federal, state, or local or
laws.
"person" (or "persons" as the context may require) means any individual,
corporation, limited liability company, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
Governmental Entity or other entity.
"Proceeding" has the meaning set forth in Section 4.14.
"property" (or "properties" as the context may require) means real, personal or
mixed property, tangible or intangible.
"Proxy Statement" has the meaning set forth in Section 4.9.
"Receiving Party" has the meaning set forth in Section 14.1.
"Releasing Party" has the meaning set forth in Section 14.1.
"SEC" means the Securities and Exchange Commission or any successor agency or
department.
"Securities Act" means the Securities Act of 1933, as amended, and the
regulations and rulings issued thereunder.
"Sub" has the meaning set forth in the preamble hereof.
"Sub Common Stock" means the common stock, par value $0.01 per share, of Sub.
"Subsidiaries" (or "Subsidiary" as the context may require), means each entity
as to which a person, directly or indirectly, owns or has the power to vote, or
to exercise a controlling influence with respect to, 50% or more of the
securities of any class of such entity, the holders of which are ordinarily, in
the absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such entity, provided that, with
respect to Parent, the term "Subsidiary" or "Subsidiaries" shall not include any
person that is not required to be consolidated on consolidated financial
statements of Parent prepared in accordance with GAAP.
"Superior Proposal" has the meaning set forth in Section 6.9(a).
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"Surviving Corporation" has the meaning set forth in Section 1.1.
"Surviving Corporation Company Stock" has the meaning set forth in Section
3.1(b).
"Taxes" (or "Tax" as the context may require) means all federal, state, county,
local, foreign and other taxes (including, without limitation, income,
intangibles, premium, excise, sales, use, gross receipts, franchise, ad valorem,
severance, capital levy, transfer, employment and payroll-related, and property
taxes, import duties and other governmental charges and assessments), and
includes interest, additions to tax and penalties with respect thereto.
"Tax Returns" means any return or report relating to Taxes.
"Voting Agreement" has the meaning set forth in the recitals.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 PUBLICITY. So long as this Agreement is in effect, prior
to making a press release or other public statement with respect to the
transactions contemplated by this Agreement, any party (a "Releasing Party")
will consult with the other party (the "Receiving Party") and provide such other
party with a draft of such press release, except as may otherwise be required by
law or stock exchange regulations.
SECTION 14.2 PARENT GUARANTY. Parent hereby unconditionally and
irrevocably guarantees the full and timely payment and performance by Sub of its
obligations hereunder.
SECTION 14.3 NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, sent
by facsimile transmission or sent by certified, registered, express mail or
nationally recognized courier service, postage prepaid. Any such notice shall
deemed given when so delivered personally or successfully sent by facsimile
transmission or, if mailed, five days after the date of deposit in the United
States mails, as follows:
(i) if to Parent or Sub to:
Allied Capital Corporation
0000 Xxxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
with a concurrent copy to:
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Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(ii) if to the Company to:
Futuronics Corporation
0000 Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy No.: (000) 000-0000
or
(000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Simeon Gold
Telecopy No.: (000) 000-0000
Any party may by notice given in accordance with this Section 14.3 to the other
parties designate another address or person for receipt of notices hereunder.
SECTION 14.4 ENTIRE AGREEMENT. This Agreement (including the exhibits
and schedules hereto) and the agreements contemplated hereby, contain the entire
agreement among the parties with respect to the subject matter hereof, and
supersede all prior agreements, written or oral, with respect thereto.
SECTION 14.5 WAIVERS AND AMENDMENTS; NON CONTRACTUAL REMEDIES;
PRESERVATION OF REMEDIES; LIABILITY. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by each of the parties or, in the case of waiver, by
the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege,
nor any single or partial exercise of any such right, power or privilege,
preclude any further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and, except
as provided in Section 12.2, are not exclusive of any rights or remedies that
any party may otherwise have at law or in equity. The rights and remedies of any
party based upon, arising out of or otherwise in respect of any inaccuracy in or
breach of any representation, warranty, covenant or agreement contained in this
Agreement shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other
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representation, warranty, covenant or agreement contained in this Agreement (or
in any other agreement between the parties) as to which there is no inaccuracy
or breach. The limitations on claims set forth in this Section 14.5 and
elsewhere in this Agreement shall not apply in the case of fraud on the part of
the Company.
SECTION 14.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 14.7 BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns and heirs and legal representatives. Neither this
Agreement, nor any right hereunder, may be assigned by any party without the
prior written consent of the other party hereto; provided, however, that Parent
may assign its rights (but not its obligations) hereto to its Subsidiaries.
SECTION 14.8 THIRD PARTY BENEFICIARIES. Except for Section 6.5,
nothing in this Agreement is intended or shall be construed to give any person,
other than the parties hereto, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
Without limiting the foregoing, no direct or indirect holder of any
equity interests or securities of any party hereto (whether such holder is a
limited or general partner, member, stockholder or otherwise), nor any affiliate
of any party hereto, nor any director, officer, employee, representative, agent
or other controlling person of each of the parties hereto and their respective
affiliates, shall have any liability or obligation arising under this Agreement
or the transaction contemplated hereby, except as may be provided in a separate
written agreement signed by such Person.
SECTION 14.9 COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto.
SECTION 14.10 EXHIBITS AND SCHEDULES. The exhibits and schedules
hereto are a part of this Agreement as if fully set forth herein. All references
herein to Articles, Sections, subsections, clauses, exhibits and schedules shall
be deemed references to such parts of this Agreement, unless the context shall
otherwise require.
SECTION 14.11 HEADINGS. The headings in this Agreement are for
reference only, and shall not affect the interpretation of this Agreement.
SECTION 14.12 SUBMISSION TO JURISDICTION; VENUE. Any action or
proceeding against any party hereto with respect to this Agreement shall be
brought in the courts of the State of New York or of the United States located
in the State of New York, and, by execution and delivery of this Agreement, each
party hereto hereby irrevocably accepts for itself and in respect of its
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property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each party hereto irrevocably consents to the service of process at any
of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such party
at its address set forth in Section 14.3, such service to become effective 30
days after such mailing. Nothing herein shall affect the right of any party
hereto to serve process on any other party hereto in any other manner permitted
by law. Each party hereto irrevocably waives any objection which it may now have
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
courts referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
SECTION 14.13 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
SECTION 14.14 SEVERABILITY. If any court of competent jurisdiction
determines that any provision of this Agreement is not enforceable in accordance
with its terms, then such provision shall be deemed to be modified so as to
apply such provision, as modified, to the protection of the legitimate interests
of the parties hereto to the fullest extent legally permissible and shall not
affect the validity or enforceability of the remaining provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
ALLIED CAPITAL CORPORATION
By: /s/ Xxxx Xxxxxxx
-----------------------------
Title: Managing Director and Chief
Operating Officer
Name: Xxxx Xxxxxxx
ALLIED CAPITAL F SUB CORPORATION
By: /s/ Xxxx Xxxxxxx
-----------------------------
Title: Managing Director
Name: Xxxx Xxxxxxx
FUTURONICS CORPORATION
By: /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------
Title: Treasurer and Director
Name: Xxxxx Xxxxxxxxxxxx
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