AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of the 11th day of
February, 2005 by and among THEATER XTREME, INC., a Delaware corporation
("Theater"), and BF ACQUISITION GROUP II, INC., a Florida corporation ("BF"),
XXXXXXX XXXXXXX, XXXXX XXXX (Messrs. Xxxxxxx and Bovi are referred to as the "BF
Additional Parties"), and XXXXX XXXXX (the "Theater Additional Party").
BACKGROUND
Theater and BF desire to merge and have entered into this Agreement to
set forth the terms and conditions of the merger. This Agreement and Plan of
Merger has been adopted and approved by the directors of Theater in accordance
with the Delaware General Corporation Law ("DGCL"), and the directors of BF in
accordance with the Florida Business Corporation Act ("FBCA").
NOW THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter contained, and intending to be legally bound, the parties
each agree as follows:
1. Merger and Reincorporation
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(a) Upon and subject to all of the terms and conditions set forth
herein, Theater shall merge (the "Merger") with and into BF which shall
survive the merger, but thereafter do business under the name "Theater
Xtreme Entertainment Group, Inc." as a Florida corporation (the "Surviving
Corporation").
(b) Following the Merger, the Surviving Corporation shall create
Theater Xtreme Entertainment Group, Inc., a wholly owned subsidiary
incorporated under the laws of the State of Delaware, and shall merge with
and into such subsidiary in order to effectuate a reincorporation of the
Surviving Corporation in the State of Delaware (the "Reincorporation");
provided, however, that the Reincorporation shall not take place until
there are at least three hundred (300) record holders of the common stock
of the Surviving Corporation.
2. Effective Time. The Merger shall become effective at such time (the
"Effective Time") as (a) a Certificate of Merger is filed with the Secretary of
State of the State of Delaware and (b) the Articles of Merger is filed with the
Department of State of the State of Florida. Such filings shall be made
simultaneously with or as soon as practicable after the closing of the
transactions contemplated by this Agreement.
3. Articles of Incorporation of Surviving Corporation. The Articles of
Incorporation of BF as in effect at the Effective Time shall constitute, from
and after the Effective Time, the Articles of Incorporation of the Surviving
Corporation until amended in accordance with applicable state law and the
By-laws of the Surviving Corporation.
4. By-laws of Surviving Corporation. The By-laws of BF as in effect at
the Effective Time shall constitute, from and after the Effective Time, the
By-laws of the Surviving Corporation until amended in accordance with applicable
state law and such By-laws.
5. Directors and Officers of Surviving Corporation. At or prior to the
Effective Time, BF shall cause all of its officers and directors to execute and
deliver their resignations of all positions at BF held by each of them together
with a release executed by each of them releasing BF from any and all claims
arising during or relating to any time period prior to the Effective Time except
for claims pursuant to this Agreement and their rights to indemnification and
exculpation under BF's By-laws. Schedule 5 sets forth a full and complete list
of all of the officers and directors of the Surviving Corporation following the
Effective Time.
6. Exchange of Securities. (a) As of the Effective Time by virtue of
the Merger and without any further action on the part of the holders of the
securities of Theater:
(i) Each stockholder (other than ones exercising dissenters rights
pursuant to Section 262 of the DGCL) shall be entitled to
receive, in exchange for each share of common stock of Theater,
4.6 shares of voting common stock of the Surviving Corporation,
par value one-tenth of a cent ($0.001) per share. Fractional
shares resulting from the exchange shall be cancelled.
(ii) Each holder of an option, warrant, or convertible security of
Theater shall be entitled upon exercise or conversion, as the
case may be, to receive the number of shares of voting common
stock of Surviving Corporation as it would have received if it
had exercised such option or warrant or converted such
convertible security immediately before the Effective Time.
(b) Notwithstanding the actual date of delivery by any Theater
stockholder of physical possession of certificates for shares of capital
stock of Theater, the exchange and transfer of legal title and beneficial
ownership of such shares shall for all purposes be deemed to occur at and
as of the Effective Time.
7. Representations and Warranties of BF. As a material inducement to
Theater to enter into this Agreement and to close hereunder, BF hereby makes the
following representations and warranties to and with Theater:
(a) Corporate Status; Outstanding Stock. BF is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Florida and has the power and authority to own its properties and
to carry on its business as it is now being conducted. BF is not required
to and has not qualified to do business as a foreign corporation in any
jurisdiction. BF has an authorized capital consisting of (i) Five Million
(5,000,000) shares of preferred stock none of which is issued or
outstanding and (ii) Fifty Million (50,000,000) shares of common stock, par
value one-tenth of a cent ($0.001) per share, of which eight hundred
twenty-five thousand (825,000) shares are issued and outstanding. All
outstanding shares of BF are validly issued, fully paid and non-assessable.
There are no shares of BF's capital stock held in its Treasury. There are
no options, warrants, convertible securities, rights, stockholder
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agreements or other instruments or agreements outstanding giving any person
the right to acquire any shares of capital stock of BF nor are there any
commitments to issue or execute any such option, warrant, right, instrument
or agreement. The minute books and stock records of BF are complete and
accurate and all signatures included therein are the genuine signatures of
the persons whose signatures are required. True, correct and complete
copies of BF's Articles of Incorporation and By-laws, and all amendments to
both, have been initialed by Xxxxxxx X. Xxxxxxx and delivered to Theater
before the Effective Time.
(b) Officers; Directors; Bank Accounts. Schedule 7.B is a correct and
complete list of all directors and officers of BF, all bank accounts and
safe deposit boxes of BF and all persons authorized to sign checks drawn on
such accounts and to have access to such safe deposit boxes.
(c) Subsidiaries, Joint Ventures, and Investments. BF has no
subsidiary and does not own any capital stock, security, partnership
interest or other interest of any kind in any corporation, partnership,
joint venture, association or other entity.
(d) Financial Statements. The Balance Sheets of BF as at April 30,
2004 (the "BF Audited Balance Sheet") and as at October 31, 2004 (the "BF
Warranted Balance Sheet") and the related Statements of Income (Loss) for
the periods reported on and all related Schedules and Notes to the
foregoing, copies of which are set forth on Schedule 7.D, were prepared in
accordance with generally accepted accounting principles and practices
consistently applied throughout the periods reported upon and with past
periods, and fairly and accurately present the financial position of BF as
at each such date, and the results of the operations of BF for the periods
reported upon.
(e) Real Estate. BF has no interest in any real estate.
(f) Personal Property. BF has good, valid and marketable title to all
personal property, tangible and intangible, reflected on the BF Warranted
Balance Sheet, and to all other personal property owned by it, free and
clear of all liens, mortgages, pledges, security interests, restrictions,
prior assignments, encumbrances and claims of every kind or character. No
claim has been asserted against BF involving any conflict or claim of
conflict of its corporate name, trade names, trademarks, or internet domain
names, with the tradenames, trademarks, internet domain names, or corporate
names of others, and no officer or director of BF has knowledge of any
basis for any such claim of conflict. BF is the sole and exclusive owner of
its corporate name, trade names, trademarks and internet domain names and
has the sole and exclusive right to use such trade names, trademarks and
internet domain names; provided, however, that the BF Additional Parties
have formed other corporations with names similar to but slightly different
from BF's name. No process used by BF or any product manufactured or sold
by BF infringes on any patent, patent application, trademark or trade name
of any other party.
