EXHIBIT 2.1
CONFIDENTIAL
STOCK EXCHANGE AGREEMENT
Between
MEDICAL INDUSTRIES OF AMERICA, INC.
And
CYBERCARE, INC.
STOCK EXCHANGE AGREEMENT
This STOCK EXCHANGE AGREEMENT, dated as of the 6th day of July, 1999, is
by and between Medical Industries of America, Inc., a Florida Corporation
("MIOA"), and CyberCare, Inc., a Georgia corporation ("CCI")
In consideration of the mutual covenants and agreements contained in this
Agreement, and intending to be legally bound hereby, MIOA and CCI hereby agree
as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement:
"ACQUISITION" shall mean the acquisition of the CCI Stock by MIOA upon the
terms and subject to the conditions set forth in this Agreement.
"ACQUISITION PROPOSAL" shall have the meaning ascribed to it in Section
7.2 hereof.
"ACQUISITION SHARES" shall have the meaning ascribed to it in Section
3.1(a) hereof.
"ADVERSE CONSEQUENCES" shall have the meaning ascribed to it in Section
5.13 hereof.
"AFFILIATE" shall have the meaning ascribed to it in Section 7.6 hereof.
"AFFILIATED GROUP" shall have the meaning ascribed to it in Section 5.13
hereof.
"AGREEMENT" means this Stock Exchange Agreement, and all Schedules and
Exhibits hereto.
"ASSETS" means all of the assets of MIOA and its Subsidiaries, or CCI and
its Subsidiaries, as the case may be, of every kind and nature. Any
representations and warranties made by a party hereto with respect to the Assets
shall pertain only to those Assets which are owned, leased or otherwise
controlled by such party.
"AUTOMATIC TERMINATION DATE" shall have the meaning ascribed to it in
Section 10.1(e) hereof.
"BOARD APPROVAL" shall mean MIOA Board Approval or CCI Board Approval, as
applicable.
"BUSINESS DAY" shall mean any weekday, excluding any legal holiday
observed pursuant to the United States federal law or the laws of the State of
Florida.
"BUSINESS PLAN" shall have the meaning ascribed to it in Section 6.3
hereof.
"CCI" shall mean CyberCare, Inc., a Georgia corporation.
"CCI ACQUISITION STOCKHOLDERS" shall have the meaning ascribed to it in
Section 7.7(a) hereof.
"CCI BOARD APPROVAL" shall mean that the Board of Directors of CCI, at a
meeting duly called and held, has in the exercise of its sole discretion (i)
determined that the Acquisition is advisable and in the best interest of CCI and
its stockholders and approved it, (ii) duly approved, authorized and ratified
the execution and delivery of this Agreement and the consummation of the
Transactions, (iii) recommended the approval of this Agreement, the Acquisition,
and each of the Closing Documents to which it is or will be a party, by the
holders of CCI Capital Stock (and any other class of stock of CCI entitled to
vote on the Acquisition) and directed that this Agreement, the Acquisition and
each of the Closing Documents to which it is or will be a party, be submitted
for consideration by the holders of CCI Capital Stock at a meeting to be held
for that purpose, and (iv) adopted a resolution to elect not to be subject, to
the extent permitted by applicable law, to any state takeover law that may
purport to be applicable to this Agreement, the Acquisition, and the other
Transactions.
"CCI BREACH SETTLEMENT" shall have the meaning ascribed to it in Section
7.7(a) hereof.
"CCI CAPITAL STOCK" shall mean the CCI Common Stock.
"CCI COMMON STOCK" shall mean the voting common stock, no par value, of
CCI.
"CCI DISSENTING SHARES" shall have the meaning ascribed to it in Section
3.5(b) hereof.
"CCI EMPLOYEES" shall have the meaning ascribed to it in Section 6.19(a)
hereof.
"CCI EMPLOYEE BENEFIT PLAN" shall have the meaning ascribed to it in
Section 6.19(a) hereof.
"CCI EQUITY INTERESTS" shall mean all capital stock of CCI and securities
convertible into capital stock of CCI.
"CCI ERISA AFFILIATE" shall have the meaning ascribed to it in Section
6.19(a) hereof.
"CCI FINAL REVISED SCHEDULES" shall have the meaning ascribed to it in
Section 9.9 hereof.
"CCI INTELLECTUAL PROPERTY" shall have the meaning ascribed to it in
Section 6.10 hereof.
"CCI RECEIVABLES" shall have the meaning ascribed to it in Section 6.22
hereof.
"CCI STOCK OPTION PLANS" shall have the meaning ascribed to it in Section
3.3 hereof.
"CCI STOCKHOLDER APPROVAL" means with respect to CCI, the requisite
approval by the holders of CCI Capital Stock of this Agreement and the
Acquisition.
"CERTIFICATE(S)" shall have the meaning ascribed to it in section 3.4
hereof.
"CLOSING" and "CLOSING DATE" shall have the meanings ascribed to such
terms in Section 3.6 hereof.
"CLOSING DOCUMENTS" means this Agreement and all other documents to be
executed and delivered either simultaneously herewith or at Closing in
connection with the Transactions.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIALITY AGREEMENT" means that certain Nondisclosure and
Confidentiality Agreement, dated January 4, 1999, between CCI and MIOA.
"DOL" shall mean the United States Department of Labor.
"EFFECTIVE TIME" shall have the meaning ascribed to it in Section 2.2
hereof.
"EMPLOYMENT AGREEMENTS" shall have the meaning ascribed to it in Section
4.1 hereof.
"ENVIRONMENTAL LAWS" shall have the meaning ascribed to it in Section
5.6(b) hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" shall mean the Securities and Exchange Act of 1934, as
amended, and all regulations promulgated pursuant thereto.
"EXCHANGE AGENT" shall have the meaning set forth in Section 3.4(b)
hereof.
"EXCHANGE RATIO" shall have the meaning ascribed to it in Section 3.1(a)
hereof.
"FAIR MARKET VALUE" shall mean $1.50.
"FAIRNESS OPINION" shall mean an opinion (or opinions) from one or more
nationally recognized investment banking firm(s) addressed to CCI and/or to MIOA
(if a party determines that such opinion is needed) to the effect that, based
upon and subject to the assumptions, limitations and qualifications set forth
therein, the Exchange Ratio (which for purposes of the Fairness Option only is
separately defined therein) is fair to the stockholders of CCI and/or to the
stockholders of MIOA (if a party received such an opinion) from a financial
point of view.
"FINANCIAL STATEMENTS" shall have the meaning ascribed to it in Section
6.8(a) hereof.
"FLORIDA ACT" shall mean the Florida Business Corporation Act.
"FLORIDA DISSENTER'S STATUTES" mean Section 607.1301 ET SEQ. of the
Florida Act.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"GEORGIA CODE" shall mean the Georgia Business Corporation Code.
"GEORGIA DISSENTER'S STATUTES" mean Article 13 ET SEQ. of the Georgia
Code.
"GOVERNMENTAL AUTHORITY" shall include any and all governmental or
quasi-governmental bodies, agencies, bureaus, departments, boards, commissions,
instrumentalities or other entities having or asserting jurisdiction over CCI,
MIOA, or any Subsidiary of either, as applicable.
"HAZARDOUS SUBSTANCE" shall have the meaning ascribed to it in Section
5.6(b) hereof.
"HISTORICAL FINANCIALS" shall have the meaning ascribed to it in Section
5.8(a) hereof.
"INTERIM FINANCIALS" shall have the meaning ascribed to it in Section
6.8(a) hereof.
"IRS" shall mean the Internal Revenue Service.
"LIABILITY" shall have the meaning ascribed to it in Section 5.13 hereof.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon, or in, or
circumstances likely to result in, a material adverse change in (i) the
business, assets, liabilities, prospects, operations, results of operations,
properties (including intangible properties), regulatory status or condition
(financial or otherwise) of MIOA or CCI, as the case may be, or any of such
parties' respective Subsidiaries taken as a whole, (ii) the legality, validity,
binding effect or enforceability of this Agreement, or (iii) the ability of MIOA
or CCI, as the case may be, or any of such parties' respective Subsidiaries to
perform their obligations under this Agreement.
"MIOA" shall mean Medical Industries of America, Inc., a Florida
corporation.
"MIOA BOARD APPROVAL" shall mean that the Board of Directors of MIOA, at a
meeting duly called and held, has (i) determined that the Acquisition is
advisable and in the best interest of MIOA and its stockholders and approved it,
(ii) duly approved, authorized and ratified the execution and delivery of this
Agreement and the consummation of the Transactions, (iii) recommended the
approval of this Agreement, the Acquisition, each of the Closing Documents to
which it is or will be a party by the holders of MIOA Capital Stock (and any
other class of stock of MIOA entitled to vote on the Acquisition) and directed
that this Agreement, the Acquisition, each of the Closing Documents to which it
is or will be a party be submitted for consideration by the holders of MIOA
Capital Stock, at a meeting to be held for that purpose, and (iv) adopted a
resolution to elect not to be subject, to the extent permitted by applicable
law, to any state takeover law that may purport to be applicable to this
Agreement, the Acquisition, and other Transactions.
"MIOA BREACH SETTLEMENT" shall have the meaning ascribed to it in Section
7.7(b) hereof.
"MIOA CAPITAL STOCK" shall mean, collectively, the MIOA Common Stock and
the MIOA Preferred Stock.
"MIOA COMMON STOCK" shall mean the common stock, $.0025 par value, of
MIOA.
"MIOA EMPLOYEES" shall have the meaning ascribed to it in Section 5.19(a)
hereof.
"MIOA EMPLOYEE BENEFIT PLAN" shall have the meaning ascribed to it in
Section 5.19(a) hereof.
"MIOA EQUITY INTERESTS" shall mean all capital stock of MIOA and
securities convertible into capital stock of MIOA.
"MIOA ERISA AFFILIATE" shall have the meaning ascribed to it in Section
5.19(a) hereof.
"MIOA FINAL REVISED SCHEDULES" shall have the meaning ascribed to it in
Section 8.9 hereof.
"MIOA GROUP" shall have the meaning ascribed to it in Section 5.13(b)
hereof.
"MIOA INTELLECTUAL PROPERTY" shall have the meaning ascribed to it in
Section 5.10 hereof.
"MIOA PREFERRED STOCK" shall mean the Series B Preferred Stock, no par
value, of MIOA.
"MIOA RECEIVABLES" shall have the meaning ascribed to it in Section 5.22
hereof.
"MIOA SHAREHOLDER APPROVAL" means with respect to MIOA the requisite
approval by the holders of MIOA Capital Stock of this Agreement and the
Acquisition.
"MONTHLY FINANCIALS" shall have the meaning ascribed to it in Section 4.9
hereof.
"MOST RECENT FISCAL QUARTER END" shall have the meaning ascribed to it in
Section 5.8 hereof.
"NONDISCLOSURES/NONCOMPETE AGREEMENTS" shall have the meaning ascribed to
it in Section 4.1 hereof.
"OPTION/WARRANT SHARES" shall have the meaning ascribed to it in Section
3.3(b) hereof.
"OUT-OF-POCKET COSTS" shall mean, with respect to MIOA or CCI, as the case
may be, all fees, expenses, and other costs which are directly related to the
Transactions which such party has incurred through the date of termination of
this Agreement.
"PERMITTED EQUITY FINANCING" shall have the meaning ascribed to it in
Section 3.1(c) hereof.
"PERSON" means an individual, corporation, limited liability company,
limited liability partnership, limited partnership, trust, joint venture,
association or unincorporated organization or a Governmental Authority.
"PROSPECTUS" means the final prospectus relating to the registration of
the Acquisition Shares under the Securities Act.
"PUBLIC REPORTS" shall have the meaning set forth in Section 5.6(c)
hereof.
"REGISTRATION RIGHTS AGREEMENT" shall have the meaning ascribed to it in
Section 3.1(d) hereof.
"SCHEDULE DELIVERY DATE" shall mean the date upon which each of MIOA and
CCI has delivered each and all of their respective Schedules and Exhibits to
each other, and, in the exercise of their respective sole discretion, each has
acknowledged in writing their satisfaction with the results of their respective
due diligence investigations of the other party hereto and their mutual consent
as to the contents of the Schedules and Exhibits to be attached hereto and the
incorporation of such Schedules and Exhibits into this Agreement, which date in
no event shall be later than June 30, 1999, unless otherwise agreed to in
writing by CCI and MIOA.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
all regulations promulgated thereunder.
"SECURITIES FILINGS" shall mean the most recent Form 10-KSB filed by MIOA
with the SEC, as well as any and all filings made by MIOA thereafter pursuant to
the Exchange Act.
"SECURITY INTEREST" shall have the meaning ascribed to it in Section 5.13
hereof.
"SETTLEMENT CUT-OFF" shall have the meaning ascribed to it in Section 7.7
hereof.
"SPECIAL MEETING" shall have the meaning ascribed to it in Section 7.1
hereof.
"SUBSIDIARY" shall mean one of the business entitles identified as such on
SCHEDULE 5.1 hereto, as to MIOA, and on SCHEDULE 6.1, as to CCI.
"TAX" shall have the meaning ascribed to it in Section 5.13 hereof.
"TAX RETURN" shall have the meaning ascribed to it in Section 5.13 hereof.
"TRANSACTIONS" means the transactions contemplated by this Agreement,
including but not limited to the Acquisition.
ARTICLE 2
THE ACQUISITION
2.1 THE ACQUISITION. At the Effective Time and subject to and upon the
terms and conditions of this Agreement, the Georgia Code and the Florida Act,
MIOA shall acquire from the CCI Stockholders all the issued and outstanding CCI
Capital Stock. At such time, CCI will become a wholly-owned subsidiary of MIOA.
2.2 EFFECTIVE TIME. As promptly as practicable after the satisfaction or
waiver of the conditions set forth in Articles 8 and 9, the parties hereto shall
cause the Acquisition to be consummated (the "Effective Time"). At the Effective
Time, MIOA will irrevocably instruct its
stock transfer agent to issue and deliver in the manner provided in Articles 2
and 3 hereof the certificates evidencing the Acquisition Shares to be issued in
the Acquisition.
2.3 ARTICLES OF INCORPORATION; BY-LAWS; DIRECTORS AND OFFICERS.
(a) At the Effective Time and as part of the Acquisition, the
Articles of Incorporation of MIOA shall be in the form attached hereto as
EXHIBIT 2.3(A), until thereafter amended as provided by law, the By-Laws of MIOA
and such Articles of Incorporation.
(b) At the Effective Time and as part of the Acquisition, the
By-Laws of MIOA shall be in the form attached hereto as EXHIBIT 2.3(B), until
thereafter amended as provided by law, the Articles of Incorporation and such
By-Laws.
(c) After the Effective Time, the Board of Directors of CCI will
consist of those individuals specified on EXHIBIT 2.3(C).
2.4 STOCKHOLDER APPROVAL. This Agreement is subject to, and it is a
condition to the consummation of the Acquisition, that CCI Stockholder and MIOA
Stockholder Approval be obtained.
2.5 TAX CONSEQUENCES. It is intended that this Transaction shall
constitute a reorganization within the meaning of Section 368 of the Code, and
that this Agreement shall constitute a "plan of reorganization" for purposes of
Section 368 of the Code.
ARTICLE 3
ACQUISITION CONSIDERATION
3.1 EXCHANGE OF CAPITAL STOCK. The manner and basis of exchanging shares
of CCI Capital Stock shall be as follows:
(a) Except as provided in Section 3.2, each share of CCI Capital
Stock which shall be outstanding immediately prior to the Effective Time shall
at the Effective Time, by virtue of the Acquisition, and without any action on
the part of the holder hereof, be exchanged into only the right to receive the
same number and type of shares of MIOA Common Stock computed as set forth on
EXHIBIT 3.1(A) (the "EXCHANGE RATIO"). The shares to be issued by MIOA with
respect to the CCI Capital Stock are collectively hereinafter referred to as
"ACQUISITION SHARES". The Exchange Ratio shall be subject to appropriate and
proportional adjustment in the event of any stock split, stock dividend or other
recapitalization of CCI Capital Stock or MIOA Capital Stock after the date
hereof but prior to Closing. After the Effective Time, CCI Capital Stock shall
be recognized or deemed to be issued only to MIOA and MIOA shall have all rights
in respect thereof and the CCI holders shall not have any rights other than as
set forth in Article 3.5.
(b) Each share of MIOA Capital Stock which shall be outstanding
immediately prior to the Effective Time shall at the Effective Time remain
outstanding. In no event shall the outstanding CCI Capital Stock outstanding, on
a fully diluted basis, at the Effective Time exceed 8,184,993 shares of CCI
Common Stock. Set forth in EXHIBIT 3.1(B) is a listing of each of the CCI
Stockholders with the number of shares CCI Capital Stock owned by each
Stockholder.
(c) The parties hereto acknowledge that the other party may, prior
to the Closing and with the consent of the other party hereto, issue additional
shares of its capital stock (and/or securities convertible into shares of its
capital stock) in connection with (i) those offerings specifically identified on
EXHIBIT 3.1(C) so long as the conditions with respect to each such offering
contained in such Exhibit are satisfied, including but not limited to the
condition that any such offering is closed no later than the date which is ten
days prior to the earlier of the Special Meetings, or (ii) any offering of such
issuer's securities issued as consideration for the acquisition of assets or
equity interests of another entity if the securities issued in such offering
have an aggregate fair market value of less than $0.00 (each, a "Permitted
Equity Financing"), provided, that in either case, such offering must be made in
compliance with all applicable securities laws and structured so that it will
not be integrated with the offering of Acquisition Shares and/or Option/Warrant
Shares as contemplated herein, and if any such offering (or offerings taken as a
whole) would be deemed material so as to require amendment of the registration
statement described in subsection (d) below, such offering(s) shall be closed no
later than the day immediately prior to the filing of such registration
statement. In the event that either MIOA or CCI desires to issue additional
shares of its capital stock (and/or securities convertible into shares of its
capital stock) in an offering that does not constitute a Permitted Equity
Financing, then MIOA and CCI shall attempt in good faith to agree upon the terms
and conditions of the proposed offering and how the resulting percentage
ownership of MIOA will be allocated on a fully diluted basis (using the treasury
stock method) among the holders of CCI Equity Interest or the holders of MIOA
Equity, as the case may be, issued in connection with such offering.
(d) MIOA shall use its reasonable best efforts to effect a
registration with the Securities and Exchange Commission on Form S-3, or other
appropriate form (the "REGISTRATION STATEMENT"), of the Acquisition Shares to be
issued to the CCI stockholders in connection with the Acquisition in accordance
with the Registration Rights Agreement in the form attached hereto as EXHIBIT
3.1(D).
