Exhibit 10.2
AGREEMENT AND PLAN OF MERGER
AND REORGANIZATION
BY AND AMONG
COL ACQUISITION CORP., COUPONS ONLINE, L.L.C.,
XXXXX X. XXXXXXX, XXXX X. XXXXXXXXXX, XXXXX XXXXXXX,
XXX XXXXX, XXXX XXXXXXXX, XXXXX XXXXXX, XXXXX XXXXXXX,
XXXXX XXXXXXXXX, DIVERSIFIED EQUITIES AND MANAGEMENT II
t/a DEM II, XXXXXX XXXXXX, XXXXXX XXXXXX,
XXXXXXXX XXXXXX, XXXXXXX XXXXXXXXXXX, XX. XXXXXX X. XXXXXX,
XXXXX XXXXXX, XXXXXX XXXXXXXX, XXXX XXXXXXXX,
XXXX XXXXXX FAMILY TRUST, XXXXX XXXXXXXXXX
AND MUZAK LIMITED PARTNERSHIP
DATED AS OF SEPTEMBER 12, 1996
TABLE OF CONTENTS
ARTICLE 1..................................................................-2-
The Merger.................................................................-2-
1.1 The Merger....................................................-2-
1.2 Effective Time................................................-2-
1.3 Effect of the Merger..........................................-2-
1.4 Certificate of Incorporation; By-Laws; Operating Agreement....-2-
1.5 Directors and Officers.......................................-3-
1.6 Effect on Securities..........................................-3-
1.7 Taking of Necessary Action; Further Action...................-6-
1.8 Material Adverse Effect; Ordinary Course of Business.........-6-
1.9 Tax Consequences..............................................-7-
ARTICLE 2..................................................................-7-
Representations and Warranties of COL and the Active Holders...............-7-
ARTICLE 3..................................................................-7-
Representations and Warranties the Holders.................................-7-
ARTICLE 4..................................................................-7-
(i)
Representations and Warranties of Company...................................-7-
ARTICLE 5...................................................................-8-
Conduct of Business Pending the Merger......................................-8-
Section 5.1 Conduct of Business by COL Pending the Merger....-8-
5.2 No Solicitation or Transfer of Interests.....................10-
5.3 No Transfer of Holder Rights.................................10-
5.4 Conduct of Business by the Company Pending the Merger........10-
ARTICLE 6...................................................................11-
Additional Covenants.......................................................-11-
6.1 Registration Under the Securities Act........................11-
6.2 Access to Information........................................14-
6.3 Consents; Approvals..........................................15-
6.4 Notification of Certain Matters..............................15-
6.5 Further Action...............................................15-
6.6 Public Announcements.........................................15-
6.7 Conveyance Taxes.............................................15-
ARTICLE 7...................................................................15-
Conditions to the Merger...................................................-15-
7.1 Conditions to Obligation of Each Party to Effect the Merger..16-
7.2 Additional Conditions to Obligations of the Company..........16-
7.3 Additional Conditions to Obligation of COL and the Holders...18-
ARTICLE 8...................................................................19-
Termination.................................................................19-
8.1 Termination..................................................19-
8.2 Effect of Termination........................................20-
8.3 Fees and Expenses............................................20-
ARTICLE 9...................................................................21-
Survival of Representations and Warranties; Indemnification................-21-
9.1 Survival.................................................-21-
9.2 Indemnification..........................................-21-
9.3 Conditions of Indemnification for Third Party Claims.....-22-
9.4 Payment of Claims........................................-23-
9.5 Set-Off..................................................-23-
(ii)
9.6 Loan and Security Agreement..............................-24-
ARTICLE 10.................................................................-24-
General Provisions.........................................................-24-
10.1 Disclosure Schedules.....................................-24-
10.2 Notices..................................................-24-
10.3 Certain Definitions......................................-25-
10.4 Amendment................................................-25-
10.5 Waiver...................................................-26-
10.6 Headings.................................................-26-
10.7 Severability.............................................-26-
10.8 Entire Agreement.........................................-26-
10.9 No Assignment............................................-26-
10.10 Parties In Interest......................................-26-
10.11 Failure or Indulgence Not Waiver; Remedies Cumulative....-27-
10.12 GOVERNING LAW............................................-27-
10.13 Counterparts.............................................-27-
10.14 Joint Participation......................................-27-
10.15 No Tax Advice............................................-27-
10.16 Exhibits and Schedules...................................-27-
10.17 WAIVER OF JURY TRIAL.....................................-28-
(iii)
AGREEMENT AND PLAN OF MERGER
AND REORGANIZATION
Agreement and Plan of Merger and Reorganization, dated as of September
12, 1996 (this "Agreement"), by and among COL Acquisition Corp., a Delaware
corporation (the "Company"), Coupons Online, L.L.C., a New Jersey limited
liability company ("COL"), Xxxxx X. Xxxxxxx ("X. Xxxxxxx"), Xxxx X. Xxxxxxxxxx
("Xxxxxxxxxx"), Xxxxx Xxxxxxx ("Xxxxxxx"), Xxx Xxxxx ("Reddy"), Xxxx Xxxxxxxx
("Xxxxxxxx"), Xxxxx Xxxxxx ("Xxxxxx"), Xxxxx Xxxxxxx ("X. Xxxxxxx"), Xxxxx
Xxxxxxxxx ("Xxxxxxxxx"), Diversified Equities and Management II t/a DEM II
("DEM"), Xxxxxx Xxxxxx ("X. Xxxxxx"), Xxxxxx Xxxxxx ("X. Xxxxxx"), Xxxxxxxx
Xxxxxx ("Xxxxxx"), Xxxxxxx Xxxxxxxxxxx ("Xxxxxxxxxxx"), Xx. Xxxxxx X. Xxxxxx
("Xx. Xxxxxx"), Xxxxx Xxxxxx ("X. Xxxxxx"), Xxxxxx Xxxxxxxx ("X. Xxxxxxxx"),
Xxxx Xxxxxxxx ("X. Xxxxxxxx"), Xxxx Xxxxxx Family Trust ("Trust"), Xxxxx
Xxxxxxxxxx ("Xxxxxxxxxx") and Muzak Limited Partnership ("Muzak") (collectively,
the "Holders").
X. Xxxxxxx and Xxxxxxxxxx are sometimes collectively referred to as
the "Active Holders". Reisner, Reddy, Jamieson, Horgan, L. Barnett, Braverman,
DEM, X. Xxxxxx, X. Xxxxxx, Martin, Silverstein, Xx. Xxxxxx, X. Xxxxxx, X.
Xxxxxxxx, X. Xxxxxxxx, Trust, Xxxxxxxxxx and Muzak are sometimes collectively
referred to as the "Passive Holders". DEM, X. Xxxxxx, X. Xxxxxx, Martin,
Silverstein, Xx. Xxxxxx, X. Xxxxxx, X. Xxxxxxxx, X. Xxxxxxxx and Trust are
sometimes collectively referred to as the "Xxxxxx Group". The Active Holders,
the Xxxxxx Group, Reisner, Reddy, Jamieson, Horgan, X. Xxxxxxx and Xxxxxxxxx are
sometimes collectively referred to as the "Interest Holders".
WITNESSETH:
WHEREAS, the Board of Directors of the Company and the Board of
Managers of COL have each determined that it is advisable and in the best
interests of their respective stockholders and members for COL to be acquired by
the Company pursuant to the merger (the "Merger") of COL with and into the
Company upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance thereof, the Board of Directors of the Company
and the Board of Managers and members of COL have each approved the Merger in
accordance with the applicable provisions of the Delaware General Corporation
Law ("Delaware Law") and the New Jersey Limited Liability Company Act ("New
Jersey Law") and upon the terms and subject to the conditions set forth herein;
and
WHEREAS, pursuant to the Merger, the Holders will receive the Merger
Consideration (as defined in Section 1.6(d) hereof), in exchange for (i) all of
the issued and outstanding membership interests of COL, (ii) the termination of
any and all agreements among COL and the Holders and (iii) the release of any
and all pre-existing rights, claims, causes of actions and suits which the
Holders have or may have against COL, upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, the Company, COL and each of the Holders hereby agree as follows:
ARTICLE 1.
The Merger
Section 1.1 The Merger.
(a) Effective Time. At the Effective Time (as defined in
Section 1.2), and subject to and upon the terms and conditions of this
Agreement, New Jersey Law and Delaware Law, respectively, COL shall be merged
with and into the Company, the separate existence of COL shall cease, and the
Company shall continue as the surviving corporation. The Company, as the
surviving corporation after the Merger, is hereinafter sometimes referred to as
the "Surviving Corporation."
