AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
AMENDMENT
NO. 1 TO AGREEMENT AND PLAN OF MERGER
This
Amendment No. 1 (the “Amendment”), entered into July
7, 2009, to the Agreement and Plan of Merger (the “Agreement” or “Merger Agreement”) executed on
or around May 22, 2009, by and between SARS Corporation (“SARS”), a corporation formed
under the laws of the State of Nevada, and/or its assignees, Environmental
Insulation, LLC (“EI”),
a limited liability company formed under the laws of the State of Nevada, EI
Acquisition Corp. (the “EI
Merger Sub”), a corporation to be formed under the laws of the State of
Nevada and a wholly owned subsidiary of SARS, ESDD, LLC (“ESDD”), a limited liability
company formed under the laws of the State of Tennessee, ESDD Acquisition Corp.,
a corporation to be formed under the laws of the State of Nevada and a wholly
owned subsidiary of SARS (the “ESDD Merger Sub”),
Alternatech, Inc. (“Alternatech”), a corporation
formed under the laws of the State of Illinois, Alternatech Acquisition Corp.
(the “Alternatech Merger
Sub”), a corporation to be formed under the laws of the State of Nevada
and a wholly owned subsidiary of SARS, Associated Mechanical, Inc. (“AMI”), a corporation formed
under the laws of the State of Illinois, AMI Acquisition Corp. (the “AMI Merger Sub”), a
corporation to be formed under the laws of the State of Nevada and a wholly
owned subsidiary of SARS, Swank Enterprises, Inc. (“SEI”) d/b/a Art and Print,
Inc. (“A&P”), a
corporation formed under the laws of the State of Illinois, A&P Acquisition
Corp. (the “A&P Merger
Sub”), a corporation to be formed under the laws of the State of Nevada
and a wholly owned subsidiary of SARS and X.X. Power Plumbing &
Heating Company (“RJP”),
a corporation formed under the laws of the State of Illinois, RJP Acquisition
Corp. (the “RJP Merger Sub”), a corporation to
be formed under the laws of the State of Nevada and a wholly owned subsidiary of
SARS. Hereinafter, EI, ESDD, Alternatech, AMI, A&P and RJP shall
be referred to collectively as the “Acquisition
Entities”:
WHEREAS,
the Parties desire to revise the Closing Date of the Agreement;
WHEREAS,
the Parties wish to consolidate the individual merger subsidiaries, as
previously contemplated by the Parties into one (1) merger
subsidiary;
WHEREAS,
the Parties wish to revise the number of SARS shares received by the EI, ESDD,
Alternatech, AMI, A&P and RJP collectively;
WHEREAS,
the Parties desire the effective date of this Amendment to be retroactively
effective as of June 30, 2009;
WHEREAS,
the Parties now wish to amend the Agreement, as set forth herein;
and
WHEREAS, except as set forth herein,
all other terms to the Agreement shall remain in full force and
effect.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, it is hereby covenanted and agreed to by the Parties as
follows:
1. The
“Closing Date” in the
Agreement shall be defined as July 8, 2009.
2.
All references to the “EI
Merger Sub, ESDD Merger
Sub, Alternatech Merger
Sub, AMI Merger
Sub, A&P Merger
Sub, the RJP Merger
Sub and the Merger
Subs” shall be removed and replaced by “FasTech Services,
Inc.” FasTech Services, Inc. shall be formed by SARS as a
wholly-owned subsidiary of SARS.
3. Section 1.01”The Share
Exchange” subsection (b) shall be stricken and replaced in its entirety
by the following:
“The
Acquisition Entities shall receive twenty four million (24,000,000) shares of
SARS’ restricted common stock shares, on a pro rata basis, otherwise known
herein as the ‘Merger
Shares’;”
4. Section 1.02 “The Merger”
subsection (b)(i)(3) shall be stricken and replaced in its entirety by
the following:
“The
Merger Shares acquired in the Share Exchange shall represent, when issued, the
equivalent of approximately, but no less than, sixty percent (60%) of SARS’
issued and outstanding common stock at the Effective Time (defined, herein
below).”
5. Section 1.02 “Conversion of
Merger Sub Stock” subsection (b)(ii) shall be stricken and replaced in
its entirety by the following:
“At the
Effective Time (defined, herein below), by virtue of the Merger and without any
action on the part of the Acquisition Entities and FasTech Services, Inc. and
SARS, or the holders of any of their respective securities, each share of
capital stock of the FasTech Services, Inc. outstanding, immediately prior to
the Effective Time (defined herein, below), shall be converted into one
(1) unit of EI membership units, one (1) unit of ESDD membership
units, one (1) share of capital stock of Alternatech, one (1) share of the
capital stock of AMI, one (1) share of capital stock of A&P and one (1)
share of the capital stock of RJP, whereby FasTech Services, Inc. shall be the
‘Surviving Entity,’ and
the shares of capital stock of the Surviving Entity so issued in such conversion
shall constitute the only outstanding shares of capital stock of the Surviving
Entity shall be a wholly owned subsidiary of SARS.”
