Exhibit 10
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), dated as of
December 1, 2005 among SIAM IMPORTS, INC., a Nevada corporation ("Siam"); SIAM
ACQUISITION CORP., a Nevada corporation ("SAC"); and XXXXXXX FOODS, INC., an
Oklahoma corporation ("Xxxxxxx") and together with Siam and SAC collectively,
the "Parties," and individually, a "Party" ).
RECITALS
X. Xxxxxxx is a privately held corporation engaged in the business of
processing certain food products and Siam is a publicly reporting corporation.
B. Siam and Xxxxxxx have agreed in principle to a merger on the terms and
subject to the conditions set forth in this Agreement.
C. The respective Boards of Directors of Xxxxxxx, Siam and SAC have each
determined that it is advisable and in the best interests of their respective
stockholders that Siam acquire Xxxxxxx pursuant to the terms and conditions of
this Agreement, and, in furtherance of such acquisition, such Boards of
Directors have approved the merger of SAC with and into Xxxxxxx, so that Xxxxxx
will be the surviving corporation (the "Merger"), in accordance with the terms
of this Agreement and the applicable provisions of Article 78 (Private
Corporations) the Nevada Revised Statutes("NRS") and, if applicable, the
Oklahoma General Corporation Act ("OGCA," and together with the NRS, the
"Corporation Laws").
D. For United States federal income tax purposes, it is intended that the
Merger shall qualify as a "reorganization" within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), and that this
Agreement shall be, and is hereby, adopted as a "plan of reorganization" for
purposes of Section 368(a) of the Code;
E. Pursuant to the Merger, each outstanding share of the common stock of
Xxxxxxx ("Xxxxxxx Common Stock") shall be converted into the right to receive
shares of common stock of Siam, par value $.001 par per share ("Siam Common
Stock").
F. The Parties desire in this Agreement to make certain representations,
warranties, covenants, and agreements in connection with, and establish certain
conditions precedent to, the Merger.
Accordingly, in consideration of the representations, warranties and
covenants contained in this Agreement, the Parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger; The Merger Consideration.
(a) As of the date of this Agreement and immediately prior to the Effective
Time (as defined below), Siam has (and will have) outstanding 8,000,000 shares
of Siam Common Stock.
(b) In connection with the Merger,
(i) The shares of Xxxxxxx Common Stock issued and outstanding at the
Effective Time shall be exchangeable for that number of fully paid and
nonassessable shares of the Siam Common Stock, and each holder of Xxxxxxx Common
Stock will be entitled to receive such number of shares of Siam Common Stock as
shall be proportionate to the number of outstanding shares of Xxxxxxx Common
Stock held by such shareholder immediately prior to the Effective Time. As of
the Effective Time, each holder of a certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of the
Xxxxxxx Common Stock shall cease to have any rights with respect thereto, except
the right to receive a certificate or certificates representing the number of
whole shares of the Siam Common Stock into which such shares of Xxxxxxx Common
Stock have been converted;
(ii) Each warrant to acquire shares of Xxxxxxx Common Stock (each, a
"Xxxxxxx Warrant" and collectively, the "Xxxxxxx Warrants") issued and
outstanding at the Effective Time shall cease to be outstanding and shall be
converted into a warrant (a "Siam Warrant") to acquire that number of fully paid
and nonassessable shares of the Siam Common Stock. As of the Effective Time,
each holder of Xxxxxxx Warrant shall cease to have any rights with respect
thereto, except the right to receive a Siam Warrant representing the right to
acquire the number of whole shares of Siam Common Stock which such option
represents in accordance with the preceding sentence;
(iii) Each warrant to acquire units comprised of shares of Xxxxxxx
Common Stock and warrants to purchase shares of Xxxxxxx Common Stock (each, a
"Xxxxxxx Unit Purchase Warrant" and collectively, the "Xxxxxxx Unit Purchase
Warrants") issued and outstanding at the Effective Time shall cease to be
outstanding and shall be converted into a warrant (a "Siam Unit Purchase
Warrant") to acquire that number of units comprised of fully paid and
nonassessable shares of the Siam Common Stock and warrants to acquire fully paid
and nonassessable shares of Siam Common Stock. As of the Effective Time, each
holder of a Xxxxxxx Unit Purchase Warrant shall cease to have any rights with
respect thereto, except the right to receive a Siam Unit Purchase Warrant
representing the right acquire the number of whole shares of Siam Common Stock
and the number of warrants which such option represents in accordance with the
preceding sentence;
(iv) Each share of Siam Common Stock issued and outstanding at the
Effective Time shall continue to be outstanding, with the same rights and
privileges; and
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(v) By operation of law, as of the Effective Time the assets and the
liabilities, obligations, contracts, if any, of SAC will become the debts,
obligations, contracts, liabilities and assets of Xxxxxxx.