3.2 FRACTIONAL SHARES. No scrip or fractional shares of the capital stock
of MIOA shall be issued in the Acquisition, nor will any outstanding fractional
share interest entitle the owner thereof to vote, to receive dividends or to
exercise any other right as a stockholder of MIOA. All fractional shares of the
common stock to which a holder of multiple certificates of CCI Common Stock
immediately prior to the Effective Time would otherwise be entitled at the
Effective Time shall be aggregated. If a fractional share results from such
aggregation, the number of shares of the Acquisition Shares to which such
stockholder shall be entitled, after the Effective Time shall be rounded to the
nearest whole number of Acquisition Shares.
3.3 STOCK OPTIONS AND WARRANTS.
(a) All options for CCI Common Stock outstanding at the Effective
Time under CCI's option plans or otherwise as described in EXHIBIT 3.3(D) (the
"CCI STOCK OPTION PLANS") shall be exchanged at the Effective Time into options
for the common stock of MIOA. All warrants for CCI Common Stock outstanding at
the Effective Time as described in EXHIBIT 3.3(D) shall be exchanged for
warrants for common stock of MIOA. At the Effective Time, such options and
warrants shall, by virtue of the Acquisition and without any further action on
the part of CCI or the holder of any such option or warrant, be assumed by MIOA
and be substituted for options and warrants of MIOA on the same terms and
conditions as in effect at the Effective
Time (and the terms and conditions of MIOA Stock Option Plans as applicable to
the options, if any), except that:
(i) each such option or warrant for CCI Common Stock shall be
exercisable:
(A) for that number of shares of the common stock (to
the nearest whole share) of MIOA equal to (x) the number of shares of CCI Common
Stock subject to such option or warrant immediately prior to the Effective Time
multiplied by (y) the applicable Exchange Ratio as described in EXHIBIT 3.1(A)
(provided that in the event of an increase or reduction in Acquisition Shares as
provided in Section 7.7, such Exchange Ratio as applied to such options and
warrants will be adjusted as described in EXHIBIT 3.1(A)); and
(B) at an exercise price per share of common stock of
MIOA (rounded to the nearest whole cent) equal to (x) the exercise price per
share of CCI Common Stock subject to such option or warrant in effect
immediately prior to the Effective Time divided by (y) the applicable Exchange
Ratio (subject to adjustment as provided in Section 7.7 as described above).
(ii) all actions to be taken under the CCI Stock Option Plans
by the Board of Directors of CCI or a committee thereof shall be taken by the
Board of Directors of MIOA or a committee thereof.
From and after the date of this Agreement, no additional options or warrants
shall be granted by CCI under the CCI Stock Option Plans or otherwise. All
incentive stock options, if any (as defined in Section 422 of the Code) shall be
converted in a manner consistent with the regulations promulgated under Section
422 of the Code.
(b) The assumed options and warrants of CCI, as set forth in this
Agreement, shall not give to any holder thereof any benefits in addition to
those which such holder had prior to the assumption of the option or warrant.
MIOA shall take all corporate action necessary to reserve for issuance a
sufficient number of shares of its common stock for delivery upon exercise of
such options and warrants after the Effective Time. MIOA shall with respect to
the shares of MIOA subject to such options and warrants (the "Option/Warrant
Shares") include such Option/Warrant Shares in the Registration Statement and
shall use its reasonable best efforts to maintain the effectiveness of such
Registration Statement for so long as MIOA shall be obligated to file reports
under the Exchange Act. In addition, MIOA will cause the Acquisition Shares and
the Option/Warrant Shares to be listed on the Nasdaq Market.
(c) Approval by the Board of Directors and Stockholders of MIOA and
the Board of Directors and Stockholders of CCI of this Agreement shall
constitute, without limitation, authorization and approval of any and all of the
actions described in Section 3.3(a) and (b).
(d) If any holders of such options or warrants exercise such options
or warrants and acquire shares of CCI Capital Stock prior to the Closing, and
pay in full the aggregate exercise price for such shares, then MIOA shall issue
and deliver to such stockholders Acquisition Shares in exchange for such shares
of CCI Capital Stock in accordance with this Article 3.
(e) All options for MIOA Capital Stock outstanding at the Effective
Time under MIOA's Stock Option Plans or otherwise shall remain outstanding
following the Effective Time and no change to their terms shall be made in
connection with the Acquisition. All warrants for MIOA Capital Stock outstanding
at the Effective Time shall remain outstanding following the Effective Time and
no change to their terms shall be made in connection with the Acquisition.
3.4 DELIVERY OF ACQUISITION NOTE AND SHARES.
(a) Except as set forth in this Agreement, from and after the
Effective Time, each holder of a certificate or certificates that immediately
prior to the Effective Time represented outstanding shares of CCI Capital Stock
("Certificate(s)") shall be entitled to receive in exchange therefore, upon
surrender thereof to the Exchange Agent, the appropriate number and type of
Acquisition Shares (as described in EXHIBIT 3.1(A)) for each share of CCI
Capital Stock so represented by the Certificates(s) surrendered by such holder.
(b) At or simultaneous with the Closing, (1) MIOA will furnish to
MIOA's stock transfer agent (the "Exchange Agent") irrevocable instructions to
issue certificates to holders of CCI Capital Stock which represent that number
and type of Acquisition Shares to which each such holder of CCI Capital Stock is
entitled hereunder, and (2) MIOA will cause the Exchange Agent to mail a letter
of transmittal (with instructions for its use) to each record holder of
outstanding CCI Capital Stock for the holder to use in surrendering the
Certificate(s) that represented such holder's CCI Capital Stock in exchange for
a stock certificate representing the number and type of Acquisition Shares to
which the holder is entitled. Such letter of transmittal shall specify that
delivery shall be effected, and risk of loss and title to the Certificate(s)
shall pass, only upon proper delivery of the Certificate(s) for exchange
therefor. Upon surrender to the Exchange Agent of Certificate(s), together with
such letter of transmittal duly executed and completed in accordance with the
instructions thereon, and such other documents as may be reasonably requested by
the Exchange Agent, the Exchange Agent shall, pursuant to this Agreement,
promptly deliver the appropriate number and type of Acquisition Shares to the
person entitled to such Acquisition Shares for each share of CCI Capital Stock
so represented by the Certificate(s) surrendered by such holder thereof, and
such Certificate(s) shall forthwith be cancelled.
(c) If delivery of all or part of the Acquisition Shares is to be
made to a person other than the person in whose name a surrendered Certificate
is registered, it shall be a condition of such delivery or exchange that the
Certificate so surrendered shall be properly endorsed or shall be otherwise in
proper form for transfer and that the person requesting such delivery or
exchange shall have paid any transfer and other taxes required by reason of such
delivery or exchange in a name other than that of the registered holder of the
Certificate surrendered or shall have established to the reasonable satisfaction
of CCI that such tax either has been paid or is not payable.
(d) Until surrendered and exchanged in accordance with this Section
3.4 each such Certificate shall, after the Effective Time, represent solely the
right to receive the Acquisition Shares, in an amount and of the type determined
in accordance with Section 3.1 hereof, and shall have no ownership or other
rights. No interest shall accrue or be payable on any Acquisition Shares.
Neither MIOA or CCI shall be liable to any holder of CCI Capital Stock
for any Acquisition Shares (or dividends or distributions with respect thereto)
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(e) From and after the Effective Time, no holder of Certificate(s)
shall be entitled to receive any interest, dividend or other distribution from
MIOA until proper surrender by such holder of such Certificate(s) for stock
certificate(s) representing Acquisition Shares. Upon such surrender, the holder
shall be paid the amount of any dividends or other distributions (without
interest) that theretofore became payable by MIOA after the Effective Time but
prior to such surrender, but were not paid by reason of the foregoing with
respect to the number and type of Acquisition Shares represented by the
certificate(s) issued upon such surrender. From and after the Effective Time,
MIOA shall, however, be entitled to treat such Certificate(s) that have not yet
been surrendered or exchanged as evidencing the ownership of the type and
aggregate number of Acquisition Shares into which the shares of CCI Capital
Stock represented by such Certificate(s) would have been exchanged,
notwithstanding any failure to surrender such Certificate(s).
(f) MIOA shall be responsible for the payment of all charges and
expenses of the Exchange Agent.
(g) If any Certificate shall have been lost, stolen or destroyed,
upon the receipt by MIOA of an indemnity agreement and the making of an
affidavit by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by MIOA, the posting by such person of a bond in such
reasonable amount as MIOA may direct as indemnity against any claim that may be
made against it with respect to such Certificate, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed Certificate the number and type
of Acquisition Shares and any cash in lieu of fractional shares, and unpaid
dividends and distributions on the number and type of Acquisition Shares
deliverable in respect thereof pursuant to this Agreement.
3.5 DISSENTING SHARES. (a) Notwithstanding Section 3.1, no outstanding
shares of CCI Common Stock shall be converted into or represent a right to
receive any Acquisition Shares pursuant to Section 3.1 hereof if the holder
thereof has demanded and perfected his demand for payment of the fair value of
his CCI Capital Stock in accordance with the applicable provisions of Article 13
of the Georgia Code (the "GEORGIA DISSENTER'S STATUTES") and has not effectively
withdrawn or lost his right to such payment. All such shares of CCI Capital
Stock shall represent only the rights granted with respect to such shares
pursuant to the Georgia Dissenter's Statutes. CCI shall give notice to MIOA upon
receipt by CCI of any written demands for payment of the fair value of CCI
Common Stock and of withdrawals of such demands and any other written
communications provided in accordance with or pursuant to the Georgia
Dissenter's Statutes (any stockholder duly making such a demand being
hereinafter called a "CCI Dissenting Stockholder"). MIOA shall have the right to
participate in all negotiations and proceedings with respect to any CCI
Dissenting Stockholder. CCI agrees that it will not, except with the prior
consent of MIOA, make any determination of fair value or any payment with
respect to, or settle or offer to settle any matter arising out of, any dissent.
Each CCI Dissenting Stockholder, if any, who becomes entitled to payment for his
shares of CCI Capital Stock pursuant to the Georgia Dissenter's Statutes shall
receive payment therefore from MIOA (but only after the amount thereof shall
have been agreed upon or finally determined pursuant to the Georgia Dissenter's
Statutes and such dissenting shares of CCI Capital Stock shall be canceled and
shall not be entitled to receive any Acquisition Shares. If any holder of the
shares of CCI Capital Stock who demands payment of the fair value of his shares
under the Georgia Dissenter's
Statute shall effectively withdraw or lose (through failure to perfect or
otherwise) his right to such payment at any time, the shares of CCI Capital
Stock of such holder shall be converted into a right to receive the Acquisition
Shares set forth in Section 3.1 hereof.
(b) Notwithstanding the foregoing, if CCI shareholders owning more
than 5 percent of the CCI Capital Stock become CCI Dissenting Stockholder(s)
then, in such event, MIOA shall have the right to rescind and terminate this
Agreement and the Transactions and thereafter all rights, duties and
responsibilities of the parties herein shall be immediately null and void, AB
INITIO.
3.6 CLOSING. The closing of the Transactions (the "CLOSING") shall take
place within five (5) days of the consent of the Transactions by the CCI
Stockholders and MIOA Stockholders but in no event later than August 1, 1999, at
the offices of MIOA in Boynton Beach, Florida, or another mutually agreed upon
location on the Business Day following compliance or waiver of the terms,
conditions and contingencies contained in this Agreement or such other date as
is mutually agreed upon by the parties hereto (such date to be herein referred
to as the "CLOSING DATE"). All computations, adjustments, and transfers for the
purposes hereof shall be effective as of the close of business on the Closing
Date. Each of the parties will take all such reasonable and lawful action as may
be necessary or appropriate in order to effectuate the Acquisition as promptly
as possible subject to the satisfaction of the closing conditions set forth in
Articles 8 and 9.
ARTICLE 4
ADDITIONAL COVENANTS
4.1 SUPPLEMENTAL AGREEMENTS. Concurrently with the Closing, Mr. Xxxx
Xxxxxx shall enter into the employment agreement with MIOA in the form of
EXHIBIT 4.1(A) hereof and each of the individuals listed in EXHIBIT 4.1 shall
enter into employment agreements with CCI in the form of EXHIBIT 4.1(A) hereof
(collectively the "EMPLOYMENT AGREEMENTS"), which shall replace such
individual's existing employment agreement with CCI. Each of such individuals
shall also enter into that certain Restricted Sale Agreement in the form of
EXHIBIT 4.1(B) hereof ((the "RESTRICTED SALE AGREEMENT").
4.2 CONDUCT OF BUSINESS BY CCI PENDING ACQUISITION. CCI covenants and
agrees that, unless MIOA shall otherwise consent in writing or except as
otherwise set forth in this Agreement, between the date of this Agreement and
the Closing, the business of CCI and its Subsidiaries shall be conducted only
in, and CCI shall take any action except in, the ordinary course of business and
in a manner consistent with past practice; and CCI will use its best efforts to
preserve intact its business organization, to keep available the services of its
present officers, employees and consultants and to preserve its present
relationships with customers, suppliers and other persons with which they have
significant business relations. Except as set forth on EXHIBIT 4.2, but without
otherwise limiting the foregoing, CCI covenants that neither it nor any of its
Subsidiaries shall, between the date of this Agreement and the Closing, directly
or indirectly, do any of the following with the prior written consent of MIOA;
(a) (i) issue, sell (other than upon exercise of outstanding options
or warrants, whose terms shall not be changed), pledge, dispose of, encumber,
authorize, or propose the issuance, sale, pledge, disposition, encumbrance or
authorization of any shares of capital stock of
any class, or any options, warrants, convertible securities or other rights of
any kind to acquire any shares of capital stock of, or any other ownership
interest in CCI or any Subsidiary; PROVIDED, HOWEVER, that CCI shall have the
right to carry out any Permitted Equity Financing or other offering of its
securities that such parties have agreed to pursuant to Section 3.1(c) hereof;
(ii) amend or propose to amend the Articles of Incorporation as applicable, or
By-Laws of CCI, except as contemplated by this Agreement; (iii) split, combine
or reclassify any outstanding shares of its Capital Stock, or declare, set aside
or pay any dividend or distribution payable in cash, stock, property or
otherwise with respect to such capital stock; or (iv) authorize or propose or
enter into any contract, agreement, commitment or arrangement with respect to
any of the matters set forth in this Section 4.2(a):
(b) (i) acquire (by merger, consolidation, or acquisition of stock
or assets) directly or indirectly, any Person or any business owned by such
Person; (ii) except in the ordinary course of business and in a manner
consistent with past practices, sell, pledge, dispose of, or encumber or
authorize or propose the sale, pledge, disposition or encumbrance of any assets
of CCI or any Subsidiary; (iii) enter into any material contract or agreement,
except in the ordinary course of business; (iv) authorize any single capital
expenditure or commitment in excess of $50,000, except as otherwise set forth in
EXHIBIT 4.2(B)(IV); (v) authorize any capital expenditure or commitment outside
the ordinary course of business, except as otherwise set forth in EXHIBIT
4.2(B)(IV); or (vi) enter into or amend any contract, agreement, commitment or
arrangement with respect to any of the matters prohibited by Section 4.2(b);
(c) take any action other than in the ordinary course of business
and in a manner consistent with the past practices (none of which actions shall
be unreasonable or unusual) with respect to increasing compensation of any
officer, director, stockholder or employee or with respect to the grant of any
severance or termination pay (otherwise than pursuant to policies in effect on
the date hereof and fully disclosed to the other party prior to the date hereof)
or with respect to any increase of benefits payable under its severance or
termination pay policies in effect on the date hereof;
(d) make any payments except in the ordinary course of business and
in amounts and in a manner consistent with past practice (none of which payments
shall be unreasonable or unusual), under any employee benefit plan or otherwise
to any employee, independent contractor or consultant, enter into any employee
benefit plan, any employment or consulting agreement, grant or establish any new
awards under any such existing employee benefit plan or agreement, or adopt or
otherwise amend any of the foregoing;
(e) take any action in the ordinary course of business and in a
manner consistent with past practice or make any change in existing methods of
management, distribution, marketing, accounting or operating (or practices
relating to payment of trade accounts or to other payments);
(f) except in the ordinary course of business or as set forth on
EXHIBIT 4.2(F), incur or increase prior to Closing any indebtedness for borrowed
money from banks, financial institutions or other Persons or cancel, without
payment in full, any notes, loans or receivables;
(g) directly or indirectly loan or advance monies to any Person
(other than any of its own Subsidiaries) under any circumstances whatsoever
except for credit transactions with customers on terms consistent with past
practices; or
(h) do any act or omit to do any act which might reasonably be
expected to cause a breach of any material contract, commitment or obligation.
4.3 EXPENSES. All of the expenses incurred by CCI in connection with
authorization, preparation, execution and performance of this Agreement and
other agreements referred to in this Agreement, including, without limitation,
all fees and expenses of agents, representatives, brokers, counsel and
accountants for CCI, shall be paid by CCI if the Transaction is not consummated,
and except as otherwise provided herein all of the expenses incurred by MIOA in
connection with the authorization, preparation, execution and performance of
this Agreement and other agreements referred to in this Agreement, including
without limitation, all reasonable fees and expenses of advisors, agents,
representatives, brokers, counsel and accountants, shall be paid by MIOA if the
Transaction is not consummated. After the Closing, such expenses of CCI, unless
otherwise agreed, shall be paid by CCI and such expenses of MIOA will be paid by
MIOA.
4.4 NOTIFICATION OF CERTAIN MATTERS.
(a) MIOA shall give prompt written notice to CCI of the following:
(i) the occurrence or nonoccurrence of any event whose occurrence or
nonoccurrence would be likely to cause either (A) any representation or warranty
of MIOA contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the Schedule Delivery Date to the Closing (assuming
that each representation and warranty was re-affirmed as of each day between the
Schedule Delivery Date and the Closing Date, inclusive), including but not
limited to those resulting from the consummation of any Permitted Equity
Financings, or (B) directly or indirectly, any Material Adverse Effect; or
(ii) any material failure of MIOA, any officer, director, employee
or agent thereof, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder.
(b) CCI shall give prompt written notice to MIOA of the following:
(i) the occurrence or nonoccurrence of any event whose occurrence or
nonoccurrence would be likely to cause either (A) any representation or warranty
of CCI contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the Schedule Delivery Date to the Closing (assuming
that each representation and warranty was re-affirmed as of each day between the
Schedule Delivery Date and the Closing Date, inclusive), including but not
limited those resulting from the consummation of any Permitted Equity
Financings; or (B) directly or indirectly, any Material Adverse Effect;
(ii) any material failure of CCI, any officer, director, employee or
agent thereof, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder.