(b) Closing. Subject to the satisfaction or waiver of the
conditions set forth in Article 7 hereof, the closing of the transactions
contemplated hereby will take place upon the earlier of (i) the satisfaction or
waiver of the conditions set forth in Article 7 hereof and (ii) September 18,
1996, at the offices of Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx LLP, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, or such other date, time or
place as is agreed to in writing by the Company and COL (the date of the closing
of the transactions contemplated hereby is hereinafter referred to as the
"Closing Time").
Section 1.2 Effective Time. As promptly as practicable after the
Closing Time, the parties hereto shall cause the Merger to be consummated by
filing articles of merger (the "Articles of Merger"), together with any required
certificates, with the Secretary of State of the State of New Jersey and the
Secretary of State of the State of Delaware, in such form as is required by, and
executed in accordance with, the relevant provisions of New Jersey Law and
Delaware Law, respectively (the time of such filing being the "Effective Time").
Section 1.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement, the Articles of Merger and
the applicable provisions of New Jersey Law and Delaware Law, respectively.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
each of COL and the Company shall vest in the Surviving Corporation, and all
debts, liabilities and duties of each of COL and the Company shall become the
debts, liabilities and duties of the Surviving Corporation.
Section 1.4 Certificate of Incorporation; By-Laws; Operating
Agreement.
(a) Certificate of Incorporation. At the Effective Time, the
Certificate of Incorporation of the Company, as in effect immediately prior to
the Closing Time, shall be the
-2-
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by Delaware Law and such Certificate of Incorporation;
provided, however, that Article I of the Certificate of Incorporation of the
Surviving Corporation shall be amended as of the Effective Time to read as
follows: "FIRST" The name of the corporation is "Coupons Online, Inc." (or such
other name as is selected by the Surviving Corporation).
(b) By-Laws. At the Effective Time, the By-Laws of the Company,
as in effect immediately prior to the Closing Time, shall be the By-Laws of the
Surviving Corporation until thereafter amended as provided by Delaware Law, the
Certificate of Incorporation of the Surviving Corporation and such By-Laws.
(c) Operating Agreement. At the Effective Time, the Operating
Agreement (as defined in Section 1.6(a) hereof) and all obligations and rights
thereunder shall be terminated and shall no longer be of any force or effect.
(d) Investors Agreement. At the Effective Time, that certain
Investors Agreement by and among COL and the Xxxxxx Group and all obligations
and rights thereunder shall be terminated and shall no longer be of any force or
effect.
Section 1.5 Directors and Officers. As soon as reasonably practicable
following the Effective Time, the sole director of the Company shall cause (i)
the three (3) individuals to be identified by American Maple Leaf Financial
Corporation, Xxxxxxx X. Xxxxx and X. Xxxxxxx (with Xxxxxxxxxx having the right
to attend all meetings of the Board of Directors so long as X. Xxxxxxx shall be
a director of the Surviving Corporation) to be elected to and constitute the
entire Board of Directors of the Surviving Corporation and (ii) Xxxxxxx X. Xxxxx
and such other executive officers of the Surviving Corporation as are identified
by Xx. Xxxxx to be appointed to their respective positions, in each case until
their respective successors are duly elected or appointed and qualified. Xx.
Xxxxx and X. Xxxxxxx shall be elected to serve as Class B Directors of the
Surviving Corporation in accordance with the Surviving Corporation's Bylaws.
Section 1.6 Effect on Securities. Subject to the terms and conditions
contained herein, at the Effective Time, by virtue of the Merger and without any
action on the part of the Company, COL or any of the Holders:
(a) Conversion of Securities. All of the Interests (as defined
in the Operating Agreement for COL dated December 1994 by and among COL and the
Interest Holders (the "Operating Agreement")) of COL shall be canceled.
(b) Termination of Agreements. Any and all agreements among COL
and any of the Holders (the "Holder Agreements") shall be terminated.
(c) Release of Claims. Except for the obligations of COL set
forth on Schedule 1.6(c) attached hereto, which claims shall survive the
consummation of the Merger (collectively, the
-3-
"Surviving Claims"), any and all pre-existing rights, claims, causes of actions
and suits which any of the Holders then have or may have against COL (the
"Holder Claims" (which term specifically excludes the Surviving Claims) and
together with the Holder Agreements, the "Holder Rights") shall be released.
(d) Merger Consideration. In exchange for the consideration set
forth in clauses (a), (b) and (c) of this Section 1.6, the Holders shall
receive, in the aggregate, 2,474,000 shares of validly issued, fully paid and
nonassessable shares of common stock of the Company, $.01 par value per share
(the "Common Stock"). No fraction of a share of Common Stock shall be issued
hereunder and no cash shall be issued in lieu of any such fractional shares
which would otherwise be issuable thereof. The Common Stock issuable under this
Section 1.6(d) is referred to herein as the "Merger Consideration".
The shares of Common Stock issued as Merger
Consideration, except (i) for all the shares of Common Stock issued to the
Xxxxxx Group (the "Xxxxxx Shares") and (ii) 57,000 of the shares of Common Stock
issued to Xxxxxxxxx (the "Unrestricted Xxxxxxxxx Shares"), may not be sold,
transferred or otherwise disposed of by any or all of the Holders until the
Second Anniversary of the Effective Time (the "Transfer Restriction").
Notwithstanding the foregoing, the restrictions contained herein shall in no way
restrict or limit such Holder's ability to (a) transfer shares of Common Stock
to (1) another Holder, (2) his immediate family members or (3) a trust or trusts
for the benefit of his immediate family members for estate planning purposes or
(b) pledge shares of Common Stock to a bona fide reputable financial institution
as security for debt incurred by such Holder (all transferees permitted by
clause (a) and (b) are referred to herein as "Permitted Transferees"); provided,
however, that such Holder and such Permitted Transferees shall (i) be bound by
the Transfer Restriction and (ii) execute, prior to any such transfer to such
Permitted Transferee, such documents as may be reasonably requested by the
Company to evidence and affirm its obligations hereunder (each of such permitted
transfers shall hereinafter be referred to as a "Permissible Transfer").
The Xxxxxx Shares may not be sold, transferred or
otherwise disposed of by any or all of the Holders constituting the Xxxxxx Group
except (i) in connection with a Permissible Transfer or (ii) in accordance with
the following provisions: (x) 25% of such Shares on the first anniversary of the
Effective Date; (y) 25% of such Shares on the eighteenth month anniversary of
the Effective Date; and (z) the balance of such Shares on the second anniversary
of the Effective Date.
The Unrestricted Xxxxxxxxx Shares may not be sold,
transferred or otherwise disposed of by Xxxxxxxxx except (i) in connection with
a Permissible Transfer or (ii) in accordance with the following provisions: (x)
25% of such Shares on the first anniversary of the Effective Date; (y) 25% of
such Shares on the eighteenth month anniversary of the Effective Date; and (z)
the balance of such Shares on the second anniversary of the Effective Date.
(e) The certificates for all shares of Common Stock issued as
Merger Consideration will be issued with a restrictive legend setting forth or
otherwise indicating the
-4-
restrictions on transfer set forth in clause (d) of this Section 1.6.
Immediately upon the Effective Time, (i) all Interests of COL shall
automatically be canceled and all rights of holders of such Interests with
respect thereto shall cease and be extinguished, (ii) all Holder Agreements
shall be terminated and (iii) all Holder Claims shall be waived. The Merger
Consideration shall be allocated among the Holders as set forth in Exhibit A
attached hereto. By accepting a certificate for shares of Common Stock
representing such Merger Consideration, a Holder shall knowingly and willingly
remise, waive, release and forever discharge COL and its successors, including
the Company, and their respective members, managers, shareholders, directors,
officers, employees, agents, affiliates, and assigns (collectively, the
"Releasees") of and from any and all manner of actions and causes of action,
debts, agreements, claims and demands whatsoever (collectively, "Claims") which
such Holder, his heirs, executors, administrators or assigns has, had or may
hereafter have against the Releasees or any of them from or by reason of any
cause, matter or thing whatsoever from the beginning of time to the Effective
Time, including, without in any way limiting the generality of the foregoing
(but specifically excluding the Surviving Claims), (i) any and all matters
relating to his status as a member of COL; (ii) any and all matters relating to
his employment, if any, by COL and the termination thereof; (iii) any and all
claims under any federal, state or local law; (iv) any common law claims now or
hereafter recognized and (v) all claims for counsel fees and costs. By accepting
such Merger Consideration, except in connection with the Surviving Claims,
Holder shall also be deemed to agree that neither he nor any person,
organization, or other entity acting on his behalf, will file, charge, claim,
xxx or cause or permit to be filed, charged, or claimed any action, suit or
proceeding against any of the Releasees involving any matter occurring at any
time in the past up to the Effective Time or involving any continuing effects of
any acts or practices which may have arisen or occurred prior to the Effective
Time.
