AMENDED AND RESTATED
MERGER AGREEMENT AND PLAN OF MERGER
among
Contessa Corporation,
and
Fullcomm Acquisition Corp.
and
Fullcomm, Inc.,
the Shareholders of Fullcomm, Inc. and the
Principal Stockholders of Contessa Corporation
TABLE OF CONTENTS
Page
----
ARTICLE I. THE MERGER.................................................. 2
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF CONTESSA,
ACQUISITION AND THE PRINCIPAL STOCKHOLDERS.................. 4
ARTICLE III. COVENANTS OF CONTESSA, ACQUISITION AND
THE PRINCIPAL STOCKHOLDERS.................................. 12
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF FULLCOMM
AND THE FULLCOMM SHAREHOLDERS............................... 15
ARTICLE V. CONDUCT PRIOR TO CLOSING.................................... 19
ARTICLE VI. ADDITIONAL AGREEMENTS....................................... 20
ARTICLE VII. CONDITIONS TO OBLIGATIONS OF THE PARTIES.................... 23
ARTICLE VIII. CONDITIONS PRECEDENT TO OBLIGATIONS OF CONTESSA,
ACQUISITION, AND THE PRINCIPAL STOCKHOLDERS................. 24
ARTICLE IX. CONDITIONS PRECEDENT TO OBLIGATIONS OF
CONTESSA, ACQUISITION AND THE PRINCIPAL STOCKHOLDERS...... 25
ARTICLE X. THE CLOSING................................................. 27
ARTICLE XI. MISCELLANEOUS............................................... 29
(ii)
Exhibits:
Exhibit A: Case Employment Agreement
Exhibit B: Fullcomm Officer's Certificate
Exhibit C-1: Contessa Officer's Certificate
Exhibit C-2: Acquisition Officer's Certificate
Exhibit D: Contessa Principal Stockholder's Certificate
Exhibit E: Opinion of Xxxxxx Xxxxxxxxxx
Exhibit F: Secretary's Certificate
Exhibit G: Opinion of Xxxxxxxx Ingersoll
Exhibit H: Confidentiality Agreements
Exhibit I: Shareholders Agreement
Schedules:
1.2 Fullcomm Shareholders and Merger Shares
2.2(a) Holders of Contessa Common Stock
2.11 Lawsuits, Litigation, etc.
2.16 Contessa Bank Accounts
2.19 Affiliate Business Arrangements
4.1 Fullcomm affiliates
4.2 Other Options, Rights, etc.
4.9 Fullcomm Litigation, etc.
4.10 Patents, Trademarks, etc.
4.15 Fullcomm Property, Contracts, Employees
Addendum Regarding Post-Merger Disposition
of Fullcomm Assets
(iii)
AMENDED AND RESTATED
MERGER AGREEMENT
AND
PLAN OF MERGER
THIS AMENDED AND RESTATED MERGER AGREEMENT AND PLAN OF MERGER,
(hereinafter referred to as the "Agreement") amends and restates the MERGER
AGREEMENT AND PLAN OF MERGER made and entered into on the 28th day of January
2000 (the "Initial Agreement") by and among CONTESSA CORPORATION, a Delaware
corporation (hereinafter referred to as "Contessa"), the stockholders of
Contessa listed on the signature pages hereof (collectively, the "Principal
Stockholders"), the shareholders of Fullcomm, Inc. listed on the signature pages
(collectively, the "Fullcomm Shareholders"), FULLCOMM ACQUISITION CORP., a
Delaware corporation (hereinafter referred to as "Acquisition"), and FULLCOMM,
INC., a New Jersey corporation (hereinafter referred to as "Fullcomm").
RECITALS
WHEREAS, the parties hereto entered into the Initial Agreement on January
28, 2000 providing for the merger of Fullcomm with and into Contessa's
wholly-owned subsidiary, Acquisition, whereby Acquisition shall be the surviving
entity pursuant to the terms and conditions set forth herein and whereby the
transaction shall qualify as a tax free exchange pursuant to Section 351 of the
Internal Revenue Code ("IRC");
WHEREAS, in furtherance of such combination, the Boards of Directors
and/or shareholders of Contessa, Acquisition and Fullcomm have each approved the
merger of Fullcomm with and into Acquisition (the "Merger"), upon the terms and
subject to the conditions set forth herein, in accordance with the applicable
provisions of the Delaware General Corporation Law (the "DGCL") and the New
Jersey Business Corporation Act (the "NJBCA");
WHEREAS, the Fullcomm Shareholders desire to exchange all of their
ownership interest in Fullcomm for shares of Contessa common stock representing
60.53% of the total issued and outstanding common stock of Contessa on the
partially diluted basis set forth in Section 1.2(d) and in the respective
amounts set forth in Schedule 1.2 hereto as a tax free exchange pursuant to
Section 351 of the IRC;
WHEREAS, the parties hereto desire to reorganize, pursuant to Section
368(a)(1)(A) of the IRC, the management, operations and principal place of
business of Contessa and Acquisition;
WHEREAS, certain provisions of the Initial Agreement have been modified by
agreement among the parties; and
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WHEREAS, the parties hereto wish to amend and restate the Initial
Agreement to reflect the changes agreed to by the parties.
NOW, THEREFORE, the parties hereto, intending to amend and restate the
Initial Agreement as of the date of its initial execution and delivery and in
consideration of the premises and mutual representations, warranties and
covenants herein contained, hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 (a) Merger and Plan of Reorganization. At the Effective Time
(as defined in Section 1.1(b) hereof), and subject to and upon the terms and
conditions of this Agreement, the DGCL and the NJBCA, Fullcomm shall be merged
with and into Acquisition, the separate corporate existence of Fullcomm shall
cease, and Acquisition shall continue as the surviving corporation. Acquisition
after the Effective Time is sometimes referred to herein as the "Surviving
Corporation." Contessa shall change its name to "Fullcomm Technologies, Inc." or
a any other name to be approved by the shareholders of Contessa, Acquisition
shall change its name to "Fullcomm, Inc." and the renamed Acquisition shall
remain a wholly-owned subsidiary of Contessa. As consideration for their
agreement to surrender their ownership interests in Fullcomm and to approve the
Merger, the Fullcomm Shareholders shall receive not less than Four Million, Six
Hundred and One Thousand, One Hundred (4,601,100) shares (the "Merger Shares")
of authorized but previously unissued Contessa common stock, par value $0.0001
per share. Fullcomm shareholders will be entitled to receive Merger Shares on a
one for one basis in accordance with Schedule 1.2. As consideration for the
Merger, the shareholders of Contessa shall receive a stock dividend of Six
Hundred and Ninety Five Thousand, Nine Hundred and Ninety Four (695,994) shares
after which the former holders of the Two Million, Three Hundred and Four
Thousand, Six (2,304,006) shares of Contessa common stock issued and outstanding
after the GBDR Disposition shall hold Three Million (3,000,000) shares of
Contessa common stock as set forth on Schedule 2.2(a). The parties hereto
further agree that as promptly as practicable after the Closing, the necessary
steps shall be taken in order to effect the relocation of Acquisition's
principal place of business to Fullcomm's facility in Princeton, New Jersey; and
the management and operations of Acquisition will be reorganized to become
engaged in the current business endeavors of Fullcomm.
(b) The Effective Time. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Articles VII, VIII and IX,
the parties hereto shall cause the merger to be consummated by filing the
certificates of merger as contemplated by the DGCL and the NJBCA (the
"Certificates of Merger"), together with any required related documents, with
the appropriate administrator, as indicated in the DGCL and the NJBCA, as the
case may be, in such form as required by, and executed in accordance with the
relevant provisions of, the DGCL and the
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NJBCA, as the case may be. The Merger shall be effective at the time indicated
in such Certificates of Merger (the "Effective Time").
SECTION 1.2 Issuance of Shares.
(a) At the Effective Time, Contessa shall cause to be issued and delivered
to the Fullcomm Shareholders or their designees, stock certificates evidencing
ownership of the Merger Shares in the amounts set forth in Schedule 1.2 hereto.
(b) The Merger Shares to be issued hereunder are deemed "restricted
securities" as defined by Rule 144 promulgated by the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), and the recipients shall represent that they are acquiring
the Merger Shares for investment purposes only and without the intent to make a
further distribution of the Merger Shares. All Merger Shares to be issued under
the terms of this Agreement shall be issued pursuant to exemptions from the
registration requirements of the Securities Act and the rules and regulations
promulgated thereunder. Certificates representing the restricted Merger Shares
shall bear the following, or similar legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH
THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION
FROM SUCH REGISTRATION PROVISIONS, THE AVAILABILITY OF WHICH IS TO
BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
Merger Shares received by Messrs. Elliott, Lee, and Escaravage and shares issued
in connection with any Ancillary Agreement shall bear a restrictive legend
stating that they are subject to the terms of a 3 year lockup provision.
(c) Notional denominator for calculation of above percentages. The
percentage of 60.53 in the recitals above is based on a notional denominator of
Seven Million, Six Hundred and One Thousand, One Hundred (7,601,100) shares and
are not intended to include shares issuable under the (i) Plan; (ii) the Case
Employment Agreement; (iii) the Tashenberg Advisory Agreement; (iv) the
Xxxxxxxxx Advisory Agreement; (v) the Grace Agreements; and (vi) the Grace
Private Placement.
SECTION 1.3 Actions to be Taken by the Board of Directors. As a condition
concurrent with the consummation of the Merger, the Board of Directors of
Contessa shall take the following actions in accordance with the DGCL:
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(a) The election of Xxxxxxx X. Xxxxxxx as a member of the Board of
Directors of Contessa as of and at the Closing Date;
(b) The election of Xxxxxxx X. Case, Xxxxxxx X. Xxxxxxx, Xxxxx X. Xxx and
X. Xxxxxxx Tashenberg as members of the Board of Directors of Acquisition as of
and at the Closing Date; and
(c) The acceptance of the resignations of the current officers of Contessa
and appointment of the following individuals as officers of Contessa and of
Acquisition as of and at the Closing Date:
1. Xxxxxxx X. Xxxxxxx, President and Treasurer;
2. Xxxxxxx X. Case, Chief Executive Officer; and
3. Xxxxx X. Xxx, Executive Vice President and Secretary.
SECTION 1.4 Closing. Unless this Agreement shall have been terminated
pursuant to Article X, and subject to the satisfaction or waiver, if
permissible, of the conditions set forth in Articles VII, VIII and IX, the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place (i) at the offices of Xxxxxx Xxxxxxxxxx & Xxxxxxxx, LLP, as promptly
as practicable (and in any event within five business days) after satisfaction
or waiver, if permissible, of the conditions set forth in Articles VII, VIII and
IX or (ii) at such other time, date or place as Fullcomm and Contessa may
mutually agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF
CONTESSA, ACQUISITION AND THE PRINCIPAL STOCKHOLDERS
As an inducement for Fullcomm and the Fullcomm Shareholders to enter into
this Agreement, Contessa and each Principal Stockholder hereby makes jointly and
severally, as of the date hereof and as of the Closing Date, the following
representations and warranties to Fullcomm and the Fullcomm Shareholders except
that each Principal Stockholder makes no representation or warranties with
respect to Sections 2.2(b) and 2.4:
SECTION 2.1 Organization of Contessa and Affiliates. (a) Contessa is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, is duly qualified and in good standing as a foreign
corporation in every jurisdiction in which such qualification is necessary, and
has the corporate power and authority to own its properties and assets and to
transact the business in which it is engaged. With the exception of Acquisition
and Gastronnomia Boca di Rosa, Inc. ("GBDR"), there are no corporations or other
entities with respect to which (i) Contessa owns any of the outstanding stock or
other interests, or (ii) Contessa may be deemed to be in control. Contessa,
Acquisition and the Principal Stockholders have all requisite corporate power
and authority to execute and deliver this Agreement, the Ancillary Agreements
(as
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defined below) and to consummate the transactions contemplated hereby and
thereby, and except for the approval of this Agreement, the Merger and the
transactions contemplated hereby and thereby, or notice thereof, by the
shareholders of Contessa as required by the DGCL and the federal securities
laws, have taken all corporate or other action necessary to consummate the
transactions contemplated hereby and thereby and to perform their respective
obligations hereunder and thereunder. This Agreement, upon its execution and
delivery, is the legal, valid and binding obligation of Contessa, Acquisition
and the Principal Stockholders, enforceable against Contessa, Acquisition, and
the Principal Stockholders in accordance with its terms, and each of the
Ancillary Agreements, upon its execution and delivery, is the legal, valid and
binding obligation of Contessa in accordance with its terms, except to the
extent that such enforcement may be limited by applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally.