(c) In the event that either MIOA or CCI is required to deliver a written
notice pursuant to subsection (a) or (b) above, respectively, such party shall,
within three (3) days after delivery of such notice, deliver to the other party
a revised Schedule updating such
representation or warranty. The receiving party shall review the Schedule and
within five (5) days after its receipt, elect to either (i) approve the Schedule
for attachment to this Agreement and treat such Schedule, as if it had been
delivered and attached to this Agreement as of the Schedule Delivery Date, or
(ii) treat such Schedule and the events giving rise to such Schedule as a breach
of such related representation or warranty in accordance with the terms of this
Agreement, including but not limited to Section 7.7, 8.1 and 9.1, as applicable;
PROVIDED, however, that any events which are permitted to occur between the date
hereof and the Closing pursuant to the terms of this Agreement (such as a
Permitted Equity Financing) shall in no event be treated as a breach of a
representation or warranty hereunder.
(d) Notwithstanding the foregoing, the delivery of any notice pursuant to
this Section shall not waive or release MIOA or CCI, as the case may be, from
its representations, warranties, covenants or agreements under this Agreement,
except as they may be modified and approved in accordance with subsection (c)(i)
above.
4.5 PUBLIC ANNOUNCEMENTS.
(a) Except for and to the extent of any public announcement or disclosures
relating to the Transactions previously made by MIOA or CCI, as may be required
by law or as provided in this Section 4.5, MIOA and CCI agree that until the
consummation of the Transactions or the termination of this Agreement, as the
case may be, each party will not, and will direct its directors, officers,
employees, representatives and agents who have knowledge of the Transaction not
to, disclose to any Person who is not a participant in discussions concerning
the Transactions (other than Persons whose consent is required to be obtained
hereunder), any of the terms, conditions or other facts with respect to the
Transactions.
(b) MIOA shall obtain the prior written consent of CCI and CCI shall
obtain the prior written consent of MIOA, before issuing any press release or
otherwise making any public statement prior to receiving such consent, except in
the case where such disclosure is required by law and the party whose consent is
required has unreasonably refused to give such consent or is unable to consent
prior to such disclosure because of exigent circumstances. The disclosing party
shall be responsible for the accuracy and completeness of any such disclosure.
Subject to the foregoing, the parties acknowledge and agree that MIOA and CCI
expect to issue a press releases with respect to the Transactions immediately
after the execution of this Agreement, as well as after the Closing.
(c) This Section 4.5 shall not restrict either MIOA or CCI in any actions
by such parties which are necessary or appropriate to enforce their respective
rights under this Agreement.
4.6 CONFIDENTIALITY. In connection with this Agreement, the parties may
have access to information which is nonpublic, confidential or proprietary in
nature. All of such information, in whole or in part, together with any
analyses, compilations, studies or other documents prepared by any party, which
contain or otherwise reflect any such information is hereinafter referred to as
the "Information". Each party hereby agrees that the Information will be kept
confidential and shall not, without the prior mutual written consent of the
parties, be disclosed, in any manner whatsoever, in whole or in part, and shall
not be used by any party following the termination of this Agreement. Each party
agrees to transmit the Information only to its respective employees and
representatives who need to know the Information and who shall agree
to be bound by the terms and conditions of this Agreement with respect to this
provision. In any event, each party shall be responsible for any breach of this
Agreement by its respective employees or representatives. If the transactions
contemplated hereunder are not consummated, the parties shall return the
Information to the other promptly upon request and no party shall retain any
copies. In the event any party becomes legally compelled to disclose any of the
Information, such party will provide to the other party prompt notice so that
each other party may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or compliance with the
provisions of this Agreement is waived, a party will furnish only that portion
of the Information which is legally required, and to the extent requested by the
other party, will exercise its best efforts to obtain a protective order or
other reliable assurance that confidential treatment will be accorded the
Information. The term "Information" does not include information which (i) was
known to any party about another party prior to its disclosure, provided that
such information was lawfully obtained or developed, (ii) becomes generally
available to the public other than as a result of a disclosure by a party in
violation of this Agreement, or (iii) becomes available from a source other than
a party to this Agreement, if the source is not bound by a confidentiality
agreement and such source lawfully obtained such information.
4.7 ACCESS AND INSPECTION. Subject to currently existing contractual and
legal restrictions applicable to MIOA or to CCI or any of their Subsidiaries,
each of MIOA and CCI shall, and shall cause each of its Subsidiaries to, afford
to the accountants, counsel, financial advisors and other representatives of the
other party hereto reasonable access to, and permit them to make such
inspections as they may reasonably require of, during normal business hours
during the period from the date of this Agreement through the Effective Time,
all their respective properties, books, contracts, commitments and records
(including, without limitation, the work papers of independent accountants, if
available and subject to the consent of such independent accountants) and,
during such period, MIOA and CCI shall, and shall cause each of its Subsidiaries
to, furnish promptly to the other (i) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of federal or state securities laws and (ii) all
other information concerning its business, properties and personnel as the other
may reasonably request. No investigation pursuant to this Section 4.7 shall
affect any representation or warranty in this Agreement of any party hereto or
any condition to the obligations of the parties hereto. All information obtained
by MIOA or CCI pursuant to this Section 4.7 shall be kept confidential in
accordance with Section 4.6 above.
4. 8 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. Subject to compliance
with applicable law, CCI and MIOA will (a) cooperate with one another (i) in
promptly determining whether any filings are required to be made or consents,
approvals, permits or authorizations are required to be obtained under any
federal, state or foreign law or regulation and (ii) in promptly making any such
filings, furnishing information required in connection therewith and seeking
timely to obtain any such consents, approvals, permits or authorization and (b)
provide one another with copies of all filings made by such party with any
governmental authority in connection with this Agreement.
4.9 MONTHLY FINANCIAL STATEMENTS. From and after the date hereof until the
Closing, each of CCI and MIOA shall provide to the other party its monthly
internal unaudited financial statements (the "Monthly Financials") as soon as
reasonably practicable after their
preparation, but in no event later than the 25th day of each month for the
immediately preceding month.
4.10 TERMINATION OF SHAREHOLDERS AGREEMENT. CCI shall take all necessary
action to terminate the Shareholders' Agreement dated ____________, by and among
CCI and certain shareholders of CCI.
4.11 PURCHASER REPRESENTATIVE QUESTIONNAIRE. CCI shall take all necessary
action to obtain fully executed purchaser representative questionnaires in
substantially the same form as attached hereto as EXHIBIT 4.11 (the "Purchaser
Representative Questionnaires") from qualified purchaser representatives as
defined in Regulation D, Section 230.501(h) with respect to each CCI Stockholder
who is deemed to be a non-accredited and non-sophisticated investor as defined
in Regulation D.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MIOA
In order to induce CCI to enter into this Agreement and consummate the
Transactions, MIOA hereby represents and warrants the following to CCI as of the
Schedule Delivery Date (and not the date hereof), each of which representations
and warranties shall be material to and relied upon by CCI and shall be deemed
remade on and as of the date of the Closing:
5.1. ORGANIZATION AND AUTHORITY. MIOA is a corporation duly organized and
validly existing under the laws of the State of Florida and each of its
Subsidiaries is incorporated in the states identified on SCHEDULE 5.1. The
states in which MIOA and each Subsidiary are qualified to do business are set
forth on SCHEDULE 5.1. Neither MIOA nor any of its Subsidiaries is required to
be qualified as a foreign corporation in any other jurisdiction where its
failure to qualify would have a Material Adverse Effect. MIOA and its
Subsidiaries have all necessary corporate power and authority to own, lease and
operate their properties and conduct their business as it is currently being
conducted. Except for MIOA's ownership of its Subsidiaries, which is fully
described on SCHEDULE 5.1, and as otherwise set forth on SCHEDULE 5.1, neither
MIOA nor any of its Subsidiaries owns, directly or indirectly, any equity
interest in any corporation, partnership, joint venture, or other entity. The
list of MIOA's Subsidiaries contained in SCHEDULE 5.1 is a true, correct and
complete list of all entities in which MIOA has a direct or indirect equity
interest. SCHEDULE 5.1 identifies each owner of an equity interest, or right to
acquire any such interest, in each Subsidiary of MIOA.
5.2. CORPORATE POWER AND AUTHORITY; DUE AUTHORIZATION. The Board of
Directors of MIOA has, on or prior to the date of this Agreement at a meeting
duly called and held and not subsequently rescinded or modified in any way, (i)
unanimously adopted this Agreement in accordance with the Florida Act, and (ii)
taken all actions necessary to consummate the Agreement and the transactions
contemplated hereby.
Subject to MIOA Stockholder Approval, MIOA has all requisite corporate
power and authority to enter into this Agreement and, subject to the
Transactions contemplated hereby and the issuance of the Acquisition Shares in
connection with the Acquisition, to consummate the Transactions contemplated
hereby. The execution and delivery of this Agreement by MIOA and the
consummation by MIOA of the Transactions contemplated hereby have been duly
authorized
by all necessary corporate action on the part of MIOA, subject to obtaining MIOA
Stockholder Approval and the filing of appropriate Acquisition documents, if
any, as required by the Florida Act. This Agreement has been duly executed and
delivered by MIOA and assuming MIOA Stockholder Approval, this Agreement
constitutes the valid and binding obligation of MIOA enforceable against it in
accordance with its terms except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency of other similar laws relating to the
enforcement of creditors' rights generally and the application of general rules
of equity. The Acquisition, the Acquisition Shares and the filing of the
Registration Statement with the SEC by MIOA under the Securities Act for the
purpose of registering the Acquisition Shares have been duly authorized by
MIOA's Board of Directors. The duly elected officers and directors of MIOA and
its Subsidiaries are set forth on SCHEDULE 5.2. Copies of the Articles of
Incorporation, the Bylaws and all minutes of MIOA and its Subsidiaries are
contained in the minute books of MIOA, or such Subsidiaries, respectively. True,
correct and complete copies of the minute books of MIOA and its Subsidiaries
have been made available to CCI.
5.3. SUFFICIENCY OF ASSETS. All material assets and rights relating to
MIOA's business and that of its Subsidiaries are held solely by, and all
agreements, obligations, expenses and transactions relating to the business of
MIOA and its Subsidiaries have been entered into, incurred and conducted solely
by, MIOA and its Subsidiaries. Except as described in SCHEDULE 5.3, the Assets
are all of the items necessary to provide all services required in connection
with the business of MIOA and its Subsidiaries, assuming competent personnel,
general office facilities, and adequate facilities are available.
5.4. NO CONFLICT; REQUIRED CONSENTS. Exclusive of MIOA Board Approval
which has been obtained and MIOA Stockholder Approval, SCHEDULE 5.4 lists all
material third-party consents or approvals required with respect to MIOA and its
Subsidiaries for consummation of the Transactions, which consents MIOA agrees to
use its best reasonable efforts to obtain. Assuming all such consents and
approvals have been obtained and assuming the appropriate filings and mailings
are made by CCI and MIOA to effectuate the Acquisition under the Florida Act,
the Georgia Code and under the Securities Act and the Exchange Act, the
execution and delivery by MIOA of this Agreement and the Closing Documents and
the consummation by MIOA of the Transactions do not and will not, except as set
forth on SCHEDULE 5.4, (a) require the consent, approval or action of, or any
filing or notice to, any corporation, firm, Person or other entity or any
public, governmental or judicial authority (except for such consents, approvals,
actions, filing or notices the failure of which to make or obtain will not in
the aggregate have a Material Adverse Effect); (b) violate in any material
respect the terms of any material instrument, document or agreement to which
MIOA or any of its Subsidiaries is a party, or by which MIOA or any of its
Subsidiaries or the property of MIOA or any of its Subsidiaries is bound, or be
in conflict in any material respect with, result in a material breach of or
constitute (upon the giving of notice or lapse of time or both) a material
default under any such instrument, document or agreement, or result in the
creation of any lien upon any of the property or assets of MIOA or any of its
Subsidiaries; (c) violate in any respect the terms of any instrument, document
or agreement to which MIOA or any of its Subsidiaries is a party, or by which
MIOA or any of its Subsidiaries or the property of MIOA or any of it
Subsidiaries is bound, or be in conflict in any respect with, result in a breach
of or constitute (upon the giving of notice or lapse of time or both) a default
under any such instrument, document or agreement, or result in the creation of
any lien upon any of the property or assets of MIOA or any of its Subsidiaries
if the aggregate effect of all such violations listed in this subsection (c)
results in a Material Adverse Effect on MIOA and its Subsidiaries taken as a
whole; (d) violate MIOA's Articles of Incorporation or
Bylaws; or (e) violate any order, writ, injunction, decree, judgment, ruling,
law, rule or regulation of any federal, state, county, municipal, or foreign
court or governmental authority applicable to MIOA or any of its Subsidiaries,
or the business or assets of MIOA or any of its Subsidiaries. Neither MIOA nor
any of its Subsidiaries is subject to, or a party to, any mortgage, lien, lease,
agreement, contract, instrument, order, judgment or decree or any other material
restriction of any kind or character which would prevent or hinder the continued
operation of the business of MIOA and its Subsidiaries after the closing on
substantially the same basis as theretofore operated.
5.5. CAPITALIZATION. All of the authorized and outstanding MIOA capital
stock is set forth on SCHEDULE 5.5, and no shares of MIOA capital stock are held
in the treasury of MIOA. No shares or any class of capital stock or other equity
interests of MIOA, other than (i) MIOA Common Stock, (ii) options or warrants
for MIOA Common Stock, or (iii) those shares of MIOA Capital Stock identified in
SCHEDULE 5.5, shall be issued and outstanding at the Closing. All outstanding
MIOA capital stock has been duly authorized, and is validly issued, fully paid
and nonassessable. No preemptive (whether statutory or contractual) rights have
been violated. Current MIOA stock option plans, all previous forms of those
plans, and amendments, and all outstanding options and warrants, are identified
on SCHEDULE 5.5. Except as set forth on SCHEDULE 5.5, all options were granted
in accordance with the provisions of MIOA stock option plans. SCHEDULE 5.5 also
sets forth information as to options (if any) and warrants (if any) previously
granted which have terminated, expired or been exercised. Except for the
outstanding options, warrants and other commitments set forth in SCHEDULE 5.5,
MIOA has no convertible securities, options, warrants, or other contracts,
commitments, agreements, understandings, arrangements or restrictions by which
it is bound to issue any additional shares of MIOA Capital Stock or other
securities. Except as set forth on SCHEDULE 5.2, MIOA owns, directly or
indirectly, all of the equity in its Subsidiaries and no third party has a right
to acquire any such interest. All securities of MIOA and its Subsidiaries were
offered and sold in compliance with applicable federal and state securities
laws. SCHEDULE 5.5 identifies each stock option plan and outstanding option,
warrant, or other right, if any, to acquire the capital stock of any of its
Subsidiaries, full and complete copies of which have been provided to CCI. Each
and every dividend of MIOA and each Subsidiary, if any, whether paid in cash or
other property, has been declared and paid in compliance with applicable law,
and neither MIOA nor any of its Subsidiaries has any further obligation with
respect to such payment. SCHEDULE 5.5 also summarizes in detail all currently
effective registration rights which have been granted by MIOA to any other
person or entity and all currently effective shareholder agreements between any
shareholders of MIOA.
5.6. COMPLIANCE WITH LAWS; FILINGS WITH THE SEC. Except as set forth in
SCHEDULE 5.6, (a) to the best of MIOA's knowledge, MIOA and its Subsidiaries are
in compliance with, and MIOA and its Subsidiaries have operated any Persons or
businesses previously owned or operated by them in compliance with, all
applicable laws, orders, rules and regulations of all governmental bodies and
agencies, including applicable securities laws and regulations and environmental
laws and regulations, but excluding applicable laws and regulations related to
Medicare, Medicaid and other federally funded programs, except where such
noncompliance has and will have, in the aggregate, no Material Adverse Effect.
Neither MIOA, nor any of its Subsidiaries, has received notice of any
noncompliance with the foregoing.
(b) Without limiting the foregoing, MIOA and each of its
Subsidiaries and any other person or entity for whose conduct MIOA is legally
held responsible are in material
compliance with all applicable federal, state, regional, local or provincial
laws, statutes, ordinances, judgments, rulings and regulations relating to any
matters of pollution, protection of the environment, health or safety, or
environmental regulation or control (collectively, "Environmental Laws").
Neither MIOA nor any of its Subsidiaries, nor any other person or entity for
whose conduct MIOA is legally responsible, has (i) received any notice, demand,
request for information, or administrative inquiry relating to any violation of
an Environmental Law or the institution of any suit, action, claim or proceeding
alleging such violation or investigation by any Governmental Authority or any
third party of any such violation, (ii) manufactured, generated, treated,
stored, handled, processed, released, transported or disposed of any Hazardous
Substance on, under, from or at any of MIOA's or any of its Subsidiaries'
properties or any other properties, (iii) become aware or received notice of the
release or disposal of any Hazardous Substances in violation of any applicable
Environmental Law, on, under or at any of MIOA's, or any of its Subsidiaries'
properties or any other properties, (iv) become aware or received notice of any
actual or potential material liability on the part of MIOA for the response to
or remediation of any Hazardous Substance at or arising from any of MIOA's or
any of its Subsidiaries' properties or any other properties owned or operated by
MIOA, any of its Subsidiaries or any other Person for whose conduct MIOA is
legally responsible, or (v) become aware of or received notice of any actual or
potential liability on the part of MIOA for the costs of response to or
remediation of Hazardous Substances at or arising from any of MIOA's or any of
its Subsidiaries' properties or any other properties owned or operated by MIOA,
any of its Subsidiaries or any other Person for whose conduct MIOA is or may be
held responsible. For purposes of this Agreement, the term "Hazardous Substance"
shall mean any toxic or hazardous materials or substances, including asbestos,
buried contaminants, chemicals, flammable explosives, radioactive materials or
petroleum and petroleum products and any substances defined as, or included in
the definition of, "hazardous substances," "hazardous wastes," "hazardous
materials" or "toxic substances" under any Environmental Law. No Environmental
Law imposes any obligation upon MIOA or its Subsidiaries arising out of or as a
condition to any transaction contemplated hereby, including, without limitation,
any requirement to modify or to transfer any permit or license, any requirement
to file any notice or other submission with any Governmental Authority, the
placement of any notice, acknowledgment, or covenant in any land records, or the
modification of or provision of notice under any agreement, consent order, or
consent decree. No lien has been placed upon any of MIOA's properties or its
Subsidiaries' properties under any Environmental Law.