6. Section 1.05 “Effective
Time” subsections (a) through (f) shall be stricken and replaced in its
entirety by the following:
“At the
Effective Time and subject to and upon the terms and conditions of this Merger
Agreement, FasTech Services, Inc. shall, and SARS shall cause FasTech Services,
Inc., to merge with and into the Acquisition Entities (as defined in the
Agreement, or: EI, ESDD, Alternatech, AMI, A&P and RJP) in accordance with
the provisions of the Nevada Revised Statutes. FasTech Services, Inc.
shall continue as the Surviving Entity. The Effective Time shall
occur upon the filing with the Nevada Secretary of State, executed in accordance
with the applicable provisions of the Nevada Secretary of State, the Tennessee
Department of State and the Illinois Secretary of State, as
necessary.”
7. Section 1.10 “Employment
Agreements” shall be added to Article I of the Agreement with the
following:
“Following
the Closing Date of the Merger Agreement, Xxxxx Xxxxxxx and Xxxx Xxxxx shall
mutually agree to voluntarily terminate their existing employment agreements
with the Acquisition Entities and to and execute terms of employment with
SARS.”
8. Section 2.03
“Capitalization” subsection (b) shall be stricken and replaced in its
entirety by the following:
“It is
acknowledged that as of the Closing Date, the individuals named, which shall be
disclosed on Schedule
2.03 and attached hereto prior to the Closing, collectively, will own of
record and beneficially up to approximately twenty four million
(24,000,000) of the issued and outstanding SARS Common Shares, constituting
sixty percent (60%) of such shares. Five million (5,000,000) SARS
Common Shares shall be reserved for issuance to as part of the employee stock
option plan for SARS. There exist no other outstanding rights, warrants, options
or agreements for the exchange of SARS Common or Preferred Shares except as
provided in this Merger Agreement.”
9. Section 3.02
“Capitalization” subsections (a) through (f) shall be revised, with
respect to issued and outstanding membership units or shares of common stock for
each entity, in accordance with the capitalization table included below,
otherwise the remainder of the existing language shall survive:
|
Acquisition
Entity
|
Membership
Unit/Common Stock Ownership by Xxxx Xxxxx (75%), pre-merger closing
date
|
Membership
Unit/Common Stock Ownership by Xxxxx Xxxxxxx (25%), pre-merger closing
date
|
|
Environmental
Insulation
|
100.00
|
33.33
|
|
Associated
Mechanical, Inc.
|
70.00
|
23.33
|
|
Swank
Enterprises
|
100,000.00
|
33.333.33
|
|
X.X.
Power, Plumbing & Heating
|
51.00
|
17.00
|
|
Alternatech,
Inc.
|
178.00
|
59.33
|
|
Total
|
100,399.00
|
36,466.32
|
10. Section 3.03 “Authority for
Merger Agreement” shall be stricken and replaced in its entirety by the
following:
“The
execution, delivery and performance of this Merger Agreement by the Acquisition
Entities has been duly authorized by all necessary corporate action, and this
Merger Agreement constitutes the valid and binding obligation of the Acquisition
Entities, enforceable against the Acquisition Entities, in accordance with its
terms, except as enforceability may be affected by bankruptcy, insolvency or
other laws of general application affecting the enforcement of creditors'
rights. The execution and consummation of the Merger contemplated by
this Merger Agreement and compliance with its provisions by the Acquisition
Entities will not violate any provision of Applicable Law and will not conflict
with or result in any breach of any of the terms, conditions, or provisions of,
or constitute a default under, the Acquisition Entities’ Certificates of
Incorporation or Bylaws, in each case as amended, or, to the Knowledge of the
Acquisition Entities, in any material respect, any indenture, lease, loan
agreement or other agreement instrument to which the Acquisition Entities are a
party to or by which it or any of them or any of its or their properties are
bound, or any decree, judgment, order, statute, rule or regulation applicable to
the Acquisition Entities.
Notwithstanding
the above, SARS acknowledges that the transfer of shares of the Acquisition
Entities pursuant to the Closing of the Agreement may violate the terms of loan
agreements previously entered into by the Acquisition Entities.”
11. Section 3.07 “Governmental
or Third Party Consent” shall be stricken and replaced in its entirety by
the following:
“No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party to
any agreement with the Acquisition Entities, is required by or with respect to
the Acquisition Entities in connection with the execution and delivery of this
Merger Agreement or the consummation of the Merger contemplated hereby, except
for such consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under (i) applicable securities
laws, (ii) the Nevada General Corporation Law, the Illinois Business
Corporation Act of 1983 or the Tennessee Business Corporation Act; (iii)
existing lending institutions currently having the extension of credit to the
Acquisition Entities; (iv) Soy Capital Bank; (v) Associated Bank; (vi) SouthSide
Trust Bank; (vii) Citizens Bank of Cropsey; and (viii) the Internal Revenue
Service.”