(g) Liabilities. BF has no liabilities, except as and to the extent
reflected on the BF Warranted Balance Sheet or in this Agreement including
its Schedules.
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(h) Contracts, Leases, Agreements and Other Commitments. BF is not a
party to or bound by any written, oral or implied contract, agreement,
lease, power of attorney, guaranty, surety arrangement, or other
commitment, including but not limited to any contract or agreement for the
purchase or sale of merchandise or for the rendition of services, other
than as set forth on Schedule 7.H.
(i) Labor, Employment Contracts, and Employee Benefit Programs. BF is
not a party to any collective bargaining agreement or employment agreement,
and BF is not a party to any pending or threatened labor dispute. BF has
complied with all applicable provisions of the Employee Retirement Income
Security Act or 1974, as amended, ("ERISA") and all applicable Federal,
state and local laws relating to the employment of labor, including but not
limited to the provisions thereof relative to wages, hours, collective
bargaining, contributions to pension or benefit plans, and payment of
Social Security and other payroll taxes, and BF is not liable for any
arrears of wages or any taxes or penalties for failure to comply with any
of the foregoing. No "reportable event" (as that term is defined in Section
4043 of ERISA or regulations thereunder) has occurred and is continuing
with respect to any employee benefit plan of BF, and the present value of
all benefits vested under all of BF's "employee pension benefit plans" (as
that term is defined in Section 3 of ERISA) do not exceed the value of the
assets of such plans allocable to such vested benefits. None of such plans
nor any trusts created thereunder have incurred any "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA since the
effective date of Section 302. BF neither has currently nor during the past
five (5) years has had written or oral retirement, pension, profit sharing,
stock option, bonus, hospitalization, vacation or other employee benefit
plan, practice, agreement or understanding. BF has no employees other than
its statutory officers listed on Schedule 7.B, and owes no remuneration to
any such officer.
(j) Litigation. BF is not a party to or, to the Knowledge of the BF
Additional Parties, threatened with any suit, action, arbitration,
administrative or other proceeding, or governmental investigation; there is
no judgment, decree, award or order outstanding against BF; and BF is not
contemplating the institution of any suit, action, arbitration,
administrative or other proceeding.
(k) Conflicting Interests. No director, officer or employee of BF or
any blood relative or any Affiliate of any of the foregoing (i) has any
pecuniary interest in any supplier or customer of BF or in any other
business enterprise with which BF conducts business or with which BF is in
competition or (ii) is indebted to BF for money borrowed.
(l) Compliance with Law and Regulations. BF is in compliance in all
material respects with all requirements of law, Federal, state and local,
and all requirements of all governmental bodies or agencies having
jurisdiction over it, the conduct of its business, the use of its
properties and assets, and all premises occupied by it. BF has properly
filed all reports and other documents required to be filed with any
Federal, state, local and foreign government or subdivision or agency
thereof. BF has not received any notice, not heretofore complied with, from
any Federal, state or municipal authority or any insurance or inspection
body that any of its properties, facilities, equipment, or business
procedures or practices, fails to comply with any applicable law,
ordinance, regulation, building or zoning law, or requirement of any public
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authority or body. BF requires no licenses, permits, orders or approvals
issued by any governmental body or agency to conduct its current business.
(m) Agreement Not in Breach of Other Instruments Affecting BF;
Governmental Consent. The execution and delivery of this Agreement, the
consummation of the transactions provided for herein, and the fulfillment
of the terms hereof (i) will not result in the imposition of any lien,
security interest or encumbrance on any asset of BF or in the breach of any
of the terms and provisions of, or result in a termination or modification
of or constitute a default under, or conflict with, or cause any
acceleration of any obligation of BF under, or permit any other party to
modify or terminate, any agreement or other instrument by which BF is
bound, any judgment, decree, order, or award of any court, governmental
body, or arbitrator, or any applicable law, rule or regulation, and (ii) do
not require the consent of any governmental authority.
(n) Filing of Tax Returns. BF has filed all Federal, state, local and
foreign tax returns required to be filed in accordance with provisions of
law pertaining thereto and has paid all taxes and assessments (including,
without limitation of the foregoing, income, withholding, excise,
unemployment, Social Security, occupation, transfer, franchise, property,
sales and use taxes, import duties or charges, and all penalties and
interest in respect thereof) required to have been paid to date. The net
operating losses ("NOL") of BF are not, as of the date hereof, subject to
Section 382 or 269 of the Code, Regulation Section 1.1502-21T(c), or any
similar provisions or regulations otherwise limiting the use of the NOL's
of BF.
(o) Actions Since October 31, 2004. Except as set forth on Schedule
7.O since October 31, 2004, BF:
(i) has not taken any action outside of the ordinary and usual course
of business other than as expressly authorized hereby;
(ii) has not borrowed any money or become contingently liable for any
obligation or liability of others;
(iii) has paid all of its debts and obligations as they became due;
(iv) has not incurred any debt, liability or obligation of any nature
to any party except for obligations relating to the purchase of
goods or the rendition of services in the ordinary course of
business;
(v) has not knowingly waived any right of substantial value;
(vi) has used its best efforts to preserve its business organization
intact, to keep available the services of its employees, and to
preserve its relationships with its customers, suppliers and
others with whom it deals;
(vii) has not purchased or redeemed any shares of its capital stock,
or transferred, distributed or paid, directly or indirectly, any
money or other property or assets to any non-stockholder other
than payment of liabilities shown on the BF Audited Balance Sheet
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on or after the scheduled maturity or due date thereof, and
payments in the ordinary course of business for goods and
services in arm's length transactions; and
(viii) has not issued any shares of capital stock.
(p) No Material Adverse Change. Since October 31, 2004, there has not
been and there is not threatened any material adverse change in the
financial condition, business, prospects or affairs of BF or any material
physical damage or loss to any of its properties or assets or to the
premises occupied by it (whether or not such damage or loss is covered by
insurance).
(q) Ownership of Capital Stock of BF. A true and correct list of the
Stockholders of BF and their respective shareholdings are set forth on
Schedule 7.Q.
(r) Filings with the SEC. BF has made all filings with the Securities
and Exchange Commission (the "SEC") that it has been required to make since
April 30, 2004 under the Securities Act of 1933 (the "1933 Act") and the
Securities Exchange Act of 1934 (the "1934 Act") (collectively the "Public
Reports") in accordance with the 1933 Act and the 1934 Act and the rules
and regulations promulgated thereunder. Each of the Public Reports has
complied with the 1933 Act and the 1934 Act and the rules and regulations
of the SEC promulgated thereunder applicable to such Public Reports in all
material respects. None the Public Reports, as of its applicable date,
contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. (s)
Power and Authority. BF has the corporate power, legal right and authority
to enter into, execute and deliver this Agreement and to consummate the
transactions contemplated herein.
(t) Valid and Binding Agreement. This Agreement is a valid and legally
binding obligation of BF, enforceable in accordance with its terms.