(c) MIOA has filed all required documents, reports and schedules
with the SEC since December 31, 1997 (collectively, the "MIOA SEC DOCUMENTS").
As of their respective dates, the MIOA SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and, at the respective times they were filed, none of the MIOA SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except as set forth in SCHEDULE 5.6, the consolidated financial
statements (including, in each case, any notes thereto) of MIOA included in the
MIOA SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted accounting
principles (except as may be indicated therein or in the notes thereto) applied
on a consistent basis during the periods involved (except as may be indicated
therein or in the notes thereto) and fairly presented in all material respects
the consolidated financial position of MIOA and its consolidated Subsidiaries as
at the respective dates thereof and the consolidated results of
their operations and their consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein). Except as set forth
in SCHEDULE 5.6, MIOA has not, since December 31, 1997, made any change in the
accounting practices or policies applied in the preparation of financial
statements.
5.7. LICENSES AND PERMITS. Except as set forth in SCHEDULE 5.7, neither
MIOA nor any of its Subsidiaries has received notice of any violations in
respect of any licenses, permits, concessions, grants, franchises, approvals or
authorizations necessary or required for the use or ownership of their assets
and the operation of their business. No proceeding is pending or, to the
knowledge of MIOA, threatened, which seeks revocation or limitation of any such
licenses, permits, concessions, grants, franchises, approvals or authorizations.
5.8. FINANCIAL INFORMATION.
(a) MIOA has filed a Quarterly Report on Form 10-QSB for the fiscal
quarter ended March 31, 1999 (the "Most Recent Fiscal Quarter End"), and an
Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998, copies
of which are attached hereto as EXHIBIT 5.8. The financial statements included
in or incorporated by reference into these Public Reports (including the related
notes and schedules - the "Historical Financials") have been, and MIOA's Monthly
Financials will be, prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby, present fairly the financial
condition of MIOA and its Subsidiaries as of the indicated dates and the results
of operations of MIOA and its Subsidiaries for the indicated periods, are
consistent with the books and records of MIOA and its Subsidiaries and, except
as discussed on SCHEDULE 5.8, do not contain any material item of special or
nonrecurring income not earned in the ordinary course of business; provided,
however, that the interim statements and such Monthly Financials are subject to
normal year-end adjustments that are not expected to be material in amount.
(b) Except as and to the extent specifically disclosed in this
Agreement, there are no liabilities or obligations of MIOA or any of its
Subsidiaries of any nature, whether liquidated, accrued, absolute, contingent or
otherwise except for those (i) that are specifically reflected or reserved
against as to amount in the latest balance sheet contained in the Historical
Financials, (ii) that arose thereafter in the ordinary course of business, or
(iii) that are specifically set forth on SCHEDULE 5.8; and at all times after
the execution of this Agreement until the Closing, there will be no liabilities
or obligations of MIOA or any of its Subsidiaries of any nature, whether
liquidated, unliquidated, accrued, absolute, contingent or otherwise, which are
material, individually or in the aggregate, except for those (A) that are
specifically reflected or reserved against as to amount in the latest balance
sheet contained in the Historical Financials, or (B) that arose after the date
of such balance sheet in the ordinary course of business (and are, individually
and in the aggregate, immaterial), (C) that are specifically set forth on
SCHEDULE 5.8, or (D) that are permitted as set forth on EXHIBITS 4.2,
4.2(B)(IV), or 4.2(F).
(c) MIOA and its Subsidiaries are not, nor have any of them been
during the twelve (12) months immediately preceding the execution of this
Agreement, insolvent within the meaning of 11 U.S.C. ss.101(31).
5.9. NO UNDISCLOSED LIABILITIES. Except as and to the extent specifically
disclosed in this Agreement and those that are specifically reflected or
reserved against as to amount in the
latest balance sheet contained in the Historical Financials, neither MIOA nor
any of its Subsidiaries knows of any reasonable basis for the assertion against
MIOA or any of its Subsidiaries of any material liabilities or obligations of
any nature, whether absolute, accrued, contingent or otherwise and whether due
or to become due, including, without limitation, any liability for taxes and
interest, penalties and other charges payable with respect thereto. Except as
set forth in this Agreement, neither the execution and delivery of this
Agreement nor the consummation of the Acquisition will (a) result in any payment
(whether severance pay, unemployment compensation or otherwise) becoming due
from MIOA to any employee, director or officer or former employee, director or
officer of MIOA, (b) increase any benefits otherwise payable to any employee,
director or officer or former employee, director or officer of MIOA, or (c)
result in the acceleration of the time of payment or vesting of any such
benefits.
5.10. INTELLECTUAL PROPERTY. Except as described in SCHEDULE 5.10, to the
knowledge of MIOA and its Subsidiaries, no patent, formula, process, trade
secret, trademark, trade name, assumed name or copyright relating to MIOA's
business and that of its Subsidiaries, including all intellectual property used
in the operation of the business of MIOA and its Subsidiaries (collectively, the
"MIOA Intellectual Property"), infringes on any patent, copyright, trademark or
other intellectual property right of any Person, or violates the terms of any
agreements related thereto, nor to MIOA's knowledge have there been any claims
of infringement. Except as set forth in SCHEDULE 5.10, there are no pending or,
to MIOA's and its Subsidiaries' knowledge, threatened claims against MIOA or any
of its Subsidiaries contesting the validity of, or their right to use any of,
the MIOA Intellectual Property.
5.11. CONTRACTS AND COMMITMENTS. Except as disclosed on SCHEDULE 5.11:
(a) To MIOA's and its Subsidiaries knowledge, no aspect of MIOA's
and its Subsidiaries' business or operations or the Assets is of such character
as would restrict MIOA from carrying on the business of MIOA and its
Subsidiaries as it is presently being conducted.
(b) MIOA and its Subsidiaries have no consultants or independent
contractors who are officers or directors of MIOA or any of its Subsidiaries, or
who are affiliates of such officers or directors, to whom they are paying
compensation for services.
(c) Except with respect to its aircraft and mobile catherization
laboratories, neither MIOA nor any of its Subsidiaries has material contracts,
commitments, arrangements, or understandings relating to their business,
operations, financial condition, or prospects. For purposes of this Section
5.11(c), "material" means payment or performance of a contract, commitment,
arrangement or understanding entered into in the ordinary course of business
which is expected to (i) involve payments in excess of $100,000 per year, or
(ii) have a duration exceeding five (5) years with expected payments over its
duration exceeding $1,000,000 (in each case other than leases not required to be
disclosed pursuant to Section 5.17), or any contract, commitment, arrangement or
understanding entered into not in the ordinary course of business.
(d) To MIOA's and its Subsidiaries' knowledge, there are no
outstanding contracts, commitments or bids, or services, development or sales
proposals, that will result in any substantial loss to MIOA or any of its
Subsidiaries (and/or the Surviving Corporation) upon completion or performance
thereof, after allowance for normal direct employee expenses, licensing,
development, distribution expenses and other costs.
(e) There are no outstanding material lease or purchase commitments
of MIOA or any of its Subsidiaries which are not consistent with MIOA's and its
Subsidiaries' past lease and purchase commitment practices.
5.12. ABSENCE OF CERTAIN CHANGES. Except as reflected on SCHEDULE 5.12, or
elsewhere in this Agreement or specifically identified on any Schedules hereto,
since March 31, 1999, MIOA and its Subsidiaries have not, and at the Closing
Date will not, have:
(a) Suffered a Material Adverse Effect, or become aware of any
circumstances which might reasonably be expected to result in such a Material
Adverse Effect; or suffered any material casualty loss to the Assets (whether or
not insured);
(b) Incurred any obligations specifically related to the Assets,
except in the ordinary course of business, consistent with past practices;
(c) Permitted or allowed any of the Assets to be mortgaged, pledged,
or subjected to any lien or encumbrance, except liens or encumbrances
specifically excepted by the provisions of Section 5.14;
(d) Written down the value of any inventory, contract or other
intangible asset, or written off as uncollectible any notes or accounts
receivable or any portion thereof, except for write-downs and write-offs in the
ordinary course of business, consistent with past practice and at a rate no
greater than during the latest complete fiscal year; cancelled any other debts
or claims, or waived any rights of substantial value, or sold or transferred any
of its material properties or assets, real, personal, or mixed, tangible or
intangible, except in the ordinary course of business and consistent with past
practice;
(e) Sold, licensed or transferred or agreed to sell, license or
transfer, any of the Assets, except in the ordinary course of business and
consistent with past practice;
(f) To MIOA's and its Subsidiaries' knowledge, received notice of
any pending or threatened adverse claim or an alleged infringement of
proprietary material, whether such claim or infringement is based on trademark,
copyright, patent, license, trade secret, contract or other restrictions on the
use or disclosure of proprietary materials;
(g) Incurred obligations to refund money to customers, except in the
ordinary course of business, all of which will have no Material Adverse Effect;
(h) Become aware of any event, condition or other circumstance
relating solely to the Assets (as opposed to any such event, condition, etc.,
which is, for example, national or industry-wide in nature) which might
reasonably be expected to have a Material Adverse Effect on the Assets;
(i) Made any capital expenditures or commitments, any one of which
is more than $1,000,000, for additions to property, plant, or equipment, unless
approved in writing by CCI or deemed approved by CCI pursuant to EXHIBIT
4.2(B)(IV) hereof;
(j) Made any material change in any method of accounting or
accounting practice;
(k) Paid, loaned, guaranteed, or advanced any material amount to, or
sold, transferred, or leased any material properties or assets (real, personal,
or mixed, tangible or intangible) to, or entered into any agreement,
arrangement, or transaction with any of MIOA's or any Subsidiaries' officers or
directors, or any business or Person in which any officer or director of MIOA or
any of its Subsidiaries, or any affiliate or associate of any of such Persons
has any direct or indirect interest; or
(l) Agreed to take any action described in this Section 5.12.
5.13. TAXES.
(a) As used in this Agreement:
(i) "Adverse Consequences" means all actions, suits,
proceedings, hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues, penalties,
fines, costs, amounts paid in settlement, liabilities, obligations, taxes,
liens, losses, expenses, and fees, including court costs and attorneys' fees and
expenses;
(ii) "Affiliated Group" means any affiliated group within the
meaning of Code ss.1504(a) (or any similar group defined under a similar
provision of state, local or foreign law);
(iii) "Liability" means any liability (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or to
become due), including, without limitation, any liability for Taxes;
(iv) "Security Interest" means any mortgage, lien, encumbrance
or other security including any "tax lien" (other than for current taxes not yet
due);
(v) "Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
ss.59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property personal
property, sales, use, transfer, registration, value added, alternative, or
added-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not;
(vi) "Tax Return" means any return, declaration, report, claim
for refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
(b) MIOA and its Subsidiaries have not been a member of an
Affiliated Group filing a consolidated federal income Tax Return other than a
group the common parent of which is MIOA. The Affiliated Group of which MIOA is
the common parent (the "MIOA Group") has filed all income Tax Returns that it
was required to file for each taxable period during which MIOA and its
Subsidiaries were a member of the MIOA Group. All such Tax Returns are
correct and complete in all material respects. All income Taxes owed by the MIOA
Group (whether or not shown on any Tax Return) have been paid for each taxable
period during which MIOA and its Subsidiaries filed a consolidated federal
income Tax Return.
(c) The amounts booked as provisions for Taxes in the Historical
Financials are sufficient for payment of all unpaid Taxes of MIOA, its
Subsidiaries, and the MIOA Group through December 31, 1998. Copies of the MIOA
Group's federal and state income Tax Returns for calendar years 1995, 1996, and
1997 have been provided to CCI.
(d) No claim has ever been made by a Governmental Authority in a
jurisdiction where MIOA or a Subsidiary does not file Tax Returns that it is or
it may be subject to taxation by that jurisdiction. There are no Security
Interests on any of the assets of MIOA or any of its Subsidiaries that arose in
connection with any failure (or alleged failure) to pay any Tax when due.
(e) MIOA, each MIOA Subsidiary, and the MIOA Group have withheld and
paid over to the proper governmental authorities all Taxes required to have been
withheld and paid over, and complied with all information reporting and back-up
withholding requirements, including maintenance of required records with respect
thereto, in connection with amounts paid to any employee, independent
contractor, creditor, or other third party.
(f) There is no dispute or claim concerning any Tax Liability of
MIOA, a Subsidiary or the MIOA Group either (i) claimed or raised by any
Governmental Authority in writing, or (ii) as to which any of MIOA or any of its
Subsidiaries (and employees responsible for Tax matters) has knowledge.
(g) MIOA, its Subsidiaries, and the MIOA Group have not waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.
(h) MIOA and its Subsidiaries do not have any liability for the
Taxes of any Person other than MIOA or its Subsidiaries (i) as a transferee or
successor, (ii) by contract, or (iii) otherwise.
(i) MIOA and each Subsidiary currently utilize the accrual method of
accounting for income Tax purposes. MIOA has utilized the accrual method of
accounting for income Tax purposes since the date of its incorporation. Each
Subsidiary of MIOA has utilized the accrual method of accounting for income Tax
purposes since the date of its incorporation or acquisition by MIOA, as the case
may be. MIOA, its Subsidiaries, and the MIOA Group have not agreed to, and are
not and will not be required to, make any adjustments under Code Section 481(a)
as a result of a change in accounting methods.
(j) There are no contracts, agreements, plans or arrangements,
including but not limited to the provisions of this Agreement, covering any
employee or former employee of MIOA or its Subsidiaries that, individually or
collectively, could give rise to the payment of any amount (or portion thereof)
that would not be deductible pursuant to Sections 280G, 404 or 162 of the Code.
(k) Deferred Taxes of MIOA and its Subsidiaries have been provided
for in accordance with generally accepted accounting principles, consistently
applied during the periods involved.
(l) There are no deferred intercompany gains, losses or other
intercompany items, or excess loss accounts, within the meaning of Treasury
Regulation Sections 1.1502-13 or 1.1502-19 (or any predecessor regulations or
any comparable items for state, local or foreign Tax purposes) with respect to
MIOA or any Subsidiary.
(m) Neither MIOA nor any Subsidiary has filed an election pursuant
to Section 341(f) of the Code to be a consenting corporation.
5.14. TITLE TO PROPERTIES; ENCUMBRANCES. Except as specifically identified
in the Schedules hereto and except for items leased or licensed by MIOA or any
of its Subsidiaries, or on SCHEDULE 5.14, MIOA or such Subsidiaries have good,
valid, and marketable title to all of the Assets. All of the Assets are in the
possession or under the control of MIOA or a Subsidiary, and none of the Assets
are subject to any mortgage, pledge, lien, security interest, conditional sale
agreement, encumbrance, or charge of any kind except as set forth on SCHEDULE
5.14 or as specifically disclosed on the other Schedules hereto and, except
minor imperfections or title and encumbrances, if any, that are not substantial
in amount, do not materially detract from the value or functional utility of the
property subject thereto, and do not in any way materially impair the value of
the Assets.
5.15. EQUIPMENT. Except with respect to its aircraft and mobile
catherization laboratories, all of the equipment owned or leased by MIOA and its
Subsidiaries which has (or had at the date of its acquisition or execution of
the related lease by MIOA or its Subsidiary) a fair market value of $200,000 or
greater is listed on SCHEDULE 5.15 attached hereto. All of the equipment owned
or leased by MIOA and its Subsidiaries is in adequate operating condition and
repair subject to normal wear and tear, except as set forth on SCHEDULE 5.15.
5.16. REAL PROPERTY. SCHEDULE 5.16 contains a list of all real property
owned by MIOA and its Subsidiaries, including, without limitation, the
improvements and structures located thereon. To MIOA's and its Subsidiaries'
knowledge, such improvements and structures are structurally sound with no known
defects and in good operating condition and repair subject to normal wear and
tear, and neither MIOA nor any of its Subsidiaries has received any written
notification that there is any violation of any building, zoning, or other law,
ordinance, or regulation in respect of such property, improvements, or
structures, and to the best of MIOA's and its Subsidiaries' knowledge, no such
violation exists.
5.17. LEASES. Except with respect to its aircraft and mobile catherization
laboratories, SCHEDULE 5.17 contains a list of all leases (including both
operating and capital leases) pursuant to which MIOA or any of its Subsidiaries
leases real or personal property and (i) which involve lease payments in excess
of $100,000 per year, (ii) which are between MIOA or any of its Subsidiaries, on
the one hand, and any of their Affiliates, on the other hand, or (iii) which
were not entered into in the ordinary course of business. Copies of all such
leases have been made available to CCI. All such leases are valid, binding, and
enforceable in accordance with their terms (except as the enforceability thereof
may be limited by applicable bankruptcy, insolvency or other similar laws
relating to the enforcement of creditors' rights generally and by the
application of general principles of equity), are in full force and effect and
except as set forth on
SCHEDULE 5.17, no event has occurred which is a default or which with the
passage of time will constitute a default by MIOA or any of its Subsidiaries
thereunder, nor has any such event occurred to the knowledge of MIOA and its
Subsidiaries which is a default, or with the passage of time will constitute a
default, by any other party to such lease. All property leased by MIOA or any of
its Subsidiaries as lessee is in the possession of MIOA and its Subsidiaries.
Except as indicated in SCHEDULE 5.17, no consent of any lessor is required in
connection with the Transactions.
5.18. LITIGATION. Except as set forth in SCHEDULE 5.18, (i) there are no
pending (served) actions, proceedings or regulatory agency investigations
against MIOA or its Subsidiaries or, to MIOA or such Subsidiaries' knowledge,
threatened against MIOA or any of its Subsidiaries involving the Assets, and
(ii) no such action, proceeding, or regulatory agency investigation has been
pending (served) during the three-year period preceding the date of this
Agreement. No assertion has ever been made to MIOA or any of its Subsidiaries to
the effect that MIOA or any of its Subsidiaries has any liability as a successor
to a third party's business or product line, and neither MIOA nor any of its
Subsidiaries has knowledge of any basis for such an assertion.
5.19. EMPLOYEE BENEFIT PLANS; EMPLOYEES. (a) SCHEDULE 5.19 sets forth a
list of each material "employee benefit plan" (as defined by Section 3(e) of
ERISA) and any other material compensation, deferred compensation, fringe
benefit, severance, disability, sick leave, vacation, or other agreement,
policy, or arrangement (each such plan, agreement, policy, or arrangement is
referred to herein as a "MIOA Employee Benefit Plan," and, collectively, the
"MIOA Employee Benefit Plans") for the benefit of employees (and their
beneficiaries) of MIOA or any of its Subsidiaries (collectively, "MIOA
Employees") or with respect to which MIOA or any "MIOA ERISA Affiliate" (hereby
defined to include any trade or business, whether or not incorporated, other
than MIOA, which has employees who are treated pursuant to Section 4001(a)(14)
of ERISA and/or Section 414 of the Code as employees of a single employer which
includes MIOA).
