AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 4, 2001 ("Agreement"), between
Saratoga International Holdings Crop., a Nevada corporation ("Saratoga"), and
Agents Xxxxxx.Xxx, Inc., a State of Washington Corporation hereinafter referred
to as "Agents" or "Company".
BACKGROUND
The respective Boards of Directors of Saratoga and Agents have each approved,
upon the terms and subject to the conditions set forth in this Agreement, the
merger ("Merger") of Agents with and into Saratoga whereby each issued and
outstanding share of common stock of Agents not owned directly or indirectly by
Agents will be converted into the common stock of Saratoga ("Common Stock") as
set forth in Article I.
In consideration of the respective representations, warranties, covenants and
agreements contained in this Agreement, Saratoga and Agents hereby agree as
follows:
ARTICLE I
THE MERGER
1.01 The Merger. Upon the terms and subject to the conditions hereof, and in
accordance with the relevant provisions of the Nevada Corporation Act
("Nevada Statute"), Agents shall be merged with and into Saratoga subject
to the conditions set forth in Article VI. Following the Merger, Saratoga
shall continue as the surviving corporation ("Surviving Corporation") and
shall continue its existence under the laws of the State of Nevada, and the
separate corporate existence of Agents shall cease.
1.02 Effective Time. This Agreement shall become effective at such time
("Effective Time") as the conditions set forth in Article VI are satisfied
or waived, if permissible.
1.03 Effects of the Merger. The Merger shall have the effects specified in the
Nevada Statute. This Plan of Merger is intended to constitute "a plan of
reorganization" within the meaning of Section 354 of the Internal Revenue
Code, 1986 as amended. Further for federal income tax purposes it is
intended that the merger shall qualify as a reorganization as defined in
Section 368 (a) of the Internal Revenue Code.
1.04 Amendments to Articles of Incorporation and Bylaws. At the Effective Time,
(i) the Articles of Incorporation of Saratoga as amended, and as in effect
immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation, except that Article "I" of the
"Certificate of Incorporation of Saratoga International Holdings Corp.",
the Surviving Corporation shall be amended to read as follows: "The name of
the Corporation is Fortune Credit and Insurance Inc. and the original date
of incorporation is June 17, 1996"; (ii) Article VI shall read: "The total
authorized capital of the corporation shall be 500,000,000 shares of common
stock, par value $0.001 per share and 100,000,000 shares of preferred
stock, par value $0.001 per share. The board of directors shall have the
authority, without any further approval of the shareholders, to establish
the relative rights, preferences and limitations of any class of common or
preferred stock. The consideration for the issuance of any shares of
capital stock may be paid, in whole or in part, in money, services or other
things of value. The judgment of the directors as to the value of the
consideration for the shares shall be conclusive. When the payment of the
consideration for the shares has been received by the corporation, such
shares shall be deemed fully paid and nonassessable", and (iii) the Bylaws
of Saratoga as in effect immediately prior to the Effective time shall be
the Bylaws of the Surviving Corporation.
1.05 Directors and Officers of the Surviving Corporation. From and after the
Effective Time, the directors and officers of the Surviving Corporation
shall be the persons set forth on Exhibit 1.05 hereto, until their
successors shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and by laws.
1.06 Shares. At or prior to the Effective Time, by virtue of the Merger the
following events shall occur: (a) Each share of common stock or preferred
stock held by Agents as treasury stock shall be cancelled and retired and
shall cease to exist, and no payment or consideration shall be made with
respect thereto; (b) Saratoga shall take all necessary corporate action to
effectuate a reverse stock split so that the total issued and outstanding
Common Stock shall not exceed 4,000,000 shares ("Reverse Stock Split")
immediately prior to the issuance of Common Stock as set forth in Section
1.06(c). (c) Saratoga shall arrange delivery of 30,000,000 post reverse
stock split common stock ("Common Stock") to effectuate closing of this
Agreement and 15,000,000 shares of Class "B" 8% non-cumulative preferred
stock ("Preferred Shares"). Features of the Preferred shares shall include
(1) voting rights of 20 votes for each Preferred share held. (2)
convertible by the holder at anytime into Saratoga's common shares at one
common share for each Preferred Share held; the common share conversion
feature shall be anti-dilutive. These common shares and Preferred Shares to
be issued from Saratoga's treasury shall be issued to each of Agents
shareholders, as set forth on Exhibit 1.06(c) annexed hereto, in the number
of Common Stock shares set forth next to each name.