(u) Status of Officers and Directors. No officer or director of BF has
been involved in any proceeding that would require disclosure under Item
401(f) of Regulation S-K promulgated by the Securities and Exchange
Commission.
(v) Environmental, Health, and Safety Matters. BF has not received any
written or oral notice, report or other information regarding any actual or
alleged violation by BF of any environmental, health, or safety statute,
ordinance or regulation.
(w) Brokers' Fees. Except as disclosed on Schedule 7.W, BF, has no
liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.
(x) Background of Directors and Officers. No director of officer of BF
or beneficial owner of ten percent (10%) or more of any class of BF's
securities (i) has been convicted within the past ten (10) years of any
felony or misdemeanor in connection with the purchase or sale of any
security involving the making of a false filing with the SEC, or arising
6
out of the conduct of the business of an underwriter, broker, dealer,
municipal securities dealer, or investment adviser; (ii) is subject to any
order, judgment or decree of any court of competent jurisdiction,
temporarily or preliminarily enjoining or restraining, or is subject to any
order, judgment or decree of any court of competent jurisdiction, entered
within the last five (5) years, permanently enjoining or restraining such
person from engaging in or continuing any conduct or practice in connection
with the purchase or sale of any security, involving the making of a false
filing with the SEC, or arising out of the conduct of the business of an
underwriter, broker, dealer, municipal securities dealer, or investment
adviser; (iii) is subject to an order of the SEC pursuant to Section 15(b),
15B(a), or 15B(c) of the Securities Exchange Act of 1934, or Section 203(e)
or (f) of the Investment Advisers Act of 1940; (iv) is suspended or
expelled from any membership in, or suspended or barred from association
with a member of, a national securities exchange registered under Section 6
of the Securities Exchange Act of 1934 or a national securities association
registered under Section 15A of the 1934 Act for any act or omission to act
constituting conduct inconsistent with just and equitable principles of
trade; or (v) is subject to a U.S. Postal Service false representation
order entered under 39 U.S.C. ss.3005 within the last five (5) years, or is
subject to a restraining order or preliminary injunction entered under 39
U.S.C. ss.3007 with respect to conduct alleged to have violated 39 U.S.C.
ss.3005.
8. Representations and Warranties of Theater. Theater represents and
warrants to BF, that as of the date hereof:
(a) Corporate Status; Outstanding Stock. Theater is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the power and authority to own its properties and
to carry on its business as it is now being conducted. Theater has an
authorized capital consisting of Two Million Five Hundred Thousand
(2,500,000) shares of common stock, par value one-tenth of a cent ($0.001)
per share, of which Two Million Five Hundred Twenty-One Thousand Seven
Hundred Thirty Nine 13/100 (2,521,739.13) shares are issued and outstanding
or reserved for issuance. All outstanding shares of Theater are validly
issued, fully paid and non-assessable. There are no shares of Theater's
capital stock held in its Treasury. Except as set forth in Schedule 8.A,
there are no options, warrants, convertible securities, rights, stockholder
agreements or other instruments or agreements outstanding giving any person
the right to acquire any shares of capital stock of Theater nor are there
any commitments to issue or execute any such option, warrants, rights,
instruments or agreements.
(b) Officers; Directors; Bank Accounts. Schedule 8.B is a correct and
complete list of all directors and officers of Theater, all bank accounts
and safe deposit boxes of Theater and all persons authorized to sign checks
drawn on such accounts and to have access to such safe deposit boxes.
(c) Subsidiaries, Joint Ventures, and Investments. Except as set forth
on Schedule 8.C, Theater has no subsidiary and does not own any capital
stock, security, partnership interest or other interest of any kind in any
corporation, partnership, joint venture, association or other entity.
(d) Financial Statements. The Balance Sheets of Theater as at June 30,
2004 (the "Theater
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Audited Balance Sheet") and as at September 30, 2004 (the "Theater
Warranted Balance Sheet") and the related Statements of Income (Loss) and
all related Schedules and Notes to the foregoing, copies of which are set
forth on Schedule 8.D, were prepared in accordance with generally accepted
accounting principles and practices consistently applied throughout the
periods reported upon and with past periods, and fairly and accurately
present the financial position of Theater as at each such date, and the
results of the operations of Theater for the periods reported upon.
(e) Real Estate. Except as set forth on Schedule 8.E, Theater has no
interest in any real estate.
(f) Personal Property. Theater has good, valid and marketable title to
all personal property, tangible and intangible, and to all other personal
property owned by it, free and clear of all liens, mortgages, pledges,
security interests, restrictions, prior assignments, encumbrances and
claims of every kind or character. No claim has been asserted against
Theater involving any conflict or claim of conflict of its corporate name,
trade names, trademarks, or internet domain names, with the tradenames,
trademarks, internet domain names, or corporate names of others, and no
officer or director of Theater has knowledge of any basis for any such
claim of conflict. Theater is the sole and exclusive owner of its corporate
name, trade names, trademarks and internet domain names and has the sole
and exclusive right to use such trade names, trademarks and internet domain
names. No process used by Theater or any product manufactured or sold by
Theater infringes on any patent, patent application, trademark or trade
name of any other party.
(g) Liabilities. Theater has no liabilities, except as and to the
extent reflected on the Theater Warranted Balance Sheet or in this
Agreement (including its Schedules), or which was incurred in the ordinary
course of business subsequent to September 30, 2004.
(h) Contracts, Leases, Agreements and Other Commitments. Theater is
not a party to or bound by any written, oral or implied contract,
agreement, lease, power of attorney, guaranty, surety arrangement, or other
commitment, including but not limited to any contract or agreement for the
purchase or sale of merchandise or for the rendition of services other than
contracts for the sale and installation of home theaters entered into in
the ordinary course of business and other than as set forth on Schedule
8.H.
(i) Labor, Employment Contracts, and Employee Benefit Programs.
Theater is not a party to any collective bargaining agreement or employment
agreement, and Theater is not a party to any pending or threatened labor
dispute. Theater has complied with all applicable provisions of the
Employee Retirement Income Security Act or 1974, as amended, ("ERISA") and
all applicable Federal, state and local laws relating to the employment of
labor, including but not limited to the provisions thereof relative to
wages, hours, collective bargaining, contributions to pension or benefit
plans, and payment of Social Security and other payroll taxes, and Theater
is not liable for any arrears of wages or any taxes or penalties for
failure to comply with any of the foregoing. No "reportable event" (as that
term is defined in Section 4043 of ERISA or regulations thereunder) has
occurred and is continuing with respect to any employee benefit plan of
Theater, and the present value of all benefits vested under all of
Theater's "employee pension benefit plans" (as that term is defined in
Section 3 of ERISA) do not exceed the value of the assets of such plans
allocable to such vested benefits. None of such plans nor any trusts
8
created thereunder have incurred any "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA since the effective date of
Section 302. Theater neither has currently nor during the past five (5)
years has had written or oral retirement, pension, profit sharing, stock
option, bonus, hospitalization, vacation or other employee benefit plan,
practice, agreement or understanding.
(j) Litigation. Theater is not a party to or, to the Knowledge of the
Theater Additional Party, threatened with any suit, action, arbitration,
administrative or other proceeding, or governmental investigation; there is
no judgment, decree, award or order outstanding against Theater; and
Theater is not contemplating the institution of any suit, action,
arbitration, administrative or other proceeding.