12. Section 5.01 “Conditions
Precedent to the Parties’ Obligations” subsection (a) shall be stricken
and replaced in its entirety by the following:
“Consents,
Approvals. The Parties shall have obtained all necessary
consents and approvals of their respective boards of directors, and all
consents, approvals and authorizations required under their respective charter
documents, and all material consents, including any material consents and
waivers by the Parties’ respective lenders and other third parties, if
necessary, to the consummation of the transactions contemplated by this Merger
Agreement. The Parties acknowledge and accept that consent to enter
this Merger Agreement was not sought or provided by: (i) Soy Capital Bank; (ii)
Associated Bank; (iii) Southside Trust Bank; (iv) Citizens Bank of Cropsey; and
(v) the Internal Revenue Service.”
13. Section 5.01 “Conditions
Precedent to the Parties’ Obligations” subsection (c) shall be stricken
and replaced in its entirety by the following:
“Absence of Certain
Litigation. Notwithstanding any actions brought by: (i) Soy
Capital Bank; (ii) Associated Bank; (iii) Citizens Bank of Cropsey; and (iv) the
Internal Revenue Service, no action or proceeding shall be threatened or pending
before any governmental entity or authority which, in the reasonable opinion of
counsel for the Parties, is likely to result in a restraint, prohibition or the
obtaining of damages or other relief in connection with this Merger Agreement or
the consummation of the transactions contemplated hereby.”
14. Section 5.02 “Employment
Agreement” subsection (i) shall be stricken in its entirety.
15. Section 5.03 “Employment
Agreement” (l) shall be stricken in its entirety.
16. Section 6.01 “Termination,
Unwinding” subsections (a) through (f) shall survive in their entirety,
and become subsections (b) through (g). In addition, a new subsection
(a) shall be added to Section 6.01 with the following:
“(a) At
any time whatsoever immediately upon and during the seven (7) years following
the Closing of this Merger Agreement, this Merger Agreement may be cancelled and
unwound by either of the Parties should any known or unknown third party
creditors of the Acquisition Entities present any act or action which would
jeopardize the ownership of the Acquisition Entities’ assets by SARS or the
ownership of SARS shares pursuant to this Merger Agreement by Xxxx Xxxxx
individually. In the event of cancellation and unwinding of this
Merger Agreement by either of the Parties, as provided herein, this Merger
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of the Parties, and such cancellation and unwinding
shall not relieve any party hereto for any intentional breach prior to such
cancellation and unwinding by a party hereto of any of its representations or
warranties or any of its covenants or agreements set forth in this Merger
Agreement. In the event of cancellation and unwinding of this Merger
Agreement, (i) the Acquisition Entities agree to make a good faith effort to
return all consideration tendered and delivered by SARS, as detailed in Section
1.01 of this Merger Agreement; and (ii) SARS agrees to return the Merger Shares
and the assets of the Acquisition Entities.”
Except as
set forth herein, all other terms to the Agreement shall remain in full force
and effect.
[Remainder of this page left
intentionally blank; signature page to follow]
This
Amendment may be executed simultaneously 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.
IN WITNESS WHEREOF, the Parties have
executed this Amendment on the date indicated above and agree that the effective
date of this Amendment shall be retroactively effective as of June 30,
2009.
|
SARS
CORPORATION
|
|
By:
|
/s/ Xxxxx Xxxxxxx |
|
Name:
|
Xxxxx
Xxxxxxx
|
| Title: | Interim Chairman and Chief Executive Officer |
FASTECH
SERVCES, INC.
|
By:
|
/s/ Xxxxx Xxxxxxx |
|
Name:
|
Xxxxx
Xxxxxxx
|
| Title: | Interim Chairman and Chief Executive Officer |
ENVIRONMENTAL
INSULATION, LLC
|
By:
|
/s/ Xxxx Xxxxx |
|
Name:
|
Xxxx
Xxxxx
|
| Title: | Manager |
ESDD,
LLC
|
By:
|
/s/ Xxxxx Xxxxxxx |
|
Name:
|
Xxxxx
Xxxxxxx
|
| Title: | Manager |
ALTERNATECH,
INC.
|
By:
|
/s/ Xxxxx Xxxxxxx |
|
Name:
|
Xxxxx
Xxxxxxx
|
| Title: | President |
ASSOCIATED
MECHANICAL, INC.
|
By:
|
/s/ Xxxxx Xxxxxxx |
|
Name:
|
Xxxxx
Xxxxxxx
|
| Title: | President |
SWANK
ENTERPRISES, INC. d/b/a ART & PRINT, INC.
|
By:
|
/s/ Xxxxx Xxxxxxx |
|
Name:
|
Xxxxx
Xxxxxxx
|
| Title: | President |
X.X. POWER PLUMBING & HEATING COMPANY
|
By:
|
/s/ Xxxxx Xxxxxxx |
|
Name:
|
Xxxxx
Xxxxxxx
|
| Title: | President |
Exhibit
A