1.07 Private Placement.
(a) The Common Stock issued to Agents' shareholders have not been and will
not be registered with the Securities and Exchange Commission ("SEC")
or the securities commission of any state, including but not limited
to Nevada and Washington state, pursuant to an exemption from
registration by virtue of Agents' intended compliance with the
provisions of Sections 4(2) and 4(6) of the Securities Act of 1933, as
amended ("Securities Act"), and the Common Stock will be made
available only to "accredited investors" or Company shareholders who
have used a "Purchaser representative", as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act. Such exemption
limits the number and types of investors to which the offering of
Common Stock may be made and restricts subsequent transfers of the
Common Stock so offered which also may be restricted by state
securities laws. The Common Stock may not be resold or otherwise
disposed of by Agents' shareholders unless, in the opinion of counsel
to Saratoga, registration under federal and applicable state
securities laws is not required or compliance is made with the
registration requirements of such laws.
ARTICLE II EXCHANGE OF SHARES
2.01 Issuance of Certificates. Promptly after the Effective Time, the Surviving
Corporation shall issue to each person set forth on Exhibit 1.06(c)
certificates representing the Common Stock and Preferred Shares to be
issued to each Agents shareholder and simultaneously each Agents
shareholder shall exchange and surrender the certificate representing all
of such Agents shareholder's shares in the Company. At the close of
business on the day of the Effective Time, the stock ledger of Agents shall
be closed.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
SARATOGA
Saratoga represents and warrants to Agents as of the date of this Agreement and
as of the Effective Time as follows:
3.01 Existence; Good Standing. Saratoga is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation.
3.02 Capitalization. The authorized capital stock of Saratoga prior to the
Reverse Stock Split consists of 200,000,000 shares of Common Stock, par
value $0.001 ("Common Shares") and 50,000,000 shares of Preferred Stock par
value $0.001 ("Preferred Shares"). As of April 30, 2001, there were
121,538,503 shares of Common Stock issued and outstanding including
1,000,000 shares held in escrow pending completion and outcome of
Saratoga's claim and related lawsuit against Language Force, Inc. There
were 251,838 shares of Preferred Stock issued and outstanding. The
Preferred Shares issued and outstanding are 8% cumulative redeemable and
convertible into Common Shares as set forth in the provisions thereto. All
issued and outstanding shares of Common Stock are duly authorized, validly
issued, free of preemptive rights, non-assessable, and, except for the
1,000,000 shares held in escrow, are fully paid. Saratoga has issued common
stock options under its Stock Option Incentive Plan and has issued common
stock warrants in connection with various transactions. Information as to
such options and warrants is set forth in Saratoga's most recent 10-K and
10-Q filings with the SEC, copies of which have been delivered to Agents as
set forth in Section 3.05 herein. Except as set forth in this Section 3.02,
(i) Saratoga is not a party to or bound by any written or oral contract or
agreement which grants to any person an option, warrant or right of first
refusal or other right of any character to acquire at any time, or upon the
happening of any stated events any shares of or interest in Saratoga,
whether or not presently authorized, issued or outstanding, and (ii) there
are outstanding (a) no shares of capital stock or other voting securities
of Saratoga, (b) no securities of Saratoga or any of its subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of Saratoga, (c) no options or other rights to acquire from
Saratoga or any of its subsidiaries, and no obligation of Saratoga or any
of its subsidiaries to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of Saratoga, and (d) no equity equivalents, interests in the
ownership or earnings of Saratoga or any of its subsidiaries or other
similar rights. Upon issuance of the Common Stock to Agents' shareholders,
such shares of Common Stock shall be duly authorized, validly issued, fully
paid, non-assessable, and free of preemptive rights.
3.03 Authorization: Validity and Effect of Agreements. Saratoga has the
requisite corporate power and authority to execute and deliver this
Agreement. The consummation by Saratoga of the transactions contemplated
hereby has been duly authorized by all requisite corporate action and the
issuance of the Common Stock to Agents' shareholders is required to be
approved by the Board of Directors of Saratoga and such approval was
obtained by a meeting of the Board of Directors held on May 17, 2001. This
Agreement constitutes the valid and legally binding obligation of Saratoga,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights
and general principles of equity.