(k) Conflicting Interests. No director, officer or employee of Theater
or any blood relative or any affiliate of any of the foregoing (i) has any
pecuniary interest in any supplier or customer of Theater or in any other
business enterprise with which Theater conducts business or with which
Theater is in competition or (ii) is indebted to Theater for money
borrowed.
(l) Compliance with Law and Regulations. Theater is in compliance and
has at all times complied in all material respects with all requirements of
law, Federal, state and local, and all requirements of all governmental
bodies or agencies having jurisdiction over it, the conduct of its
business, the use of its properties and assets, and all premises occupied
by it. Theater has properly filed all reports and other documents required
to be filed with any Federal, state, local and foreign government or
subdivision or agency thereof. Theater has not received any notice, not
heretofore complied with, from any Federal, state or municipal authority or
any insurance or inspection body that any of its properties, facilities,
equipment, or business procedures or practices, fails to comply with any
applicable law, ordinance, regulation, building or zoning law, or
requirement of any public authority or body. Theater requires no licenses,
permits, orders or approvals issued by any governmental body or agency to
conduct its current business.
(m) Agreement Not in Breach of Other Instruments Affecting Theater;
Governmental Consent. The execution and delivery of this Agreement, the
consummation of the transactions provided for herein, and the fulfillment
of the terms hereof (i) will not result in the imposition of any lien,
security interest or encumbrance on any asset of Theater or in the breach
of any of the terms and provisions of, or result in a termination or
modification of or constitute a default under, or conflict with, or cause
any acceleration of any obligation of Theater under, or permit any other
party to modify or terminate, any agreement or other instrument by which
Theater is bound, any judgment, decree, order, or award of any court,
governmental body, or arbitrator, or any applicable law, rule or
regulation, and (ii) do not require the consent of any governmental
authority.
(n) Filing of Tax Returns. Theater has filed all Federal, state, local
and foreign tax returns required to be filed in accordance with provisions
of law pertaining thereto and has paid all taxes and assessments
(including, without limitation of the foregoing, income, withholding,
excise, unemployment, Social Security, occupation, transfer, franchise,
9
property, sales and use taxes, import duties or charges, and all penalties
and interest in respect thereof) required to have been paid to date.
(o) Actions Since June 30, 2004. Except as set forth on Schedule 8.O,
since June 30, 2004, Theater:
(i) has not taken any action outside of the ordinary and usual course
of business other than as expressly authorized hereby;
(ii) has not borrowed any money or become contingently liable for any
obligation or liability of others;
(iii) has paid all of its debts and obligations as they became due;
(iv) has not incurred any debt, liability or obligation of any nature
to any party except for obligations relating to the purchase of
goods or the rendition of services in the ordinary course of
business;
(v) has not knowingly waived any right of substantial value;
(vi) has used its best efforts to preserve its business organization
intact, to keep available the services of its employees, and to
preserve its relationships with its customers, suppliers and
others with whom it deals;
(vii) has not purchased or redeemed any shares of its capital stock,
or transferred, distributed or paid, directly or indirectly, any
money or other property or assets to any non-stockholder other
than payment of liabilities shown on Schedule 8.D on or after the
scheduled maturity or due date thereof, and payments in the
ordinary course of business for goods and services in arm's
length transactions; and
(viii) has not issued any shares of capital stock.
(p) Ownership of Capital Stock of Theater. A true and correct list of
the Stockholders of Theater and their respective shareholdings are set
forth on Schedule 8.P.
(q) Power and Authority. Theater has the corporate power, legal right
and authority to enter into, execute and deliver this Agreement and to
consummate the transactions contemplated herein.
(r) Valid and Binding Agreement. This Agreement is a valid and legally
binding obligation of Theater, enforceable in accordance with its terms.
(s) Status of Officers and Directors. No officer or director of
Theater has been involved in any proceeding that would require disclosure
under Item 401(f) of Regulation S-K promulgated by the Securities and
Exchange Commission.
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(t) Environmental, Health, and Safety Matters. Theater has not
received any written or oral notice, report or other information regarding
any actual or alleged violation by Theater of any environmental, health, or
safety statute, ordinance or regulation.
(u) Brokers' Fees. Except as disclosed on Schedule 8.U, Theater, has
no liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.
9. Representations and Warranties of Messrs. Xxxxxxx, Xxxx and Oglum.
Each of Messrs. Xxxxxxx, Xxxx and Oglum, severally and not jointly, represents
and warrants to Theater and BF as follows:
(a) Authority. He has the requisite power and authority to enter into
this Agreement, to perform his obligations hereunder, and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by him and constitutes his valid and binding obligation,
enforceable against him in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the enforcement of creditors'
rights generally, and except for judicial limitations on the enforcement of
the remedy of specific performance and other equitable remedies.
(b) Title; Authority to Vote Shares. He owns of record and has voting
power over the number of shares of capital stock of BF or Theater as set
forth in the Schedules to this Agreement and all of such shares of capital
stock are owned by him free and clear of all liens, charges, pledges,
restrictions, and encumbrances (other than those created by this
Agreement).
(c) Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of any of the transactions contemplated
hereby, nor compliance with any of the provisions hereof by him, will
violate, conflict with, or result in a breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or suspension of, or
accelerate the performance required by, or result in a right of termination
or acceleration under, or result in the creation of any lien on any of his
properties or assets under, any agreement or instrument to which he is a
party or any statute, rule, regulation, judgment, order, decree, or other
legal requirement applicable to him.
(d) Litigation. He is not subject to any outstanding order, writ,
injunction, or decree which, if determined adversely, would prohibit him
from fulfilling his obligations hereunder.
10. Survival. The representations and warranties made in this Agreement
shall survive until the first anniversary of the Effective Time except that all
representations and warranties with respect to taxes, employee benefits plans
and employment matters shall survive until sixty days (60) after the expiration
of the applicable statute of limitations (including any extensions.)
11. Effect of Merger. At the Effective Time:
11
(a) Theater shall be merged with and into BF, and BF shall be the
Surviving Corporation, and the separate existence of Theater shall cease;
(b) All property (real, personal and mixed) of Theater, all franchises
of Theater, and all debts due on whatever account to Theater, shall be
transferred to and vested in the Surviving Corporation without further act
or deed;
(c) All liabilities and obligations of Theater shall be vested in and
shall be the liabilities and obligations of the Surviving Corporation.
Liens on the property of Theater shall not be impaired by the Merger and
any claim existing or action or proceeding pending by or against Theater
may be prosecuted to judgment as if such Merger had not taken place or the
Surviving Corporation may be substituted in Theater's place;
(d) All taxes, penalties, and other governmental accounts claimed
against Theater, but not settled, assessed or determined prior to the
Merger shall be settled, assessed or determined against the Surviving
Corporation and shall be a lien against the franchises and property, both
real and personal, of the Surviving Corporation to the extent required by
law.
12. Principal Office. The location of the principal office of the
Surviving Corporation shall be 000 Xxxxxxxxx Xxxx., Xxxxxx X & X, Xxxxxx,
Xxxxxxxx 00000.