(b) Acquisition is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, is duly qualified and in
good standing as a foreign corporation in every jurisdiction in which such
qualification is necessary, and has the corporate power and authority to own its
properties and assets and to transact the business in which it is engaged. There
are no corporations or other entities with respect to which (i) Acquisition owns
any of the outstanding stock or other interests, or (ii) Acquisition may be
deemed to be in control.
SECTION 2.2 Capitalization of Contessa and Acquisition. (a) The authorized
capital stock of Contessa consists of Twenty Million (20,000,000) shares of
common stock, par value $0.0001 per share (the "Common Stock"), of which Two
Million, Eight Hundred and Sixty Six Thousand, Five Hundred and Six (2,866,506)
shares of Common Stock are issued and currently outstanding, and Five Million
(5,000,000) shares of preferred stock, par value $0.001 per share, with such
rights, privileges, preferences and other terms and conditions as shall be
approved by its Board of Directors pursuant to a duly adopted resolution
thereof, of which no shares are issued and outstanding. All shares of Common
Stock currently issued and outstanding have been duly authorized and validly
issued and are fully paid and non-assessable, and have been issued in compliance
with any and all applicable federal and state laws or pursuant to appropriate
exemptions therefrom. There are no options, warrants, rights, calls, commitments
or agreements of any character obligating Contessa to issue any shares of its
capital stock or other securities or any security representing the right to
purchase or otherwise receive any such stock or other securities. The Merger
Shares, when issued, will be duly authorized, validly issued, fully paid and
non-assessable.
(b) To the best knowledge of Contessa and Acquisition, Schedule
2.2(a) sets forth the name of each holder of shares of Common Stock, as well as
the number of shares of Common Stock held by each such holder, subject to the
GBDR Disposition as defined in Section 2.7(c) below.
(c) Other than the transactions contemplated by this Agreement and
the GBDR Disposition as defined below, there is no outstanding vote, plan,
pending proposal or right of any person to cause any redemption of Common Stock
or the merger or consolidation of Contessa with
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or into any other entity. Contessa is not under any obligation under any
agreement to register any of its securities under federal or state securities
laws.
(d) To the best knowledge of Contessa, Acquisition and the Principal
Stockholders, there are no agreements among shareholders of Contessa, or
otherwise, voting trusts, proxies or other agreements or understanding of any
character, whether written or oral, with respect to or concerning the purchase,
sale, transfer or voting of the Common Stock or any other security of Contessa.
(e) None of Contessa, Acquisition or any Principal Stockholder has
any legal obligations, absolute or contingent, to any other Person to sell the
assets or to sell any capital stock or any other security of Contessa or any of
its subsidiaries or to effect any merger, consolidation or other reorganization
of Contessa or any of its subsidiaries or to enter into any agreement with
respect thereto, except pursuant to this Agreement and pursuant to the GBDR
Disposition.
(f)(i) Acquisition and GBDR, each a Delaware corporation, are the
only subsidiaries of Contessa. Each of GBDR and Acquisition is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
(ii) There are Two Hundred (200) shares of common stock, with a par
value of $0.001 per share (the "Acquisition Stock"), of Acquisition authorized,
which are all outstanding and held by Contessa. The Acquisition Stock was
validly issued, fully paid and non-assessable and not subject to any preemptive
rights created by statute, Acquisition's Certificate of Incorporation or By-Laws
or any contract. There is no outstanding vote, plan, pending proposal or right
of any person to cover any redemption of the Acquisition Stock as for the merger
or consolidation of Acquisition with or into any other entity, except as
contemplated hereby. Acquisition holds no assets and conducts no business.
SECTION 2.3 Charter Documents. Certified copies of the Contessa and
Acquisition Certificate of Incorporation and By-Laws, as amended to date, as
have been or will be delivered to Fullcomm prior to the Closing are true,
correct and complete copies thereof.
SECTION 2.4 Corporate Documents. The Contessa shareholders' list and
corporate minute books are complete and accurate in all material respects and
the corporate minute books contain the recorded minutes of all corporate
meetings or the written consents of shareholders and directors.
SECTION 2.5 Financial Statements. (a) Contessa's audited financial
statements for the fiscal year ended December 31, 1998 and the unaudited
September 30, 1999 financial statements (collectively, the "Contessa Financial
Statements"), copies of which have been delivered to Fullcomm, are true and
complete in all material respects, having been prepared in accordance with
generally accepted accounting principles applied on a consistent basis for the
period covered by such statements, and fairly present, in accordance with
generally accepted accounting principles, the
6
financial condition of Contessa and its subsidiaries, on a consolidated basis,
and results of its operations for the periods covered thereby. Contessa and each
of its subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
with management's authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's authorizations and (iv) the recorded accountability
for assets if compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any difference. Neither Contessa nor
any of its subsidiaries has engaged in any transaction, maintained any bank
account or used any corporate funds except for transactions bank accounts or
funds which have been and are reflected in the normally maintained books and
records. Except as otherwise set forth on Schedule 2.5(a) and as set forth
herein, there has been no material adverse change in the business operations,
assets, properties, prospects or condition (financial or otherwise) of Contessa
taken as a whole (a "Material Adverse Effect") from that reflected in the
financial statements referred to in this Section 2.5.
(b) SEC Documents. Contessa has furnished Fullcomm with a true and
complete copy of each report, schedule, registration statement and definitive
proxy statement filed by Contessa with the Commission since November 30, 1998
(as such documents have since the time of their filing been amended, the
"Contessa SEC Documents") and since that date Contessa has filed with the
Commission all documents required to be filed pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). As of their
respective dates, the Contessa SEC Documents complied in all material respects
with the requirements of the Securities Act of 1933 or the Exchange Act, as the
case may be, and the rules and regulations of the Commission thereunder
applicable to such Contessa SEC Documents, and none of the Contessa SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of Contessa included in the Contessa
SEC Documents comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, are accurate, complete and in accordance with the books
and records of Contessa, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q) and fairly present (subject, in
the case of the unaudited statements, to normal, recurring audit adjustments)
the consolidated financial position of Contessa as at the dates thereof and the
consolidated results of its operations and cash flows for the periods then
ended.
SECTION 2.6 Absence of Certain Changes or Events. Since September 30,
1999, and except as disclosed otherwise herein, Contessa has not (i) issued or
sold any promissory note, stock, bond, option or other security of which it was
an issuer or other obligor, (ii) discharged or satisfied any lien or encumbrance
or paid any obligation or liability, absolute or contingent, direct or indirect,
(iii) incurred or suffered to be incurred any liability or obligation
whatsoever, (iv) cause or permitted any lien, encumbrance or security interest
to be created or arise on or in any of its properties or assets, (v) declared or
made any dividend, payment or distribution to shareholders or purchased or
redeemed
7
or agreed to purchase or redeem any shares of its capital stock, (vi)
reclassified its shares of capital stock, (vii) amended its Certificate of
Incorporation or By-Laws, (viii) acquired any equity interest in any other
Person, or (ix) entered into any agreement or transaction except in connection
with the execution and performance of this Agreement. Neither Contessa nor
Acquisition, has entered into any Agreement to do any of the foregoing action
described in this Section 2.6, except with respect to the GBDR Disposition.
SECTION 2.7 Assets and Liabilities. (a) Contessa has good and marketable
title to all of its assets and property, free and clear of any and all liens,
claims and encumbrances. As of the date hereof, Contessa does not have any
debts, liabilities or obligations of any nature, whether accrued, absolute,
contingent, or otherwise, whether due or to become due, that are not fully
reflected in the Contessa Financial Statements.
(b) Acquisition has no assets and no liabilities.
(c) Contessa has entered into an agreement of sale with respect to
its investment in GBDR whereby it shall sell to a non-affiliated existing
shareholder of Contessa its stock holding in GBDR, and will receive in return
therefor such shareholder's stock holding which is comprised of 562,500 shares
of Contessa (the "GBDR Disposition").
SECTION 2.8 Tax Returns and Payments. (a) All of Contessa's tax returns
(federal, state, city, county or foreign) which are required by law to be filed
on or before the date of this Agreement, have been duly filed and are complete
and accurate in all material respects. Contessa has paid all taxes due on said
returns, any assessments made against Contessa and all other taxes, fees and
similar charges imposed on Contessa by any governmental authority (other than
those, the amount or validity of which is being contested in good faith by
appropriate proceedings). No tax liens have been filed and no claims are being
assessed with respect to any such taxes, fees or other similar charges. Contessa
and Acquisition know of (i) no other tax returns or reports which are required
to be filed which have not been so filed and (ii) no unpaid assessment for
additional taxes for any fiscal period or any basis thereof.
(b) Acquisition, which was incorporated on June 24, 1999, has not
filed, and has not yet been required to file, any tax return.
SECTION 2.9 Required Authorizations. There have been or will be timely
filed, given, obtained or taken, all applications, notices, consents, approvals,
orders, registrations, qualifications waivers or other actions of any kind
required by virtue of execution and delivery of this Agreement by Contessa or
the consummation by it of the transactions contemplated hereby. Prior to the
Closing, a majority of the shareholders of Contessa and Acquisition shall have
approved this Agreement and the transactions contemplated hereunder and
appropriate corporate filings shall have been made with the State of Delaware,
as required.
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SECTION 2.10 Compliance with Law and Government Regulations. Contessa and
Acquisition are in compliance with and are not in violation of, applicable
federal, state, local or foreign statutes, laws and regulations (including
without limitation, any applicable building, zoning or other law, ordinance or
regulation) affecting Contessa, Acquisition, or either of their respective
properties or the operation of their respective businesses, except where failure
to be in compliance would not result in a Material Adverse Effect. To the best
knowledge of Contessa, Acquisition, and the Principal Stockholders, Contessa and
Acquisition are not subject to any order, decree, judgment or other sanction of
any court, administrative agency or other tribunal.