3.04 No Violation. To the best of Saratoga's knowledge neither the execution and
delivery by Saratoga of this Agreement, nor the consummation by Saratoga of
the transactions contemplated hereby in accordance with the terms hereof,
will: (i) conflict with or result in a breach of any provisions of the
Articles of Incorporation or Bylaws of Saratoga (ii) violate, or conflict
with, or result in a breach of any provision of, or constitute a default
(or an event which with notice or lapse of time or both, would constitute a
default) under, or result in the termination or in a right of termination
or cancellation of, or accelerate the performance required by, or result in
the triggering of any payment of compensation under, or result in the
creation of any lien, security interest, charge or encumbrance ("Lien")
upon any of the material properties of Saratoga or its subsidiaries under,
or result in being declared void, voidable, or without further binding
effect, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust or any material license, franchise
permit, lease, contract, agreement or other instrument, commitment or
obligation to which Saratoga or any of Saratoga's subsidiaries is a party,
or by which Saratoga or any of Saratoga's subsidiaries or any of their
respective properties is bound or affected, except for any of the foregoing
matters which would not have a material adverse effect on the business,
results of operations, financial condition or prospects of Saratoga and its
subsidiaries taken as a whole ("Saratoga Material Adverse Effect"), or
(iii) other than the filings required under the Securities Exchange Act of
1934, ("Exchange Act"), the Securities Act or applicable state securities
and "Blue Sky" laws or filings in connection with the maintenance of its
qualification to do business in other jurisdictions, and the filings
contemplated by Section 5.02 of this Agreement (collectively, "Regulatory
Filings"), require any material consent, approval or authorization of, or
declaration, filings or registration with, any domestic governmental or
regulatory authority, the failure to obtain or make which would have a
Saratoga Material Adverse Effect.
3.05 Documents. Saratoga has delivered to Agents the following reports and/or
statements:
Audited financial statements for the year ended October 31, 2000.
Form 10-K SEC filing for the year ended October 31, 2000.
Form 10-Q SEC filing for the three month period ended January 31, 2001.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF AGENTS
Agents represents and warrants to Saratoga as of the date of this Agreement and
as of the Effective Time as follows:
4.01 Existence; Good Standing; Corporate Authority; Compliance with Law Agents
is a corporation duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. The copies of
Agents Articles of Incorporation and by laws previously delivered to
Saratoga are true and correct and have not since been amended, modified or
rescinded.
4.02 Authorization, Validity and Effect of Agreements. Agents has the requisite
corporate power and authority to execute and deliver this Agreement,
subject to the approval of the Merger by the shareholders of Agents. The
consummation by Agents of all transactions contemplated hereby has been
duly authorized by all requisite corporate action. This Agreement
constitutes the valid and legally binding obligation of Agents, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and general
principles of equity.
4.03 Capitalization. The authorized capital stock of Agents consists of
50,000,000 shares of no par value common stock and no other classes of
stock, common or preferred, or other securities. There are 2,000,000 shares
of common stock issued and outstanding as of May 15, 2001. All issued and
outstanding shares of common stock are duly authorized, validly issued,
fully paid, non-assessable and free of preemptive rights. Except as set
forth in Exhibit 4.03 Agents is not a party to or bound by any written or
oral contract or agreement which grants to any person an option, warrant or
right of first refusal or other right of any character to acquire at any
time, or upon the happening of any stated events, any shares of or interest
in Agents, whether or not presently authorized, issued or outstanding.
Except as set forth in Exhibit 4.03, there are outstanding (i) no shares of
capital stock or other voting securities of Agents, (ii) no securities of
Agents or any of its subsidiaries convertible into or exchangeable for
shares of capital stock or voting securities of Agents, (iii) no options or
other rights to acquire from Agents or any of its subsidiaries, and no
obligations of Agents or any of its subsidiaries to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of Agents, and (iv) no equity
equivalents, interest in the ownership or earnings of Agents or any of its
subsidiaries or other similar rights. There are no outstanding obligations
of Agents or any of its subsidiaries to repurchase, redeem or otherwise
acquire any securities of Agents.
4.04 No Violation. Neither the execution and delivery by Agents of this
Agreement nor the consummation by Agents of the transactions contemplated
hereby in accordance with the terms hereof will: (i) conflict with or
result in a breach of any provisions of the Articles of Incorporation or
Bylaws of Agents or its subsidiaries, (ii) violate, or conflict with, or
result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or in a right of termination
or cancellation of, or accelerate the performance required by, or result in
the triggering of any payment or compensation under, or result in the
creation of any Lien upon any of the properties of Agents or its
subsidiaries under, or result in being declared void, voidable, or without
further binding effect, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust or any material license,
franchise, permit, lease, contract, agreement or other instrument,
commitment or obligation of which Agents or its subsidiaries is a party, or
by which Agents or its subsidiaries or any of their respective properties
or assets is bound or affected, except for any of the foregoing matters
which, singularly or in the aggregate, would not have a material adverse
effect on the business, results of operations, financial condition or
prospects of Agents ("Agents Material Adverse Effect"); (iii) other than
the Regulatory filings, require any material consent, approval or
authorization of, or declaration, filing or registration with, any domestic
governmental or regulatory authority, the failure to obtain or make which
would have an Agents Material Adverse Effect, as defined in Section 7.01(c)
below, or (iv) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Agents, any of its subsidiaries or any of their
assets, except for violations which in the aggregate would not have an
Agents Material Adverse Effect or materially adversely affect the ability
of Agents to consummate the Merger.