(f) Capital Stock of the Company. Each share of Common Stock,
and all rights, options and warrants to purchase Common Stock ("Stock Purchase
Rights") of the Company issued and outstanding immediately prior to the
Effective Time shall become shares and Stock Purchase Rights of the Surviving
Corporation after the Merger and together with all the shares of Common Stock
issuable as Merger Consideration hereunder shall at the Effective Time
constitute all of the issued and outstanding shares and Stock Purchase Rights of
the Surviving Corporation. Each stock certificate or agreement of the Company
evidencing ownership of any such shares and Stock Purchase Rights shall continue
to evidence ownership of such shares and Stock Purchase Rights of the Surviving
Corporation.
(g) Adjustments to Merger Consideration. In the event the
Company shall effect any stock split, reverse split, stock dividend (including
any dividend or other similar distribution of securities convertible into Common
Stock), reorganization, recapitalization or other like change with respect to
Common Stock after the date hereof and prior to the Effective Time, the number
of shares of Common Stock issuable as Merger Consideration hereunder shall be
adjusted to reflect fully such split, dividend, reorganization, recapitalization
or change.
(h) Delivery of Certificates. At the Effective Time, the
Company will cause to be delivered to each Holder (in accordance with clauses
(a) through (e) of this Section 1.6 and Exhibit
-5-
A attached hereto) certificate or certificates, appropriately registered in the
name of the holder, representing the shares of Common Stock issuable as Merger
Consideration hereunder.
(i) Withholding Rights. The Company shall be entitled to
receive from each Holder, prior to the payment of the Merger Consideration, an
amount in cash equal to the amount which the Company is required to deduct and
withhold with respect to the making of such payment under the Internal Revenue
Code of 1986, as amended (the "Code") or any provision of state, local,
provincial or foreign tax law.
(j) The Merger Consideration delivered upon the surrender for
exchange of Interests and termination and/or waiver of Holder Rights in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Interests and/or Holder Rights, as
the case may be.
Section 1.7 Taking of Necessary Action; Further Action. Each of the
Company, COL and each of the Holders in good faith will take, and will cause any
other persons who are or become holders of Interests or other rights against the
Company at or prior to the Effective Time to take, all such commercially
reasonable and lawful actions as may be necessary or appropriate in order to
effectuate the Merger in accordance with this Agreement as promptly as possible.
If, at any time after the Effective Time, any such further action is necessary
or desirable to carry out the purposes of this Agreement and to vest the
Surviving Corporation with full right, title and possession to all assets,
property, rights, privileges, powers and franchises of COL and the Company, the
officers, managers and directors of COL and the Company, respectively, are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary actions.
Section 1.8 Material Adverse Effect; Ordinary Course of Business. When
used herein or in any Exhibit, Annex or Schedule hereto in connection with COL
or the Company, as the case may be, the term "Material Adverse Effect", or any
derivation thereof, means any change or effect that, individually or when taken
together with all other such changes or effects that have occurred prior to the
date of determination of the occurrence of the Material Adverse Effect, is or is
reasonably likely to be materially adverse to the business, assets (including
intangible assets), financial condition, prospects or results of operations of
COL or the Company, as the case may be, in each case taken as a whole.
When used in connection with either COL or the Company, as the case
may be, the term "ordinary course of business", or derivations thereof, means
the normal conduct of business consistent with past practice except that no
action which is contrary to law, order, rule or regulation or otherwise contrary
to commercial reasonableness shall be considered to be in the ordinary course of
business.
-6-
Section 1.9 Tax Consequences. It is intended by the parties hereto
that the Merger be part of a series of transactions which, together, will be
treated as a transaction in which no gain or loss is recognized pursuant to
Section 351 of the Code. The parties hereto agree to report the Merger
consistent with such treatment for income tax purposes.
ARTICLE 2.
Representations and Warranties of COL and the Active Holders
COL and each Active Holder hereby, jointly and severally, represents
and warrants to the Company (which representations and warranties shall be true
and correct on the date hereof and at the Effective Time) as to each of the
matters set forth in Annex I hereto.
In addition, COL hereby represents and warrants to Muzak (which
representation and warranty shall be true and correct on the date hereof and at
the Effective Time) that, to the best of COL's knowledge, there are no claims,
actions, suits, proceedings or investigations pending or threatened against COL
or any properties or rights of COL, before any court, arbitrator or
administrative, governmental or regulatory authority or body, domestic or
foreign, which claims, actions, suits, proceedings or investigations are
reasonably likely to be asserted or commenced against Muzak or any of its assets
or properties. Notwithstanding anything to the contrary contained herein, in the
event that the representation and warranty set forth in the preceding sentence
is determined (by a court of competent jurisdiction) to have been untrue as of
the date hereof or at the Effective Time, then Muzak's remission, waiver,
release and discharge of the Claims set forth in Section 1.6(e) hereof shall be
of no force and effect.
ARTICLE 3.
Representations and Warranties the Holders
Each Holder, with respect to such Holder only, hereby represents and
warrants to the Company (which representations and warranties shall be true and
correct as of the date hereof and at the Effective Time) as to each of the
matters set forth in Annex II hereto.
ARTICLE 4.
Representations and Warranties of Company
The Company represents and warrants to COL and to each Holder (which
representations and warranties shall be true and correct on the date hereof and
at the Effective Time) as to each of the matters set forth in Annex III hereto.
-7-
ARTICLE 5.
Conduct of Business Pending the Merger
Section 5.1 Conduct of Business by COL Pending the Merger. During the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, COL covenants and agrees
that, unless the Company shall otherwise agree in writing, COL shall conduct its
business only in, and COL shall not take any action except in, the ordinary
course of business; and COL shall use reasonable commercial efforts to (i)
preserve substantially intact its business organization, (ii) pay its trade
payables and other liabilities in accordance with their terms as they became
due, (iii) collect its receivables and other claims in full in accordance with
their terms, as they become due, (iv) keep available the services of each of its
present officers, employees and consultants, (v) take all reasonable actions in
the ordinary course of business necessary to prevent the loss, cancellation,
abandonment forfeiture or expiration of any COL Intellectual Property, and (vi)
preserve each of its present relationships with customers, suppliers and other
persons with which COL has significant business relations. By way of
amplification and not limitation, except as contemplated by this Agreement, COL
shall not, during the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement or the Effective Time,
directly or indirectly do, or propose to do, any of the following without the
prior written consent of the Company:
(a) amend or otherwise change its Articles of Formation or the
Operating Agreement;
(b) issue, transfer, pledge, dispose of or encumber, or
authorize the transfer, pledge, disposition or encumbrance of, any Interests;
(c) sell, lease, assign, transfer, pledge, dispose of or
encumber any of its assets (whether real, personal or intellectual property)
(except for (i) sales of assets in the ordinary course of business; and (ii)
dispositions of obsolete or worthless assets).
(d) [Intentionally Omitted];
(e) sell, transfer, license, sublicense or otherwise dispose of
any COL Intellectual Property Rights, or amend or modify any existing agreements
with respect to COL Intellectual Property Rights or Third Party Intellectual
Property Rights, other than nonexclusive licenses in the ordinary course of
business;
(f) (i) acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership or other business organization or
division thereof; (ii) incur any indebtedness for borrowed money or representing
the deferred purchase price of any property or assets or issue debt securities
or assume, guarantee or endorse or otherwise as an accommodation become
responsible for, the obligations of any person (except for the endorsement of
commercial paper for
-8-
deposit or collection in the ordinary course of business) or make any loans or
advances to or investments in any person; (iii) create, incur, assume or suffer
to exist, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind or nature upon its property or assets, income or profits, whether
now owned or hereafter acquired, other than "Permitted Liens" (as defined in
that certain Loan and Security Agreement dated as of June 14, 1996 by and
between VDC Corporation and COL (the "VDC Loan Agreement")); (iv) assume,
guarantee, endorse or otherwise in anyway be or become responsible or liable
for, directly or indirectly, any contingent obligation; (v) enter into or amend
any contract or agreement other than in the ordinary course of business; (vi)
authorize any capital expenditures or purchase of fixed assets which are, in the
aggregate, in excess of $10,000 for COL, taken as a whole; (vii) enter into any
agreement or become liable under any agreement for the lease, hire or use of any
real or personal property; or (viii) enter into or amend any contract,
agreement, commitment or arrangement to effect any of the matters prohibited by
this Section 4.1(f);
(g) increase the compensation payable or to become payable to
any of their officers or employees (except for such increases as may be set
forth in the employment agreements and/or consulting agreements to be entered
into upon consummation of the Merger) or grant any severance or termination pay
to, or enter into any employment or severance agreement with, any director,
officer or other employee of COL, or establish, adopt or enter into any Employee
Plan;
(h) take any action, other than as required by GAAP, to change
accounting policies or procedures (including, without limitation, procedures
with respect to revenue recognition, payments of accounts payable and collection
of accounts receivable);
(i) make any material Tax election inconsistent with past
practices or settle or compromise any material, federal, state, local or foreign
tax liability or agree to an extension of a statute of limitations for any
assessment of any Tax, except to the extent the amount of any such settlement
has been reserved for on the Balance Sheet of COL;
(j) pay, discharge or satisfy any principal of any debt prior
to its scheduled maturity for borrowed money or for the deferred purchase price
of property or services, except at the stated maturity of such debt or as
required by mandatory prepayment provisions relating thereto; or amend any
provision pertaining to the subordination or the terms of payment of any debt;
(k) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)
except for (i) the payment, discharge or satisfaction in the ordinary course of
business of liabilities reflected or reserved against on the Balance Sheet of
COL or incurred in the ordinary course of business, (ii) the Loan (as such term
is defined in the VDC Loan Agreement), (iii) reasonable attorneys' fees and
expenses incurred in the ordinary course of business, and (iv) Indebtedness
secured by Permitted Liens (as each such term is defined in the VDC Loan
Agreement);
(l) liquidate or dissolve itself (or suffer any liquidation or
dissolution); or
-9-
(m) take, or agree in writing or otherwise to take, any of the
actions described in Sections 5.1(a) through (l) above, or any action which
would make any of the representations or warranties contained in Article 2 or
Article 3 of this Agreement untrue or incorrect or prevent COL from performing
or cause COL not to perform its covenants hereunder or result in any of the
conditions to the Merger set forth herein not being satisfied.