(b) MIOA has, or will have prior to the Schedule Delivery
Date, delivered to CCI, with respect to each MIOA Employee Benefit Plan, copies
of the documents embodying the Plan, if any, and employee handbooks governing
the employment of MIOA Employees.
(c) Neither MIOA nor any Subsidiary has any obligation to
contribute to or provide benefits pursuant to, and has no other liability of any
kind with respect to, (i) a "multiple employer welfare arrangement" (within the
meaning of Section 3(40) of ERISA), (ii) a "plan maintained by more than one
employer" (within the meaning of Section 413(c) of the Code), (iii) a
"multi-employer plan" within the meaning of Section 3(37) of ERISA), or (iv) an
"employee pension benefit plan" (within the meaning of Section 3(2) of ERISA)
which is subject to Title IV of ERISA.
(d) To the knowledge of MIOA, neither MIOA nor any Subsidiary
is subject to any liens, or excise or other taxes under ERISA, the Code or other
applicable law relating to any MIOA Employee Benefit Plan.
(e) The consummation of the Transactions will not give rise to
any liability for any employee benefits to any MIOA Employee, including, without
limitation,
liability for severance pay, unemployment compensation, termination pay or
withdrawal liability.
(f) No MIOA Employee Benefit Plan in any way provides for any
benefits of any kind whatsoever (other than under Section 4980B of the Code and
Part 6 of Subtitle B of Title I of ERISA, the Federal Social Security Act or any
MIOA Employee Benefit Plan qualified under Section 401(a) of the Code) to any
MIOA Employee who, at the time the benefit is to be provided, is a former
director or employee of, other provider of services to MIOA or an MIOA ERISA
Affiliate (or a beneficiary of any such person).
(g) Any contribution, insurance premium, excise tax, interest
charge or other liability or charge imposed or required with respect to any MIOA
Employee Benefit Plan which is attributable to any period or any portion of any
period prior to the Closing will be paid by MIOA or a Subsidiary or will be
reflected on the Historical Financials.
(h) Except as disclosed on SCHEDULE 5.19(H), to the knowledge
of MIOA, no claim, lawsuit, arbitration or other action has been asserted or
instituted or threatened in writing against any MIOA Employee Benefit Plan, any
trustee or fiduciaries thereof, MIOA, any of its Subsidiaries or any MIOA ERISA
Affiliate, any director, officer or employee thereof, or any of the assets of an
MIOA Employee Benefit Plan or any related trust.
(i) Except as disclosed on SCHEDULE 5.19(I), to the knowledge
of MIOA, no MIOA Employee Benefit Plan is under audit or investigation by the
IRS or the DOL or any other governmental authority and no such completed audit,
if any, has resulted in the imposition of any tax, interest or penalty.
(j) Since December 31, 1998 and through the date hereof, and
except as set forth on SCHEDULE 5.19(J), neither MIOA, any of its Subsidiaries
nor any MIOA ERISA Affiliate has, nor will it, (i) institute or agree to
institute any new MIOA Employee Benefit Plan or practice, (ii) make or agree to
make any change in any MIOA Employee Benefit Plan, (iii) make or agree to make
any increase in the compensation payable or to become payable by MIOA, any of
its Subsidiaries or any MIOA ERISA Affiliate to any MIOA Employee, except for
normal periodic salary increases consistent with past practices, or (iv) except
pursuant to this Agreement and except for contributions required to provide
benefits pursuant to the provisions of the MIOA Employee Benefit Plans, pay or
accrue or agree to pay or accrue any bonus, percentage of compensation, or other
like benefit to, or for the credit of, any MIOA Employee.
(k) There are no collective bargaining or other labor union
agreements to which MIOA or any of its Subsidiaries is a party or by which any
of them is bound.
5.20. ADVISORS FEES. Other than as set forth on SCHEDULE 5.20, neither
MIOA nor any of its Subsidiaries or any Affiliate thereof has retained or
utilized the services of any advisor, broker, finder or intermediary, or paid or
agreed to pay any fee or commission to any other Person or entity for or on
account of the Transactions, or had any communications with any Person or entity
which would obligate CCI to pay any such fees or commission.
5.21. NO EXISTING DISCUSSION FOR ACQUISITION PROPOSAL. Except as set forth
on SCHEDULE 5.21, as of the date hereof, MIOA is not engaged in any negotiations
with any other party with respect to an Acquisition Proposal.
5.22. ACCOUNTS RECEIVABLE. Except as set forth on SCHEDULE 5.22 and as
otherwise may be specifically identified on the Historical Financials, all
accounts receivable (the "MIOA Receivables") of MIOA which are reflected in the
Historical Financials, and all MIOA Receivables acquired or generated since the
date of the Historical Financials, are in all material respects valid and BONA
FIDE MIOA Receivables arising from the furnishing of goods or services to
customers in the ordinary course of business.
5.23. INVENTORIES. Any and all inventories of MIOA which are reflected on
the Historical Financials, plus any replacements for such items acquired on or
before the Closing, and minus any such items sold by MIOA in the ordinary course
of business on or before the Closing, are properly valued at the lower of cost
(first-in, first-out) or market in accordance with generally accepted accounting
principles consistently applied and, except for obsolete and slow moving items
which have been fully written off or reserved for and except for items sold in
the ordinary course of business, consist of items of a quality and quantity
currently useable and saleable in the ordinary course of business without
markdown or discount.
5.24. SOFTWARE. Except as set forth on SCHEDULE 5.24, MIOA presently has
the right to use all computer software owned by it, and to the knowledge of
MIOA, the right to use all other computer software which is leased or licensed
to, or otherwise used by MIOA. To the knowledge of MIOA, neither MIOA nor any
Subsidiary is in violation of any license or other agreement related to its
software.
5.25 Y2K COMPLIANCE. Except as set forth on SCHEDULE 5.25, MIOA's
equipment, computers, software, hardware, aircraft, business and processes in
which date sensitive software is utilized are year 2000 compliant such that such
equipment, computers, software, hardware, aircraft, business and processes will
not experience failures, interruptions or malfunctions in a manner that will
have a material adverse effect on such equipment, computers, software, hardware,
aircraft, business and processes, MIOA and/or it Assets.
5.26. SHARES TO BE DELIVERED. The Acquisition Shares to be issued with
respect to previously outstanding CCI Common Stock when issued and delivered to
such CCI stockholders pursuant to this Agreement will be duly authorized,
validly issued, fully paid and nonassessable shares of voting common stock of
MIOA. Upon delivery of the Acquisition Shares after the Closing and assuming
that the former stockholders of CCI are receiving the Acquisition Shares in good
faith without notice of any adverse claims, such stockholders will receive good
and unencumbered title to the Acquisition Shares, free and clear of all liens,
restrictions, charges, encumbrances, and other security interests of any kind or
nature whatsoever, except for claims arising out of acts of or claims against
such stockholders, restrictions existing under applicable securities laws, and
the restrictions imposed hereby (as to Affiliates) and restrictions with respect
to the Registration Rights Agreement and Restricted Sale Agreement.
5.27. DISCLOSURE AND ALL DOCUMENTATION. No representation or warranty by
MIOA contained in this Agreement and no statement contained in any certificate
or schedule furnished to CCI pursuant to the provisions hereof contains or shall
contain any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein not misleading. To the
knowledge of MIOA and its Subsidiaries, there is no current event or condition
of any kind or character pertaining to MIOA or its Subsidiaries that may
reasonably be expected to have a Material Adverse Effect, except as disclosed in
this Agreement and except for
those events and conditions which are national or industry-wide in nature.
Except as specifically indicated elsewhere in this Agreement, all documents
delivered by MIOA or its Subsidiaries to CCI in connection herewith have been
and will be complete originals, or exact copies thereof.
5.28. REGISTRATION STATEMENT. None of the information to be included by
MIOA for inclusion or incorporation by reference in the Registration Statement
or any other document filed with any other regulatory agency in connection
herewith will: (i) in the case of the Registration Statement, at the time it
becomes effective, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; or, (ii) in the case of any other
filing required by any regulatory agency in connection herewith, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make statements therein, in light
of the circumstances under which they are made, not misleading. If, at any time
prior to the Effective Time, any event with respect to MIOA, its officers and
directors or any of its Subsidiaries shall occur which is required to be
described in the Registration Statement, such event shall be so described, and
an appropriate amendment or supplement shall be promptly filed with the SEC and,
as required by law, disseminated to the shareholders of MIOA and CCI. The
Registration Statement will comply as to form in all material respects with the
provisions of the Securities Act, as applicable.
5.29. SURVIVAL. The representations and warranties contained in this
Article 5 shall survive the Closing for one(1) year.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF CCI
In order to induce MIOA to enter into this Agreement and consummate the
Transactions, CCI hereby represents and warrants the following to MIOA as of the
Schedule Delivery Date (and not the date hereof), each of which representations
and warranties shall be material to and relied upon by MIOA and shall be deemed
remade on and as of the date of the Closing:
6.1. ORGANIZATION AND AUTHORITY. CCI is a corporation duly organized and
validly existing under the laws of the State of Georgia and each of its
Subsidiaries is incorporated in the states identified on SCHEDULE 6.1. The
states in which CCI and each Subsidiary are qualified to do business are set
forth on SCHEDULE 6.1. Neither CCI nor any of its Subsidiaries is required to be
qualified as a foreign corporation in any other jurisdiction where its failure
to qualify would have a Material Adverse Effect. CCI and its Subsidiaries have
all necessary corporate power and authority to own, lease and operate their
properties and conduct their business as it is currently being conducted. Except
for CCI's ownership of its Subsidiaries, which is fully described on SCHEDULE
6.1, and as otherwise set forth on SCHEDULE 6.1, neither CCI nor any of its
Subsidiaries owns, directly or indirectly, any equity interest in any
corporation, partnership, joint venture, or other entity. The list of CCI's
Subsidiaries contained in SCHEDULE 6.1 is a true, correct and complete list of
all entities in which CCI has a direct or indirect equity interest. SCHEDULE 6.1
identifies each owner of an equity interest, or right to acquire any such
interest, in each Subsidiary of CCI.
6.2. CORPORATE POWER AND AUTHORITY; DUE AUTHORIZATION. Subject to CCI
Board Approval which has been obtained, CCI has full corporate power and
authority to execute and
deliver this Agreement and each of the Closing Documents to which CCI is or will
be a party, to amend its Articles of Incorporation in the manner set forth in
this Agreement, and to consummate the Transactions. No corporate proceeding is
necessary to approve the Transactions other than CCI Board Approval and CCI
Stockholder Approval. Assuming CCI Board Approval and that this Agreement and
each of the Closing Documents to which MIOA is a party constitutes a valid and
binding agreement of MIOA this Agreement and each of the Closing Documents to
which CCI is a party constitutes, or will constitute when executed and
delivered, a valid and binding agreement of CCI in each case enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency or other similar laws relating to the
enforcement of creditors' rights generally and by the applicability of general
principles of equity. The duly elected officers and directors of CCI and its
Subsidiaries are set forth on SCHEDULE 6.2. Copies of the Articles of
Incorporation, the Bylaws and all minutes of CCI and its Subsidiaries are
contained in the minute books of CCI, or such Subsidiaries, respectively. True,
correct and complete copies of the minute books of CCI and its Subsidiaries have
been made available to MIOA.
6.3. SUFFICIENCY OF ASSETS. All material assets and rights relating to
CCI's business and that of its Subsidiaries are held solely by, and all
agreements, obligations, expenses and transactions relating to the business of
CCI and its Subsidiaries have been entered into, incurred and conducted solely
by, CCI and its Subsidiaries. Except as described in SCHEDULE 6.3, the Assets
are all of the items necessary to provide all services and products required in
connection with the business of CCI and its Subsidiaries as presently being
conducted and as anticipated being conducted in accordance with the Business
Plan and projections set forth in SCHEDULE 6.3, assuming competent personnel,
general office facilities, and adequate facilities are available.
6.4. NO CONFLICT; REQUIRED CONSENTS. Exclusive of CCI Board Approval and
CCI Stockholder Approval, SCHEDULE 6.4 lists all material third-party consents
or approvals required with respect to CCI and its Subsidiaries for consummation
of the Transactions, which consents CCI agrees to use its best reasonable
efforts to obtain. Assuming all such consents and approvals have been obtained
and assuming the appropriate filings and mailings are made by CCI to effectuate
the Acquisition under the Georgia Code, and under the Securities Act and the
Exchange Act, the execution and delivery by CCI of this Agreement and the
Closing Documents and the consummation by CCI of the Transactions do not and
will not, except as set forth on SCHEDULE 6.4, (a) require the consent, approval
or action of, or any filing or notice to, any corporation, firm, Person or other
entity or any public, governmental or judicial authority (except for such
consents, approvals, actions, filing or notices the failure of which to make or
obtain will not in the aggregate have a Material Adverse Effect); (b) violate in
any material respect the terms of any material instrument, document or agreement
to which CCI or any of its Subsidiaries is a party, or by which CCI or any of
its Subsidiaries or the property of CCI or any of its Subsidiaries is bound, or
be in conflict in any material respect with, result in a material breach of or
constitute (upon the giving of notice or lapse of time or both) a material
default under any such instrument, document or agreement, or result in the
creation of any lien upon any of the property or assets of CCI or any of its
Subsidiaries; (c) violate in any respect the terms of any instrument, document
or agreement to which CCI or any of its Subsidiaries is a party, or by which CCI
or any of its Subsidiaries or the property of CCI or any of its Subsidiaries is
bound, or be in conflict in any respect with, result in a breach of or
constitute (upon the giving of notice or lapse of time or both) a default under
any such instrument, document or agreement, or result in the creation of any
lien upon any of the property or assets of CCI or any of its Subsidiaries if the
aggregate effect of all such violations listed in this subsection (c) results in
a Material Adverse Effect on
CCI and its Subsidiaries taken as a whole; (d) violate CCI's Articles of
Incorporation or Bylaws; or (e) violate any order, writ, injunction, decree,
judgment, ruling, law, rule or regulation of any federal, state, county,
municipal, or foreign court or governmental authority applicable to CCI or any
of its Subsidiaries, or the business or assets of CCI or any of its
Subsidiaries. Neither CCI nor any of its Subsidiaries is subject to, or a party
to, any mortgage, lien, lease, agreement, contract, instrument, order, judgment
or decree or any other material restriction of any kind or character which would
prevent or hinder the continued operation of the business of CCI and its
Subsidiaries after the closing on substantially the same basis as theretofore
operated.
6.5. CAPITALIZATION. All of the authorized and outstanding CCI capital
stock is set forth on SCHEDULE 6.5, and no shares of CCI capital stock are held
in the treasury of CCI. No shares or any class of capital stock or other equity
interests of CCI, other than (i) CCI Common Stock, (ii) options or warrants for
CCI Common Stock, or (iii) those shares of CCI Capital Stock identified in
SCHEDULE 6.5, shall be issued and outstanding at the Closing. All outstanding
CCI capital stock has been duly authorized, and is validly issued, fully paid
and nonassessable. No preemptive (whether statutory or contractual) rights have
been violated. Current CCI stock option plans, all previous forms of those
plans, and amendments, and all outstanding options and warrants, are identified
on SCHEDULE 6.5. Except as set forth on SCHEDULE 6.5, all options were granted
in accordance with the provisions of CCI stock option plans. SCHEDULE 6.5 also
sets forth information as to options (if any) and warrants (if any) previously
granted which have terminated, expired or been exercised. Except for the
outstanding options, warrants and other commitments set forth in SCHEDULE 6.5,
CCI has no convertible securities, options, warrants, or other contracts,
commitments, agreements, understandings, arrangements or restrictions by which
it is bound to issue any additional shares of CCI Capital Stock or other
securities. Except as set forth on SCHEDULE 6.2, CCI owns, directly or
indirectly, all of the equity in its Subsidiaries and no third party has a right
to acquire any such interest. All securities of CCI and its Subsidiaries were
offered and sold in compliance with applicable federal and state securities
laws. SCHEDULE 6.5 identifies each stock option plan and outstanding option,
warrant, or other right, if any, to acquire the capital stock of any of its
Subsidiaries, full and complete copies of which have been provided to MIOA. Each
and every dividend of CCI and each Subsidiary, if any, whether paid in cash or
other property, has been declared and paid in compliance with applicable law,
and neither CCI nor any of its Subsidiaries has any further obligation with
respect to such payment. SCHEDULE 6.5 also summarizes in detail all currently
effective registration rights which have been granted by CCI to any other person
or entity and all currently effective shareholder agreements between any
shareholders of CCI.
6.6. COMPLIANCE WITH LAWS. Except as set forth in SCHEDULE 6.6, (a) to the
best of CCI's knowledge, CCI and its Subsidiaries are in compliance with, and
CCI and its Subsidiaries have operated any Persons or businesses previously
owned or operated by them in compliance with, all applicable laws, orders, rules
and regulations of all governmental bodies and agencies, including applicable
securities laws and regulations and environmental laws and regulations, but
excluding applicable laws and regulations related to Medicare, Medicaid and
other federally funded programs, except where such noncompliance has and will
have, in the aggregate, no Material Adverse Effect. Neither CCI, nor any of its
Subsidiaries, has received notice of any noncompliance with the foregoing.