1.2 Certificates of Merger.
Articles of merger (the "Nevada Certificate") shall be prepared, executed
and delivered to the Secretary of State of the State of Nevada (the "Nevada
Secretary") for filing on the Closing Date, as defined in Section 3, in
accordance with the NRS, and, if required by the OGCA, a certificate of merger
or consolidation (the "Oklahoma Certificate," and together with the Nevada
Certificate, the "Merger Certificates") shall be prepared, executed and
delivered to the Secretary of State of the State of the State of Oklahoma (the
"Oklahoma Secretary," and together with the Nevada Secretary, the "Secretaries")
for filing on the Closing Date, as defined in Section 3, in accordance with the
respective Corporation Laws.
1.3 Effective Time.
The Merger shall become effective upon the filing of the respective Merger
Certificates with the Secretaries in accordance with the provisions of the
respective Corporation Laws (or solely with the Nevada Secretary, if a
certificate of merger or consolidation is not legally required to be filed with
the Oklahoma Secretary). The date and time of the filing of the Merger
Certificates with the Secretaries (or articles of merger solely with the Nevada
Secretary) is referred to herein as the "Effective Time."
1.4 Tax-Free Merger.
The Parties intend that the Merger will be treated as a tax-free
reorganization under Section 368(a) of the Code.
ARTICLE II
EFFECT OF THE MERGER
2.1 General
Subject to the terms and conditions of this Agreement, at the Effective
Time, the corporate existence of SAC shall merge with and into Xxxxxxx in
accordance with the respective Corporation Laws, the separate corporate
existence of SAC shall cease, and Xxxxxxx shall continue as the surviving
corporation in the Merger and deemed to be a continuation of the entities and
identities of SAC and Xxxxxxx. Xxxxxxx, in its capacity as the surviving
corporation of the Merger, is sometimes referred to herein as the "Surviving
Corporation." The Surviving Corporation shall possess all the rights,
privileges, powers, immunities and franchises of SAC (sometimes referred to
hereinafter as the "Merged Corporation"); all assets, real, personal and mixed,
and all debts due on whatever account, and all and every interest, of or
belonging to or due the Merged Corporation shall, by operation of law, be vested
in the Surviving Corporation without further act or deed. The Surviving
Corporation shall have all the rights, privileges, immunities and powers, and
shall be subject to all the duties and liabilities of, a corporation organized
under the OGCA.
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2.2 Exchange or Conversion of Securities.
(a) At the Effective Time, by virtue of the Merger and without any action
on the part of any Party or holder of Xxxxxxx Shares, the aggregate number of
shares of Xxxxxxx Common Stock outstanding immediately prior to the Effective
Time and owned of record by Xxxxxxx shareholders shall be exchangeable solely
for an aggregate of 11,580,000 validly issued, fully paid and nonassessable
shares of Siam Common Stock.
(b) At the Effective Time, by virtue of the Merger and without any action
on the part of any Party or holder of Xxxxxxx Warrants, the aggregate number of
Xxxxxxx Warrants outstanding immediately prior to the Effective Time and owned
of record by holders of Xxxxxxx Warrants shall be converted into and become an
aggregate of 2,000,000 validly issued Siam Warrants, each Siam Warrant entitling
the holder to acquire one share of Siam Common Stock on substantially the same
terms as applied to the Xxxxxxx Warrant.
(c) At the Effective Time, by virtue of the Merger and without any action
on the part of any Party or holder of Xxxxxxx Unit Purchase Warrants, the
aggregate number of Xxxxxxx Unit Purchase Warrants outstanding immediately prior
to the Effective Time and owned of record by holders of Xxxxxxx Unit Purchase
Warrants shall be converted into and become an aggregate of 80,000 validly
issued Siam Unit Purchase Warrants, each Siam Unit Purchase Warrant entitling
the holder to purchase to acquire a unit consisting of four shares of Siam
Common Stock and two warrants to purchase shares of Siam Common Stock on
substantially the same terms as applied to the Xxxxxxx Unit Purchase Warrant.