13. Securities Laws Compliance Procedures. The parties to this
Agreement acknowledge and confirm that each has been advised and understands
that:
(a) the shares of common stock of the Surviving Corporation to be
issued in the Merger will be exempt from registration under the 1933 Act
pursuant to Section 4(2) thereof;
(b) the shares of common stock of the Surviving Corporation to be
issued in the Merger will be "restricted securities" within the meaning of
Rule 144 promulgated under the 1933 Act and have not (and will not have)
been registered under the 1933 Act and therefore, must be held indefinitely
unless they are subsequently registered under such statute or an exemption
from registration is available; and
(c) there shall be endorsed on the certificates evidencing the shares
of common stock of the Surviving Corporation to be issued in the Merger a
restrictive securities legend.
14. Pre-Closing Covenants. Between the date of this Agreement and the
Effective Time:
(a) BF shall not and hereby agrees not to issue any shares of capital
stock, purchase any shares of portfolio companies, enter into any contracts
or agreements, or otherwise engage in any business;
(b) Theater shall and hereby agrees to continue its business intact
and to operate in the ordinary course of business and shall not and hereby
agrees not to issue any
12
shares of capital stock except upon exercise or conversion of outstanding
securities identified on a Schedule to this Agreement;
(c) Each of Theater and BF shall and hereby agrees to permit
representatives of the other party to have full access at all reasonable
times and on reasonable notice, and in a manner so as not to interfere with
its normal business operations, to all of its premises, properties,
personnel, books, records, contracts, and documents;
(d) Each of Theater and BF shall and hereby agrees to treat and hold
as confidential any Conditional Information it receives from the other
party in the course of the reviews contemplated by this Section 14, shall
and hereby agrees to not use any such Confidential Information except in
connection with this Agreement, and, if this Agreement is terminated for
any reason, shall and hereby, agrees to return to the party providing such
Conditional Information all tangible embodiments (and all copies) thereof
which are in its possession;
(e) Each of BF and Theater shall and hereby agrees to call a meeting
of its stockholders, or take such other action as shall be necessary to
submit for adoption and approval by its respective stockholders, this
Agreement and the Merger and, shall recommend their adoption and approval
by such stockholders;
(f) Each of Messrs. Xxxxxxx, Xxxx and Oglum, severally and not
jointly, shall and hereby agrees to vote in favor of the adoption and
approval of this Agreement and the Merger in their capacity as stockholders
of BF or Theater, as the case may be, or alternatively, to execute a
consent in writing adopting or approving this Agreement and the Merger;
(g) Each of Messrs. Xxxxxxx, Xxxx and Oglum, severally and not
jointly, shall and hereby agrees to execute a Lockup Agreement
substantially in the form of Exhibit "B" attached hereto (the "Lock-up
Agreements").
15. Conditions to Obligations to Close. (a) Conditions to Obligations
of Theater. The obligations of Theater set forth in this Agreement (including,
without limitation, the obligation to consummate the Merger) are subject to
satisfaction of the following conditions:
(i) This Agreement shall have been adopted and approved and the
Merger shall have been approved by more than 50% of the
stockholders of Theater and by more than 50% of the stockholders
of BF;
(ii) The representations and warranties set forth in Section 7 and the
representations and warranties of Messrs. Xxxxxxx and Xxxx set
forth in Section 9 shall be true and correct at and as of the
Effective Time;
(iii) BF shall have performed and complied with all of its covenants
hereunder required to be performed at or prior to the Effective
Time;
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(iv) BF shall have no more than 1,250,000 shares of its common stock
outstanding and shall not have any shares of its preferred stock
outstanding as of the Effective Time;
(v) No action, suit, or proceeding shall be pending or threatened
against BF before any court or quasi-judicial or administrative
agency of any Federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this
Agreement, or (B) cause of any of the transactions contemplated
by this Agreement to be rescinded following consummation;
(vi) BF shall have delivered to Theater a certificate of BF's
Secretary attaching, and certifying that each such attachment is
true, correct, complete and in effect on the Closing Date: (A)
resolutions of the Board of Directors of BF with respect to all
transactions contemplated by this Agreement; (B) resolutions or
minutes of meeting of BF stockholders adopting this Agreement and
approving the Merger; and (C) a good standing certificate for BF
issued by the Secretary of State of the State of Florida dated
not more than fifteen days prior to the Closing Date;
(vii) No state or federal securities regulator (including the
Securities and Exchange Commission) shall have issued a stop
order with respect to the trading of any shares of BF capital
stock or shall have commenced any inquiry with respect to any
filing made by BF with any such regulator or shall have commenced
any investigation with respect to BF.
Theater may waive any condition specified in this Section 14(a) if it executes a
writing so stating at or prior to Closing. (b) Conditions to Obligations of BF.
The obligations of BF set forth in this Agreement (including without limitation,
the obligations to consummate the Merger) are subject to satisfaction of the
following:
(i) This Agreement shall have been adopted and approved and the
Merger shall have been approved by more than 50% of the
stockholders of Theater and by more than 50% of the stockholders
of BF;
(ii) The representations and warranties set forth in Section 8 and the
representations and warranties of Xx. Xxxxx set forth in Section
9 shall be true and correct at and as of the Effective Time;
(iii) Theater shall have performed and complied with all of its
covenants hereunder required to be performed at or prior to the
Effective Time;
(iv) No action, suit, or proceeding shall be pending or threatened
against Theater before any court or quasi-judicial or
administrative agency of any Federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any
14
of the transactions contemplated by this Agreement or (B) cause
any of the transactions contemplated by this Agreement to be
rescinded following consummation;
(v) Theater shall have delivered to BF a certificate of Theater's
Secretary attaching, and certifying that each such attachment is
true, correct, complete and in effect on the Closing Date: (A)
resolutions of the Board of Directors of Theater with respect to
all transactions contemplated by this Agreement; (B) resolutions
or minutes of meeting of Theater stockholders adopting this
Agreement and approving the Merger; and (C) a good standing
certificate for Theater issued by the Secretary of State of the
State of Delaware dated not more than fifteen days prior to the
Closing Date.
BF may waive any condition specified in this Section 14(b) if it executes a
writing so stating at or prior to the Closing.
16. Closing.
(a) The Closing of the transactions contemplated by this Agreement
shall take place at the offices of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP,
0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX on February 11, 2005.
(b) At the Closing, the Surviving Corporation shall issue Five Hundred
Seventy-Five Thousand (575,000) shares of its voting common stock to
Universal Capital Management Inc. for services rendered. Universal is an
intended third party beneficiary of this Agreement.
(c) At the Closing, BF shall deliver each of the following documents
to Theater or to Theater stockholders, as the case may be:
(i) Executed Articles of Merger in a form suitable for filing with
the Secretary of State of the State of Florida;
(ii) An opinion of counsel to BF covering the points set forth in
Exhibit "C" attached hereto;
(iii) Share certificates for the shares to be issued to the
stockholders of Theater as a result of the Merger;
(iv) General Releases of Theater and the Surviving Corporation
executed by each director and officer of BF;
(v) A Closing Certificate executed by the President of BF certifying
to the satisfaction or waiver of all conditions of Closing,
confirming the truth and correctness of all representations and
warranties made in this Agreement by BF and by each of the BF
Additional Parties, and confirming that all covenants of BF and
the BF Additional Parties required to be performed at or prior to
the Effective Time have been performed; and
(vi) A Certificate of the Secretary of BF certifying to the
completeness, accuracy, and continued effectiveness of attached
corporate resolutions adopted
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by the directors and stockholders of BF with respect to the
Merger and this Agreement, attaching the Certificate of
Incorporation and By-laws of BF, certifying to the incumbency of
the officers of BF, and certifying to compliance with all
applicable notices with respect to the appraisal rights (if any)
of the stockholders of BF.