ARTICLE V
COVENANTS
5.01 Conduct of Business. From and after the date of this Agreement until the
Merger is affected or this Agreement is terminated, unless Saratoga has
consented in writing thereto, Agents, and, with respect to (e) and (f)
below, Saratoga and Agents:
(a) Shall, and shall cause its subsidiaries to, conduct its operations
according to its usual, regular and ordinary course in substantially
the same manner as heretofore conducted;
(b) Shall use reasonable efforts, and shall cause its subsidiaries to use
reasonable efforts, to preserve intact its business organization and
goodwill, keep available the services of its officers and employees
and maintain satisfactory relationships with those persons having
business relationships with it;
(c) Shall confer on a regular basis with one or more representatives of
Saratoga to report operational matters of materiality and any
proposals to engage in material transactions;
(d) Shall not amend its Articles of Incorporation or By Laws;
(e) Shall promptly notify the other parties hereto of any material
emergency or other material change in the condition (financial or
otherwise), business, properties, assets, liabilities, prospects or
the normal course of its businesses or in the operation of its
properties, any material litigation or material governmental
complaints, investigations or hearings (or communications indicating
that the same may be contemplated), or the breach in any material
respect of any representation or warranty contained herein;
(f) Shall promptly deliver to the other parties hereto true and correct
copies of any report, statement or schedule filed with or delivered to
the SEC, any other Governmental entity (other than routine corporate
tax and other filings in the ordinary course of business) or any
shareholder of Agents or Saratoga, as the case may be, subsequent to
the date of this Agreement;
(g) Shall not (i) issue, sell or pledge, or agree to issue, sell or
pledge, any shares of its capital stock, effect any stock split or
otherwise change its capitalization as it existed on the date hereof,
(ii) grant, confer or award any option, warrant, conversion, right or
other right to acquire any shares of its capital stock or grant any
right to convert or exchange any securities of Agents for Common
Stock, (iii) increase any compensation or enter into or amend any
employment agreement with any of its present or future officers or
directors, other than in the ordinary course of Agents' business, (iv)
adopt any new employee benefit plan, other than in the ordinary course
of Agents' business (including any stock option, stock benefit or
stock purchase plan) or amend any existing employee benefit plan in
any material respect, other than in the ordinary course of business,
except, in each case, for changes which are less favorable to
participants in such plans or as may be required by applicable law, or
(v) amend any Officer Employment Agreement or increase any
compensation payable under such Agreements to an Officer.
(h) Shall not (i) except in the normal course of business as consistent
with prior practice, declare, set aside or pay any dividend (whether
in cash, stock or property) or make any other distribution or payment
with respect to any shares of its capital stock or (ii) directly or
indirectly redeem, purchase or otherwise acquire any shares of its
capital stock or make any commitment for any such action;
(i) Shall not, and shall not permit its subsidiaries to (i) sell, lease or
otherwise dispose of any assets of Agents or its subsidiaries
(including capital stock) which are of a material amount, individually
or in the aggregate, or (ii) make any acquisition, by means of merger
or otherwise, of any assets or securities which are of a material
amount, individually or in the aggregate; and
(j) Shall not, and shall not permit its subsidiaries to, agree in writing
to take or otherwise take (i) any of the foregoing actions or (ii) any
action which would make any representation or warranty of Agents
herein untrue or incorrect.
5.02 Filings; Other Action. Subject to the terms and conditions herein provided,
Agents and Saratoga shall: (i) promptly make their respective filings and
thereafter make any other required submissions to the SEC with respect to
the Merger if required; (ii) use all reasonable efforts to cooperate with
one another in (a) determining which filings are required to be made prior
to the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time
from, governmental or regulatory authorities of the United States, the
several states, and other jurisdictions in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby and (b) timely making all such filings and timely
seeking all such consents, approvals, permits or authorizations; and (iii)
use best efforts to take, or cause to be taken, all other action and do, or
cause to be done, all other things necessary, proper or appropriate to
consummate and make effective the transactions contemplated by this
Agreement. If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purpose of this Agreement, the
proper officers and directors of Saratoga and Agents shall use best efforts
to take all such necessary action.