Section 5.2 No Solicitation or Transfer of Interests.
(a) COL and each Holder agrees that neither it nor any of their
respective officers, managers, or directors shall, and COL and each Interest
Holder shall direct and use their best efforts to cause the employees, agents,
directors and representatives of COL and of each Interest Holder (including,
without limitation, any attorney or accountant retained by any of them) not to,
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making of any proposals or offers (including, without limitation, any proposals
or offers to members of COL) with respect to a merger, consolidation or similar
transaction involving, or any purchase of all or any significant portion of the
assets or any equity securities of, COL or a change of the managers of COL (any
such proposal or offer being hereinafter referred to as an "Acquisition
Proposal") or engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal.
(b) COL and each Holder (to the extent such Holder is aware of
such Acquisition Proposal) shall immediately notify the Company after receipt of
any Acquisition Proposal or any request for information relating to COL in
connection with an Acquisition Proposal or for access to the properties, books
or records of COL by any person or entity that informs COL or such Holder that
it is considering making, or has made, an Acquisition Proposal. Such notice to
the Company 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.
(c) COL shall ensure that its officers, managers and employees,
and COL and each Interest Holder shall ensure that its or his advisors and
representatives are aware of the restrictions described in this Section, and
shall be responsible for any breach of this Section 5.2 by such officers,
managers, employees, advisors or representatives.
(d) No Interest Holder shall transfer, pledge or otherwise
dispose of any or all of his Interests or any rights therein prior to the
Effective Time or earlier termination of this Agreement.
Section 5.3 No Transfer of Holder Rights. No Holder shall transfer,
pledge or otherwise dispose of any or all of his Holder Rights prior to the
Effective Time or earlier termination of this Agreement.
Section 5.4 Conduct of Business by the Company Pending the Merger.
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement
-10-
or the Effective Time, the Company covenants and agrees that, unless COL shall
otherwise agree in writing, other than actions taken by the Company in
contemplation of the Merger, the Company shall not directly or indirectly do, or
propose to take or agree in writing or otherwise to take any action which would
prevent the Company from performing or cause the Company not to perform its
obligations hereunder.
ARTICLE 6.
Additional Covenants
Section 6.1 Registration Under the Securities Act.
(a) The Company shall use its best efforts to file, as promptly
as practicable after the Effective Time, and to cause to become effective as
soon thereafter as is reasonably practicable, a registration statement on Form
SB-2 (together with all supplements and amendments thereto, the "Registration
Statement") with the SEC covering the public resale of the Xxxxxx Shares and
Unrestricted Xxxxxxxxx Shares.
(b) The Company shall pay all Registration Expenses (as defined
below) in connection with the registration contemplated by this Section 6.1.
Each selling shareholder shall pay all underwriting and selling discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such shareholder's shares of Common Stock pursuant to the Registration
Statement. For purposes of this Agreement, "Registration Expenses" shall mean
any and all expenses incurred by the Company incident to the performance of or
compliance by the Company with this Section 6.1, including all SEC, stock
exchange or NASD registration and filing fees, all fees and expenses incurred in
connection with compliance with state securities or "blue sky" laws (including
reasonable fees and disbursements of the Company's counsel), all fees and
expenses incurred in connection with the preparation and printing of the
Registration Statement and the related prospectus and the fees and disbursements
of the Company's counsel and independent public accountants, but excluding fees
of counsel to the selling shareholders and underwriting and selling discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of such selling shareholders' shares of Common Stock pursuant to the
Registration Statement.
(c) In connection with the obligations of the Company under
this Section 6.1, the Company shall:
(i) prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement as may be necessary to
(x) keep such Registration Statement effective for the applicable period under
this Agreement and (y) cause each prospectus included as part of such
Registration Statement (a "Prospectus") to be supplemented by any required
prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424
under the Securities Act and (z) keep each Prospectus current during the period
described under Section 4(3) and Rule 174 under the Securities Act that is
applicable to transactions by brokers or dealers with respect to
-11-
the securities covered by such Prospectus;
(ii) furnish to each selling shareholder, without
charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such selling shareholder may reasonably request, in order to facilitate the
public sale or other disposition of the Common Stock covered by the Registration
Statement;
(iii) use its reasonable best efforts to register or
qualify the Common Stock covered by the Registration Statement under all
applicable Blue Sky Laws of such jurisdictions as any selling shareholder with
Common Stock covered by the Registration Statement shall reasonably request in
writing by the time the Registration Statement is declared effective by the SEC;
provided, however, that the Company shall not be required to (x) qualify as a
foreign entity or as a dealer in securities in any jurisdiction where it would
not otherwise be required to qualify but for this Section 6.1(c)(iii), (y) file
any general consent to service of process or (z) subject itself to taxation in
any such jurisdiction if it is not so subject.
(iv) notify each selling shareholder (v) when the
Registration Statement has become effective and when any post-effective
amendments and supplements thereto have been filed and become effective, (w) of
any request by the SEC or any state securities authority for amendments and
supplements to the Registration Statement and related Prospectus or for
additional information after the Registration Statement has become effective,
(x) of the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (y) of the happening of any
event which makes any statement made in the Registration Statement or the
related Prospectus untrue in any material respect or which requires the making
of any changes in the Registration statement or Prospectus in order to make the
statements therein not misleading and (z) of any determination by the Company
that a post-effective amendment to the Registration Statement would be
appropriate;
(v) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the Registration
Statement at the earliest possible moment and provide prompt notice to each
selling shareholder of the withdrawal of any such order;
(d) The Company may require each selling shareholder to furnish
to the Company such information regarding the selling shareholder and the
proposed distribution by such selling shareholder of Common Stock covered by the
Registration Statement as the Company may from time to time reasonably request
in writing. Each such selling shareholder shall provide the Company with any
such information within five business days after such information is requested
and shall provide to the Company, within five business days after such selling
shareholder receives a draft of the Registration Statement or amendment thereto
in which such information is included, comments on such Registration Statement
or amendment thereto. The Company agrees to supplement or amend the Registration
statement, if required by the rules, regulations or instructions applicable to
the Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registration or if reasonably requested by a
selling shareholder with respect to information
-12-
relating to such selling shareholder in order to accurately reflect information
regarding such selling shareholder or such selling shareholder's plan of
distribution as required by the Registration Statement, and to use its best
efforts to cause any such amendment to become effective and such Registration
Statement to become usable as soon as thereafter practicable. The Company agrees
to furnish to the selling shareholders copies of any such supplement or
amendment promptly after its being made available for use or filed with the SEC.
(e) Each selling shareholder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 6.1(c)(iv)(x)(y) or (z) hereof, such selling shareholder will forthwith
discontinue disposition of Common Stock pursuant to the Registration Statement
until such selling shareholder's receipt of the copies of the supplemented or
amended Prospectus and, if so directed by the Company, such selling shareholder
will deliver to the Company (at its expense) all copies in its possession, other
than permanent file copies then in such selling shareholder's possession, of the
Prospectus current at the time of receipt of such notice.