SECTION 2.11 Litigation. Except as set forth on Schedule 2.11, there is no
litigation, arbitration, proceeding or investigation pending, or to the best
knowledge of Contessa, Acquisition and the Principal Stockholders, threatened or
anticipated, to which Contessa or Acquisition is a party or which may result in
a Material Adverse Effect, or which might result in any liability on the part of
Contessa or Acquisition, or which questions the validity of this Agreement or of
any action taken or to be taken pursuant to or in connection with the provisions
of this Agreement, and to the best knowledge of Contessa and Acquisition, there
is no basis for any such litigation, arbitration, proceeding or investigation.
To the best knowledge of Contessa, Acquisition and the Principal Stockholders,
there are presently no outstanding judgments, decrees or orders of any court or
any governmental or administrative agency against or affecting Contessa or
Acquisition or any of either of their assets that is not disclosed herein.
Schedule 2.11 contains a complete and accurate description of all claims, suits,
litigations, proceedings, investigations, disputes, writs, injunctions,
judgments and decrees since inception to which Contessa has been a party.
SECTION 2.12 Trade Names and Rights. Contessa does not use any trade xxxx,
service xxxx, trade name, or copyright in its business, nor does it own any
trade marks, trade xxxx registrations or applications, trade names, service
marks, copyrights, copyright registrations or applications. To the knowledge of
Contessa and Acquisition, no Person owns any trade xxxx, trade xxxx registration
or application, service xxxx, trade name, copyright or copyright registration or
application, the use of which is necessary or contemplated in connection with
the operation of Contessa's business.
SECTION 2.13 Governmental Consent. No consent, approval, authorization or
order of, or registration, qualification, designation, declaration or filing
with, any governmental authority on the part of Contessa, Acquisition or the
Principal Stockholders is required in connection with the execution and delivery
of this Agreement or the Ancillary Agreements or the carrying out of any
transactions contemplated hereby or thereby with the exception of the necessary
corporate filings with the State of Delaware and the State of New Jersey
relating to the proposed exchange of shares.
SECTION 2.14 No Disqualifying Orders. Neither Contessa, Acquisition, the
Principal Stockholders nor any of their respective affiliates, directors,
officers or principals is subject to any disqualifying order under the "Bad Boy"
provisions of the federal or any state securities law. As used herein, "Bad Boy"
provisions include Rule 262 of Regulation A, Rule 507 of Regulation D and other
similar disqualifying provisions of federal and state securities laws.
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SECTION 2.15 Business. Contessa and Acquisition: (i) do not own or lease
any real property or personal property; (ii) are not a party to any contract;
(iii) have no employees or anyone who acts as an employee; (iv) have only the
bank accounts listed on Schedule 2.16 hereto; and (v) are not required to have
any Permits.
SECTION 2.16 No Conflict or Violation; Consent. None of the execution,
delivery or performance of this Agreement, the Ancillary Agreements, the
consummation of the transactions contemplated hereby or thereby, nor compliance
by Contessa, Acquisition or any Principal Stockholder with any of the provisions
hereof or thereof, will (a) violate or conflict with any provision of the
governing documents of Contessa, any of its subsidiaries or any Principal
Stockholder, (b) violate, conflict with, or result in a breach of or constitute
a default (with or without notice of passage of time) under, or result in the
termination of, or accelerate the performance required by, or result in a right
to terminate, accelerate, modify or cancel under, or require a notice under, or
result in the creation of any encumbrance upon any of their respective assets
under, any contract, lease, sublease, license, sublicense, franchise, permit,
indenture, agreement or mortgage for borrowed money, instrument of indebtedness,
security interest or the arrangement to which Contessa, any of its subsidiaries
or any Principal Stockholder is a party or by which Contessa, any of its
subsidiaries or any Principal Stockholder is bound or to which any of their
respective assets are subject, (c) violate any applicable regulation or court
order or (d) impose any encumbrance on any of their respective assets. No
notices to, declaration, filing or registration with, approvals or consents of,
or assignments by, any Person (including any federal, state or local
governmental or administrative authorities) are necessary to be made or obtained
by Contessa, any of its subsidiaries or any Principal Stockholder in connection
with the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby.
SECTION 2.17 Full Disclosure. None of the representations and warranties
made by Contessa, Acquisition or the Principal Stockholders herein, or in any
Ancillary Agreement, exhibit, certificate or memorandum furnished or to be
furnished by Contessa, Acquisition or the Principal Stockholders on their behalf
pursuant hereto or thereto, contains or will contain any untrue statement of
material fact, or omits any material fact, the omission of which would be
misleading. The information with respect to Contessa and Fullcomm which is to be
included in any information statement or proxy statement to be sent to the
shareholders of Contessa will not contain any untrue statement of material fact,
or omit to state any material fact necessary to make the statement or fact
contained herein or therein not misleading.
SECTION 2.18 Brokerage. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
Merger based upon arrangements made by or on behalf of Contessa or Acquisition,
or with respect to the GBDR Disposition.
SECTION 2.19 Transactions with Affiliates. Except as set forth on Schedule
2.19, no director or officer of Contessa, Acquisition or any Principal
Stockholder or any member of his or her immediate family, is a party to any
contract or other business arrangement or relationship of any kind
10
with Contessa, has an ownership interest in any business, corporate or
otherwise, which is a party to, or in any property which is the subject of,
business arrangements or relationships of any kind with Contessa.
SECTION 2.20 Environmental Matters.
(i) Contessa, its subsidiaries and Acquisition are in
compliance in all material respects with all Environmental Laws (as defined
below).
(ii) Contessa has no knowledge of an existing or potential
Environmental Claim (as defined below), nor has Contessa or any Principal
Stockholder received any notification or has knowledge of alleged, actual or
potential responsibility for, or any inquiry or investigation regarding, any
disposal, release, or threatened release at any location of any Hazardous
Substance (as defined below) stored, generated or transported by Contessa, its
subsidiaries or Acquisition.
(iii) To the best knowledge of Contessa, Acquisition and the
Principal Stockholders, (A) no underground tank or other underground storage
receptacle for Hazardous Substance has leaked from any underground tank or
related piping at any time; and (B) there have been no releases of Hazardous
Substances by Contessa on, upon or into any properties of Contessa, any of its
subsidiaries or any of their respective predecessors.
(iv) To the best knowledge of Contessa, Acquisition and the
Principal Stockholders, there has never been any PCBs or asbestos located at or
on any owned or leased property by Contessa, any of its subsidiaries, or any of
their respective predecessors.
(v) No environmental lien has ever been attached to any real
property owned or leased by Contessa, any of its subsidiaries or any of their
respective predecessors.
(vi) Definitions. For purposes of this Agreement,
"Environmental Laws" shall mean all federal, state, district, local and foreign
laws, all rules or regulations promulgated thereunder, and all orders, consent
orders, judgments, notices, permits, or demand letters issued, promulgated, or
entered pursuant thereto, relating to pollution or protection of the environment
(including without limitation ambient air, surface water, ground water, land
surface, or subsurface strata), including without limitation (x) laws relating
to emissions, discharges, releases or threatened releases, or threatened
releases of pollutants, contaminants, chemicals, materials, wastes or other
substances into the environment and (y) laws relating to the identification,
generation, manufacture, processing, distribution, use, treatment, storage,
disposal, recovery, transport or other handling of pollutants, contaminants,
chemicals, industrial materials, wastes or other substances.
For purposes of this Agreement, "Environmental Claims" shall mean all
accusations, allegations, notice of violations, liens, claims, demands, suits or
causes of action or any damage, including without limitation, personal injury,
property damage (including any depreciation of property
11
values), lost use of property, or consequential damages, arising directly or
indirectly out of Environmental Conditions or Environmental Laws.
For purposes of this Agreement, "Environmental Conditions" shall mean the
state of environment, including natural resources (e.g. flora and fauna), soil,
surface water, ground water, any present or potential drinking water supply,
subsurface strata, or ambient air, relating to or arising out of the use,
handling, storage, treatment, recycling, generation, transportation, release,
spilling, leaking, pumping, pouring, emptying, discharging, injection, escaping,
leaching, disposal, dumping, or threatened release of Hazardous Substances by
Contessa, any of its subsidiaries or any of their respective predecessors or
such predecessors in interest, agents, representatives, employees, or
independent contractors.
For purposes of this Agreement, "Hazardous Substances" shall mean all
pollutants, contaminants, chemicals, wastes, and any other carcinogenic,
ignitable, corrosive, reactive, toxic, or otherwise hazardous substances or
materials (whether solids, liquids or gases), including but not limited to any
substances, materials, or wastes subject to regulation, control, or remediation
under Environmental Laws.
ARTICLE III
COVENANTS OF CONTESSA, ACQUISITION AND
THE PRINCIPAL STOCKHOLDERS
SECTION 3.1 Conduct Prior to the Closing. Between the date hereof and the
Closing, other than actions or transactions referred to herein:
(a) Contessa and Acquisition will not enter into any material agreement,
contract or commitment, whether written or oral, or engage in any transaction,
without the prior written consent of Fullcomm;
(b) Contessa and Acquisition will not pay, incur or declare any dividends
or distributions with respect to its capital stock or amend their respective
Certificates of Incorporation or By-Laws, without the prior written consent of
Fullcomm;
(c) Other than with respect to the GBDR Disposition, Contessa and
Acquisition will not authorize, issue, sell, purchase or redeem any shares of
its capital stock or any options or other rights to acquire its capital stock,
without the prior written consent of Fullcomm;
(d) Contessa and Acquisition will comply with all requirements which
federal or state law may impose on it with respect to this Agreement and the
transactions contemplated hereby, and will promptly cooperate with and furnish
written information to Fullcomm in connection with any such requirements imposed
upon the parties hereto in connection therewith and will provide Fullcomm with
the opportunity to review and approve any mailing or proxy to be delivered to
shareholders of Contessa;
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(e) Contessa and Acquisition will not incur any indebtedness for money
borrowed, or issue or sell any debt securities, incur or suffer to be incurred
any liability or obligation of any nature whatsoever, or cause or permit any
lien, encumbrance or security interest to be created or arise on or in any of
its properties or assets, acquire or dispose of fixed assets, change employment
terms, enter into any material or long-term contract, guarantee obligations of
any third party, settle or discharge any balance sheet receivable for less than
its stated amount or enter into any other transaction other than in the regular
course of business, except to comply with the terms of this Agreement, without
the prior written consent of Fullcomm;
(f) Contessa and Acquisition will not make any investment of capital
nature either by purchase of stock or securities, contribution to capital,
property transfer or otherwise, or by the purchase of any property or assets of
any other Person;
(g) Contessa and Acquisition will not enter into any contract whatsoever,
including any employment contract or any other compensation arrangement;
(h) Contessa and Acquisition will not do any other act which would cause
any representation or warranty of Contessa in this Agreement to be or become
untrue in any material respect or that is not in the ordinary course of business
consistent with past practice;
(i) None of Contessa, Acquisition or any Principal Stockholder shall
directly or indirectly (a) solicit any inquiry or proposals or enter into or
continue any discussions, negotiation or agreements relating to (i) the sale or
exchange of Contessa's or Acquisition's capital stock, or (ii) the merger of
Contessa or Acquisition with any Person other than Fullcomm or (b) provide any
assistance or any information to other otherwise cooperate with any Person in
connection with any such inquiry, proposal or transaction;
(j) Contessa and Acquisition shall grant to Fullcomm and its counsel,
accountants and other representatives, full access during normal business hours
during the period prior to the Closing to all of their respective properties,
books, contracts, commitments and records and, during such period, furnish
promptly to Fullcomm and such representatives all information relating to
Contessa as Fullcomm may reasonably request, and shall extend to Fullcomm the
opportunity to meet with Contessa's accountants and attorneys to discuss the
consolidated financial condition of Contessa; and
(k) Except for the transactions contemplated by this Agreement and the
GBDR Disposition, Contessa and Acquisition will conduct its business in the
normal course consistent with past practice, and shall not sell, pledge or
assign any of its assets without the prior written consent of Fullcomm.