5.03 Due Diligence Review. From the date hereof to the Effective Time, each of
Saratoga and Agents shall allow their respective designated officers,
attorneys, accountants and other representatives, as the case may be,
access at all reasonable times to the records and files, correspondence,
audits and properties, as well as to all information relating to
commitments, contracts, titles and financial position, or otherwise
pertaining to the business and affairs of Saratoga, Agents and their
subsidiaries.
For the purpose of conducing their respective due diligence investigations, each
party will make available to the other for examination and reproduction all
documents and data of every kind and character relating to this Agreement and
the transactions contemplated hereby, in possession or control of, or subject to
reasonable access by either party. All such due diligence investigation shall be
completed and each party shall notify the other in writing of the satisfaction
or removal of this due diligence review condition on or prior to the Effective
time.
Upon mutual agreement of the parties, additional time may be allowed to complete
such due diligence investigation. Should a party ("Reviewing Party") become
aware of any information during its due diligence investigation which, in the
opinion of the Reviewing Party, could have material adverse impact on this
Agreement and/or the transactions contemplated hereby, the Reviewing Party shall
immediately notify the other party ("Receiving Party") in writing of such
information and the concerns which such information has caused. The Receiving
Party shall have a reasonable time to respond to those concerns. In the event
that the concerns cannot be resolved to the satisfaction of the Reviewing Party,
the Reviewing Party shall have the right to terminate this Agreement without
further liability hereunder. Each party shall bear the costs and expenses of its
own due diligence investigation hereunder, including the fees and expenses of
professional advisors.
5.04 Indemnification.
(a) (i) After the Effective Time, the Surviving Corporation shall, to
the fullest extent permitted, indemnify, defend and hold harmless
the present and former directors and officers of Saratoga and
Agents and any subsidiaries and their respective heirs,
executors, administrators and legal representatives
(individually, an "Indemnified Party" and, collectively, the
"Indemnified Parties") against all losses, expenses, claims,
damages or liabilities arising out of actions or omissions
occurring on or prior to the Effective Time (including, without
limitation, acts or omissions relating to the transactions
contemplated by this Agreement (collectively "Losses")). In
connection with the foregoing obligations from and after the
Effective Time, the Surviving Corporation, shall bear the cost of
expenses incurred in defending against any claim, action, suit,
proceeding or investigation arising out of any alleged acts or
omissions occurring on or prior to the Effective Time (including,
without limitation, acts or omissions relating to the
transactions contemplated by this Agreement), as incurred to the
fullest extent permitted under applicable law. All rights to
indemnification, including provisions relating to advances,
expenses and exculpation of director liability, existing in favor
of the Indemnified Parties as provided in Saratoga's or Agents'
Articles of Incorporation and Bylaws, as in effect as of the date
of this Agreement, with respect to matters occurring through the
Effective Time, will survive the Effective Time and will continue
in full force and effect.
(ii) Any Indemnified Party will promptly notify the Surviving
Corporation of any claim, action, suit, proceeding or
investigation for which such party may seek indemnification under
this Section (a "Third Party Claim"). In the event of any such
Third Party Claim, (x) within twenty (20) days of receipt of such
notice, the Surviving Corporation will have the right to assume
the defense thereof, and the Surviving Corporation will not be
liable to such Indemnified Parties for any legal expenses of
other counsel or any other expenses subsequently incurred
thereafter by such Indemnified Parties in connection with the
defense thereof, except that all Indemnified Parties (as a group)
will have the right to retain one separate counsel, acceptable to
such Indemnified Parties, as the expense of the Indemnifying
Party if the named parties to any such proceeding include both
the Indemnified Party and the Surviving Corporation and the
representation of such parties by the same counsel would be
inappropriate due to a conflict of interest between them, and
each Indemnified Party will have the right to retain a separate
counsel, acceptable to such Indemnified Party, at the expense of
the Indemnifying Party, if representation of such Indemnified
Party and the other Indemnified Parties as a group would be
inappropriate due to a conflict of interest between them and (y)
the Indemnified Parties will cooperate in the defense of any such
matter. If the Surviving Corporation fails to take action within
twenty (20) days as set forth in (x) above, then the Indemnified
Party shall have the right to pay, compromise or defend any Third
Party Claim and to assert the amount of any payment on the Third
Party Claim plus the expense of defense or settlement as a Loss.