(f) (i) The Company agrees to indemnify and hold harmless, each
selling shareholder from and against any and all losses, claims, damages,
liabilities and expenses (including, without limitation, any legal or other
expenses reasonably incurred by such selling shareholder in connection with
defending or investigating any such action or claim) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Prospectus, or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with information relating to any
selling shareholder furnished to the Company by a selling shareholder for use
therein; provided, however, that the indemnification provided for in this
paragraph shall not inure to the benefit of any selling shareholder with respect
to any sale or disposition of Common Stock by such selling shareholder in
violation of Section 1.6.
(ii) Each Holder comprising the Xxxxxx Group and
Xxxxxxxxx (collectively, the "Indemnifying Holders") agrees, severally and not
jointly, to indemnify and hold harmless the Company, each other selling
shareholder, each director and officer of the Company and each person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act or is under common control with
or is controlled by the Company to the same extent as the foregoing indemnity
from the Company to the selling shareholders with respect to any and all
information provided by such Indemnifying Holder to the Company for use or
inclusion in the Registration Statement.
-13-
(iii) If any action, suit or proceeding shall be
instituted involving any person in respect of which such person is entitled to
indemnity pursuant to either paragraph (i) or (ii) above, such person (the
"indemnified party") shall promptly notify the parties against whom
indemnification is being sought (each an "indemnifying party") and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. Such indemnified party shall
have the right to select its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (x) the
indemnifying parties have agreed in writing to pay such fees and expenses, (y)
the indemnifying parties shall have failed to assume the defense and employ
counsel on a timely basis or (z) the named parties to any such action, suit, or
proceeding (including any impleaded parties) include both such indemnifying
parties and such indemnified party and such indemnified party shall have been
reasonably advised by its counsel that representation of such indemnified party
and any indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed due to actual or potential differing
interests between them (in which case the indemnifying parties shall not have
the right to assume the defense of such action, suit or proceeding on behalf of
the indemnified party)). It is understood, however, that the indemnifying
parties shall, in connection with any one such action, suit or proceeding, or
substantially similar action, suit or proceeding or related actions, suits or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all of the indemnified parties. The indemnifying parties shall not be liable for
any settlement of any action, suit or proceeding effected without their written
consent, but if settled with such written consent or if there be a final
judgment for the plaintiff, the indemnifying parties agree to indemnify and hold
harmless the indemnified party from and against any loss, action, damage,
liability or expense by reason of such settlement or judgment.
(iv) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
(g) The Holders acknowledge that the Company has granted
certain of its security holders the right to include additional shares of Common
Stock in the Registration Statement.
Section 6.2 Access to Information. COL shall afford to the officers,
employees, accountants, counsel and other representatives of the Company,
reasonable access, during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records and, during such period,
COL shall furnish promptly to the Company all information concerning its
business, properties and personnel as the Company may reasonably request, and
COL shall make available to the Company the appropriate individuals (including
attorneys, accountants and other professionals) for discussion of its business,
properties and personnel as the Company may reasonably request. The Company
acknowledges and agrees that all such information shall be maintained in strict
confidence and may not be used for any purpose other than to facilitate the
Merger.
-14-
Section 6.3 Consents; Approvals. COL, each Holder and the Company
shall each use their best efforts to obtain all consents, waivers, approvals,
authorizations or orders (including, without limitation, all United States and
foreign governmental and regulatory rulings and approvals), and COL, each Holder
and the Company shall make all filings (including, without limitation, all
filings with United States and foreign governmental or regulatory agencies)
required in connection with the authorization, execution and delivery of this
Agreement by COL, the Holders and the Company, respectively, and the
consummation by them of the transactions contemplated hereby.
Section 6.4 Notification of Certain Matters. COL and each Holder shall
give prompt notice to the Company and the Company shall give prompt notice to
COL and to each Holder of (i) the occurrence, or non-occurrence, of any event
the occurrence, or non-occurrence, of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate, and (ii) any failure of COL, each Holder and the Company, as the
case may be, materially to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it or him hereunder; provided,
however, that the delivery of any notice pursuant to this Section shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
Section 6.5 Further Action. Upon the terms and subject to the
conditions hereof, each of the parties hereto in good faith shall use all
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement, to obtain in a timely manner all necessary
filings, and to otherwise satisfy or cause to be satisfied all conditions
precedent to its obligations under this Agreement.
Section 6.6 Public Announcements. The Company shall be responsible
for, and have exclusive control over, any and all press releases and public
statements with respect to the Merger or this Agreement.
Section 6.7 Conveyance Taxes. The Company, COL and the Holders shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any real property
transfer or gains, sales, use, transfer, value added, stock transfer and stamp
taxes, any transfer, recording, registration and other fees, and any similar
taxes which become payable in connection with the transactions contemplated
hereby that are required or permitted to be filed on or before the Effective
Time.
ARTICLE 7.
Conditions to the Merger
Section 7.1 Conditions to Obligation of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
-15-
(a) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Merger shall be in effect, nor
shall any proceeding brought by any administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; and there shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, which makes the consummation of the Merger illegal.
(b) (i) The Company shall have raised an aggregate of at least
$2,000,000 in one or more private placements of the Company's securities.
(ii) Without in any way limiting the foregoing
condition, COL and each of the Holders hereby acknowledges that the Company
expects to raise an aggregate of $2,600,000 in exchange for 1,910,000 shares of
Common Stock (the "Private Placement Shares") in four separate private
placements. In the first private placement, the Company expects to issue an
aggregate of 581,429 shares of Common Stock to a group of accredited investors
in exchange for $100,000. In the second private placement, the Company expects
to issue an aggregate of 250,000 shares of Common Stock to a group of accredited
investors in exchange for $350,000. In the third private placement, the Company
expects to issue 650,000 shares of Common Stock to VDC Corporation Ltd. ("VDC")
in exchange for $650,000. It is then contemplated that VDC will spin off all of
such shares to its existing stockholders. In the fourth private placement, the
Company expects to issue an aggregate of 428,571 shares of Common Stock to a
group of accredited investors in exchange for $1,500,000. There can be no
assurance that the transactions contemplated by this Section 7.1(b)(ii) will be
consummated by the Company on the terms set forth above, or at all. As further
clarification, it is acknowledged by the parties that the consummation of any or
all of transactions contemplated by this Section 7.1(b)(ii) is not a condition
to the Merger.
Section 7.2 Additional Conditions to Obligations of the Company. The
obligations of the Company to effect the Merger are also subject to the
following conditions:
(a) The satisfactory completion of the Company's due diligence
investigation of COL;
(b) Representations and Warranties. The representations and
warranties of COL and each of the Holders contained in this Agreement (together
with the COL Disclosure Schedule) shall be true and correct in all respects as
of the date hereof and on and as of the Effective Time, except for (i) changes
contemplated by this Agreement and (ii) those representations and warranties
which address matters only as of a particular date (which shall remain true and
correct as of such date), with the same force and effect as if made on and as of
the Effective Time, and the Company shall have received a certificate to such
effect signed by the President of COL and each Holder;
-16-
(c) Agreements and Covenants. COL and each Holder shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or prior to
the Effective Time, and the Company shall have received a certificate to such
effect signed by the President of COL and each Holder;
(d) Consents Obtained. All material consents, waivers,
approvals, authorizations or orders required or advisable (in the Company's
discretion) to be obtained, and all filings required to be made, by COL for the
authorization, execution and delivery of this Agreement and the consummation by
them of the transactions contemplated hereby shall have been obtained or made by
COL. At the Effective Time, COL shall deliver to the Company copies of the
resolutions adopted by the members and Board of Managers of COL approving the
Merger and the other transactions contemplated hereby, certified by the
Secretary of COL as being in full force and effect and not modified in any
manner whatsoever;
(e) Governmental Actions. There shall not have been instituted,
pending or threatened any action or proceeding (or any investigation or other
inquiry that might result in such an action or proceeding) by any governmental
authority or administrative agency before any governmental authority,
administrative agency or court of competent jurisdiction, in either case,
seeking to prohibit or limit the Merger or the transactions contemplated by this
Agreement;
(f) Material Adverse Change. Since the date of this Agreement,
there shall have been no change, occurrence or circumstance affecting the
business, results of operations or financial condition of COL having or which
may have a Material Adverse Effect;
(g) Legal Opinion. The Company shall have received an opinion,
dated the Effective Date, from Greenberg, Traurig, counsel to COL, substantially
in the form of, and covering such matters as are set forth in, Exhibit B hereto;
(h) Private Placement Representations. The Company shall have
received a certificate dated as of the Effective Time from each Holder,
substantially in the form of Exhibit C hereto, to ensure that the issuance of
Common Stock as Merger Consideration hereunder will be a valid private placement
under Section 4(2) of the Securities Act and will not require any filings to be
made with any state securities regulatory authority under any Blue Sky Laws;
(i) Other Certificates. COL and the Holders shall have
furnished to the Company such other certificates and documents as the Company
shall have reasonably requested;
(j) Contractual Matters. All unliquidated claims which may
arise under, and/or all material ambiguities contained in, any agreement to
which COL may be a party (the determination of whether any such unliquidated
claim or ambiguity exists is to be made by the Company in its reasonable
discretion) shall be clarified and satisfied to the reasonable satisfaction of
the Company, and no such clarification shall result in any additional material
obligation on the part of the Surviving Corporation or the Company;
-17-
(k) [Intentionally Omitted.]