SECTION 3.2 Pre-Closing Affirmative Covenants. Prior to Closing, Contessa
will do the following:
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(a) Use its best efforts to accomplish all actions necessary to consummate
this Agreement, including satisfaction of all conditions contained in this
Agreement without limitation, declaration of the stock dividend necessary to
result in the Three Million (3,000,000) shares issued and outstanding;
(b) Promptly notify Fullcomm in writing of any material adverse change in
the financial condition, business, operations or key personnel of Contessa or
Acquisition, any threatened material litigation or investigation, any breach of
its representations or warranties contained herein, and any material contract,
agreement, license or other agreement which, if in effect on the date of this
Agreement, should have been included in this Agreement or in a schedule hereto;
(c) Use its best efforts to obtain approval of this Agreement from its
shareholders and otherwise satisfy all consents of or notices to its
shareholders under federal and state securities laws and state corporate law;
(d) Obtain the written resignations of its existing officers and appoint
as new officers the individuals listed in Section 1.3(c), which appointment
shall be effective upon the Closing;
(e) File all necessary filings with the Commission to the extent it needs
to do so.
SECTION 3.3 Post-Closing Affirmative Covenants.
(a) As promptly as practicable after the Closing, Contessa shall deliver
notice of and hold a Special Meeting of Shareholders (the "Contessa Shareholder
Meeting") in accordance with the DGCL and with the Exchange Act and all other
applicable federal securities laws to transact the following business:
(i) To consider and vote upon a proposal to amend the Certificate of
Incorporation of Contessa to change the name of Contessa to "Fullcomm
Technologies, Inc." or to any other name to be approved by the shareholders of
Contessa, in order to more accurately describe the new business of Contessa;
(ii) To elect Directors of Contessa for the ensuing year and until
their successors shall have been elected and qualified; and
(iii) To consider and vote upon a proposal to adopt Contessa's 2000
Stock Plan;
(b) The Board of Directors of Contessa will nominate Xxxxxxx X. Case,
Xxxxxxx X. Xxxxxxx, Xxxxx X. Xxx, Xxxxxxx Xxxxxxxxx and X. Xxxxxxx Tashenberg as
management's slate of directors (the "Board Slate") for election at the Contessa
Shareholder Meeting; and
(c) The Principal Stockholders will vote their shares in favor of the name
change referred to above, in favor of the adoption of Contessa's 2000 Stock Plan
and in favor of the election of the Board Slate at such Contessa Shareholder
Meeting.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FULLCOMM
Fullcomm hereby represents, warrants and agrees that:
SECTION 4.1 Organization of Fullcomm. Fullcomm is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey, is duly qualified or will become duly qualified and in good standing
in every jurisdiction in which such qualification is necessary. Fullcomm is the
surviving entity from the merger with Fullcomm, LLC, a New Jersey limited
liability company ("Fullcomm LLC"), which merger became effective on May 18,
1999, and pursuant thereto Fullcomm became vested with all properties, rights,
privileges, franchises, licenses or other properties formerly owned by Fullcomm
LLC. There are no corporations or other entities with respect to which (i)
Fullcomm owns any of the outstanding stock or other interests, or (ii) Fullcomm
may be deemed to be in control except as otherwise disclosed in Schedule 4.1
annexed hereto and by this reference made a part hereof.
SECTION 4.2 Share Ownership. Prior to the consummation of the Ancillary
Agreements to which it is party, and after giving pro forma effect to the
issuance of a 20% stock dividend to its current private places, all of the
issued and outstanding capital stock of Fullcomm is owned as set forth on
Schedule 1.2. There are no options, warrants, rights, calls, commitments or
agreements of any character obligating Fullcomm to issue, now or at any future
time or upon any circumstance whether or not existing, any units of ownership,
shares or other equity interest, except as otherwise disclosed in Schedule 4.2
annexed hereto.
SECTION 4.3 Charter Documents. Complete and correct copies of the
Certificate of Incorporation and By-Laws of Fullcomm and all amendments thereto,
have been or will be delivered to Contessa prior to the Closing.
SECTION 4.4 Financial Statements, Assets and Liabilities. Fullcomm's and
Fullcomm LLC's unaudited financial statements for the stub period from inception
to and through the period ending December 31, 1999, have been or will be
delivered to Contessa and are true and complete in all material aspects.
Fullcomm has good and marketable title to all of its assets and property to be
delivered to Contessa hereunder free and clear of any and all liens, claims and
encumbrances, except as may be otherwise set forth herein and in its financial
statements. Fullcomm maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
with management's authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's authorizations and (iv) the recorded accountability
for assets if compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any difference. Fullcomm has not
engaged in any transaction, maintained any bank account or used any corporate
funds except for transactions, bank
15
accounts or funds which have been and are reflected in the normally maintained
books and records of Fullcomm.
SECTION 4.5 Absence of Certain Changes or Events. Since June 30, 1999 and
except as disclosed otherwise herein, Fullcomm has not (i) issued or sold any
promissory note, evidence of indebtedness, bond, option or other security of
which it was an issuer or other obligor, (ii) discharged or satisfied any lien
or encumbrance or paid any obligation or liability, absolute or contingent,
direct or indirect, except in the ordinary course of its business, (iii)
incurred or suffered to be incurred any liability or obligation whatsoever,
except in the ordinary course of its business, (iv) cause or permitted any lien,
encumbrance or security interest to be created or arise on or in any of its
properties or assets, (v) declared or made any dividend, payment or distribution
to shareholders, purchased or redeemed or agreed to purchase or redeem any
shareholder's ownership rights, (vi) reclassified its shares of capital stock,
or (vii) entered into any agreement or transaction except in connection with the
execution and performance of this Agreement.
SECTION 4.6 Tax Returns and Payments. As of the date hereof, Fullcomm has
not filed tax returns (federal, state, city, county or foreign). Fullcomm knows
of (i) no other tax returns or reports which are required to be filed which have
not been so filed and (ii) no unpaid assessment for additional taxes for any
fiscal period or any basis thereof.
SECTION 4.7 Required Authorizations. There have been or will be timely
filed, given, obtained or taken, all applications, notices, consents, approvals,
orders, registrations, qualifications waivers or other actions of any kind
required by virtue of execution and delivery of this Agreement by Fullcomm or
the consummation by it of the transactions contemplated hereby and appropriate
corporate filings shall have been made in the State of New Jersey, as required.
SECTION 4.8 Compliance with Law and Government Regulations. Fullcomm is,
to the best of its knowledge, in compliance with all applicable statutes,
regulations, decrees, orders, restrictions, guidelines and standard affecting
its properties and operations, imposed by the United States of America or any
state to which Fullcomm is subject, the failure to comply with which would,
either individually or in the aggregate, have a Material Adverse Effect.
SECTION 4.9 Litigation. There is no litigation, arbitration, proceeding or
investigation pending or, to the best of its knowledge, threatened to which
Fullcomm is a party or which may result in any Material Adverse Effect, or which
might result in any liability on the part of Fullcomm, or which questions the
validity of this Agreement or of any action taken or to be taken pursuant to or
in connection with the provisions of this Agreement, and to the best knowledge
of Fullcomm, there is no basis for any such litigation, arbitration, proceeding
or investigation except as otherwise set forth in Schedule 4.9. To the best of
its knowledge, there are presently no outstanding judgments, decrees or orders
of any court or any governmental or administrative agency against or affecting
Fullcomm or any of its assets that is not disclosed herein.
16
SECTION 4.10 Patents, Trademarks, Trade Names and Rights. Schedule 4.10
annexed hereto and by this reference is made a part hereof, contains a complete
list of all patents, assignments of patents, patent licenses, trademarks,
service marks, trade marks, service xxxx, trademark and service xxxx
registrations, applications and licenses with respect to the forgoing owned or
held by Fullcomm. Fullcomm has no knowledge of any facts and nothing has come to
its attention that would lead it to believe that it has infringed or
misappropriated or is infringing upon any trademark, copyright, patent or other
similar right of any person. No claim relating thereto is pending or, to the
knowledge of Fullcomm, is threatened. Fullcomm has no knowledge of any rights
owned by third parties in the patents, trademarks and other intellectual
property rights listed in Schedule 4.10, except as set forth in Schedule 4.10.
SECTION 4.11 Governmental Consent. No consent, approval, authorization or
order of, or registration, qualification, designation, declaration or filing
with, any governmental authority on the part of Fullcomm is required in
connection with the execution and delivery of this Agreement or the Ancillary
Agreements or the carrying out of any transactions contemplated hereby or
thereby other than filing the Agreement together with a Certificate of Merger
with the State of Delaware and State of New Jersey.
SECTION 4.12 Authority. Fullcomm and each of the Fullcomm Shareholders
have approved this Agreement and duly authorized the execution hereof. Fullcomm
has full power, authority and legal right to enter into this Agreement and to
consummate the transactions contemplated hereby, and all corporate actions
necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby has been duly and validly
taken. The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and compliance by Fullcomm with the provisions
hereof will not (a) conflict with or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Fullcomm under, any of the terms, conditions or provisions of the Certificate of
Incorporation or By-Laws of Fullcomm, or any note, bond, mortgage, indenture,
license, agreement or any instrument or obligation to which Fullcomm is a party
or by which it is bound; or (b) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Fullcomm or any of its properties or
assets.
SECTION 4.13 Investment Purpose. Fullcomm has received or shall receive
representations from the Fullcomm Shareholders that the recipients of the
restricted Merger Shares hereunder are acquiring the shares for investment
purposes only and acknowledges that the Contessa Shares issued hereunder are
"restricted securities" and may not be sold, traded or otherwise transferred
without registration under the Securities Act or exemption therefrom, and in
addition, shares issuable under the Ancillary Agreements and Merger Shares
receivable by Messrs. Elliott, Lee, and Escaravage are also subject to the terms
of the three year "lockup" provision referred to herein.