(b) Without limiting the foregoing, CCI and each of its Subsidiaries
and any other person or entity for whose conduct CCI is legally held responsible
are in material compliance with all applicable federal, state, regional, local
or provincial laws, statutes,
ordinances, judgments, rulings and regulations relating to any matters of
pollution, protection of the environment, health or safety, or environmental
regulation or control (collectively, "Environmental Laws"). Neither CCI nor any
of its Subsidiaries, nor any other person or entity for whose conduct CCI is
legally responsible, has (i) received any notice, demand, request for
information, or administrative inquiry relating to any violation of an
Environmental Law or the institution of any suit, action, claim or proceeding
alleging such violation or investigation by any Governmental Authority or any
third party of any such violation, (ii) manufactured, generated, treated,
stored, handled, processed, released, transported or disposed of any Hazardous
Substance on, under, from or at any of CCI's or any of its Subsidiaries'
properties or any other properties, (iii) become aware or received notice of the
release or disposal of any Hazardous Substances in violation of any applicable
Environmental Law, on, under or at any of CCI's, or any of its Subsidiaries'
properties or any other properties, (iv) become aware or received notice of any
actual or potential material liability on the part of CCI for the response to or
remediation of any Hazardous Substance at or arising from any of CCI's or any of
its Subsidiaries' properties or any other properties owned or operated by CCI,
any of its Subsidiaries or any other Person for whose conduct CCI is legally
responsible, or (v) become aware of or received notice of any actual or
potential liability on the part of CCI for the costs of response to or
remediation of Hazardous Substances at or arising from any of CCI's or any of
its Subsidiaries' properties or any other properties owned or operated by CCI,
any of its Subsidiaries or any other Person for whose conduct CCI is or may be
held responsible. For purposes of this Agreement, the term "Hazardous Substance"
shall mean any toxic or hazardous materials or substances, including asbestos,
buried contaminants, chemicals, flammable explosives, radioactive materials or
petroleum and petroleum products and any substances defined as, or included in
the definition of, "hazardous substances," "hazardous wastes," "hazardous
materials" or "toxic substances" under any Environmental Law. No Environmental
Law imposes any obligation upon CCI or its Subsidiaries arising out of or as a
condition to any transaction contemplated hereby, including, without limitation,
any requirement to modify or to transfer any permit or license, any requirement
to file any notice or other submission with any Governmental Authority, the
placement of any notice, acknowledgment, or covenant in any land records, or the
modification of or provision of notice under any agreement, consent order, or
consent decree. No lien has been placed upon any of CCI's properties or its
Subsidiaries' properties under any Environmental Law.
6.7. LICENSES AND PERMITS. Except as set forth in SCHEDULE 6.7, neither
CCI nor any of its Subsidiaries has received notice of any violations in respect
of any licenses, permits, concessions, grants, franchises, approvals or
authorizations necessary or required for the use or ownership of their assets
and the operation of their business. No proceeding is pending or, to the
knowledge of CCI, threatened, which seeks revocation or limitation of any such
licenses, permits, concessions, grants, franchises, approvals or authorizations.
6.8. FINANCIAL INFORMATION.
(a) CCI has provided to MIOA or will provide to MIOA on or before
the Effective Time its interim financial statements for the period through April
30, 1999 ("Interim Financials") and an unaudited financial statement for the
most recent fiscal year-end December 31, 1998 ("Financial Statement"); together
with Interim Financials are herewith called (the "Financial Statements"), copies
of which are attached hereto as EXHIBIT 6.8. Except as disclosed in SCHEDULE 6.8
attached hereto, the Financial Statements have been and CCI's Monthly Financials
will be, prepared on the cash method of accounting applied on a consistent basis
throughout the periods covered thereby, present fairly the financial condition
of CCI and its Subsidiaries as of the indicated dates and the results of
operations of CCI and its Subsidiaries for the indicated periods, are consistent
with the books and records of CCI and its Subsidiaries and, except as discussed
on SCHEDULE 6.8 do not contain any material item of special or nonrecurring
income not earned in the ordinary course of business; provided, however, that
the Interim Financials and such Monthly Financials are subject to normal
year-end adjustments that are not expected to be material in amount.
(b) Except as and to the extent specifically disclosed in this
Agreement, there are no liabilities or obligations of CCI or any of its
Subsidiaries of any nature, whether liquidated, accrued, absolute, contingent or
otherwise except for those (i) that are specifically reflected or reserved
against as to amount in the latest balance sheet contained in the Financial
Statements, (ii) that arose thereafter in the ordinary course of business, or
(iii) that are specifically set forth on SCHEDULE 6.8; and at all times after
the execution of this Agreement until the Closing, there will be no liabilities
or obligations of CCI or any of its Subsidiaries of any nature, whether
liquidated, unliquidated, accrued, absolute, contingent or otherwise, which are
material, individually or in the aggregate, except for those (A) that are
specifically reflected or reserved against as to amount in the latest balance
sheet contained in the Financial Statements, or (B) that arose after the date of
such balance sheet in the ordinary course of business (and are, individually and
in the aggregate, immaterial), (C) that are specifically set forth on SCHEDULE
6.8, or (D) that are permitted as set forth on EXHIBITS 4.2, 4.2(B)(IV), or
4.2(F).
(c) CCI and its Subsidiaries are not, nor have any of them been
during the twelve (12) months immediately preceding the execution of this
Agreement, insolvent within the meaning of 11 U.S.C. ss.101(31). CCI and its
Subsidiaries have paid and are paying their debts as they become due, except
with respect to certain debts owing to the Georgia Institute of Technology and
the Medical College of Georgia both of which MIOA is aware.
6.9. NO UNDISCLOSED LIABILITIES. Except as and to the extent specifically
disclosed in this Agreement and those that are specifically reflected or
reserved against as to amount in the latest balance sheet contained in the
Financial Statements, neither CCI nor any of its Subsidiaries knows of any
reasonable basis for the assertion against CCI or any of its Subsidiaries of any
material liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and whether due or to become due, including, without
limitation, any liability for taxes and interest, penalties and other charges
payable with respect thereto. Except as set forth in this Agreement, neither the
execution and delivery of this Agreement nor the consummation of the Acquisition
will (a) result in any payment (whether severance pay, unemployment compensation
or otherwise) becoming due from CCI to any employee, director or officer or
former employee, director or officer of CCI, (b) increase any benefits otherwise
payable to any employee, director or officer or former employee, director or
officer of CCI, or (c) result in the acceleration of the time of payment or
vesting of any such benefits.
6.10. INTELLECTUAL PROPERTY. SCHEDULE 6.10 lists all Trade Rights (as
defined below) in which CCI now has any interest, specifying whether such Trade
Rights are owned, controlled, used or held (under license or otherwise)
including, without limitation, the intelligent routing software and medication
management software (which is only in the development stage and for which no
source code has been written) by CCI, and also indicating which of such Trade
Rights are registered and patented. To the best of CCI's knowledge, all Trade
Rights shown as registered or patented in SCHEDULE 6.10 have been properly
registered, all pending registrations
and applications have been properly made and filed and all annuity, maintenance,
renewal and other fees relating to registrations or applications are current.
Except as provided in SCHEDULE 6.10, in order to conduct the business of CCI, as
such is currently being conducted or proposed to be conducted in accordance with
its Business Plan and projections, CCI does not require any Trade Rights that it
does not already have in order to effectuate its Business Plan and meet its
projections. To the best of CCI's knowledge, the intelligent routing software
and medication management software are patentable processes or applications or,
if not, the failure to obtain letters patent with respect to the intelligent
routing process and/or medication management software will not materially
adversely affect CCI or its business as described in the Business Plan and
projections. To the best of CCI's and its shareholders' knowledge, CCI is not
infringing and has not infringed any Trade Rights of another in the operation of
the business of CCI, nor is any other person infringing the Trade Rights of the
CCI. CCI has not granted any license or made any assignment of any Trade Right
listed in SCHEDULE 6.10, nor does it pay any royalties or other consideration
for the right to use any Trade Rights of others other than as disclosed in
SCHEDULE 6.10. There is no Litigation pending or threatened to challenge CCI's
right, title and interest with respect to its continued use and right to
preclude others from using any Trade Rights of CCI. To the best of CCI's and its
shareholders' knowledge, all Trade Rights of CCI are valid, enforceable and in
good standing, and there are no equitable defenses to enforcement based on any
act or omission of CCI. The consummation of the transactions contemplated hereby
will not alter or impair any Trade Rights owned or used by CCI. As used herein,
the term "Trade Rights" shall mean and include: (i) all trademark rights,
business identifiers, trade dress, service marks, trade names and brand names,
all registrations thereof and applications therefor and all goodwill associated
with the foregoing; (ii) all copyrights, copyright registrations and copyright
applications, and all other rights associated with the foregoing and the
underlying works of authorship; (iii) all patents and patent applications, and
all international proprietary rights associated therewith; (iv) all contracts or
agreements granting any right, title, license or privilege under the
intellectual property rights of any third party; (v) all inventions,
applications, works-in-process, mask works and mask work registrations, software
programs and applications, know-how, discoveries, improvements, designs, trade
secrets, shop and royalty rights, employee covenants and agreements respecting
intellectual property and non-competition and all other types of intellectual
property; and (vi) all claims for infringement or breach of any of the
foregoing.
6.11. CONTRACTS AND COMMITMENTS. Except as disclosed on SCHEDULE 6.11:
(a) To CCI's and its Subsidiaries knowledge, no aspect of CCI's and
its Subsidiaries' business or operations or the Assets is of such character as
would restrict or prevent CCI or MIOA from carrying on the business of CCI and
its Subsidiaries as it is presently being conducted or anticipated being
conducted as disclosed in its Business Plan and projections.
(b) CCI and its Subsidiaries have no consultants or independent
contractors who are officers or directors of CCI or any of its Subsidiaries, or
who are affiliates of such officers or directors, to whom they are paying
compensation for services.
(c) Neither CCI nor any of its Subsidiaries has material contracts,
commitments, arrangements, or understandings relating to their business,
operations, financial condition, or prospects. For purposes of this Section
5.11(c), "material" means payment or performance of a contract, commitment,
arrangement or understanding entered into in the ordinary course of business
which is expected to (i) involve payments in excess of $50,000 per year, or (ii)
have a
duration exceeding five (5) years with expected payments over its duration
exceeding $200,000 (in each case other than leases not required to be disclosed
pursuant to Section 5.17), or any contract, commitment, arrangement or
understanding entered into not in the ordinary course of business.
(d) To CCI's and its Subsidiaries' knowledge, there are no
outstanding contracts, commitments or bids, or services, development or sales
proposals, that will result in any substantial loss to CCI or any of its
Subsidiaries (and/or the Surviving Corporation) upon completion or performance
thereof, after allowance for normal direct employee expenses, licensing,
development, distribution expenses and other costs.
(e) There are no outstanding material lease or purchase commitments
of CCI or any of its Subsidiaries which are not consistent with CCI's and its
Subsidiaries' past lease and purchase commitment practices.
6.12. ABSENCE OF CERTAIN CHANGES. Except as reflected on SCHEDULE 6.12, or
elsewhere in this Agreement or specifically identified on any Schedules hereto,
since December 31, 1998, CCI and its Subsidiaries have not, and at the Closing
Date will not, have:
(a) Suffered a material Adverse Effect, or become aware of any
circumstances which might reasonably be expected to result in such a Material
Adverse Effect; or suffered any material casualty loss to the Assets (whether or
not insured);
(b) Incurred any obligations specifically related to the Assets,
except in the ordinary course of business, consistent with past practices;
(c) Permitted or allowed any of the Assets to be mortgaged, pledged,
or subjected to any lien or encumbrance, except liens or encumbrances
specifically excepted by the provisions of Section 6.14;
(d) Written down the value of any inventory, contract or other
intangible asset, or written off as uncollectible any notes or accounts
receivable or any portion thereof, except for write-downs and write-offs in the
ordinary course of business, consistent with past practice and at a rate no
greater than during the latest complete fiscal year; cancelled any other debts
or claims, or waived any rights of substantial value, or sold or transferred any
of its material properties or assets, real, personal, or mixed, tangible or
intangible, except in the ordinary course of business and consistent with past
practice;
(e) Sold, licensed or transferred or agreed to sell, license or
transfer, any of the Assets, except in the ordinary course of business and
consistent with past practice;
(f) To CCI's and its Subsidiaries' knowledge, received notice of any
pending or threatened adverse claim or an alleged infringement of proprietary
material, whether such claim or infringement is based on trademark, copyright,
patent, license, trade secret, contract or other restrictions on the use or
disclosure of proprietary materials;
(g) Incurred obligations to refund money to customers, except in the
ordinary course of business, all of which will have no Material Adverse Effect;
(h) Become aware of any event, condition or other circumstance
relating solely to the Assets (as opposed to any such event, condition, etc.,
which is, for example, national or industry-wide in nature) which might
reasonably be expected to have a Material Adverse Effect on the Assets;
(i) Made any capital expenditures or commitments, any one of which
is more than $500,000, for additions to property, plant, or equipment, unless
approved in writing by MIOA or deemed approved by MIOA pursuant to EXHIBIT
4.2(B)(IV) hereof;
(j) Made any material change in any method of accounting or
accounting practice;
(k) Paid, loaned, guaranteed, or advanced any material amount to, or
sold, transferred, or leased any material properties or assets (real, personal,
or mixed, tangible or intangible) to, or entered into any agreement,
arrangement, or transaction with any of CCI's or any Subsidiaries' officers or
directors, or any business or Person in which any officer or director of CCI or
any of its Subsidiaries, or any affiliate or associate of any of such Persons
has any direct or indirect interest; or
(l) Agreed to take any action described in this Section 6.12.
6.13. TAXES.
(a) Except a set forth on SCHEDULE 6.13(A), CCI and each Subsidiary
of which CCI owns more than fifty percent (50%) of such Subsidiary's issued and
outstanding equity interests, have not been a member of an Affiliated Group
filing a consolidated federal income Tax Return other than a group the common
parent of which is CCI. All Tax Returns that CCI was required to file for each
taxable period has been filed. All such Tax Returns are correct and complete in
all material respects. All income Taxes owed by CCI (whether or not shown on any
Tax Return) have been paid for each taxable period during which CCI and its
Subsidiaries filed a consolidated federal income Tax Return.
(b) The amounts booked as provisions for Taxes on the Financial
Statements are sufficient for payment of all unpaid Taxes of CCI and its
Subsidiaries, and the CCI Group through December 31, 1998. Copies of the CCI
Group's federal and state income Tax Returns for calendar years 1997 and 1998
have been provided to MIOA.
(c) No claim has ever been made by a Governmental Authority in a
jurisdiction where CCI or a Subsidiary does not file Tax Returns that it is or
it may be subject to taxation by that jurisdiction. There are no Security
Interests on any of the assets of CCI or any of its Subsidiaries that arose in
connection with any failure (or alleged failure) to pay any Tax when due.
(d) CCI and each CCI Subsidiary have withheld and paid over to the
proper governmental authorities all Taxes required to have been withheld and
paid over, and complied with all information reporting and back-up withholding
requirements, including maintenance of required records with respect thereto, in
connection with amounts paid to any employee, independent contractor, creditor,
or other third party.
(e) There is no dispute or claim concerning any Tax Liability of CCI
or a Subsidiary either (i) claimed or raised by any Governmental Authority in
writing, or (ii) as to which any of CCI or any of its Subsidiaries (and
employees responsible for Tax matters) has knowledge.
(f) CCI and its Subsidiaries have not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(g) CCI and its Subsidiaries do not have any liability of the Taxes
of any Person other than CCI or its Subsidiaries (i) as a transferee or
successor, (ii) by contract, or (iii) otherwise.
(h) CCI and each Subsidiary currently utilize the cash method of
accounting for income Tax purposes. CCI has utilized the cash method of
accounting for income Tax purposes since the date of its incorporation. CCI has
not agreed to, and are not and will not be required to, make any adjustments
under Code Section 481(a) as a result of a change in accounting methods.
(i) There are no contracts, agreements, plans or arrangements,
including but not limited to the provisions of this Agreement, covering any
employee or former employee of CCI or its Subsidiaries that, individually or
collectively, could give rise to the payment of any amount (or portion thereof)
that would not be deductible purchase to Sections 280G, 404 or 162 of the Code.
6.14. TITLE TO PROPERTIES; ENCUMBRANCES. Except as specifically identified
in the Schedules hereto and except for items leased or licensed by CCI or any of
its Subsidiaries, or on SCHEDULE 6.14, CCI or such Subsidiaries have good,
valid, and marketable title to all of the Assets. All of the Assets are in the
possession or under the control of CCI or a Subsidiary, and none of the Assets
are subject to any mortgage, pledge, lien, security interest, conditional sale
agreement, encumbrance, or charge of any kind except as set forth on SCHEDULE
6.14 or as specifically disclosed on the other Schedules hereto and, except
minor imperfections or title and encumbrances, if any, that are not substantial
in amount, do not materially detract from the value or functional utility of the
property subject thereto, and do not in any way materially impair the value of
the Assets.
6.15. EQUIPMENT. All of the equipment owned or leased by CCI and its
Subsidiaries which has (or had at the date of its acquisition or execution of
the related lease by CCI or its Subsidiary) a fair market value of $50,000 or
greater is listed on SCHEDULE 6.15 attached hereto. All of the equipment owned
or leased by CCI and its Subsidiaries is in adequate operating condition and
repair subject to normal wear and tear, except as set forth on SCHEDULE 6.15.
6.16. REAL PROPERTY. SCHEDULE 6.16 contains a list of all real property
owned by CCI and its Subsidiaries, including, without limitation, the
improvements and structures located thereon. To CCI's and its Subsidiaries'
knowledge, such improvements and structures are structurally sound with no known
defects and in good operating condition and repair subject to normal wear and
tear, and neither CCI nor any of its Subsidiaries has received any written
notification that there is any violation of any building, zoning, or other law,
ordinance, or regulation in respect of such property, improvements, or
structures, and to the best of CCI's and its Subsidiaries' knowledge, no such
violation exists.
6.17. LEASES. SCHEDULE 6.17 contains a list of all leases (including both
operating and capital leases) pursuant to which CCI or any of its Subsidiaries
leases real or personal property and (i) which involve lease payments in excess
of $30,000 per year, (ii) which are between CCI or any of its Subsidiaries, on
the one hand, and any of their Affiliates, on the other hand, or (iii) which
were not entered into in the ordinary course of business. Copies of all such
leases have been delivered to MIOA. All such leases are valid, binding, and
enforceable in accordance with their terms (except as the enforceability thereof
may be limited by applicable bankruptcy, insolvency or other similar laws
relating to the enforcement of creditors' rights generally and by the
application of general principles of equity), are in full force and effect and
except as set forth on SCHEDULE 6.17, no event has occurred which is a default
or which with the passage of time will constitute a default by CCI or any of its
Subsidiaries thereunder, nor has any such event occurred to the knowledge of CCI
and its Subsidiaries which is a default, or with the passage of time will
constitute a default, by any other party to such lease. All property leased by
CCI or any of its Subsidiaries as lessee is in the possession of CCI and its
Subsidiaries. Except as indicated in SCHEDULE 6.17, no consent of any lessor is
required in connection with the Transactions.
6.18. LITIGATION. Except as set forth in SCHEDULE 6.18, (i) there are no
pending (served) actions, proceedings or regulatory agency investigations
against CCI or its Subsidiaries or, to CCI or such Subsidiaries' knowledge,
threatened against CCI or any of its Subsidiaries involving the Assets, and (ii)
no such action, proceeding, or regulatory agency investigation has been pending
(served) during the three-year period preceding the date of this Agreement. No
assertion has ever been made to CCI or any of its Subsidiaries to the effect
that CCI or any of its Subsidiaries has any liability as a successor to a third
party's business or product line, and neither CCI nor any of its Subsidiaries
has knowledge of any basis for such an assertion.