(d) At the Closing, Theater shall deliver each of the following
documents to BF:
(i) An executed Certificate of Merger in a form suitable for filing
with the Secretary of State of the State of Delaware;
(ii) An opinion of counsel to Theater covering the points set forth in
Exhibit "C" attached hereto;
(iii) A Closing Certificate executed by the President of Theater
certifying to the satisfaction or waiver of all conditions of
Closing, confirming the truth and correctness of all
representations and warranties made in this Agreement by Theater
or the Theater Additional Party, and confirming that all
covenants of Theater and the Theater Additional Party required to
be performed at or prior to the Effective Time have been
performed; and
(iv) A Certificate of the Secretary of Theater certifying to the
completeness, accuracy and continued effectiveness of attached
corporate resolutions adopted by the directors and stockholders
of Theater with respect to the Merger and this Agreement,
attaching the Certificate of Incorporation and By-laws of
Theater, certifying to the incumbency of the officers of Theater,
and certifying to compliance with all applicable notices with
respect to the appraisal rights (if any) of the stockholders of
Theater.
17. BF Indemnification. (a) From and after the Effective Time the BF
Additional Parties (hereinafter sometimes collectively referred to as the "BF
Indemnitors") jointly and severally shall and hereby agree to indemnify to hold
harmless Theater, the Surviving Corporation, each Theater stockholder
immediately before the Effective Time, and their respective successors and
assigns, jointly and severally, from, against and in respect of the amount of
any and all BF Deficiencies (as hereinafter defined), in excess of Twenty
Thousand Dollars ($20,000). As used in this Agreement, "BF Deficiencies" means
any and all loss, costs, expenses, or damage resulting from:
(i) any misrepresentation, breach of warranty, or any non-fulfillment
of any warranty, representation, covenant or agreement on the
part of BF or the BF Additional Parties contained in this
Agreement or in any other document executed in connection with
the transactions contemplated by this Agreement. (This Agreement
and each such other document is referred to individually as a
"Transaction Document" and collectively, as the "Transaction
Documents");
(ii) any error contained in any statement, report or certificate
delivered to Theater by BF or the BF Additional Parties in any
Transaction Document;
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(iii) any claim, debt, liability or obligation or alleged claim, debt,
liability or obligation of BF to any party, incurred prior to the
date hereof or arising from any matter or thing occurring prior
to the date hereof, including but not limited to claims made by
governmental authorities for taxes or otherwise, except for
liabilities shown on the BF Warranted Balance Sheet or disclosed
in this Agreement (including its Schedules); and
(iv) any and all acts, suits, proceedings, demands, assessments
brought or initiated, or judgments entered, against BF or the
Surviving Corporation for or on account of any facts existing
prior to the Effective Time; and
(v) reasonable attorneys' fees, costs and expenses incident to any of
the foregoing or an investigation of any of the foregoing.
(b) From and after the Effective Time, the BF Indemnitors jointly and
severally shall and hereby agree to indemnify and to hold harmless Theater,
the Surviving Corporation, each Theater stockholder immediately before the
Effective Time and their respective successors and assigns, jointly and
severally, from and against in respect of the amount of any and all Proxy
Damages. As used in this Agreement, "Proxy Damages" means any and all loss,
costs, expenses, or damage resulting from:
(i) any non-compliance with the proxy requirements of Regulation 14A
under the 1934 Act in connection with this Agreement and any
actions taken in connection with the Merger or a Transaction
Document, including the solicitation of the shareholders of BF;
(ii) any and all acts, suits, proceedings, demands, assessments
brought or initiated, or judgments entered, against BF or the
Surviving Corporation; and
(iii) reasonable attorneys' fees, costs and expenses incident to any
of the foregoing or an investigation of any of the foregoing.
18. Theater Indemnification. From and after the Effective Time the
Theater Additional Party (hereinafter sometimes collectively referred to as the
"Theater Indemnitor") shall and hereby agrees to indemnify and to hold harmless
BF, the Surviving Corporation, the BF stockholders immediately before the
Effective Time, and their respective successors and assigns, jointly and
severally, from, against and in respect of the amount of any and all Theater
Deficiencies (as hereinafter defined), in excess of Twenty Thousand Dollars
($20,000). (a) As used in this Agreement, "Theater Deficiencies" means any and
all loss or damage resulting from:
(i) any misrepresentation, breach of warranty, or any non-fulfillment
of any warranty, representation, covenant or agreement on the
part of Theater or the Theater Additional Party contained in this
Agreement or in any other Transaction Document;
(ii) any error contained in any statement, report or certificate
delivered to BF by Theater in any Transaction Document;
17
(iii) any claim, debt, liability or obligation or alleged claim, debt,
liability or obligation of Theater to any party, incurred prior
to the date hereof or arising from any matter or thing occurring
prior to the date hereof, including but not limited to claims
made by governmental authorities for taxes or otherwise, except
for liabilities shown on the Theater Warranted Balance Sheet,
disclosed in this Agreement (including its Schedules), or
incurred subsequent to the date of this Agreement in the ordinary
course of Theater's business;
(iv) any and all acts, suits, proceedings, demands, assessments,
judgments entered against Theater; and
(v) reasonable attorneys' fees, costs and expenses incident to any of
the foregoing or an investigation of any of the foregoing.
19. Indemnification Procedure. (a) In the event that any third party
claim shall be asserted against any party which, if sustained, would result in a
BF Deficiency or a Theater Deficiency, such party, within a reasonable time
after learning of such claim, shall notify the BF Indemnitors or Theater
Indemnitor, as the case may be, of such claim, assert its right to
indemnification hereunder, and extend a reasonable opportunity to defend against
such claim, at the sole expense of the BF Indemnitors or Theater Indemnitor, as
the case may be, and through legal counsel reasonably acceptable to the party
asserting the right to indemnification, provided that the BF Indemnitors or
Theater Indemnitor, as the case may be, proceed in good faith, expeditiously and
diligently. No determination shall be made pursuant to subparagraph (d) below
while such defense is still being made until the earlier of (i) the resolution
of such claim by the BF Indemnitors or Theater Indemnitor, as the case may be,
with the claimant, or (ii) the termination of the defense by the BF Indemnitors
or Theater Indemnitor, as the case may be, against such claim or the failure of
the BF Indemnitors or Theater Indemnitor, as the case may be, to prosecute such
defense in good faith in an expeditious and diligent manner. Either party shall
be entitled to rely on the opinion of their counsel as to the occurrence of
either of such events. The party asserting the right to indemnification shall,
at its option and expense, have the right to participate in any defense with
legal counsel of its own selection. No settlement or compromise of any claim
which may result in a BF Deficiency may be made by BF Indemnitors or Theater
Indemnitor, as the case may be, without the prior written consent of the party
asserting the right to indemnification unless (i) prior to such settlement or
compromise the BF Indemnitors or Theater Indemnitor, as the case may be,
acknowledge in writing their obligation to pay in full the amount of the
settlement or compromise and any and all associated expenses and (ii) the party
asserting the right to indemnification is furnished with security reasonably
satisfactory to it that the BF Indemnitors or Theater Indemnitor, as the case
may be, will in fact pay such amount and expenses.