The Surviving Corporation will not be liable for any settlement
affected without its prior written consent, unless it has failed
to take action within the twenty (20) day period after receipt of
notice as set forth above. Notwithstanding the foregoing, the
Surviving Corporation will not have any obligation under this
Section 5.04 to indemnify an Indemnified Party when and if a
court of competent jurisdiction ultimately determines and such
determination becomes final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited
by applicable law.
(b) The Surviving Corporation shall pay all reasonable expenses, including
reasonable attorneys' fees, that may be incurred by any Indemnified
Parties in enforcing the indemnity and other obligations provided for
in this Section 5.04.
(c) The rights of each Indemnified Party hereunder shall be in addition to
any other rights such Indemnified Party may have under the Articles of
Incorporation or Bylaws of Saratoga, under the Nevada Statute or
otherwise. The provisions of this Section shall survive the
consummation of the Merger and expressly are intended to benefit each
of the Indemnified Parties and will be binding on all successors and
assigns of the Surviving Corporation.
5.05 Further Action. Each party hereto shall, subject to the fulfillment at or
before the Effective Time of each of the conditions of performance set
forth herein or the waiver thereof, perform such further acts and execute
such documents as may be reasonably required to effect the Merger.
5.06 Expenses. Whether or not the Merger is consummated, except as provided in
Section 7.02 hereof or as provided otherwise herein, all costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses.
5.07 Consent of Agents Shareholders. Agents shall submit the Merger to the
shareholders of the Company for their consideration in accordance with
Chapter 23B.11 of the Washington State Business Corporation Act and other
provisions of applicable law, and obtain the consent of its shareholders.
Agents shall notify Saratoga in writing that the consent of the
shareholders has been obtained, and shall set forth the names of any
dissenting shareholders at least one (1) day prior to the Effective Time.
5.08 Publicity. The initial press release relating to this Agreement shall be a
joint press release and thereafter Agents and Saratoga shall, subject to
their respective legal obligations (including requirements of the Nasdaq
National Market, stock exchanges and other similar regulatory bodies),
consult with each other, and use reasonable efforts to agree upon the text
of any press release, before issuing any such press release or otherwise
making public statements with respect to the transactions contemplated
hereby and in making any filings with any federal or state governmental or
regulatory agency or with Nasdaq National Market, or any national
securities exchange with respect thereto.
5.09 Best Efforts to Close. The parties hereto agree to use their best efforts
to close the transactions contemplated hereby by July 6, 2001.
ARTICLE VI
CONDITIONS TO CONSUMMATION
OF THE MERGER
6.01 Conditions to Each Party's Obligation to Effect the Merger. The respective
obligations of each party to effect the Merger are subject to the
satisfaction or waiver, where permissible, prior to the Effective Time, of
the following conditions:
(a) This Agreement shall have been approved by the affirmative vote of the
shareholders of Agents by the requisite vote in accordance with
applicable law;
(b) No statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent), shall have
been enacted, entered, promulgated or enforced by any court or
governmental authority which is in effect and has the effect of
prohibiting the consummation of the Merger; provided, however, that
each of the parties shall have used its best efforts to prevent the
entry of any injunction or other order and to appeal as promptly as
possible any injunction or other order that may be entered;
(c) This Agreement shall have been approved by the Board of Directors of
Agents and the affirmative vote of the shareholders of Agents by the
requisite vote in accordance with applicable law, if required, and by
the Board of Directors of Saratoga by resolution in accordance with
applicable law. Each of the consents and resolutions shall have been
obtained and set forth on Exhibits 6.01(c), 6.01(c)(i) and 6.01(c)(ii)
annexed hereto.
(d) Agents, on or before the Effective Time, shall have completed the
issuance of its Convertible Debentures ("Debentures") in the face
amount of $1,000,000 to ____________________, a Colorado limited
liability company, upon the terms and conditions set forth in the
Subscription Agreement and other documentation relating to the
issuance of the Debentures. Subject to and upon the Effective Time of
this Agreement, Saratoga agrees to assume the liabilities and
obligation to pay principal and interest on the Debentures. On or
prior to the Effective Time, Agents shall secure, in writing, from all
of the holders of the Debentures, their consent to Saratoga's
assumption of Agents' liability and obligations under the Debentures.
(e) On or prior to the Effective Date, Saratoga shall have completed the
spin-off of its wholly-owned subsidiary, Saratoga Telecom Corp.