(l) Muzak Agreement. COL shall have entered into a new
agreement with Muzak on terms satisfactory to the Company. Such agreement shall
supersede any and all previous agreements or arrangements between Muzak and COL
and shall inure to the benefit of the Surviving Corporation upon consummation of
the Merger;
(m) Employment/Consulting Agreements. Each of Xxxxxxx,
Braunstein, Malinowski, Xxxxxxx Xxxxx and Xxxxxxx Xxxxx shall terminate their
existing employment/consulting agreements with COL and shall have entered into
an employment/consulting agreement with the Surviving Corporation; and
(n) Consulting Agreement. The Company shall have entered into a
Consulting Agreement with American Maple Leaf Corporation ("AML") pursuant to
which AML will provide the Company with future investment banking services in
exchange for an aggregate of 350,000 shares of Common Stock.
Section 7.3 Additional Conditions to Obligation of COL and the
Holders. The obligation of each of COL and each Holder to effect the Merger is
also subject to the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be true and correct
in all respects as of the date hereof and on and as of the Effective Time,
except for (i) changes contemplated by this Agreement and (ii) those
representations and warranties which address matters only as of a particular
date (which shall remain true and correct as of such date), with the same force
and effect as if made on and as of the Effective Time, and COL shall have
received a certificate to such effect signed by the President and Chief
Financial Officer of the Company;
(b) Agreements and Covenants. The Company shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior to the
Effective Time, and COL and such Holder shall have received a certificate to
such effect signed by the President and Chief Financial Officer of the Company;
(c) Consents Obtained. All material consents, waivers,
approvals, authorizations or orders required to be obtained, and all filings
required to be made, by the Company for the authorization, execution and
delivery of this Agreement and the consummation by them of the transactions
contemplated hereby shall have been obtained or made by the Company. At the
Effective Time, the Company shall deliver to COL and to the Holders copies of
the resolutions adopted by the Company approving the Merger and the other
transactions contemplated hereby certified by the Secretary of the Company, as
the case may be, as being in full force and effect and not modified in any
manner whatsoever;
-18-
(d) Material Adverse Change. Since the date of this Agreement,
there shall have been no change, occurrence or circumstance in the business,
results of operations or financial condition of the Company having or reasonably
likely to have a Material Adverse Effect; and
(e) The Company Common Stock Certificates. The Company shall
have tendered for delivery to each Holder certificates representing the number
of shares of Common Stock set forth next to such Holder's name on Exhibit A.
(f) Stock Option Plan. The Company shall have effectuated an
employee stock option plan.
(g) Management Shares. The Company shall have reserved for
issuance an additional 600,000 shares of Common Stock (the "Management Shares");
provided, however, that in the event COL's negative net worth as of August 31,
1996 (as determined by Ernst & Young, LLP or such other accounting firm engaged
by the Surviving Corporation and then acting as its outside auditors) is greater
than $470,000 (assuming the capitalization of those certain amounts previously
indicated by Ernst & Young, LLP as appropriate to be capitalized in the
aggregate amount of $229,388)(the "Permissible Negative Net Worth"), as is
determined in accordance with generally accepted accounting principles to the
extent applicable, such number of Management Shares shall be reduced by 1 1/2
shares for each dollar by which COL's negative net worth exceeds the Permissible
Negative Net Worth. Such Shares to be granted to the management of the Surviving
Corporation shall vest according to a schedule established by the Company.
ARTICLE 8.
Termination
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, notwithstanding approval thereof by the Holders:
(a) by mutual written consent of the Company and COL;
(b) by the Company if the Merger shall not have been
consummated by September 18, 1996, provided that the Company's right to
terminate this Agreement pursuant to this Section 8.1(b) shall not be available
-19-
in the event the Company's failure to fulfill any obligation under this
Agreement or any action or inaction on the part of the Company has been, in full
or in part, the cause of or resulted in, in full or in part, the failure of the
conditions to COL's and each Holder's obligation to consummate the Merger to be
satisfied or the failure of the Merger to occur on or before such date;
(c) by COL or any Holder if the Merger shall not have been
consummated by September 18, 1996, provided that the right of COL or any Holder,
as the case may be, to terminate this Agreement pursuant to this Section 8.1(c)
shall not be available in the event COL's or such Holder's, as the case may be,
failure to fulfill any obligation under this Agreement or any action or inaction
on the part of COL or any Holder, as the case may be, has been, in full or in
part, the cause of or resulted in, in full or in part, the failure of the
conditions to the Company's obligation to consummate the Merger to be satisfied
or the failure of the Merger to occur on or before such date;
(d) by the Company or COL if a court of competent jurisdiction
or governmental, regulatory or administrative agency or commission shall have
issued a non-appealable final order, decree or ruling or taken any other action,
in each case having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger; or
(e) by the Company if prior to the Effective Time, (i) trading
in securities generally on the New York Stock Exchange, American Stock Exchange
or The Nasdaq National Market shall have been suspended or materially limited,
(ii) a general moratorium on commercial banking activities in New York shall
have been declared by either Federal or state authorities or (iii) there shall
have occurred any outbreak or escalation of hostilities or other international
or domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in the judgment of the Company, impracticable or inadvisable
to consummate the transactions contemplated hereby.
Section 8.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1, this Agreement shall forthwith become
null and void and there shall be no liability on the part of any party hereto or
any of its affiliates, directors, officers, managers, members or stockholders
except (i) as set forth in Section 8.3, Article 9 and Section 10.8 hereof, and
(ii) nothing herein shall relieve any party from liability for any willful
breach hereof.
Section 8.3 Fees and Expenses.
In the event the Merger is consummated, the Surviving Corporation
will pay all reasonable legal and accounting fees and costs incurred by the
parties in connection with this Agreement and the transactions contemplated
hereby; provided, however, that with respect to any such legal fees and costs
incurred by COL or any of the Holders, the Surviving Corporation shall only be
obligated to pay those reasonable amounts attributable to the engagement of
Xxxxxxxxx, Xxxxxxx in connection with the transactions contemplated hereby and
shall have no obligation to pay any legal fees and costs incurred by any Holder
in connection with their engagement of independent counsel.
In the event the Merger is not consummated as a result of COL's or any
Holder's (i) breach of their respective representations, warranties, agreements
or covenants contained herein or (ii) failure to fulfill their respective
obligations hereunder, COL shall be obligated to pay all reasonable
out-of-pocket expenses and legal and accounting fees and costs incurred by the
Company in connection with this Agreement and the transactions contemplated
hereby. In the event the Merger is not consummated for any reason other than as
set forth in the preceding sentence, the parties' obligations with respect to
the payment of fees and expenses shall be as set forth in the Letter Agreement
-20-
dated June 7, 1996 by and among COL and American Maple Leaf Financial
Corporation (the "Letter Agreement").
ARTICLE 9.
Survival of Representations and Warranties; Indemnification
Section 9.1 Survival. All statements contained in any certificate or
other instrument delivered by or on behalf of COL, any of the Holders or the
Company pursuant to this Agreement or in connection with the transactions
contemplated by this Agreement shall be considered representations and
warranties by COL, such Holder or Holders or the Company with the same force and
effect as if contained in this Agreement. All representations, warranties,
covenants and agreements by COL, any Holder or the Company shall survive the
Effective Time for a period of two years after the Effective Time (provided that
the representations, warranties, covenants and agreements contained in Annex I
hereto and this Article 8 in so far as they relate to any Tax shall survive
until the expiration of the applicable statute of limitation for a claim by the
applicable taxing authority for such Tax) notwithstanding any investigation at
any time by or on behalf of any party to which such representation or warranty
was given, and shall not be considered waived by the consummation of the Merger
contemplated by this Agreement with knowledge of any breach or misrepresentation
by any of the parties hereto.
Section 9.2 Indemnification.