17
SECTION 4.14 Nonexistence of Disqualifying Orders. Neither Fullcomm nor
any of its affiliates, directors, officers or principals is subject to any
disqualifying order under the "Bad Boy" provisions of the federal or any state
securities law which are defined in Section 2.14.
SECTION 4.15 Business. Except as listed on Schedule 4.15, Fullcomm: (i)
does not own or lease any real property or personal property; (ii) is not a
party to any contract; (iii) has no employees or anyone who acts as an employee;
and (iv) is not required to have any Permits.
SECTION 4.16 No Conflict or Violation: Consent. None of the execution,
delivery or performance of this Agreement, the Ancillary Agreements, the
consummation of the transactions contemplated hereby or thereby, nor compliance
by Fullcomm with any of the provisions hereof or thereof, will (a) violate or
conflict with any provision of the governing documents of Fullcomm, (b) violate,
conflict with, or result in a breach of or constitute a default (with or without
notice of passage of time) under, or result in the termination of, or accelerate
the performance required by, or result in a right to terminate, accelerate,
modify or cancel under, or require a notice under, or result in the creation of
any encumbrance upon any of its assets under, any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, security interest or the arrangement
to which Fullcomm is a party or by which Fullcomm is bound or to which any of
its assets are subject, (c) violate any applicable regulation or court order or
(d) impose any encumbrance on any of its assets. No notices to, declaration,
filing or registration with, approvals or consents of, or assignments by, any
Person (including any federal, state or local governmental or administrative
authorities) are necessary to be made or obtained by Fullcomm, any of its
Subsidiaries or any Principal Stockholder in connection with the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.
SECTION 4.17 Full Disclosure. None of the representations and warranties
made by Fullcomm herein, or in any Ancillary Agreement, exhibit, certificate or
memorandum furnished or to be furnished by, on its behalf pursuant hereto or
thereto, contains or will contain any untrue statement of material fact, or
omits any material fact, the omission of which would be misleading.
SECTION 4.18 Transactions and Affiliates. No Fullcomm Shareholder or any
member of his or her immediate family, is a party to any contract or other
business arrangement or relationship of any kind with Fullcomm has an ownership
interest in any business, corporate or otherwise, which is a party to, or in any
property which is the subject of, business arrangements or relationships of any
kind with Fullcomm.
18
ARTICLE V
CONDUCT PRIOR TO CLOSING
SECTION 5.1 Conduct Prior to the Closing. Between the date hereof and the
Closing:
(a) Except within the regular course of business or in connection with its
financing activities previously disclosed to Contessa, including, without
limitation the Ancillary Agreements and the Grace Private Placement, Fullcomm
will not enter into any material agreement, contract or commitment, whether
written or oral, without the prior written consent of Contessa;
(b) Fullcomm will not pay, incur or declare any dividends or distributions
with respect to its shareholders or amend its Certificate of Incorporation or
By-Laws, without the prior written consent of Contessa ;
(c) Except for the shares of Common Stock of Fullcomm to be issued in
connection with the Ancillary Agreements and the Grace Private Placement
Agreement, Fullcomm will not authorize, issue, sell, purchase, or redeem any
shares of capital stock or any options or other rights to acquire ownership
interests without the prior written consent of Contessa;
(d) Except within the regular course of business and in its financing
activities previously disclosed to Contessa, Fullcomm will not incur any
indebtedness for money borrowed (other than the South Edge Loan) or issue any
debt securities, or incur or suffer to be incurred any liability or obligation
of any nature whatsoever, or cause or permit any lien, encumbrance or security
interest to be created or arise on or in any of its properties or assets,
without the prior written consent of Contessa;
(e) Fullcomm will not make any investment of capital nature either by
purchased stock or securities, contribution to capital, property transfer or
otherwise, or by the purchase of any property or assets of any other Person;
(f) Fullcomm will not do any other act which would cause representation or
warranty of Contessa in this Agreement to be or become untrue in any material
respect or that is not in the ordinary course of business consistent with past
practice;
(g) Fullcomm shall not directly or indirectly (a) solicit any inquiry or
proposals or enter into or continue any discussions, negotiation or agreements
relating to (i) the sale or exchange of Fullcomm's capital stock or (ii) the
merger of Fullcomm with any Person other than Acquisition or (b) provide any
assistance or any information to other otherwise cooperate with any Person in
connection with any such inquiry, proposal or transaction;
(h) Fullcomm will comply with all requirements which federal or state law
may impose on it with respect to this Agreement and the transactions
contemplated hereby, and will promptly
19
cooperate with and furnish written information to Contessa in connection with
any such requirements imposed upon the parties hereto in connection therewith;
and
(i) Fullcomm shall grant to Contessa and its counsel, accountants and
other representatives, full access during normal business hours during the
period to the Closing to all its respective properties, books, contracts,
commitments and records and, during such period, furnish promptly to Contessa
and such representatives all information relating to Fullcomm as Contessa may
reasonably request, and shall extend to Contessa the opportunity to meet with
Fullcomm's accountants and attorneys to discuss the financial condition of
Fullcomm.
SECTION 5.2 Affirmative Covenants. Prior to Closing, Fullcomm will do the
following:
(a) Use its best efforts to accomplish all actions necessary to consummate
this Agreement, including satisfaction of all conditions contained in this
Agreement and declaration of a stock dividend, or taking of other corporate
action to result in the Four Million, Six Hundred and One Thousand, One Hundred
(4,601,100) share ownership on Schedule 1.2; and
(b) Promptly notify Contessa in writing of any material adverse change in
the financial condition, business, operations or key personnel of Fullcomm, any
threatened material litigation or investigation, any breach of its
representations or warranties contained herein, and any material contract,
agreement, license or other agreement which, if in effect on the date of this
Agreement, should have been included in this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expense except as provided for in Section 11.1 herein.
SECTION 6.2. Brokers and Finders. Except for the fees to be paid under the
Grace Agreements, each of the parties hereto represents, as to itself, that no
agent, broker, investment banker or firm or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement.
SECTION 6.3 Necessary Actions. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action, and to do or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In the event at any time after the Closing, any further action is necessary or
desirable to carry out the
20
purpose of this Agreement, the proper managers, officers and/or directors of
Contessa, Acquisition or Fullcomm, as the case may be, shall take all such
necessary action.
SECTION 6.4 Indemnification.
(a) General.
(i) Subsequent to the Closing, the Principal Stockholders
shall, jointly and severally, indemnify Fullcomm, and each of the Fullcomm
Shareholders ("Fullcomm Indemnified Parties") against, and hold each of the
Fullcomm Indemnified Parties harmless from any damage, claim, loss, cost,
liability or expense, including without limitation, interest, penalties,
reasonable attorneys' fees and expenses of investigation, diminution of value,
response action, removal action or remedial action (collectively "Damages")
incurred by any such Fullcomm Indemnified Party, that are incident to, arise out
of, in connection with, or related to, whether directly or indirectly, the
breach of any warranty, representation, covenant or agreement of Contessa,
Acquisition or the Principal Stockholders contained in this Agreement, the
Ancillary Agreements or any schedule hereto or thereto or in any certificate or
instrument of conveyance (including, without limitation, any notice to be
delivered to the shareholders of Contessa) delivered by or on behalf of Contessa
or the Principal Stockholders pursuant to this Agreement, the Ancillary
Agreements or in connection with the transactions contemplated hereby or
thereby.
(ii) Subsequent to the Closing, Fullcomm shall indemnify
Contessa and the Principal Stockholders ("Contessa Indemnified Parties"),
against, and hold each of the Contessa Indemnified Parties harmless from, any
Damages incurred by such Contessa Indemnified Party, that are incident to, arise
out of, in connection with, or related to, whether directly or indirectly, the
breach of any warranty, representation, covenant or agreement of Fullcomm
contained in this Agreement, the Ancillary Agreements, any schedule hereto or
thereto or in any certificate or instrument of conveyance delivered by or on
behalf of Fullcomm pursuant to this Agreement, the Ancillary Agreements or in
connection with the transactions contemplated hereby or thereto.
(iii) The term "Damages" as used in this Section 6.4 is not
limited to matters asserted by third parties against Fullcomm Indemnified
Parties or Contessa Indemnified Parties, but includes Damages incurred or
sustained by such persons in the absence of third party claims.
(b) Procedure for Claims.
(i) If a claim for Damages (a "Claim') is to be made by a
person entitled to indemnification hereunder, the person claiming such
indemnification (the "Indemnified Party"), subject to clause (ii) below, shall
give written notice (a "Claim Notice") to the indemnifying person (the
"Indemnifying Party") as soon as practicable after the Indemnified Party becomes
aware of any fact, condition or event which may give rise to Damages for which
indemnification may be sought under this Section 6.4. The failure of any
Indemnified Party to give timely notice hereunder shall not
21
affect rights to indemnification hereunder, except and only to the extent that,
the Indemnifying Party demonstrates actual material damage caused by such
failure. In the case of a Claim involving the assertion of a claim by a third
party (whether pursuant to a lawsuit or other legal action or otherwise, a
"Third-Party Claim"), if the Indemnifying Party shall acknowledge in writing to
the Indemnified Party that the Indemnifying Party shall be obligated to
indemnify the Indemnified Party under the terms of its indemnity hereunder in
connection with such Third-Party Claim, then (A) the Indemnifying Party shall be
entitled and, if it so elects, shall be obligated at its own cost, risk and
expense, (1) to take control of the defense and investigation such Third-Party
Claim and (2) to pursue the defense thereof in good faith by appropriate actions
or proceedings promptly taken or instituted and diligently pursued, including,
without limitation, to employ and engage attorneys of its own choice reasonably
acceptable to the Indemnified Party to handle and defend the same, and (B) the
Indemnifying Party shall be entitled (but not obligated), if it so elects, to
compromise or settle such claim, which compromise or settlement shall be made
only with the written consent of the Indemnified Party, such consent not to be
unreasonably withheld. In the event the Indemnifying Party elects to assume
control of the defense and investigation of such lawsuit or other legal action
in accordance with this Section 6.4, the Indemnified Party may, at its own cost
and expense, participate in the investigation, trial and defense of such
Third-Party Claim; provided that, if the named persons to a lawsuit or other
legal action include both the Indemnifying Party and the Indemnified Party and
the Indemnified Party has been advised in writing by counsel that there may be
one or more legal defenses available to such Indemnified Party that are
different from or additional to those available to the Indemnifying Party, the
Indemnified Party shall be entitled, at the Indemnifying Party's cost, risk and
expense, to separate counsel of its own choosing. If the Indemnifying Party
fails to assume the defense of such Third-Party Claim in accordance with this
Section 6.4 within 10 calendar days after receipt of the Claim Notice, the
Indemnified Party against which such Third-Party Claim has been asserted shall
upon delivering notice to such effect to the Indemnifying Party have the right
to undertake, at the Indemnifying Party's cost, risk and expense, the defense,
compromise and settlement of such Third-Party Claim on behalf of and for the
account of the Indemnifying Party; provided that such Third-Party Claim shall
not be compromised or settled without the written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld. In the event the
Indemnifying Party assumes the defense of the claim, the Indemnifying Party
shall keep the Indemnified Party reasonably informed of the progress of any such
defense, compromise or settlement, and in the event the Indemnified Party
assumes the defense of the claim, the Indemnified Party shall keep the
Indemnifying Party reasonably informed of the progress of any such defense,
compromise or settlement. The Indemnifying Party shall be liable for any
settlement of any Third-Party Claim effected pursuant to and in accordance with
this Section 6.4 and for any final judgment (subject to any right of appeal),
and the Indemnifying Party agrees to indemnify and hold harmless each
Indemnified Party from and against any and all Damages by reason of such
settlement or judgment.