6.19. EMPLOYEE BENEFIT PLANS; EMPLOYEES.
(a) SCHEDULE 6.19 sets forth a list of each material "employee
benefit plan" (as defined by Section 3(e) of ERISA) and any other material
compensation, deferred compensation, fringe benefit, severance, disability, sick
leave, vacation, or other agreement, policy, or arrangement (each such plan,
agreement, policy, or arrangement is referred to herein as a "CCI Employee
Benefit Plan," and, collectively, the "CCI Employee Benefit Plans") for the
benefit of employees (and their beneficiaries) of CCI or any of its Subsidiaries
(collectively, "CCI Employees") or with respect to which CCI or any "CCI ERISA
Affiliate" (hereby defined to include any trade or business, whether or not
incorporated, other than CCI, which has employees who are treated pursuant to
Section 4001(a)(14) of ERISA and/or Section 414 of the Code as employees of a
single employer which includes CCI).
(b) CCI has, or will have prior to the Schedule Delivery Date,
delivered to CCI, with respect to each CCI Employee Benefit Plan, copies of the
documents embodying the Plan, if any, and employee handbooks governing the
employment of CCI Employees.
(c) Neither CCI nor any Subsidiary has any obligation to contribute
to or provide benefits pursuant to, and has no other liability of any kind with
respect to, (i) a "multiple employer welfare arrangement" (within the meaning of
Section 3(40) of ERISA), (ii) a "plan maintained by more than one employer"
(within the meaning of Section 413(c) of the Code), (iii) a "multi-employer
plan" within the meaning of Section 3(37) of ERISA), or (iv) an "employee
pension benefit plan" (within the meaning of Section 3(2) of ERISA) which is
subject to Title IV of ERISA.
(d) To the knowledge of CCI, neither CCI nor any Subsidiary is
subject to any liens, or excise or other taxes under ERISA, the Code or other
applicable law relating to any CCI Employee Benefit Plan.
(e) The consummation of the Transactions will not give rise to any
liability for any employee benefits to any CCI Employee, including, without
limitation, liability for severance pay, unemployment compensation, termination
pay or withdrawal liability.
(f) No CCI Employee Benefit Plan in any way provides for any
benefits of any kind whatsoever (other than under Section 4980B of the Code and
Part 6 of Subtitle B of Title I of ERISA, the Federal Social Security Act or any
CCI Employee Benefit Plan qualified under Section 401(a) of the Code) to any CCI
Employee who, at the time the benefit is to be provided, is a former director or
employee of, other provider of services to CCI or an CCI ERISA Affiliate (or a
beneficiary of any such person).
(g) Any contribution, insurance premium, excise tax, interest charge
or other liability or charge imposed or required with respect to any CCI
Employee Benefit Plan which is attributable to any period or any portion of any
period prior to the Closing will be paid by MIOA or a Subsidiary or will be
reflected on the Historical Financials.
(h) Except as disclosed on SCHEDULE 6.19(H), to the knowledge of
CCI, no claim, lawsuit, arbitration or other action has been asserted or
instituted or threatened in writing against any CCI Employee Benefit Plan, any
trustee or fiduciaries thereof, CCI, any of its Subsidiaries or any CCI ERISA
Affiliate, any director, officer or employee thereof, or any of the assets of a
CCI Employee Benefit Plan or any related trust.
(i) Except as disclosed on SCHEDULE 6.19(I), to the knowledge of
CCI, no CCI Employee Benefit Plan is under audit or investigation by the IRS or
the DOL or any other governmental authority and no such completed audit, if any,
has resulted in the imposition of any tax, interest or penalty.
(j) Since December 31, 1998 and through the date hereof, and except
as set forth on SCHEDULE 6.19(J), neither CCI, any of its Subsidiaries nor any
CCI ERISA Affiliate has, nor will it, (i) institute or agree to institute any
new CCI Employee Benefit Plan or practice, (ii) make or agree to make any change
in any CCI Employee Benefit Plan, (iii) make or agree to make any increase in
the compensation payable or to become payable by CCI, any of its Subsidiaries or
any CCI ERISA Affiliate to any CCI Employee, except for normal periodic salary
increases consistent with past practices, or (iv) except pursuant to this
Agreement and except for contributions required to provide benefits pursuant to
the provisions of the CCI Employee Benefit Plans, pay or accrue or agree to pay
or accrue any bonus, percentage of compensation, or other like benefit to, or
for the credit of, any CCI Employee.
(k) There are no collective bargaining or other labor union
agreements to which CCI or any of its Subsidiaries is a party or by which any of
them is bound.
6.20. ADVISORS FEES. Other than as set forth on SCHEDULE 6.20, neither CCI
nor any of its Subsidiaries or any Affiliate thereof has retained or utilized
the services of any advisor, broker, finder or intermediary, or paid or agreed
to pay any fee or commission to any other
Person or entity for or on account of the Transactions, or had any
communications with any Person or entity which would obligate MIOA to pay any
such fees or commission.
6.21. NO EXISTING DISCUSSION FOR ACQUISITION PROPOSAL. Except as set forth
on SCHEDULE 6.21, as of the date hereof, CCI is not engaged in any negotiations
with any other party with respect to an Acquisition Proposal.
6.22. ACCOUNTS RECEIVABLE. Except as set forth on SCHEDULE 6.22 and as
otherwise may be specifically identified on the Financial Statements, all
accounts receivable (the "CCI Receivables") of CCI which are reflected as
schedules to the Financial Statements, and all CCI Receivables acquired or
generated since the date of the Financial Statements, are in all material
respects valid and BONA FIDE CCI Receivables arising from the furnishing of
goods or services to customers in the ordinary course of business.
6.23. INVENTORIES. Any and all inventories of CCI which are reflected on
the schedules to the Financial Statements, plus any replacements for such items
acquired on or before the Closing, and minus any such items sold by CCI in the
ordinary course of business on or before the Closing, are properly valued at the
lower of cost (first-in, first-out) or market in accordance with generally
accepted accounting principles consistently applied and, except for obsolete and
slow moving items which have been fully written off or reserved for and except
for items sold in the ordinary course of business, consist of items of a quality
and quantity currently useable and saleable in the ordinary course of business
without markdown or discount.
6.24. SOFTWARE. Except as set forth on SCHEDULE 6.24, CCI presently has
the right to use all computer software owned by it, and to the knowledge of CCI,
the right to use all other computer software which is leased or licensed to, or
otherwise used by CCI. To the knowledge of CCI, neither CCI nor any Subsidiary
is in violation of any license or other agreement related to its software.
6.25. Y2K COMPLIANCE. Except as set forth in SCHEDULE 6.25, CCI's
equipment, computers, software, hardware, business and processes in which date
sensitive software is utilized are year 2000 compliant such that such equipment,
computers, software, hardware, business and processes will not experience
failures, interruptions or malfunctions in a manner that will have a material
adverse effect on such equipment, computers, software, hardware, business and
processes, CCI and/or it Assets.
6.26 LICENSES. SCHEDULE 6.26 contains a list of all licenses and other
material agreements pursuant to which CCI is a party. Copies of all such
licenses and other material agreements have been delivered to MIOA. All such
licenses and other material agreements are valid, binding, and enforceable in
accordance with their terms (except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency or other similar laws relating to the
enforcement of creditors' rights generally and by the application of general
principles of equity), are in full force and effect and except as set forth on
SCHEDULE 6.26, no event has occurred which is a default or which with the
passage of time will constitute a default by CCI thereunder, nor has any such
event occurred to the knowledge of CCI which is a default, or with the passage
of time will constitute a default, by any other party to such license or
agreement. Except as indicated in SCHEDULE 6.26, no consent of any party to such
license or material agreement is required in connection with the Transactions.
In order to conduct the business of the CCI, as such is currently being
conducted or proposed to be conducted in accordance with its Business Plan and
projections and except with respect to FDA, UL and FCC approval regarding the
portable care management system and a license for the multipoint software (all
of which to the best knowledge and belief of CCI will be obtained without undue
delay or material cost or expense), CCI does not require any licenses or other
material agreements that it does not already have in order to effectuate its
Business Plan and meet its projections. There is no Litigation pending or
threatened to challenge CCI's right, title and interest with respect to its
licenses and other material agreements. All licenses and other material
agreements are valid, enforceable and in good standing, and there are no
equitable defenses to enforcement based on any act or omission of CCI. The
consummation of the transactions contemplated hereby will not alter or impair
any such license and other material agreement.
6.27. DISCLOSURE AND ALL DOCUMENTATION. No representation or warranty by
CCI contained in this Agreement and no statement contained in any certificate or
schedule furnished to MIOA pursuant to the provisions hereof contains or shall
contain any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein not misleading. To the
knowledge of CCI and its Subsidiaries, there is no current event or condition of
any kind or character pertaining to CCI or its Subsidiaries that may reasonably
be expected to have a Material Adverse Effect, except as disclosed in this
Agreement and except for those events and conditions which are national or
industry-wide in nature. Except as specifically indicated elsewhere in this
Agreement, all documents delivered by CCI or its Subsidiaries to MIOA in
connection herewith have been and will be complete originals, or exact copies
thereof.
6.28. REGISTRATION STATEMENT. None of the information to be provided by
CCI or any of its officers, directors or employees (which were officers,
directors or employees prior to the Closing of this Agreement) for inclusion or
incorporation by reference in the Registration Statement or any other document
filed with any other regulatory agency in connection herewith will: (i) in the
case of the Registration Statement, at the time it becomes effective, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; or, (ii) in the case of any other filing required by any
regulatory agency in connection herewith, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make statements therein, in light of the circumstances
under which they are made, not misleading. If, at any time prior to the
Effective Time, any event with respect to CCI, its officers and directors shall
occur which is required to be described in the Registration Statement, such
event shall be so described, and an appropriate amendment or supplement shall be
promptly delivered to MIOA to be filed with the SEC.
6.29. SURVIVAL. The representations and warranties contained in this
Article 6 shall survive the Closing for one (1) year.
ARTICLE 7
CERTAIN ADDITIONAL COVENANTS
7.1. SPECIAL MEETING. Subject to Board Approval which has been obtained,
each of MIOA and CCI shall take all action necessary, in accordance with
applicable law and their respective Articles of Incorporation and Bylaws, to
convene a special meeting of their respective stockholders (each, a "SPECIAL
MEETING") on or before July 2, 1999 for CCI and July 31, 1999 for MIOA for the
purpose of considering and taking action upon this Agreement and the
Transactions. The Board of Directors of CCI and MIOA will recommend, subject to
Section 7.4 hereof, that the CCI Stockholders and the MIOA Stockholders,
respectively, vote in favor of and approve the Acquisition and this Agreement at
the Special Meeting, as applicable.
7.2. NO SOLICITATION. Subject to the provisions of Section 7.4, in
consideration of the expenses to be incurred by MIOA in negotiating this
Agreement and in conducting their due diligence investigation, CCI shall not,
directly or indirectly, through any officer, director, employee, financial
advisor, representative or agent of such party: (i) solicit, initiate, or
encourage any inquiries or proposals that constitute, or could reasonably be
expected to lead to, a proposal or offer for a merger, consolidation, business
combination, sale or transfer of substantial assets, sale of any shares of
capital stock (including without limitation by way of tender offer) or similar
transaction involving CCI or any of its Subsidiaries, other than the
Transactions (any of the foregoing inquiries or proposals being referred to in
this Agreement as an "Acquisition Proposal"), or (ii) engage in negotiations or
discussions concerning, or provide any non-public information to any Person
relating to, any Acquisition Proposal, or agree to or recommend any Acquisition
Proposal.
7.3. NOTIFICATION OF ACQUISITION PROPOSAL. CCI shall notify MIOA within
three (3) Business Days after receipt by CCI (or its advisors) of any
Acquisition Proposal or any request for non-public information in connection
with an Acquisition Proposal or for access to its properties, books or records
by any person or entity that informs CCI that it is considering making, or has
made, an Acquisition Proposal. Such notice shall be made orally and in writing
and shall indicate in reasonable detail the identity of the offeror and the
terms and conditions of such proposal, inquiry or contact. Such party shall
continue to keep the other party informed, on a prompt and current basis, of the
status of any such discussions, negotiations and the terms being discussed or
negotiated.
7.4. FIDUCIARY OUT. Notwithstanding the provisions of Section 7.2 above,
nothing contained in this Agreement shall prevent CCI or its Board of Directors,
from (A) furnishing non-public information, or entering into discussions or
negotiations, with, any person or entity in connection with an unsolicited bona
fide written Acquisition Proposal by such person or entity or recommending an
unsolicited bona fide written Acquisition Proposal to its stockholders, if and
only to the extent that (1) the Board of Directors of CCI believes in good faith
(after consultation with its financial advisor) that such Acquisition Proposal
is reasonably capable of being completed on the terms proposed and, after taking
into account the strategic benefits anticipated to be derived from the
Acquisition and the long-term prospects of MIOA and CCI as a combined company,
such Acquisition Proposal would, if consummated, result in a transaction
significantly more favorable over the long term than the Transactions, and CCI's
Board of Directors determines in good faith after receipt of an opinion from
outside legal counsel to the effect that such action is likely necessary for the
Board of Directors to comply with its fiduciary duties to stockholders under
applicable law and (2) prior to furnishing such non-public information to, or
entering into discussions or negotiations with, such person or entity, the CCI
Board of Directors receives from such Person an executed confidentiality
agreement with terms no more favorable to such party than those contained in
this Agreement and in the Confidentiality Agreement. Without limiting Section
7.3 above, CCI shall give written notice to MIOA as soon as possible of any such
Acquisition Proposal that the CCI Board of Directors determines meets standards
set forth in this Agreement and whether CCI will exercise its right to use
Acquisition Proposal as a fiduciary out shall mean that this Agreement is
terminated and a termination fee is payable by CCI to MIOA pursuant to Section
7.5 hereof.
7.5. BREAK-UP FEE. UPON OCCURRENCE OF FIDUCIARY OUT. CCI shall pay MIOA a
termination fee immediately upon the termination of this Agreement pursuant to
Section 7.4. The termination fee shall be the sum of (i) MIOA Out-Of-Pocket
Costs, and (ii) $800,000.00, but shall not in any event exceed $1,000,000.00.
The payment of a termination fee pursuant to this subsection, which is agreed to
be a fair estimate of the expenses and lost opportunity which would be suffered
by MIOA in such event, shall be the sole and exclusive remedy of MIOA against
CCI and any of its Subsidiaries and their respective directors, officers,
employees, attorneys, agents, advisors or other representatives, with respect to
the occurrences giving rise to such payment; provided that this limitation shall
not be applicable in the event of a willful breach of Sections 4.5 or 4.6 of
this Agreement by CCI or its representatives.
7.6. COMPLIANCE WITH THE SECURITIES ACT; REORGANIZATION. (a) Prior to the
Effective Time, CCI and MIOA shall cause to be delivered to the other party,
after consultation with its counsel, a certificate of their Chief Executive
Officer which identifies all persons who as of the Effective Time, are likely to
be considered "affiliates" of such party as that term is used in Paragraphs (c)
and (d) of Rule 145 under the Securities Act ("Affiliates"). CCI and MIOA shall
cause it Chief Executive Officers to deliver to the other party at the Closing a
second certificate updating such original certificate to the Effective Time.
(b) CCI and MIOA shall obtain a written agreement from each current
executive officer, director and stockholder who is identified as a possible
Affiliate in the certificates referred to in clause (a) above in substantially
the form attached hereto as EXHIBIT 7.6 which agreement will provide that such
person will not offer to sell, or otherwise dispose of any of the Acquisition
Shares issued to such person pursuant to the Acquisition, except in compliance
with Rule 145, another exemption from the registration requirements of the
Securities Act, or pursuant to an effective registration under the Securities
Act. CCI and MIOA shall deliver such written agreements to the other party on or
prior to the Closing.
7.7. BREACH PRIOR TO CLOSING. (a) If MIOA becomes aware of breach(es) by
CCI of any of its representations or warranties contained in this Agreement
after the Schedule Delivery Date but prior to the termination date for the
survival of the representations or warranties (the "Settlement Cut-Off Date") as
a result of its due diligence investigation of CCI and its Subsidiaries or
otherwise, it shall give written notice to CCI and the CCI Stockholders of the
nature and the amount of damages suffered as a result of such breach(es). If in
the exercise of its good faith business judgment MIOA alleges that such damages
exceed $250,000 in the aggregate, MIOA and CCI and its shareholders shall in
good faith negotiate a mutually acceptable dollar value settlement ( the "CCI
Breach Settlement") of the damages caused by such breach(es). If MIOA and the
CCI Stockholders agree on the CCI Breach Settlement prior to delivery of the
Acquisition Shares, they shall jointly instruct the Exchange Agent to decrease
the number of Acquisition Shares issuable to all holders of CCI Capital Stock
immediately prior to the Closing (collectively, the "CCI Acquisition
Stockholders") by an amount equal to the CCI Breach Settlement divided by the
Fair Market Value (i.e., $1.50). Such decrease in the number of Acquisition
Shares to be issued to the CCI Acquisition Stockholders shall be allocated among
the CCI Acquisition Stockholders pro rata based upon the ownership of the CCI
Capital Stock immediately prior to the Acquisition. If MIOA and the CCI
Stockholders agree on the CCI Breach Settlement subsequent to delivery of the
Acquisition Shares, they shall jointly instruct the CCI Acquisition Stockholders
to return to MIOA the number of Acquisition Shares issued to all such holders by
an amount equal to the CCI Breach Settlement divided by the Fair Market
Value. Such decrease in the number of Acquisition Shares to be returned by the
CCI Acquisition Stockholders shall be allocated among the CCI Acquisition
Stockholders pro rata based upon the ownership of the CCI Capital Stock
immediately prior to the Acquisition, unless otherwise agreed by the CCI
Acquisition Stockholders. In the event that MIOA and the CCI Stockholders, in
the exercise of good faith efforts, cannot reach agreement on the CCI Breach
Settlement or the CCI Acquisition Stockholders fail to return the appropriate
number of Acquisition Shares, MIOA shall have the right to exercise each and
every remedy for which it may otherwise be entitled under the law and/or
terminate this Agreement. If such damages do not exceed $250,000 in the
aggregate, no decrease in the number of Acquisition Shares issuable to the CCI
Acquisition Stockholders shall be made.