2.3 Surrender of Securities.
(a) For purposes of this Agreement, "Business Day" shall mean a day other
than a Saturday, Sunday or day when commercial banks are not generally open to
the public in New York, New York. Not later than one (1) Business Day after the
Effective Time, each holder of record of shares of Xxxxxxx Common Stock
outstanding immediately prior to the Effective Time ("Outstanding Shares"),
shall deliver or cause to be delivered to Siam a certificate or certificates
representing the number of shares of Outstanding Shares held by such holder
("Outstanding Share Certificates"). To the extent that a holder of record of
Outstanding Shares (each a "Shareholder") delivers or causes to be delivered to
Siam a Outstanding Share Certificates, then Siam shall promptly deliver or cause
to be delivered to such Shareholder or such Shareholder's duly appointed agent,
a certificate(s) representing the number of shares of Siam Common Stock to which
the Shareholder is entitled pursuant to Sections 1.1(b) and 2.2 hereof. Siam
shall effect delivery of the certificate or certificates for Siam Common Stock
against receipt of the Shareholder's Outstanding Share Certificates. At the
Effective Time, a holder of an Outstanding Share Certificate shall not have any
rights with respect to shares of Siam Common Stock, other than to surrender such
Outstanding Share Certificate pursuant to this Section 2.3(a)
(b) Not later than one (1) Business Day after the Effective Time, each
holder of record of Xxxxxxx Warrants and of Xxxxxxx Unit Purchase Warrants
outstanding immediately prior to the Effective Time ("Outstanding Warrants"),
shall deliver or cause to be delivered to Siam a certificate or certificates
representing the number of Outstanding Warrants held by such holder
("Outstanding Warrant Certificates"). To the extent that a holder of record of
Outstanding Warrants (each a "Warrantholder") delivers or causes to be delivered
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to Siam an Outstanding Warrant Certificate(s), then Siam shall promptly deliver
or cause to be delivered to such Warrantholder or such Warrantholder's duly
appointed agent, a certificate(s) representing the number of Siam Warrants or
Siam Unit Purchase Warrants, as applicable, to which the Warrantholder is
entitled pursuant to Sections 1.1(b) and 2.2 hereof. Siam shall effect delivery
of the certificate or certificates for Siam Warrants or Siam Unit Purchase
Warrants, as applicable, against receipt of the Holder's Outstanding Warrant
Certificate(s). Each Outstanding Warrant Certificate surrendered shall
immediately be canceled. At the Effective Time, a holder of an Outstanding
Warrant Certificate shall not have any rights with respect to the securities of
Siam, other than to surrender such Outstanding Warrant Certificate pursuant to
this Section 2.3(b).
(c) Siam shall follow the same procedure with respect to lost, stolen or
mutilated Share Certificates or Warrant Certificates as Xxxxxxx followed with
respect to lost, stolen or mutilated certificates prior to the Effective Time,
which procedures shall include, at a minimum, receipt of an affidavit and
indemnity of lost certificate in customary form (but without the requirement of
any bond or security for such indemnity).
2.4 Distributions With Respect To Outstanding Shares Not Exchanged.
No dividends or other distributions declared or made after the Effective
Time with respect to Siam Common Stock with a record date after the Effective
Time shall be paid to the holder of any Outstanding Share Certificate not
surrendered in respect of the shares of Siam Common Stock such Shareholder is
entitled to receive upon surrender thereof, until the holder of such Outstanding
Share Certificate shall surrender, or cause to be surrendered, to Siam, such
Outstanding Share Certificate. Subject to the effect of applicable laws,
following surrender of any such Outstanding Share Certificate, there shall be
paid to the holder of the certificates representing shares of Siam Common Stock
issued in exchange for such Outstanding Share Certificate, (i) promptly, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such shares of Siam Common Stock
and (ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such shares of Siam Common Stock. No interest shall be paid on any amounts
payable under this Section 2.5.
2.5 No Further Rights in Outstanding Shares or Outstanding Warrants.
All shares of Siam Common Stock and Siam Warrants or Siam Purchase Warrants
issued upon exchange of the Outstanding Shares or Outstanding Warrants, as
applicable, in accordance with the terms of this Agreement shall be deemed to
have been issued in full satisfaction of all rights pertaining to such
Outstanding Shares or Outstanding Warrants, as applicable.
2.6 No Fractional Shares.
No certificates or scrip evidencing fractional shares of Siam Common Stock
shall be issued upon the surrender for exchange of Outstanding Share
Certificates and such fractional share interests will not entitle the owner
thereof to vote or to any rights of a stockholder of Siam. In lieu of fractional
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shares of Siam Common Stock, any fractional share will be rounded up to the
nearest whole share of Siam Common Stock.