(ii) Notwithstanding clause (i) above, in the event that the
Indemnified Party is a Contessa Indemnified Party, any Claim Notice election or
other notification or correspondence required pursuant to such clause (i) shall
be valid if it is delivered to each Contessa Principal Stockholder (the
"Stockholder Representative"). Each Principal Stockholder hereby irrevocably
appoints the Stockholder Representative as its agent and attorney-in-fact with
respect to
22
the matters set forth in this Section 6.4, and hereby irrevocably grants to the
Stockholder Representative the authority to administer Claims on behalf of such
Contessa Indemnified Party, to exercise such other rights and powers as are set
forth in this Agreement and to enter into, and to bind such Stockholder with
respect to, the settlement of any such Claim. Each Fullcomm Indemnified Party
shall be entitled to rely on the agreements and representations of, and notices
and other correspondence from, the Stockholder Representative as such agent and
attorney-in-fact in connection with any Claim by or against any Contessa
Indemnified Party pursuant to this Section 6.4.
(c) No Right of Contribution. After the Closing, no Principal
Stockholder shall have any right of contribution against the Surviving
Corporation for any breach of any representation, warranty, covenant or
agreement of Contessa. Fullcomm and Contessa shall be entitled to specific
performance and injunctive relief, without posting bond or other security, for
the purpose of asserting their respective rights under this Section 6.4. The
remedies described in this Section 6.4 shall be in addition to, and not in lieu
of, and any other remedies at law or in equity that the parties may elect to
pursue.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
The obligations of the parties under this Agreement are subject to the
fulfillment and satisfaction of each of the following conditions:
SECTION 7.1 Legal Action. No preliminary or permanent injunction or other
order by any federal or state court which prevents the consummation of this
Agreement or any of the transactions contemplated by this Agreement shall have
been issued and remain in effect.
SECTION 7.2 Absence of Termination. The obligations to consummate the
transactions contemplated hereby shall not have been canceled pursuant to
Article X hereof.
SECTION 7.3 Required Approvals. Contessa, Acquisition and Fullcomm shall
have received all such approvals, consents, authorizations or modifications as
may be required to permit the performance by Contessa, Acquisition and Fullcomm
of their respective obligations under this Agreement, and the consummation of
the transactions herein contemplated, whether from governmental authorities or
other Persons, and Contessa, Acquisition and Fullcomm shall each have received
any and all permits and approvals from any regulatory authority having
jurisdiction required for the lawful consummation of this Agreement and the
transactions contemplated hereby.
SECTION 7.4 "Blue Sky" Compliance. There shall have been obtained any and
all permits, approvals and consents of the appropriate state securities
commissions of any jurisdictions, and of any other governmental body or agency,
which counsel for Contessa or Fullcomm may reasonably deem necessary or
appropriate so that consummation of the transactions contemplated by this
Agreement may be in compliance with all applicable laws.
23
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF
CONTESSA, ACQUISITION AND THE PRINCIPAL STOCKHOLDERS
All obligations of Contessa, Acquisition and the Principal Stockholders
under this Agreement are subject to the fulfillment and satisfaction by Fullcomm
prior to or at the time for Closing, of each of the following conditions, any
one or more of which may be waived by Contessa.
SECTION 8.1 Representations and Warranties True at Closing. All
representations and warranties of Fullcomm contained in this Agreement will be
true and correct at and as of the time of the Closing, and Fullcomm shall have
delivered to Contessa a duly executed Officer's Certificate, dated the Closing
Date, in the form of Exhibit B.
SECTION 8.2 Performance. The obligations of Fullcomm to be performed on or
before the Closing pursuant to the terms of this Agreement shall be duly
performed at such time, and Fullcomm shall have delivered to Contessa a duly
executed Officer's Certificate, dated the Closing Date, in the form of Exhibit
B.
SECTION 8.3 Authority. All action required to be taken by, or on the part
of Fullcomm and the Fullcomm Shareholders to authorize the execution, delivery
and performance of this Agreement by Fullcomm and the Fullcomm Shareholders and
the consummation of the transactions contemplated hereby, shall have been duly
and validly taken.
SECTION 8.4 Absence of Certain Changes or Events. There shall not have
occurred, since the date hereof, any material adverse change in the business,
condition (financial or otherwise), assets or liabilities of Fullcomm or any
event or condition of any character adversely affecting Fullcomm, and it shall
have delivered to Contessa, a duly executed Officer's Certificate, dated the
Closing Date, in the form of Exhibit B hereto.
SECTION 8.5 Acceptance by Fullcomm Shareholders. Prior to the Closing,
each shareholder of Fullcomm shall have approved this Agreement and agreed to
the Merger.
SECTION 8.6 Closing Documents and South Edge Loan. Fullcomm shall have
delivered to Contessa the documents and other items described in Section 10.2
and such other documents and items as Contessa shall reasonably request. All
Ancillary Documents shall have been executed and delivered. Fullcomm shall have
received not less than $100,000 in loan proceeds from the South Edge Loan.
SECTION 8.7 Completion of Due Diligence. Contessa and Acquisition shall
have completed their due diligence which shall include, but not be limited to,
review of the terms and legal status of the Grace Agreements, regulatory status
of X.X. Xxxxx and Company and the licensed
24
broker-dealer X.X Xxxxx, receipt of audited year-end financial statements of
Fullcomm as at and for the period ending December 31, 1999 , and such other
matters as may be, in their, opinion necessary and desirable, and the results of
all such inquiry shall be satisfactory to Contessa and Acquisition in their sole
judgement.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF
FULLCOMM AND THE FULLCOMM SHAREHOLDERS
All obligations of Fullcomm and the Fullcomm Shareholders under this
Agreement are subject to the fulfillment and satisfaction by Contessa,
Acquisition and the Principal Stockholders prior to or at the time of Closing,
of the following conditions, any one or more of which may be waived by Fullcomm.
SECTION 9.1 Representations and Warranties True at Closing. All
representations and warranties of Contessa, Acquisition and the Principal
Stockholders contained in this Agreement will be true and correct at and as of
the time of the Closing, and Contessa, Acquisition and the Principal
Stockholders shall have delivered to Fullcomm a duly executed Officer's
Certificate and a Principal Stockholders' Certificate, each dated the Closing
Date, substantially in the form of Exhibits C-1, C-2 and D.
SECTION 9.2 Performance. The obligations of Contessa, Acquisition and the
Principal Stockholders to be performed on or before the Closing pursuant to the
terms of this Agreement shall have been duly performed at such time, and
Contessa, Acquisition and the Principal Stockholders shall have delivered to
Fullcomm a duly executed Officer's Certificate and a Principal Stockholders'
Certificate, each dated the Closing Date, substantially in the form of Exhibits
C-1, C-2 and D.
SECTION 9.3 Authority. All action required to be taken by, or on the part
of Contessa and Acquisition and their respective shareholders to authorize the
execution, delivery and performance of this Agreement by Contessa, Acquisition
and the Principal Stockholders and the consummation of the transactions
contemplated hereby, shall have been duly and validly taken.
SECTION 9.4 Absence of Certain Changes or Events. There shall not have
occurred, since the date hereof, any material adverse change in the business,
condition (financial or otherwise), assets or liabilities of Contessa or
Acquisition or any event or condition of any character adversely affecting
Contessa or Acquisition, and each shall have delivered to Fullcomm, an officer's
certificate, dated the Closing Date, substantially in the form of Exhibits C-1
and C-2.
SECTION 9.5 Actions by Contessa Shareholders, Xxxxx X. Xxxxxx and Officers
of Contessa and Acquisition. Prior to the Closing, the shareholders of Contessa
shall have taken the actions required under Section 9.12, Xxxxx X. Xxxxxx shall
have submitted his resignation as a director of Contessa and the officers of
Contessa and Acquisition shall have submitted their resignations.
25
SECTION 9.6 Employment Agreements and Ancillary Agreements. Contessa shall
have entered into employment agreements with Xxxxxxx X. Xxxxxxx for a term of
not less than two (2) years and in form and substance satisfactory to each
party. The Case Employment Agreement shall have been executed. The remaining
Ancillary Documents shall have been executed.
SECTION 9.7 Indemnification Agreements. Contessa shall have executed
indemnification agreements in favor of all directors of Contessa (collectively,
the "Indemnification Agreements").
SECTION 9.8 Opinion of Counsel. Contessa shall deliver to Fullcomm an
opinion of counsel substantially in the form of Exhibit E stating, among other
things, that the transactions contemplated in this Agreement do not violate any
state or federal securities laws.
SECTION 9.9 Closing Documents. Contessa and the Principal Stockholders, as
the case may be, shall have delivered to Fullcomm the documents and other items
described in Section 10.1 and such other documents and items as Fullcomm may
reasonably require.
SECTION 9.10 Exemption Under Federal and State Securities Laws. The
issuance of shares of Contessa in the Merger shall not violate any federal or
state securities laws.
SECTION 9.11 Completion of Fullcomm Diligence. Fullcomm shall have
completed its business and legal due diligence to its satisfaction, in its sole
judgment.
SECTION 9.12 Stockholder Approval/Notice. Contessa shall have taken all
actions related to the due authorization of the Merger as may be required under
the federal and state law, including the DGCL, the NJBCA and federal securities
laws.
SECTION 9.13 Board of Directors Approval. The Merger shall have been
approved by appropriate action of the Board of Directors of Contessa.
SECTION 9.14 Directors and Officers Insurance. Contessa shall have
obtained Directors and Officers insurance on each post-Merger director and
officer.
26
ARTICLE X
CLOSING
On the Closing Date:
SECTION 10.1 Deliveries by Contessa. Contessa shall deliver (or cause to
be delivered) to Fullcomm:
(a) any consents required to be obtained by Contessa and the
Principal Stockholders;
(b) Contessa and Acquisition shall each deliver an Officer's
Certificate and the Principal Stockholders shall have delivered similar
certificates as described in Sections 9.1, 9.2 and 9.4 hereof, dated the Closing
Date, that all representations, warranties, covenants and conditions set forth
herein by Contessa, Acquisition and the Principal Stockholders, as the case may
be, are true and correct as of, or have been fully performed and complied with
by the Closing Date;
(c) all Contessa company books and records.