(b) If CCI or the CCI Stockholders become aware of breach(es) by
MIOA of any of its representations or warranties contained in this Agreement
after the Schedule Delivery date but prior to the termination date for the
survival of the representations or warranties (the "Settlement Cut-Off Date") as
a result of its due diligence investigation of MIOA and its Subsidiaries or
otherwise, they shall give written notice to MIOA of the nature and the amount
of damages suffered as a result of such breach(es). If in the exercise of their
good faith business judgment the CCI Stockholders allege that such damages
exceed $250,000 in the aggregate, MIOA and the CCI Stockholders shall in good
faith negotiate a mutually acceptable dollar value settlement (the "MIOA Breach
Settlement") of the damages caused by such breach(es). If MIOA and the CCI
Stockholders agree on the MIOA Breach Settlement prior to delivery of the
Acquisition Shares, they shall jointly instruct the Exchange Agent to increase
the number of Acquisition Shares issuable to the CCI Stockholders by an amount
equal to the MIOA Breach Settlement divided by the Fair Market Value. Such
increase in the number of Acquisition Shares to be issued to the CCI Acquisition
Stockholders shall be allocated among the CCI Acquisition Stockholders pro rata
based upon the ownership of the CCI Capital Stock immediately prior to the
Acquisition. If MIOA and the CCI Stockholders agree on the MIOA Breach
Settlement subsequent to delivery of the Acquisition Shares, they shall jointly
instruct the Exchange Agent to issue additional Acquisition Shares to the CCI
Acquisition Stockholders by an amount equal to the MIOA Breach Settlement
divided by the Fair Market Value. Such increase in the number of Acquisition
Shares to be issued to the CCI Acquisition Stockholders shall be allocated among
the CCI Acquisition Stockholders pro rata based upon the ownership of the CCI
Capital Stock immediately prior to the Acquisition, unless otherwise agreed by
the CCI Acquisition Stockholders. In the event that MIOA and the CCI
Stockholders, in the exercise of good faith efforts, cannot reach agreement on
the MIOA Breach Settlement or MIOA fails to issue additional Acquisition Shares,
the CCI Acquisition Stockholders shall have the right to exercise each and every
remedy for which they may otherwise be entitled under the law. If such damages
do not exceed $250,000 in the aggregate, no increase in the number of
Acquisition Shares issuable to the CCI Acquisition Stockholders shall be made.
(c) If an adjustment has been agreed to under both subsection (a)
and (b) above, the adjustments made pursuant thereto shall be netted against
each other in order to determine the net adjustment to the number of Acquisition
Shares.
(d) Notwithstanding anything to the contrary in this Section 7.7, no
adjustment shall be made to the number of Acquisition Shares if the absolute
difference between the aggregate amount of CCI Breach Settlement(s) and the
aggregate amount of MIOA Breach Settlement(s) does not exceed $250,000.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF CCI TO CLOSE
Each and every obligation of CCI under this Agreement to be performed on or
prior to the Closing shall be subject to the fulfillment, on or prior to the
Closing, of each of the following conditions, which conditions MIOA agrees to
use its best efforts to satisfy:
8.1 REPRESENTATIONS AND WARRANTIES AT CLOSING. The representations and
warranties made by MIOA in or pursuant to this Agreement or given on its behalf
hereunder shall be true and correct on and as of the Closing Date, in each case
with the same effect as though such representations and warranties had been made
or given on and as of the Closing Date except for such representations and
warranties which if not true and correct on and as of the Closing Date, do not
result in damages suffered by CCI in excess of $250,000 in the aggregate.
8.2 OBLIGATIONS PERFORMED. MIOA shall have performed and complied with all
material agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
8.3 CONSENTS AND STOCKHOLDER APPROVAL.
(a) MIOA shall have obtained and delivered to CCI the written
consents or approvals specified, or to be specified, in SCHEDULE 5.4 (except for
such consents or approvals as to which, in the aggregate, the failure to obtain
them shall not have a Material Adverse Effect) and all of such consents shall
remain in full force and effect at and as of the Closing.
(b) This Agreement and the Acquisition shall have received the
requisite MIOA Board Approval, MIOA Stockholder Approval, CCI Board Approval and
CCI Stockholder Approval, as applicable.
(c) CCI shall have received all consents to the consummation of the
Transaction that CCI deems necessary or appropriate from its lenders.
8.4. CLOSING DELIVERIES. MIOA shall have delivered to CCI each of the
following, together with any additional items which CCI may reasonably request
to effect the Transaction:
(a) a certificate of the President of MIOA certifying as to the
matters set forth in Sections 8.1, 8.2 and 8.3 (except for 8.3(c)) hereof and as
to the satisfaction of all other conditions set forth in this Article 8:
(b) Employment Agreements duly executed by MIOA or CCI, as the case
may be, and the individuals described in EXHIBIT 4.1 in the forms of EXHIBIT
4.1(A);
(c) Restricted Sale Agreement duly executed by MIOA and the
individuals described in EXHIBIT 4.1 the form of EXHIBIT 4.1 (B);
(d) the Registration Rights Agreement in the form attached hereto as
EXHIBIT 3.1(D); and
(e) any other documents or agreements contemplated hereby and/or
necessary or appropriate to consummate the Transactions.
8.5. NO INVESTIGATIONS OF MIOA AND ITS SUBSIDIARIES OR THEIR BUSINESS. As
of the Closing Date, there shall be no, and neither MIOA nor any of its
Subsidiaries shall have any knowledge of any material pending or threatened
investigation by any municipal, state or federal government agency or regulatory
body with respect to MIOA or its Subsidiaries, the Assets or the business of
MIOA and its Subsidiaries, other than such as have been disclosed to CCI prior
to the date hereof.
8.6 NO MATERIAL ADVERSE EFFECT. Other than changes relating to, or
resulting from, the existence of, or the terms of, this Agreement and the
Transactions contemplated hereby, including any related loss of employees or
customers of MIOA or its Subsidiaries, MIOA shall not have suffered since March
31, 1999 any change that constitutes a Material Adverse Effect on MIOA.
8.7. SECURITIES LAWS. The parties shall have complied with all federal and
state securities laws applicable to the Transactions.
8.8. MINUTES. CCI shall have received at Closing copies of minutes of the
Stockholders and the Board of Directors of MIOA, certified by the corporate
secretary of MIOA, approving and authorizing the Acquisition and the
Transactions.
8.9. REVISED SCHEDULES. MIOA and its Subsidiaries shall have provided CCI
with revised Schedules dated as of the Closing Date (the "MIOA Final Revised
Schedules"), with all material changes through such date duly noted thereon,
including any modifications to and the MIOA Final Revised Schedules will not
contain any disclosures which (i) should have been but were not disclosed on the
Schedules in accordance with Section 4.4, or (ii) set forth changes which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect unless such disclosures are approved in writing by CCI.
8.10. LEGALITY. No federal or state statute, rule, regulation, executive
order, decree or injunction shall have been enacted, entered, promulgated or
enforced by any court or governmental authority which is in effect and has the
effect of making the Acquisition illegal or otherwise prohibiting the
consummation of the Acquisition.
8.11. REGULATORY MATTERS. All filings shall have been made and all
approvals shall have been obtained as may be legally required pursuant to
federal and state laws prior to the consummation of the Transactions and all
actions by or in respect of, or filings with, any governmental body, agency or
official or any other Person required to permit the consummation of the
Acquisition so that CCI shall be able to continue to carry on the business of
MIOA substantially in the manner now conducted by MIOA shall have been taken or
made.
8.12. AGREEMENT AS TO EXHIBITS AND SCHEDULES. The parties hereto shall
have mutually agreed in the exercise of their respective sole discretion to the
terms contained in each Schedule and Exhibit to this Agreement.
8.13 ADDITIONAL CLOSING CONDITIONS. Each and every one of the additional
closing conditions, if any, required of MIOA set forth in SCHEDULE 8.13 attached
hereto shall have been completed or fulfilled, as the case may be.
ARTICLE 9
CONDITIONS TO OBLIGATIONS OF MIOA TO CLOSE
Each and every obligation of MIOA under this Agreement to be performed on or
prior to the Closing shall be subject to the fulfillment, on or prior to the
Closing, of each of the following conditions, which conditions CCI agrees to use
its best efforts to satisfy:
9.1 REPRESENTATIONS AND WARRANTIES AT CLOSING. The representations and
warranties made by CCI in or pursuant to this Agreement or given on its behalf
hereunder shall be true and correct on and as of the Closing Date, in each case
with the same effect as though such representations and warranties had been made
or given on and as of the Closing Date except for such representation and
warranties which if not true and correct on and as of the Closing Date, do not
result in damages suffered by MIOA in excess of $250,000 in the aggregate.
9.2 OBLIGATIONS PERFORMED. CCI shall have performed and complied with all
material agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
9.3 CONSENTS AND STOCKHOLDER APPROVAL.
(a) CCI shall have obtained and delivered to MIOA the written
consents or approvals specified, or to be specified, in SCHEDULE 6.4 (except for
such consents or approvals as to which, in the aggregate, the failure to obtain
them shall not have a Material Adverse Effect) and all of such consents shall
remain in full force and effect at and as of the Closing.
(b) This Agreement and the Acquisition shall have received the
requisite MIOA Board Approval, MIOA Stockholder Approval, CCI Board Approval and
CCI Stockholder Approval.
(c) MIOA shall have received all consents to the consummation of the
Transaction that XXXX xxxxx necessary or appropriate from its lenders.
9.4. CLOSING DELIVERIES. CCI shall have delivered to MIOA each of the
following, together with any additional items which MIOA may reasonably request
to effect the Transaction:
(a) a certificate of the President of CCI certifying as to the
matters set forth in Sections 9.1, 9.2 and 9.3 (except for 9.3(c)) hereof and as
to the satisfaction of all other conditions set forth in this Article 9:
(b) Employment Agreements duly executed by the individuals described
in EXHIBIT 4.1 in the forms of EXHIBIT 4.1(A);
(c) Restricted Sale Agreement duly executed by the individuals
described in EXHIBIT 4.1 the form of EXHIBIT 4.1(B);
(d) the Registration Rights Agreement in the form attached hereto as
EXHIBIT 3.1(D);
(e) the Conditional Termination Agreement in the form attached
hereto as EXHIBIT 9.4(E);
(f) the Purchaser Representative Questionnaires in substantially the
same form as attached hereto as EXHIBIT 4.11;
(g) the release from each of Messrs. Xxxxxx, Xxxxxx and Xxxxxx in
substantially the same form as attached hereto as EXHIBIT 9.4(G); and
(h) any other documents or agreements contemplated hereby and/or
necessary or appropriate to consummate the Transactions.
9.5 NO INVESTIGATIONS OF CCI AND ITS SUBSIDIARIES OR THEIR BUSINESS. As of
the Closing Date, there shall be no, and neither CCI nor any of its Subsidiaries
shall have any knowledge of any material pending or threatened investigation by
any municipal, state or federal government agency or regulatory body with
respect to CCI or its Subsidiaries, the Assets or the business of CCI and its
Subsidiaries, other than such as have been disclosed to MIOA prior to the date
hereof.
9.6 NO MATERIAL ADVERSE EFFECT. Other than changes relating to, or
resulting from, the existence of, or the terms of, this Agreement and the
transactions contemplated hereby, including any related loss of employees or
customers of CCI or its Subsidiaries, CCI shall not have suffered since March
31, 1999 any change that constitutes a Material Adverse Effect on CCI.
9.7 SECURITIES LAWS. The parties shall have complied with all federal and
state securities laws applicable to the Transactions.
9.8. MINUTES. MIOA shall have received at Closing copies of minutes of the
Stockholders and the Board of Directors of CCI, certified by the corporate
secretary of CCI, approving and authorizing the Acquisition and the
Transactions.
9.9. REVISED SCHEDULES. CCI and its Subsidiaries shall have provided MIOA
with revised Schedules dated as of the Closing Date (the "CCI Final Revised
Schedules"), with all material changes through such date duly noted thereon,
including any modifications to CCI's representations and warranties resulting
from the Permitted Equity Financings, and the CCI Final Revised Schedules will
not contain any disclosures which (i) should have been but were not disclosed on
the Schedules in accordance with Section 4.4, or (ii) set forth changes which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect unless such disclosures are approved in writing by MIOA.
9.10. LEGALITY. No federal or state statute, rule, regulation, executive
order, decree or injunction shall have been enacted, entered, promulgated or
enforced by any court
or governmental authority which is in effect and has the effect of making the
Acquisition illegal or otherwise prohibiting the consummation of the
Acquisition.
9.11. REGULATORY MATTERS. All filings shall have been made and all
approvals shall have been obtained as may be legally required pursuant to
federal and state laws prior to the consummation of the Transactions and all
actions by or in respect of, or filings with, any governmental body, agency or
official or any other Person required to permit the consummation of the
Acquisition so that MIOA shall be able to continue to carry on the business of
CCI substantially in the manner now conducted by CCI shall have been taken or
made.
9.12. AGREEMENT AS TO EXHIBITS AND SCHEDULES. The parties hereto shall
have mutually agreed in the exercise of their respective sole discretion to the
terms contained in each Schedule and Exhibit to this Agreement.
9.13 ADDITIONAL CLOSING CONDITIONS. Each and every one of the additional
closing conditions, if any, required of CCI or its stockholders set forth in
SCHEDULE 9.13 attached hereto shall have been completed or fulfilled, as the
case may be.
ARTICLE 10
TERMINATION
10.1. TERMINATION. This Agreement may be terminated:
(a) by mutual written consent of CCI and MIOA at any time before the
Closing Date;
(b) by either CCI or MIOA if there occurs prior to Closing a
substantial loss, damage or diminution of the other party's Assets or other
event which taken singularly or in the aggregate caused a Material Adverse
Effect on the business of the other party and its Subsidiaries (taken as a
whole) arising from any cause, including but not limited to theft, fire, flood
or act of God;
(c) by either CCI or MIOA in the exercise of their respective sole
discretion at anytime prior to the Schedule Delivery Date.
(d) by either MIOA or CCI in writing, without liability, if there
shall be any order, writ, injunction or decree of any court or governmental or
regulatory agency binding on MIOA or CCI, which prohibits or restrains MIOA or
CCI from consummating the transactions contemplated hereby, provided that MIOA
and CCI shall have used their reasonable, good faith efforts to have any such
order, writ, injunction or decree lifted, and the same shall not have been
lifted within 30 days after entry, by any such court or governmental or
regulatory agency;
(e) by MIOA or CCI in the event that any conditions precedent to the
obligations of such party to consummate the transactions contemplated hereby
cannot be satisfied or fulfilled by August 15, 1999, other than as a result of
the breach of this Agreement by the party attempting to terminate this
Agreement;
(f) by either CCI or MIOA if the Closing is not consummated on or
before August 15, 1999 (the "Automatic Termination Date"), unless the failure to
close by such date is attributable to actions or omissions of the party seeking
to terminate this Agreement under this subsection (g);
(g) by either MIOA or CCI pursuant to Section 7.4 (Fiduciary Out);
(h) by either CCI or MIOA if CCI Stockholder Approval has not been
obtained on or before the Automatic Termination Date;
(i) in accordance with Section 7.7 (a) or (b), as applicable; or
(j) by MIOA pursuant to Section 3.5(b).
10.2. EFFECT OF TERMINATION. In the event this Agreement is terminated
pursuant to Sections 10.1(a), 10.1(b), 10.1(c), 10.1(d), 10.1(e), 10.1(f),
10.1(h) or 10.1(j) above, no party shall have any obligations to the other
hereunder except for those obligations set forth in Section 4.3 (Expenses) and
those with respect to confidentiality and the return of confidential information
set forth below. If this Agreement is terminated pursuant to Section 10.1(g),
the remedies set forth in Section 7.5 shall apply. If this Agreement is
terminated, each party shall promptly return to the other party all copies of
the due diligence materials previously provided by such party to the other or
their representatives including, without limitation, each party's Intellectual
Property, and the obligations in respect of confidentiality set forth in this
Agreement and in the Confidentiality Agreement shall remain in effect.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 SEVERABILITY. If any provision of this Agreement is prohibited by the
laws of any jurisdiction as those laws apply to this Agreement, that provision
shall be ineffective to the extent of such prohibition and/or shall be modified
to conform with such laws, without invalidating the remaining provisions hereto.
11.2. MODIFICATION. This Agreement may not be changed or modified except
in writing specifically referring to this Agreement and signed by each of the
parties hereto.
11.3 ASSIGNMENT, SURVIVAL AND BINDING AGREEMENT. This Agreement and the
Closing Documents may not be assigned by CCI, without prior written consent of
MIOA, and may not be assigned by MIOA, without prior written consent of CCI. The
terms and conditions hereof shall survive the Closing as provided in this
Agreement and shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, personal representatives, successors and
assigns.
11.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.5 NOTICES. All notices, requests, demands, claims and other
communication hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
Business Days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid and addressed to the intended recipient as set forth
below:
If to MIOA Medical Industries of America, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telefax: (000) 000-0000
If to CCI CyberCare, Inc.
000 00xx Xxxxxx XX
Xxxxx X-000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telefax:
or at such other address as any party hereto notifies the other parties hereof
in writing.
11.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement,
together with the Exhibits and Schedules attached hereto, constitutes the entire
agreement and supersedes any and all other prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof and, except as otherwise expressly provided in this
Agreement, is not intended to confer upon any Person other than CCI and MIOA,
any rights or remedies hereunder. No provision of this Agreement shall be
construed against any party on the ground that such party drafted the provision
or caused it to be drafted or the provision contains a covenant of such party.
11.7 GOVERNING LAW; JURISDICTION AND VENUE. This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Florida, excluding those relating to conflicts of laws. The parties
hereto expressly agree that the exclusive jurisdiction and venue for legal
proceedings under this Agreement shall be the state or applicable federal court
having jurisdiction over the defendant's domicile (or in the case of CCI and
MIOA, the location of its principal corporate office).
11.8. ATTORNEY'S FEES. In any action between the parties to enforce any of
the terms of this Agreement, the prevailing party shall be entitled to recover
reasonable expenses, including reasonable attorney's fees.
11.9. HEADINGS. The section headings contained in this Agreement and the
Schedules and Exhibits attached hereto are inserted for convenience only and
shall not affect in any way the meaning or interpretation of this Agreement.
11.10. INCORPORATION OF EXHIBIT AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated in this Agreement by reference and
made a part hereof.
11.11. CONSTRUCTION. Within this Agreement, the singular shall include the
plural and the plural shall include the singular and any gender shall include
all other genders, all as the meaning and context of this Agreement shall
require. The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party hereto by virtue of the authorship of any of the
provisions of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
MEDICAL INDUSTRIES OF AMERICA, INC.
By:/s/ Xxxxxxx X. Xxxxxxx
Its: CEO
CYBERCARE, INC.
By:/s/ Xxxx Xxxxxx
Its: President & CEO