(b) In the event that after the Effective Time any party asserts the
existence of any BF Deficiency or Theater Deficiency, such party shall give
written notice to the BF Indemnitors or Theater Indemnitor, respectively,
of the nature and amount of the Deficiency asserted. If the BF Indemnitors
or Theater Indemnitor, as the case may be, within a period of thirty (30)
days after the giving of such notice, shall not have given written notice
to the party asserting the right to indemnification announcing their
intention to contest such assertion (such notice by the BF Indemnitors or
Theater Indemnitor, being hereinafter called the "contest
18
notice"), such assertion shall be deemed accepted and the amount of
the Deficiency shall be deemed established. In the event, however, that a
contest notice is given within such thirty-day period, then the contested
assertion of a Deficiency shall be settled by arbitration to be held in
Philadelphia, Pennsylvania in accordance with the rules of the American
Arbitration Association then obtaining. The determination of the
arbitrator(s) shall be delivered in writing to the BF Indemnitors or
Theater Indemnitor, as the case may be, and to the party asserting the
right to indemnification and shall be final, binding and conclusive upon
all of the parties hereto, and the amount of the Deficiency, if any,
determined to exist, shall be deemed established.
(c) The BF Indemnitors or Theater Indemnitor, as the case may be, may
agree in writing, at any time, as to the existence and amount of a
Deficiency, and upon execution of such agreement, such Deficiency shall be
deemed established.
(d) The BF Indemnitors and Theater Indemnitor hereby agree to pay the
amount of established BF Deficiencies or Theater Deficiencies,
respectively, within five (5) days after the establishment thereof in cash.
Such liability shall be joint and several among the BF Indemnitors or the
Theater Indemnitor, as the case may be. Any amounts not paid by the BF
Indemnitors or Theater Indemnitors, when due shall bear interest from the
due date thereof until the date paid at a rate equal to the lesser of (i)
ten percent (10%) per annum or (ii) the highest legal rate permitted by
applicable law.
(e) If the existence of any state of facts constituting a breach of
representation or warranty results in the Surviving Corporation's suffering
or being subjected to any claims, losses, damages, liabilities,
deficiencies or expenses (including, without limitation, settlement costs
and any legal or other expenses for investigating or defending any action
or threatened action) which the Surviving Corporation would not have been
subjected to or suffered had the state of facts been as represented or
warranted in this Agreement or any statement or certificate furnished
pursuant hereto, the Surviving Corporation shall be deemed to have been
damaged to the extent of the dollar amount of such claims, losses, damages,
liabilities, deficiencies and expenses (including as aforesaid) reasonably
and actually incurred or suffered, notwithstanding that technically the
Surviving Corporation may not have been damaged as the result of the
existence of such state of facts or such breach because it would have been
subjected to or suffered such claims, losses, damages, liabilities,
deficiencies or expenses (including as aforesaid) even if the transactions
contemplated by this Agreement had not taken place. The foregoing is not
intended to deny or limit any party's right to indemnification for damages
incurred as the result of a breach of a representation or warranty which is
not covered the preceding sentence.
20. Further Assurances. Each party shall and hereby agrees to execute
and deliver all such instruments and documents and to take all such other action
as any other party may reasonably request from time to time, before or after the
Effective Time, without payment of further consideration and without delay, in
order to effectuate the transactions provided for herein. The parties shall
cooperate fully with one another and with their respective counsel and
accountants in connection with any steps required to be taken as part of their
respective obligations under this Agreement.
21. Post-Closing Matters and Covenants.
19
(a) Each party shall use its best efforts to cause the Merger to
constitute a "reorganization" within the meaning of Section 368(a) of the
Code for Federal income tax purposes ( a "Tax-Free Reorganization"). No
party has taken or will take, either before or after consummation of the
Merger, any action that, to the Knowledge of such party, would cause the
Merger to fail to constitute a Tax-Free Reorganization. Unless otherwise
required by law, each party shall (i) report the Merger on all tax returns
and filings as a Tax-Free Reorganization, and (ii) not take any position or
action that is inconsistent with the characteristics of the Merger as a
Tax-Free Reorganization in any audit, administrative proceeding, litigation
or otherwise.
(b) The Surviving Corporation is hereby authorized, within three (3)
months of the Effective Time to offer shares of common stock at a purchase
price of not less than $0.35 per share pursuant to Rule 504 or 506
promulgated under the 1933 Act.
(c) Immediately after the Effective Time, and in no event more than
fourteen (14) days thereafter, the holders of the capital stock of TX
Expansion Group, Inc. shall contribute their stock, without further
consideration, to the Surviving Corporation.
(d) The Reincorporation shall occur promptly upon the number of record
holders of common stock of the Surviving Corporation reaching three hundred
(300).
(e) The Surviving Corporation shall not effectuate a reverse stock
split of its common stock for at least twenty-four (24) months after the
Effective Time, unless (i) otherwise required pursuant to the terms or
conditions of any underwriting agreement entered into by the Surviving
Corporation with an underwriter in connection with an underwritten
registration statements that registers shares of the Surviving
Corporation's common stock; or (ii) the Surviving Corporation receives
written notice from the BF Additional Parties waiving the Surviving
Corporation's obligation to maintain this covenant.
22. Termination.
(a) Termination Generally. This Agreement may be terminated at any
time before the Effective Time:
(i) by mutual written consent of BF and Theater; or
(ii) by BF or by Theater if the transactions contemplated hereby have
not been consummated on or before March 31, 2005 (which date may
be extended by the mutual written consent of BF and Theater),
provided that such failure to consummate the transaction is not
due to the failure of the party seeking to terminate this
Agreement to comply in all material respects with its obligations
under this Agreement.