("STC") to its shareholders of record at a time effective prior to the
issuance of shares to Agents shareholders set forth in Article 1.06 of
this Agreement. Approximately $500,000 of Saratoga's obligation to its
debenture holders shall be transferred to STC on or prior to the
effective date of the spin-off.
(f) A Consulting Agreement between Saratoga and Coast Northwest Management
LLC or its principals shall have been executed, a copy of which is
annexed to this Agreement as Exhibit 6.01(f). This Consulting
Agreement shall become an obligation of the Surviving Corporation.
(g) Effective with and subject to the closing of this Agreement set forth
in Article 7.01 to this Agreement, Messrs. Xxxxxxx X. Xxxxxxx and
Xxxxxxxx X. Xxxxxx shall agree to cancel and terminate their
respective Employment Agreements with Saratoga dated effective as of
October 1, 1999.
(h) Agents shall deliver the legal opinion of its general counsel,
substantially in the form annexed hereto as Exhibit 6.01(h) and
Saratoga shall deliver the legal opinion of its counsel, substantially
in the form annexed hereto as Exhibit 6.01(h)(1).
(i) Each party shall have completed its due diligence review and notified
the other in writing of the satisfaction or removal of the due
diligence review condition in accordance with Article 5.03 of this
Agreement.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
7.01 Closing and Termination. Except as otherwise set forth in this Section
7.01, this Agreement shall close by no later than 11:59 p.m. Seattle,
Washington, July 6, 2001, ("Closing Date") provided that either party may
extend this Agreement for an additional seven (7) day period by written
notice to the other party prior to the Closing Date. This Agreement shall
terminate if not closed by 11:59 p.m., Seattle, Washington, July 13, 2001.
Notwithstanding the foregoing and/or the approval of this Agreement by the
shareholders of Agents, this Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective
Time:
(a) By mutual written consent, duly authorized by their respective Boards
of Directors, by Saratoga and Agents;
(b) By either Saratoga or Agents
(i) if any court of competent jurisdiction or any other governmental
body shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise
permanently prohibiting the Merger and such order, decree, ruling
or other action shall have become final and non-appealable;
(ii) if, upon a vote at a duly held meeting or upon any adjournment
thereof, the shareholders of Agents shall have failed to give any
required approvals; or
(c) By Saratoga if Agents shall have breached any of its representations
and warranties or covenants contained herein and if such breach or
breaches, either individually or in the aggregate, will have, or are
reasonably likely to have, an Agents Material Adverse Effect as
defined in Section 4.04 unless, in the case of a breach of covenant,
such failure to perform has been caused by a breach of this Agreement
by Saratoga.
(d) By Agents if Saratoga shall have breached any of its representations
and warranties and such breach or breaches, either individually or in
the aggregate, will have, or are reasonably likely to have, a Saratoga
Material Adverse Effect, as defined in Section 3.04, or if Saratoga
shall have breached in any material respect any of its covenants
contained herein, unless, in the case of a breach of any covenant,
such failure to perform has been caused by a breach of this Agreement
by Agents;
7.02 Effect of Termination. In the event of the termination and abandonment of
this Agreement pursuant to Section 7.01, this Agreement, except for the
obligations of the parties pursuant to this Section 7.02 and the provisions
of Section 5.06, shall forthwith become void and have no effect, without
any liability on the part of any party or its directors, officers or
shareholders; provided that nothing in this Section 7.02 shall relieve any
party to this Agreement of liability for breach of this Agreement.
7.03 Amendment. To the extent permitted by applicable law, this Agreement may be
amended by the parties, at any time before or after approval of this
Agreement and the merger by the shareholders of Agents but, after any such
shareholder approval, no amendment shall be made that by law requires
further approval of such shareholders without the approval of such
shareholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of all the parties.
7.04 Extension; Waiver. At any time prior to the Effective Time, the parties
hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein by any
other applicable party or in any document, certificate or writing delivered
pursuant hereto by any other applicable party, or (iii) subject to the
terms hereof, waive compliance with any of the agreements or conditions of
the other parties contained herein. Any agreement on the part of any party
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of a
party to this Agreement to assert any of its rights under this Agreement
shall not constitute a waiver of those rights.
7.05 Procedure for Closing, Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 7.01, an amendment of
this Agreement pursuant to Section 7.03 or an extension or waiver pursuant
to Section 7.04 shall, in order to be effective, require (a) in the case of
Saratoga, action by its Board of Directors or the duly authorized designee
of its Board of Directors and (b) in the case of Agents, action by its
Board of Directors.