2.7 No Transfers of Stock After Effective Time.
After the Effective Time, there shall be no transfers of securities of the
Merged Corporation on the securities transfer books of the Merged Corporation.
If, after the Effective Time, Outstanding Share Certificates or Outstanding
Warrant Certificates are presented to the Surviving Corporation, they shall be
forwarded to Siam and exchanged in accordance with Section 2.4.
2.8 Restrictions on Transfer.
(a) Shares of Siam Common Stock issued in connection with the Merger (the
"New Siam Shares"), are being issued pursuant to an exemption from registration
provided for in Section 4(2) of the Securities Act. Each certificate
representing any New Siam Shares shall be subject to stop transfer instructions
and shall bear a legend substantially similar to the following:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR ANY APPLICABLE
STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER OF SUCH SECURITIES THAT SUCH REGISTRATION IS
NOT REQUIRED."
(b) Siam Warrants issued in connection with the Merger, are being issued
pursuant to an exemption from registration provided for in Section 4(2) of the
Securities Act. Each certificate representing any Siam Warrants and the shares
of Siam Common Stock underlying the Siam Warrant shall be subject to stop
transfer instructions and the Siam Warrants shall bear a legend substantially
similar to the following:
"THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT UNDER SUCH ACT OR ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER OF SUCH SECURITIES THAT SUCH
REGISTRATION IS NOT REQUIRED."
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2.9 Certificate of Incorporation and Bylaws of Surviving Corporation.
(a) The Certificate of Incorporation of Xxxxxxx in effect at the Effective
Time shall be the Certificate of Incorporation of the Surviving Corporation,
except that the name of the surviving corporation will be changed to Xxxxxxx
Operating Corp.
(b) The Bylaws of the Xxxxxxx in effect at the Effective Time shall be the
Bylaws of the Surviving Corporation.
2.10 Management of Surviving Corporation and Siam.
(a) One or more of the directors of Xxxxxxx immediately prior to the
Effective Time shall be the initial directors of Surviving Corporation and shall
hold office from the Effective Time until their respective successors are duly
elected or appointed and qualified in the manner provided in the articles of
incorporation or bylaws of the Surviving Corporation or as otherwise provided by
applicable law.
(b) The officers of Xxxxxxx immediately prior to the Effective Time shall
be the initial officers of the Surviving Corporation and shall hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualified in the manner provided in the Certificate of
Incorporation or Bylaws of the Surviving Corporation or as otherwise provided by
applicable law.
(c) At the Closing, (i) the officers and directors of Siam shall resign;
(ii) such officers and directors of Siam shall be replaced by the individuals
serving as the officers and directors of Xxxxxxx immediately prior to the
Effective Time (expected to be the individuals named under "Management" in
Xxxxxxx'x Private Placement Memorandum dated December 1, 2005 (as amended and/or
supplemented from time to time the "Memorandum," copies of which Memorandum have
heretofore been provided to Siam and its counsel), unless any such individual
shall not then be serving in such capacity), and (iii) Siam, as condition
precedent to Xxxxxxx'x obligations to consummate the transactions contemplated
hereby, shall cause such individuals to be so appointed as officers and
directors of Xxxxxxx; provided that one or more existing directors will remain
in office and the new directors shall not constitute more than 50% of the Siam's
Board until at least ten (10) days after Siam makes the filing with the SEC
required by Rule 14f-1 (the "Rule") promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and mails the statement required by
such Rule to Siam's shareholders of record; such filing to be prepared by
Xxxxxxx'x counsel in consultation with Siam's counsel The new management shall
cause Siam to make such filings as may be required or indicated under the
Exchange Act; provided, however, the resignation of the directors of Siam and
the appointment of new directors in accordance with the terms of this Section
2.11(c) shall accomplished through the filling of vacancies on the Board of
Directors of Siam in compliance with the applicable provisions of the NRS and
the Bylaws of Siam and without the vote (by written consent or otherwise) of the
shareholders of Siam. Prior to the Effective Time, Xxxxxxx will furnish to Siam
such information as Siam's counsel may reasonably request regarding the proposed
new management of Siam to permit Siam to comply, in consultation with Xxxxxxx
and its counsel with any governmental filing requirements that Siam may have.
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2.11 Taking of Necessary Action, Further Assurances.
Each of Xxxxxxx, Siam and SAC shall use its or their commercially
reasonable efforts to take all such action as may be necessary or appropriate to
effectuate the Merger in accordance with this Agreement as promptly as possible
and at the time contemplated by this Agreement. If, at any time after the
Effective Time, any such further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Xxxxxxx, as the Surviving
Corporation with, full right, title and possession to all assets property,
rights, privileges, powers and franchises of SAC, the officers and directors of
Xxxxxxx, Siam and SAC immediately prior to the Effective Time are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary action.