(d) an opinion of legal counsel to Contessa dated as of the Closing
Date, in substantially the form of Exhibit E;
(e) the Merger Shares to be issued to the Fullcomm Shareholders in
accordance with Section 1.2;
(f) evidence that this Agreement and the transactions contemplated
hereby have been approved by the shareholders of Contessa;
(g) certificates of good standing from Delaware and any other state
in which Contessa is required to be qualified to do business;
(h) a Secretary's Certificate of Contessa, substantially in the form
of Exhibit F, attaching thereto the current Certificate of Incorporation of
Contessa, By-Laws of Contessa and meeting minutes from all Board and shareholder
meetings for the last five years as well as verifying that no other director or
stockholder minutes exist and no other director or stockholder meetings took
place; and
(i) such other documents and certificates duly executed as may
reasonably be requested by Fullcomm or the Fullcomm Shareholders prior to the
Closing Date.
27
SECTION 10.2 Delivered by Fullcomm. Fullcomm shall deliver to Contessa:
(a) any consents required to be obtained by Fullcomm;
(b) an Officer's Certificate as described in Section 8.1 and 8.2
hereof, dated the Closing Date, stating that all representations, warranties,
covenants and conditions set forth herein by Fullcomm are true and correct as
of, or have been, fully performed and complied with by the Closing Date;
(c) all company books and records;
(d) an opinion of Xxxxxxxx Ingersoll Professional Corporation,
counsel to Fullcomm, dated as of the Closing Date, substantially in the form of
Exhibit G;
(e) Employment Agreements in the form of Exhibit I from Messrs. Xxx
and Xxxxxxx;
(f) a Secretary's Certificate of Fullcomm, substantially in the form
of Exhibit F, attaching thereto the current Certificate of Incorporation of
Fullcomm, By-Laws of Fullcomm and meeting minutes from all Board and shareholder
meetings since inception as well as verifying that no other director or
stockholder minutes exist and no other director or stockholder meetings took
place; and
(g) copies of the Shareholders Agreement executed by Messrs. Lee,
Elliott, and Escaravage and all Ancillary Agreement parties receiving any shares
thereunder; and
(h) such other documents and certificates duly executed as may
reasonably be requested by Contessa, Acquisition or the Principal Stockholders
prior to the Closing Date.
SECTION 10.3 Termination. Notwithstanding anything herein or elsewhere to
the contrary, this Agreement may be terminated:
(a) By mutual agreement of the parties hereto at any time prior to
the Closing;
(b) By the Board of Directors of Contessa at any time prior to the
Closing, if:
(i) a condition to performance by Contessa under this
Agreement or a covenant of Fullcomm contained herein shall not
be fulfilled on or before the date of the Closing or at such
other time and date specified in this Agreement for the
fulfillment for such covenant or condition; or
(ii) a material default or breach of this Agreement
shall be made by Fullcomm;
28
(c) By Fullcomm at any time prior to the Closing, if:
(i) a condition to Fullcomm's performance under this
Agreement or a covenant of Contessa or Acquisition contained
herein shall not be fulfilled on or before the date of the
Closing or at such other time and date specified in this
Agreement for the fulfillment for such covenant or condition;
or
(ii) a material default or breach of this Agreement
shall be made by Contessa or Acquisition or a Principal
Stockholder; or
(d) By either party if it notifies the other that it is not
satisfied with its due diligence review.
SECTION 10.4 Effect of Termination. If this Agreement is terminated, this
Agreement, except as to Section 11.1 and Section 11.2, shall no longer be of any
force or effect and there shall be no liability on the part of any party or
their respective directors, officers or shareholders; provided however, that in
the case of a termination pursuant to Section 10.3(b)(ii) or 10.3(c)(ii) hereof
because of a material breach of this Agreement by another party, the damages
which the aggrieved party or parties may recover from the defaulting party or
parties shall in no event exceed the amount of out-of-pocket costs and expenses
incurred by such aggravated party or parties in connection with this Agreement,
and no party to this Agreement shall be entitled to any injunctive relief.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Costs and Expenses. In the event of any termination of this
Agreement pursuant to Section 10.1, subject to the provisions of Section 10.2,
each party hereto will bear his or its own respective expenses.
SECTION 11.2 Extension of time: Waivers. At any time prior to the Closing:
(a) Contessa may in its sole discretion (i) extend the time for the
performance of any of the obligations or other acts of Fullcomm, (ii) waive any
inaccuracies in the representations and warranties of Fullcomm contained herein
or in any documents delivered pursuant hereto by Fullcomm and (iii) waive
compliance with any of the agreements or conditions contained herein to be
performed by Fullcomm. Any agreement on the part of Contessa to any such
extension or waiver shall be valid only if set forth in an instrument, in
writing, signed on behalf of Contessa and shall only be effective in the
specific instance. No waiver or any condition or provision shall be deemed to be
a subsequent waiver of such condition or provision or a waiver of any condition
or provision other than the one specifically waived.
29
(b) Fullcomm may in its sole discretion (i) extend the time for the
performance of any of the obligations or other acts of Contessa, Acquisition, or
the Principal Stockholders, (ii) waive any inaccuracies in the representations
and warranties of Contessa, Acquisition or the Principal Stockholders contained
herein or in any documents delivered pursuant hereto by Contessa, Acquisition or
the Principal Stockholders and (iii) waive compliance with any of the agreements
or conditions contained herein to be performed by Contessa, Acquisition or the
Principal Stockholders. Any agreement on the part of Fullcomm to any such
extension or waiver shall be valid only if set forth in an instrument, in
writing, signed on behalf of Fullcomm and shall only be effective in the
specific instance. No waiver or any condition or provision shall be deemed to be
a subsequent waiver of such condition or provision or a waiver of any condition
or provision other than the one specifically waived.
SECTION 11.3 Notices. Any notice to any party hereto pursuant to this
Agreement shall be in writing and given by Certified or Registered Mail, FedEx
or by facsimile, addressed as follows:
Fullcomm, Inc.
c/x Xxxxxxxx Xxxxxxxxx Professional Corporation
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Att.: Xxxxx X. Xxxxx, Esq.
Contessa Corporation and
Fullcomm Acquisition Corp.
c/x Xxxxxx Xxxxxxxxxx & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Att.: Xxxx X. Xxxxxxxxxx, Esq.
Additional notices are to be given as to each party, at such other address
as should be designated in writing complying as to delivery with the terms of
this Section 11.3. All such notices shall be effective when sent, addressed as
aforesaid.
SECTION 11.4 Parties in Interest. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and the respective successors
and assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.
SECTION 11.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and together shall
constitute one document. The delivery by facsimile of an executed counterpart of
this Agreement shall be deemed to be an original and shall have the full force
and effect of an original executed copy.
30
SECTION 11.6 Severability. The parties hereto agree and affirm if any part
of this Agreement is deemed to be unenforceable, the remainder of the Agreement
shall remain in full force and effect.
SECTION 11.7 Headings and Schedules. The "Article" and "Section" headings
are provided herein for convenience of reference only and do not constitute a
part of this Agreement. The Schedules, on the other hand, are hereby expressly
incorporated into this Agreement.
SECTION 11.8 Survival of Representations and Warranties. All terms,
conditions, representations and warranties set forth in this Agreement or in any
instrument, certificate, opinion, or other writing providing for in it, shall
survive the Closing and the delivery of the Contessa Shares issued hereunder at
the Closing, for a period of eighteen months from the Closing regardless of any
investigation made by or on behalf of any of the parties hereto, or whether made
before or after Closing.
SECTION 11.9 Assignability. This Agreement shall not be assigned by any of
the parties hereto without the prior written consent of the other parties.
SECTION 11.10 Amendment. This Agreement may be amended with the approval
of the Boards of Directors of Contessa, Acquisition and Fullcomm at any time
before or after approval thereof by shareholders of Contessa, if required, and
Fullcomm; but after such approval by the Contessa shareholders, no amendment
shall be made which substantially and adversely changes the terms hereof. This
Agreement may not be amended except by an instrument, in writing, signed on
behalf of each of the parties hereto.
SECTION 11.11 Choice of Law. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of New Jersey except with respect to matters of law concerning the
internal corporate affairs of any corporate entity which is a party to or the
subject of this Agreement, and as to those matters the law of the jurisdiction
under which the respective entity derives its powers shall govern.
SECTION 11.12 Publicity. Except as required by law or on advice of
counsel, no party shall issue any press release or make any public statement
regarding the transactions contemplated hereby without the prior approval of the
other parties, and the parties hereto shall issue a mutually acceptable press
release as soon as practicable after the date hereof and after the Closing Date.
SECTION 11.13 No Third Party Beneficiaries. This Agreement shall be
binding upon and inure solely to 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, including, without limitation, by way of subrogation,
except as specifically set forth in Article IX hereof.
31
SECTION 11.14 Cancellation of Initial Agreement. Upon complete execution
of this Agreement, such Agreement shall supercede and cancel the Initial
Agreement.
SECTION 11.15 Definitions.
"Ancillary Agreements" means the Case Employment Agreement, the
Grace Agreements, the Indemnification Agreements, the Master Distribution
Agreement, the Xxxxxxxxx Advisory Agreement, the Tashenberg Advisory Agreement,
the Shareholders Agreement and all other agreements required hereunder to
consummate the Merger.
"Case Employment Agreement" shall mean the agreement between
Fullcomm and Xxxxxxx Xxxx in the form of Exhibit A hereto.
"Xxxxxxxxx Advisory Agreement" shall mean an agreement satisfactory
in form and substance to Xxxxxxx Xxxxxxxxx pursuant to which Xxxxxxx Xxxxxxxxx
provides consulting services to Fullcomm and which shall entitle him to 175,000
shares of Contessa common stock payable upon consummation of the Merger.
"Grace Agreements" shall mean the agreements entered into by
Fullcomm and one or more affiliates of X.X. Xxxxx and Company consisting of a
(i) Memorandum of Understanding: Placement Agent and Financial Advisory
Engagement dated January 4, 2000 between Fullcomm and X.X. Xxxxx and Company,
and (ii) a Consulting Agreement between Grace Consulting, Inc. and Fullcomm
dated as of December 27, 1999.
"Grace Private Placement" shall mean the securities placement by
X.X. Xxxxx and Company of not less than 400,000 shares, and up to 1.2 million
shares, of common stock, in each case, of Fullcomm, at a price not less than
$2.50 per share.
"Master Distribution Agreement" shall mean a "Master Distributor's
Agreement" between Creative Web Solutions, Incorporated and Fullcomm Inc.
satisfactory in form and substance to Contessa and Fullcomm.
"Permits" means all licenses, permits, franchises, approvals,
authorizations, consents or order of, or filing with, any governmental
authority, whether foreign, federal, state or local, necessary or desirable for
the past, present or anticipated conduct or operation of the business or
ownership of the assets of such person.
"Person" means any person or entity, whether an individual, trustee,
corporation, limited liability company, general partnership, limited
partnership, trust, unincorporated organization, business association, firm,
joint venture, governmental agency or authority or any similar entity.
"Shareholders Agreement" means agreement, in form and substance
satisfactory to Contessa, whereby Contessa shall receive contractual assurance
(i) from Messrs. Xxxxxxx, Xxx and
32
Escaravage through irrevocable proxy (or otherwise) entitling it to elect one
member of the Board of Directors and (ii) that recipients of Fullcomm shares
under the Ancillary Agreements agree to be bound by the terms of the "unwind"
provisions of the "Addendum Regarding Post-Merger Disposition of Fullcomm
Assets" attached hereto and made a part hereof.