(a) Each of COL and each Active Holder shall jointly and
severally indemnify and hold harmless the Surviving Corporation against all
loss, liability, damage or expense (including reasonable fees and expenses of
counsel in any matter, whether involving a third party or between the
indemnifying or indemnified parties) Surviving Corporation may suffer, sustain
or become subject to as a result of (i) any breach by such Holder or COL of any
of its or his representations, warranties, covenants or other agreements
contained in this Agreement, (whether or not the Surviving Corporation had
knowledge, at or prior to the Effective Time, of the breach), (ii) the failure
by COL to pay, perform or discharge prior to the Effective Time any COL
Liabilities (other than the Assumed Liabilities), (iii) any liability or
obligation (other than the Assumed Liabilities) arising prior to the Effective
Time, or after the Effective Time as a result of events occurring prior to the
Effective Time, from or in connection with the violation of any federal, state
or local statute, rule or regulation, decree or ordinance applicable to COL,
(iv) any other claim (other than the Assumed Liabilities), whether made before
or after the date of this Agreement, or any litigation, proceeding or
governmental investigation, whether commenced before or after the date of this
Agreement (collectively, the "Litigation")), arising out of the operations of
COL prior to the Effective Time (regardless of whether or not referred to on a
schedule to this Agreement or otherwise disclosed or known to the Company as of
the date of this Agreement), or (v) any claim by any person that the Merger
Consideration payable hereunder should have been paid in a manner inconsistent
with the manner set forth in Exhibit A. Notwithstanding the foregoing, (i) no
Holder shall have any indemnification obligation for any claim or liability to
the extent covered by insurance maintained by the Surviving Corporation and (ii)
COL shall not have any
-21-
liability to the Surviving Corporation or any Holder (by contribution or
otherwise) hereunder at any time after the Effective Time. Notwithstanding the
foregoing, the liability of each of the Active Holders pursuant to this Section
9.2 shall be limited to (i) the amount of any and all Merger Consideration to be
issued to such Active Holder upon the consummation of the Merger and (ii) the
right of set-off set forth in Section 9.5 hereof; provided, however, that there
shall be no such limitation of liability in the event the Company seeks
indemnification from an Active Holder for any knowing breach of the provisions
of this Agreement or any fraudulent or criminal action or inaction.
(b) Each Holder shall indemnify and hold harmless the Surviving
Corporation against all loss, liability, damage or expense (including reasonable
fees and expenses of counsel in any matter, whether involving a third party or
between the indemnifying and indemnified parties) Surviving Corporation may
suffer, sustain or become subject to as a result of any breach of any
warranties, covenants or other agreements made by such Holder in this Agreement
or any misrepresentation by such Holder, or as a result of any of such Holder's
representations or warranties not being true and correct as of the Effective
Time (whether or not the Company had knowledge, prior to the Effective Time, of
the misrepresentation or breach of warranty). Notwithstanding the foregoing, the
liability of each Holder pursuant to this Section 9.2 shall be limited to (i)
the amount of any and all Merger Consideration to be issued to such Holder upon
the consummation of the Merger and (ii) the right of set-off set forth in
Section 9.5 hereof; provided, however, that there shall be no such limitation of
liability in the event the Surviving Corporation seeks indemnification from such
Holder for any fraudulent or criminal action or inaction.
(c) The Surviving Corporation shall indemnify and hold harmless
each Holder against all loss, liability, damage or expense (including reasonable
fees and expenses of counsel in any matter, whether involving a third party or
between the indemnifying and indemnified parties) such Holder may suffer,
sustain or become subject to as a result of any breach of any warranties,
covenants or other agreements contained in this Agreement or any
misrepresentation by the Company, or as a result of any of the Company's
representations or warranties not being true and correct as of the Effective
Time (whether or not such Holder had knowledge, prior to the Effective Time, of
the misrepresentation or breach of warranty).
(d) Each party acknowledges that reliance shall not be an
element of any claim by the other for breach of warranty or misrepresentation
under this Agreement.
Section 9.3 Conditions of Indemnification for Third Party Claims. The
obligations and liabilities of the parties under this Agreement with respect to,
relating to, caused (in whole or in part) by or arising out of claims of third
parties (individually, a "Third Party Claim" and collectively "Third Party
Claims") including, without limitation, any Federal, state or local taxing
authorities, shall be subject to the following terms and conditions:
(a) The party entitled to be indemnified hereunder (the
"Indemnified Party") shall give the party obligated to provide the indemnity
-22-
(the "Indemnifying Party") prompt notice of any Third Party Claim, and, provided
that the Indemnifying Party acknowledges in writing its obligation to indemnify
in accordance with the terms and subject to the limitations on such party's
obligation to indemnify contained in this Agreement with respect to that claim
(or part of that claim), the Indemnifying Party shall have the right to approve
(such approval not to be unreasonably withheld) the representatives to undertake
the defense of that claim. Any such notice of a Third Party Claim shall identify
with reasonable specificity the basis for the Third Party Claim, the facts
giving rise to the Third Party Claim, and the amount of the Third Party Claim
(or, if such amount is not yet known, a reasonable estimate of the amount of the
Third Party Claim (if determinable)). The Indemnified Party shall make available
to the Indemnifying Party copies of all relevant documents and records in its
possession. In addition, no settlement or compromise of such Third Party Claim
shall be made with the prior written consent of the Indemnifying Party.
(b) If the Indemnifying Party, within ten (10) business days
after receiving notice of any such Third Party Claim, fails to acknowledge in
writing its obligation to indemnify in accordance with Section 9.3(a) hereof,
the Indemnified Party shall (upon further notice to the Indemnifying Party and
subject to Section 9.3(c) hereof) have the right to defend, compromise or settle
the Third Party Claim without obtaining any consents from the Indemnifying
Party.
(c) Anything in this Section 9.3 to the contrary
notwithstanding, (i) the Indemnifying Party shall not, without the written
consent of the Indemnified Party (which consent shall not be unreasonably
withheld), settle or compromise any Third Party Claim or consent to the entry of
judgment which does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Indemnified Party an unconditional release
from all liability in respect of the Third Party Claim; and (ii) if there is a
reasonable probability that a claim may materially and adversely affect the
Indemnified Party other than as a result of money damages or other money
payments, the Indemnified Party shall have the right, at its own cost and
expense, to participate in the defense of the Third Party Claim.
Section 9.4 Payment of Claims. Any party obligated to indemnify
another party hereunder shall advance any amounts so payable to the Indemnified
Party as such amounts are incurred by such Indemnified Party upon written demand
therefor containing reasonable supporting documentation of the amounts so
payable.
Section 9.5 Set-Off. Any party (the "Entitled Party") entitled to
indemnification from another party hereunder (the "Obligated Party") pursuant to
the terms of this Agreement shall have the right to set-off against any amounts
payable (in cash, Common Stock or otherwise) by such Entitled Party to the
Obligated Party under this Agreement or any other agreement(s) such Obligated
Party may have with the Entitled Party (including, without limitation, any
consulting agreement) all amounts payable to the Entitled Party by the Obligated
Party under this Section 9.
Section 9.6 Loan and Security Agreement. Notwithstanding anything to
the contrary contained herein, each of the parties hereby acknowledges that
neither the execution of this Agreement, nor the consummation (or failure to
consummate) the transactions contemplated hereby, shall release COL or the
-23-
Surviving Corporation, as the case may be, from COL's obligations under the VDC
Loan Agreement.
ARTICLE 10.
General Provisions
Section 10.1 Disclosure Schedules. Any disclosure made with reference
to one or more sections of the COL Disclosure Schedule shall be deemed disclosed
with respect to each other section therein as to which such disclosure is
relevant provided such relevance is reasonably apparent.
Section 10.2 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered if delivered personally, three days after
being sent by registered or certified U.S. mail (postage prepaid, return receipt
requested), one day after dispatch by recognized overnight courier (provided
delivery is confirmed by the carrier), to the parties at the following addresses
(or at such other address for a party as shall be specified by like changes of
address):
(a) If to COL Acquisition Corp.:
COL Acquisition Corp.
000 Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, President
With a copy to:
Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
-24-
(b) If to COL:
Coupons Online, L.L.C.
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, President
With a copy to:
Greenberg, Traurig, Hoffman, Lipoff, Xxxxx & Quentel
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
(c) If to Muzak:
Muzak Limited Partnership
0000 0xx Xxxxxx
Xxxxxxx, XX 00000
Attention: President
(d) If to any Holder (other than Muzak), to the Holder's
address reflected in the Operating Agreement.
Section 10.3 Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliates" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned person, including, without limitation,
any partnership or joint venture in which either of COL (either alone, or
through or together with any other subsidiary) has, directly or indirectly, an
interest of 10 percent or more;
(b) "business day" means any day other than a day on which
banks in New York are required or authorized to be closed; and
(c) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d)(3)) of the Exchange Act).
Section 10.4 Amendment. This Agreement may be amended by COL and the
Company (without the consent of any Holder) by action taken by or on behalf of
the Board of Directors of the
-25-
Company and the Board of Managers of COL at any time prior to the Effective
Time; provided, however, that no amendment may be made which by law requires
further approval by the members of COL without such further approval; provided,
further, that no amendment that materially and adversely affects a Holder shall
be binding on or effective as to such Holder without such Holder's written
consent. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto entitled to effectuate such amendment.