(b) BF Termination. BF may terminate this Agreement if:
(i) any of the conditions set forth in Section 15(b) shall become
impossible to fulfill other than for reasons within the control
of BF, and such conditions shall not have been waived by BF; or
20
(ii) Theater shall have: (A) failed to observe or perform in any
material respect any of its covenants set forth in this Agreement
that cannot be or has not been cured within 30 days of the giving
of written notice to Theater of such failure or, (B) breached a
representation or warranty contained in Section 8 hereof, and
such breach cannot be or has not been cured within 30 days of the
giving of written notice to Theater of such breach, and the
conditions set forth in Section 15(b) cannot be satisfied; or
(c) Theater Termination. Theater may terminate this Agreement if:
(i) any of the conditions set forth in Section 15(a) shall become
impossible to fulfill other than for reasons within the control
of Theater, and such conditions shall not have been waived by
Theater; or
(ii) BF shall have: (A) failed to observe or perform in any material
respect any of its covenants set forth in this Agreement that
cannot be or has not been cured within 30 days of the giving of
written notice to BF of such failure or, (B) breached a
representation or warranty contained in Section 7 hereof, and
such breach cannot be or has not been cured within 30 days of the
giving of written notice to BF of such breach, and the conditions
set forth in Section 15(a) cannot be satisfied; or
(d) Procedure and Effect of Termination. Upon termination of this
Agreement by BF or by Theater under this Section 22, written notice thereof
shall forthwith be given to the other parties and this Agreement shall
terminate and the transactions contemplated hereby shall be abandoned
without further action by any of the parties. If this Agreement is
terminated as provided herein, no party shall have any liability or further
obligation to any other party to this Agreement, except as provided in
Sections 10 and 11, Section 17, Section 18 or Section 22, all of which
shall survive the termination, or to the extent the termination is the
direct result of a material breach by the party of a representation,
warranty, or covenant contained in this Agreement.
(e) Waiver. At any time prior to the Effective Time, the parties
hereto may: (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant thereto, and (c) waive compliance with any
of the agreements or conditions contained herein. Any such waiver shall not
be deemed to be continuing or to apply to any future obligation or
requirement of any party hereto provided herein. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid if set
forth in an instrument in writing signed on behalf of the party granting
such extension or waiver.
23. Definitions. As used in this Agreement, the following capitalized
terms have the following respective meanings:
(a) "Affiliate" means of a Person shall mean any Person which,
directly or indirectly, controls, is controlled by or is under common
control with such Person.
(b) "Code" means the Internal Revenue Code of 1986 as amended.
21
(c) "Confidential Information" means any information concerning the
business and affairs of Theater or its Affiliates or its business that is
not generally available to the public, unless such information is or
becomes readily ascertainable from published information or trade sources
or is publicly disclosed through no breach of any confidentiality
obligation.
(d) "Knowledge" with respect to BF means the actual knowledge of the
BF Additional Parties, and with respect to Theater, means the actual
knowledge of the Theater Additional Party.
(e) "Person" shall mean any natural person, corporation, business
trust, joint venture, association, company, firm, partnership or other
entity or government or governmental authority.
24. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power
or privilege, nor shall any waiver of any right, remedy, power or privilege
with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver
shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
(b) Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be
governed by and construed in accordance with the laws of the State of
Delaware (other than to the extent, but only to the extent, required to
satisfy the merger requirements of Florida law, Florida law),
notwithstanding any conflict-of-laws doctrines of any jurisdiction to the
contrary, and without the aid of any canon, custom or rule of law requiring
construction against the draftsman.
(c) Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received only when delivered
(personally, by courier service such FedEx or by other messenger) against
receipt or upon actual receipt of registered or certified mail, postage
prepaid, return receipt requested, addressed as set forth below:
If to BF:
Xxxxxxx X. Xxxxxxx
0000 Xxxx Xxxx.
Xxx Xxxxxxxxx, XX 00000-0000
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If to the BF Additional Parties:
Xxxxxxx X. Xxxxxxx
0000 Xxxx Xxxx.
Xxx Xxxxxxxxx, XX 00000-0000
If to Theater or the Theater Additional Party:
000 Xxxxxxxxx Xxxx.
Xxxxxx X & X
Xxxxxx, Xxxxxxxx 00000
A copy of each notice sent to Theater or the Theater Additional Party shall also
be sent to:
Xxxxxx X. Xxxx, Esquire
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll
51st Floor
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
In addition, notice by mail shall be sent by a reputable international courier
(such as FedEx) if posted outside of the continental United States. Any party
may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this
subparagraph for the giving of notice.
(d) Schedules. All Schedules attached hereto are hereby incorporated
by reference into, and made a part of, this Agreement.
(e) Binding Nature of Agreement; No Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns, except
that no party may assign or transfer its rights nor delegate its
obligations under this Agreement without the prior written consent of the
other parties hereto.
(f) Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon
as the signatories, including the BF Additional Parties and the Theater
Additional Party.
(g) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that
for any reason any other or others of them may be invalid or unenforceable
in whole or in part.
23
(h) Entire Agreement. This Agreement contains the entire understanding
among the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as
herein contained. The express terms hereof control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms
hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
(i) Paragraph Headings. The Paragraph and subparagraph headings in
this Agreement have been inserted for convenience of reference only; they
form no part of this Agreement and shall not affect its interpretation.
(j) Gender, Etc. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine
or neuter, as the context indicates is appropriate.
(k) Number of Days. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
Holidays; provided, however, that if the final day of any time period falls
on a Saturday, Sunday or Holiday, then the final day shall be deemed to be
the next day which is not a Saturday, Sunday or Holiday. For purposes of
this Agreement, the term "Holiday" shall mean a day, other than a Saturday
or Sunday, on which national banks with branches in the Commonwealth of
Pennsylvania are or may elect to be closed.
(l) Judicial Proceedings.
(i) Each party to this Agreement hereby waives any right it may
have to claim or recover, in any suit, action or proceeding,
any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages.
(ii) EACH PARTY ACKNOWLEDGES AND AGREES THAT THIS SUBSECTION (L)
IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT.
24
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
Attest: BF ACQUISITION GROUP II, INC.
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------- ---------------------------------
Xxxxxxx X. Xxxxxxx, Secretary Xxxxxxx X. Xxxxxxx, President
Attest: THEATER XTREME, INC.
/s/ Xxxxxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxx
------------------------------------- ---------------------------------
Xxxxxx Xxxxxxxxxx, Secretary Xxxxx Xxxxx, President
Witness: /s/ Xxx Xxxxxx /s/ Xxxxxxx X. Xxxxxxx (SEAL)
-------- -------------- ---------------------------------
Xxxxxxx X. Xxxxxxx
Witness: /s/ Xxxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxx (SEAL)
--------------------- ---------------------------------
Xxxxx X. Xxxx
Witness: /s/ Xxxxxxx Xxxxxx /s/ Xxxxx Xxxxx (SEAL)
------------------ ---------------------------------
Xxxxx Xxxxx
AGREEMENT AND PLAN OF MERGER
List of Schedules
-----------------
Schedule 5 - List of Officers and Directors of the Surviving Corporation
Schedule 7.B - List of Officers, Directors, Bank Accounts and Safe Deposit Boxes
of BF
Schedule 7.D - BF Financial Statements
Schedule 7.H - BF List of Corporation Agreements
Schedule 7.O - Actions since October 31, 2004
Schedule 7.Q - BF List of Stockholders and Shareholdings
Schedule 7.W - BF Brokers' Fees
Schedule 8.A - List of Options, Warrants, Convertible Securities, Etc. of
Theater
Schedule 8.B - List of Officers, Directors, Bank Accounts and Safe Deposit
Boxes of Theater
Schedule 8.C - Theater Subsidiaries
Schedule 8.D - Theater Financial Statements
Schedule 8.E - Theater Real Estate
Schedule 8.H - Theater List of Corporation Agreements
Schedule 8.O - Actions since September 30, 2004
Schedule 8.P - Theater List of Stockholders and Shareholdings
Schedule 8.U - Theater Brokers' Fees