ARTICLE VIII
MISCELLANEOUS
8.01 Nonsurvival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall be deemed to be only
conditions to the Merger and shall not survive the Merger, provided,
however, that the representations and warranties contained in Section 1.07,
and in this Article VIII shall survive the Merger.
8.02 Assignment, Binding Effect; Benefit; Entire Agreement. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject
to the preceding sentence, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and assigns. Notwithstanding anything contained in this Agreement to the
contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective
heirs, successors, executors, administrators and assign any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
This Agreement and any documents delivered by the parties in connection
herewith constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and
understandings (oral and written) among the parties with respect thereto.
No addition to or modification of any provision of this Agreement shall be
binding upon any party hereto unless made in writing and signed by all
parties hereto.
8.03 Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of
this Agreement or otherwise affecting the validity or enforceability of any
of the terms or provisions of this Agreement in any other jurisdiction. If
any provision, clause, section or port of this Agreement is so broad as to
be unenforceable, the provision, clause, section or part shall be
interpreted to be only so broad as is enforceable, and all other
provisions, clauses, sections or parts of this Agreement which can be
effective without such unenforceable provision, clause, section or part
shall, nevertheless, remain in full force and effect.
8.04 Notices. Any notice required to be given hereunder shall be sufficient if
in writing, and sent by facsimile transmission and by courier service (with
proof of service), hand delivery or certified or registered mail (return
receipt requested and first-class postage prepaid), addressed as follows:
If to Agents, to
Agents Xxxxxx.xxx, Inc.
Xxxx XxXxx, President 00000 XX 0xx Xxxxxx, Xxxxx #000
Xxxxxxxx, XX 00000 FAX (000) 000-0000
If to Saratoga, to
Saratoga International Holdings Corp.
0000 000xx Xxxxxx XX
Xxxxxxxx, XX 00000
Attn: Xxx Xxxxxxx, President
Fax: 000-000-0000
With a copy to:
Xxxxxx X. Xxxxxxxxx
Attorney At Law
S.W. Fifth Avenue, Suite 1300
Xxxxxxxx, XX 00000-0000
Fax: 000-000-0000
or to such other address as any party shall specify by written notice so
given, and such notice shall be deemed to have been delivered as of the
date it is telecommunicated, personally delivered or mailed.
8.05 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada without regard to its rules
of conflict of laws.
8.06 Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled under the Arbitration
Rules of the State of Nevada.
8.07 Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
8.08 Counterparts and Facsimile Signatures. 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 of this Agreement each of which may be signed
by less than all of the parities hereto, but together all such copies shall
constitute one and the same instrument. Execution and delivery of this
Agreement by exchange of facsimile copies bearing the facsimile signature
of a party hereto shall constitute a valid and binding execution and
delivery of this Agreement by such party. Such facsimile copies shall
constitute enforceable original documents.
8.09 Certain Definitions. For purposes of this Agreement, the following terms
shall have the meanings ascribed to them below:
(a) "Affiliate" of a person means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is
under common control with, the first-mentioned person.
(b) "Control" (including the terms "controlling", "controlled by" and
"under common control with") means the possession, direct or indirect,
of the power to direct or cause the direction of the management and
policies of a person, whether through ownership of voting securities,
by contract, or otherwise.
(c) "Person" means a natural person, company, corporation, partnership,
joint venture, association, trust, unincorporated organization or
other entity.
(d) "Subsidiary" of any person means a person in which such first
referenced person owns directly or indirectly an amount of the voting
securities, other voting ownership or voting partnership interest
which is sufficient to elect at least a majority of its Board of
directors or other governing body (or, if there are no such voting
interest, owns directly or indirectly 50% or more of the equity
interest).
8.10 Waivers. Except as provided in this Agreement, no action taken pursuant to
this Agreement, including, without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties,
covenants or agreements contained in the Agreement. The waiver by any party
hereto to a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any
other provision hereunder.
8.11 Incorporation of Exhibits. All Exhibits and annexes attached hereto and
referred to herein are hereby incorporated herein and made a part hereof
for all purposes as if fully set forth herein.
8.12 Interpretation. In this Agreement, unless the context otherwise requires,
words describing the singular number shall include the plural and vice
versa, words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and
vice versa.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its respective officers thereunto duly authorized, all as of
the day and year first above written.
SARATOGA INTERNATIONAL HOLDINGS CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx, President and CEO
AGENTS XXXXXX.XXX, INC.
By: /s/ Xxxx XxXxx
--------------------------------------
Xxxx XxXxx, President