"South Edge Loan" shall mean a loan from South Edge International
Limited to Fullcomm (i) to be repaid on the earlier of (A) one year from the
making thereof; and (B) the receipt of not less than $1 million in gross
proceeds and (ii) repayment of which has been personally guaranteed by Messrs.
Xxxxxxx and Xxxxxxxxxx.
"Tashenberg Advisory Agreement" shall mean an agreement satisfactory
in form and substance to X. Xxxxxxx Tashenberg pursuant to which X. Xxxxxxx
Tashenberg (i) acts as director for two (2) years, and (ii) provides consulting
services to Fullcomm and which shall entitle him to175,000 shares of Contessa
common stock payable upon consummation of the Merger.
33
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in a manner legally binding upon them as of February 24, 2000.
CONTESSA CORPORATION
By: ____________________________________
Xxxxxxx Xxxxxxxxx
Vice President
FULLCOMM, INC.
By: ____________________________________
Xxxxxxx Xxxxxxx
President
FULLCOMM ACQUISITION CORP.
By: ____________________________________
Xxxxxxx Xxxxxxxxx
President
THE FULLCOMM SHAREHOLDERS
________________________________________
Xxxxxxx X. Xxxxxxxxxx
________________________________________
Xxxxx X. Xxx
34
____________________________________________
Xxxxxxx X. Xxxxxxx
THE CONTESSA PRINCIPAL STOCKHOLDERS
____________________________________________
Xxxxxxx Xxxxxxxxx, as Principal Stockholder
VIKING INVESTMENTS GROUP II, INC.
By:_________________________________________
Name:
Title:
PARENTEAU CORPORATION
By:_________________________________________
Name:
Title:
35
SCHEDULE 1.2
Fullcomm shareholder list and number of Merger Shares to be issued to Fullcomm:
Name Shares of Fullcomm No. Merger Shares
--------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxx 1,800,000 1,800,000
Xxxxxxx X. Xxxxxxxxxx 1,575,000 1,575,000
Xxxxx X. Xxx 1,125,000 1,125,000
Private Placees:
Xxxx Xxxxxxxx 4,500 4,500
Xxxxxx Xxxxxx 6,000 6,000
Liang Xxxx Xxx 18,000 18,000
Xxxxxxxxx Xxxxxx 18,000 18,000
Xxxxx Xxxxxx 19,200 19,200
Xxxxx Xxxx Xxx 9,000 9,000
Xxxx Xx and San Xxxx Xx 4,800 4,800
Xxxxx X.X. Xx 1,800 1,800
Chun-Der Li 1,800 1,800
Viking Investment Group II, Inc. 18,000 18,000
Totals*: 4,601,100 4,601,100
*Purchasers of
Grace Private Placement Not presently "one for one"
Schedule 2.2(a)
Holders of Contessa common stock
================================================================================
NAME AND ADDRESS NO. OF POST
SHARES DIVIDEND
================================================================================
Xxxx Xxxxxxxxx 2,000 2,600
00000 Xxxxxxx
Xxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxx Parenteau 1,000 1,300
0000 Xxxxxxx
Xx. Xxxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 20,000 26,000
0000 Xxxxxxx Xxxxxxxx
Xx. Xxxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxx Xxxxxxxx 5,000 6,500
0000 Xx Xxxxxx
Xxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxx Xxxxxxxx 2,000 2,600
000 Xxxxxxxx
Xx. Xxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxx 1,000 1,300
0000 Xxxxxxx Xxxxxxxx
Xx. Xxxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxx Xxxxxxx 1,000 1,300
000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxx 1,000 1,300
000 Xx. Xxxx, Xxx. 000
Xxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxx Xxxxx 2,000 2,600
000 Xxxxxxxx
Xx. Xxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
================================================================================
NAME AND ADDRESS NO. OF POST
SHARES DIVIDEND
================================================================================
Eve Parenteau 1,000 1,300
0000 Xxxxxxx
Xx. Xxxxxxxxx Xxxxxx 00X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxx Paris 1,000 1,300
0000 Xxxxx Xxxxxxxx
Xxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxx Xxxxxx 1,000 1,300
000 Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxx Xxxxxxxx Xxxxxxxxx 1,000 1,300
0000 Xxxxxxx Xxxxxxxx
Xx. Xxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxx 1,000 1,300
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxxx 1,000 1,300
000 Xxxxxx
Xx Xxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxxx 1,006 1,307
0000 Xxxxxxx
Xx. Xxxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxx Xxxxxx 1,000 1,300
00 Xxxxxxxx
Xxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxx Xxxxxxx 1,000 1,300
0-000 Xxxx Xxxxxx, Xxx. 0
Xxxxxxxxxxxx Xxxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxxx 1,000 1,300
0000 Xxxxxx
Xxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxxx Xxxx 4,000 5,200
000 Xx. Xxxxxx
Xxxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
================================================================================
NAME AND ADDRESS NO. OF POST
SHARES DIVIDEND
================================================================================
Xxxxxxx Xxxx 2,000 2,600
000 Xx. xx Xxxx-Xxxxx X.
Xxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxx Xxxxxxxx 2,000 2,600
0000 Xxxxxx
Xxxxxxxx Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxx Xxxxxxx 1,000 1,300
000 Xxxx-Xxxxx Xxxxxx X
Xxxxxxxx, Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Shangri-La Investments Ltd. 141,665 184,165
Xxxxxxxxx Xxxxx
0 Xxxx Xxxx Xxxxxx
P.O. Box N-8195
Nassau
BAHAMAS
--------------------------------------------------------------------------------
Tradewinds Investments Ltd. 141,665 184,165
Charlotte House
Charlotte Street
P.O. Box N-7755
Nassau, BAHAMAS
--------------------------------------------------------------------------------
Partner Marketing AG 141,665 184,165
Xxxxxxxxxxxxxxxxx 00
Xxxxxxxx
0000 Xxxxxxx
Xxxxxxxxxxx
--------------------------------------------------------------------------------
CCDC Consulting Distribution AG 141,665 184,165
Xxxxxxxxxxxx 0
Xxxxxxxx
0000 Xxxxx
Xxxxxxxxxxx
--------------------------------------------------------------------------------
A&H Leasing 141,665 184,165
Xxxxxxxxxxxx 0
X-0000 Xxxxxx
XXXXXXX
--------------------------------------------------------------------------------
Tel-Ex-Ka AG 141,675 184,178
Xxxxxxxxxxxxxx 00
0000 Xxxxxxxxxxxxxx
Xxxxxxxxxxx
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxxx 300,000 390,000
x/x Xxxxxxxx Xxxxx Company
0000 X.X. 0xx Xxx
Xxxxx, XX 00000
S.S. No. ###-##-####
--------------------------------------------------------------------------------
================================================================================
NAME AND ADDRESS NO. OF POST
SHARES DIVIDEND
================================================================================
Viking Investment Group II, Inc. 525,000 682,500
c/x Xxxxxx Gottbetter & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
EIN 00-0000000
--------------------------------------------------------------------------------
Parenteau Corporation 525,000 682,500
0000 Xx. Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx X0X 0X0
Xxxxxx
--------------------------------------------------------------------------------
Xxxxxx Gottbetter & Xxxxxxxx, LLP 50,000 65,000
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
EIN 00-0000000
--------------------------------------------------------------------------------
Number of Shareholders: 34
--------------------------------------------------------------------------------
Total: 2,304,006 3,000,000
================================================================================
Schedule 2.11
Description of suits, litigations, etc.
On September 26, 1994, a shareholder of Contessa commenced a shareholder
derivative action against a company and its principal officer for breach of an
exchange agreement. On December 11, 1995, a default judgment was entered in
favor of plaintiff shareholder. The judgment awarded plaintiff, and hence
Contessa, the sum of $40,440.04. This judgment has been deemed uncollectible
(See notes to Contessa's financial statements). Copies of the pleadings and
other relevant litigation papers have been provided to Fullcomm.
Schedule 2.16
Contessa Bank Accounts
None.
Schedule 2.19
Affiliate Business Relationships
None.
Schedule 4.1
Other entities owned or controlled by Fullcomm
None.
Schedule 4.2
Other Options, Rights, etc. re: Fullcomm capital stock
Shares of Common Stock of Fullcomm to be issued in connection with the
Ancillary Agreements as follows.
=============================================================================
Case Employment Agreement 175,000 share option at 10(cent) per share
Grace Consulting Agreement 175,000 warrants at $2.75 per share
Grace Placement Agency Agreement 10% warrant override
Fullcomm has engaged X.X. Xxxxx to undertake a private placement of up to
1.2 million shares at not less than $2.50 per share. In addition, the Board of
Directors of Fullcomm has authorized the private placement of an additional 2.8
million shares at not less than $2.50 per share.
Schedule 4.9
Fullcomm Litigation
None.
Schedule 4.10
List of patents, assignments of patents, trademarks, etc.
Fullcomm intends to file a patent application relating to its hardware and
software encryption technology for secure transmissions of digital and other
data.
Schedule 4.15
Fullcomm Property, Contracts, Employees
Contract
Design Team Contract to be delivered to Contessa prior to Closing.
Employees
Xxxxxxx X. Xxxxxxx -- President and Treasurer
Xxxxx X. Xxx -- Vice President and Secretary
Addendum regarding post-Merger Disposition of Fullcomm assets
This addendum is made a part of the Merger Agreement and Plan of Merger
dated the date hereof among Contessa Corporation and Fullcomm Acquisition Corp.
and Fullcomm, Inc., the Shareholders of Fullcomm, Inc. and the Principal
Stockholders of Contessa Corporation, as if set forth in full therein.
The parties hereto agree that if the minimum amount of $1,000,000 in gross
proceeds is not received under the Grace Private Placement on or prior to the
date 30 days following the effectiveness of the Merger of Fullcomm and
Acquisition (or if such 30th day is not a business day upon the next succeeding
business day), then the parties hereto agree to take all necessary actions to
"unwind" the Merger so that the parties are restored to their ownership status
as in effect prior to the Merger. Such unwind may take the form of (i) an asset
disposition, (ii) a share for share exchange by which the former Fullcomm
shareholders receive back their share ownership in Fullcomm (or its successor by
merger) in exchange for surrendering their post-Merger shares in Contessa, or
(iii) such other transaction structure as may be advisable in order to
effectuate the goal of restoring the parties to their pre-Merger statuses. The
parties agree to work with all reasonable diligence to effectuate such unwinding
and the costs of such effectuation shall be equally borne by Contessa and the
entity into which the Former Fullcomm pre-Merger assets are vested.
In order to effectuate the foregoing, Contessa is hereby expressly
authorized to delay issuance and delivery of the post-Merger shares to former
Fullcomm shareholders pending the possible application of the 30-day unwind
contingency provided for above, and in addition, should such unwind contingency
be operative, Contessa's obligation to issue Merger shares to the former
shareholders of Fullcomm is hereby deemed to be null and void.
Date: January 28, 2000