Section 10.5 Waiver. At any time prior to the Effective Time, any
party hereto may with respect to any other party hereto (a) extend the time for
the performance of any of the obligations or other acts, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any such extension or waiver shall be
valid if set forth in an instrument in writing signed by the party or parties to
be bound thereby.
Section 10.6 Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 10.7 Severability. If any term or other provision of this
Agreement is held to be invalid, illegal or incapable of being enforced under
any rule of law or public policy by a court of competent jurisdiction, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner so that the transactions
contemplated hereby are fulfilled to the extent possible.
Section 10.8 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes all 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
herein, is not intended to confer upon any other person any rights or remedies
hereunder. Notwithstanding the foregoing, the parties hereto acknowledge that
the terms and provisions of (i) the Letter Agreement regarding confidentiality
and the payment of fees and expenses (as qualified by Section 8.3 hereof) and
(ii) the VDC Loan Agreement shall survive the execution of this Agreement, the
termination or breach of this Agreement by any party hereto for any reason
whatsoever and the consummation of the Merger, and shall thereafter continue in
full force and effect. Each Holder hereto agrees to comply with all such terms
of the Letter Agreement as if he were named a party therein.
Section 10.9 No Assignment. This Agreement shall not be assigned by
operation of law or otherwise.
Section 10.10 Parties In Interest. This Agreement shall be binding
upon and inure solely to
-26-
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
Section 10.11 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
Section 10.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS EXECUTED AND FULLY PERFORMED WITHIN THE STATE OF
DELAWARE (WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES). EACH OF THE PARTIES
HERETO, BY EXECUTION OF THIS AGREEMENT, SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF DELAWARE AND THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF DELAWARE, IN EACH CASE, LOCATED IN NEW CASTLE COUNTY, AND WAIVES ANY
OBJECTION TO SUCH JURISDICTION ON THE GROUNDS OF VENUE OR FORUM NON-CONVENIENCE,
THE ABSENCE OF IN PERSONAM OR SUBJECT MATTER JURISDICTION OR ANY SIMILAR GROUNDS
AND CONSENTS TO THE SERVICE OF PROCESS BY MAIL OR BY ANY OTHER MANNER PERMITTED
BY LAW.
Section 10.13 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same Agreement.
Section 10.14 Joint Participation. The Company, COL and each of the
Holders has participated in the drafting of this Agreement and expressly
acknowledges such joint participation, to avoid application of any rule
construing contractual language against the party which drafted the language.
Section 10.15 No Tax Advice. COL and each of the Holders hereby
acknowledges that it has not received any tax advice, guidance or information
with respect to the Tax consequences, effects or impact of transactions
contemplated hereby by the Company or any representative or agent thereof. Each
of the Holders should consult such Holder's individual counsel with regard to
such matters.
Section 10.16 Exhibits and Schedules. All Exhibits and Disclosure
Schedules attached hereto are delivered pursuant to this Agreement are
incorporated by reference into, and made a part of, this Agreement.
-27-
Section 10.17 WAIVER OF JURY TRIAL. EACH OF COL, THE COMPANY AND THE
HOLDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
-28-
IN WITNESS WHEREOF, the Company, COL and each Holder have caused this
Agreement to be executed as of the date first written above.
COL ACQUISITION CORP.
By: _______________________________
Name:
Title:
COUPONS ONLINE, L.L.C.
By: _______________________________
Name:
Title:
[SIGNATURES CONTINUED]
-29-
HOLDERS:
_________________________________
XXXXX X. XXXXXXX
_________________________________
XXXX X. XXXXXXXXXX
_________________________________
XXXXX XXXXXXX
_________________________________
XXX XXXXX
_________________________________
XXXX XXXXXXXX
_________________________________
XXXXX XXXXXX
_________________________________
XXXXX XXXXXXX
[SIGNATURES CONTINUED]
-30-
_________________________________
XXXXX XXXXXXXXX
DIVERSIFIED EQUITIES AND
MANAGEMENT II t/a DEM II
By: _______________________________
Name:
Title:
_________________________________
XXXXXX XXXXXX
_________________________________
XXXXXX XXXXXX
_________________________________
XXXXXXXX XXXXXX
_________________________________
XXXXXXX XXXXXXXXXXX
[SIGNATURES CONTINUED]
-31-
_________________________________
XX. XXXXXX X. XXXXXX
_________________________________
XXXXX XXXXXX
_________________________________
XXXXXX XXXXXXXX
_________________________________
XXXX XXXXXXXX
_________________________________
XXXX XXXXXX FAMILY TRUST
By: _______________________________
Name:
Title:
_________________________________
XXXXX XXXXXXXXXX
MUZAK LIMITED PARTNERSHIP
By: _______________________________
Name:
Title:
-32-
EXHIBIT A
Holder Shares of Common Stock
------ ----------------------
Muzak Limited Partnership 474,000
Xxxxx X. Xxxxxxx 437,000
Xxxx X. Xxxxxxxxxx 342,000
Xxxxx Xxxxxxxxxx 100,000
Xxxxxx Group 475,000
Xxxxx Xxxxxxxxx 380,000
Xxx Xxxxx 114,000
Xxxx Xxxxxxxx 57,000
Xxx Xxxxxx 47,500
Xxxxx Xxxxxxx 47,500
EXHIBIT B
Form of Legal Opinion
For the purposes of these opinions we shall assume, with the
permission of the Company, that the procedural and substantive laws of the State
of New Jersey are the same as those in the State of Delaware.
(a) COL is a limited liability company duly organized, validly existing
and in good standing under the laws of New Jersey. With respect to COL's good
standing we have relied solely upon a certificate of the Secretary of State of
the State of New Jersey.
(b) COL has the power and authority under its Articles of Formation,
the Operating Agreement and New Jersey Law to own, lease and operate its current
properties and to transact the business in which it is currently engaged.
(c) COL has all necessary power and authority under its Articles of
Formation and the New Jersey Law to execute and deliver the Merger Agreement and
to perform its obligations thereunder. The execution, delivery and performance
by COL of the Merger Agreement have been duly authorized by all necessary action
of COL.
(d) The Merger Agreement has been duly executed and delivered on behalf
of COL and constitutes a valid and binding obligation of COL, enforceable
against COL in accordance with its terms, subject to customary enforceability
qualifications.
(e) The execution, delivery and performance by COL of the Merger
Agreement do not (i) require any approval of its members which has not been
obtained or (ii) violate the New Jersey Law or COL's Articles of Formation or
the Operating Agreement.
(f) Upon the filing of the Articles of Merger in accordance with the
Delaware Law, the merger of COL into the Company will be legally effective in
accordance with the New Jersey Law.
Provided, that further assumptions and qualifications to these legal
opinions are to be contained in Counsel's final form of legal opinion.
In addition to the opinions contained above, the opinion letter shall
contain a factual statement to the effect that to the best of our knowledge and
without the benefit of conducing a lien search or any independent investigation,
all of the outstanding Interests are held by the Holders free and clear of all
security interests, liens, claims, pledges, agreements, limitations or other
encumbrances of any nature whatsoever.
EXHIBIT C
CERTIFICATE
The undersigned has executed and delivered this Certificate to COL
Acquisition Corp. (the "Company") this ____ day of September, 1996 pursuant to
Section 7.2(h) of that certain Agreement and Plan of Merger and Reorganization
dated September __, 1996, by and among the Company, Coupons Online, L.L.C., and
the Holders named therein (the "Merger Agreement"). The undersigned acknowledges
that the Company is relying upon the representations and warranties contained
herein in issuing its Common Stock to the undersigned as Merger Consideration
pursuant to the Merger Agreement.
NOW THEREFORE, the undersigned hereby certifies as follows:
1. [He/She] has received a copy of the Merger Agreement. The
undersigned acknowledges that [he/she] has had sufficient time to review the
Merger Agreement and has had the opportunity to ask questions and receive
answers concerning the terms and conditions of the merger contemplated by the
Merger Agreement and to obtain any additional information which Acquisition
Corp. possesses or can acquire without unreasonable effort or expense to verify
the information contained in the foregoing documents.
2. The undersigned has such knowledge and experience in financial and
business matters that [he/she] is capable of evaluating the merits and risks of
an investment in the Company's Common Stock.
3. The undersigned acknowledges that the shares of the Company's Common
Stock delivered to the undersigned as Merger Consideration pursuant to the
Merger Agreement have not been registered under the Securities Act of 1933, as
amended, or any state securities laws and, unless so registered, may not be
offered or sold in the United States except pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the Securities
Act and applicable state securities laws.
4. The undersigned is acquiring the shares of the Company's Common
Stock issuable to [him/her] pursuant to the Merger Agreement for [his/her] own
account.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of September, 1996.
_______________________________