ARTICLE III
CLOSING
3.1 Closing.
Subject to the provisions of this Agreement, the closing of the
transactions contemplated by this Agreement (the "Closing") shall take place at
the offices of Xxxxx Xxxxxxx Xxxx & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX,
within two (2) Business Days after the date on which the last of the conditions
to Closing set forth in Article VIII shall have been satisfied or waived, or at
such other place and on such other date as is mutually agreeable to Siam and
Xxxxxxx (the "Closing Date"). The Closing will be effective as of the Effective
Time.
3.2 Closing Deliveries.
At the Closing, each of the Parties shall make the Closing deliveries
required of it pursuant to Article VIII of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF XXXXXXX
Except as set forth in the Memorandum or the disclosure schedule attached
hereto as Exhibit A (the "Xxxxxxx Disclosure Schedule"), Xxxxxxx represents and
warrants to Siam and SAC that the statements contained in this Article IV are
true and complete as of the date of this Agreement (or if made as of a specified
date, as of such date) and will be true and complete as of the Closing Date (or,
if made as of a specified date, as of such date), except to the extent that any
such representation and warranty speaks as of an earlier date. Unless the
context otherwise requires, all references to Xxxxxxx contained in this Article
IV shall be read to include Xxxxxxx together with its direct or indirect
subsidiaries, if any.
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4.1 Organization and Qualification.
(a) Xxxxxxx is a corporation duly organized, validly existing and in good
standing under the laws of the State of Oklahoma and has the requisite corporate
power and authority to carry on its business as it is now being conducted. There
is no pending or threatened proceeding for the dissolution or liquidation of
Xxxxxxx.
(b) Except as set forth in the Memorandum or Xxxxxxx Disclosure Schedule,
Xxxxxxx (i) does not, directly or indirectly, own any interest in any
corporation, partnership, joint venture, limited liability company, or other
Person and (ii) is not subject to any obligation or requirement to provide funds
to or to make any investment (in the form of a loan, capital contribution or
otherwise) in or to any Person. For purposes of this Agreement, "Person" means
any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, limited liability company, corporation
or governmental authority or body or any group comprised of one or more of the
foregoing.
(c) Xxxxxxx is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
properties owned or leased by it makes such qualification or licensing
necessary, except for any such jurisdiction where the failure to so qualify or
be licensed, individually and in the aggregate for all such jurisdictions, would
not reasonably be expected to have a Xxxxxxx Material Adverse Effect. For
purposes of this Agreement, as to Xxxxxxx, "Xxxxxxx Material Adverse Effect"
means an action, event or occurrence if it has, or could a material adverse
effect on the business, financial condition or results of operations of Xxxxxxx.
(d) Xxxxxxx has provided or, promptly following the date of this Agreement,
will provide to Siam, upon request, complete and accurate copies of (i) the
Certificate or Articles of Incorporation and Bylaws of Xxxxxxx, each as amended
to date and currently in effect, and (ii) minutes and other records of the
meetings, written consents and other proceedings of the its Board of Directors,
any Committees thereof and stockholders of Xxxxxxx. Xxxxxxx is not violation of
any provisions of its Certificate or Articles of Incorporation or Bylaws, each
as amended to date
4.2 Capitalization.
The authorized capital stock of Xxxxxxx currently consists of 800 shares of
Xxxxxxx Common Stock, all of which shares are currently issued and outstanding.
Immediately prior to the Effective Time, the authorized capital stock of Xxxxxxx
will be increased to 20,000,000 shares of Xxxxxxx Common Stock and a "forward
split" of the currently outstanding shares of Xxxxxxx Common Stock will be
effected. Subsequent to issuance of Xxxxxxx Common Stock pursuant to the forward
split and the closing of the Placement, the issued and outstanding shares of
Xxxxxxx Common Stock will, immediately prior to the Effective Date, be increased
to 11,580,000 shares. At the Effective Time, after giving effect to the
Placement, Xxxxxxx shall have outstanding 2,000,000 Xxxxxxx Warrants and 80,000
Xxxxxxx Unit Purchase Warrants as set forth in the Xxxxxxx Disclosure statement.
All issued and outstanding shares of Xxxxxxx Common Stock are, and
immediately prior to the Effective Time will be, validly issued and outstanding,
fully paid and nonassessable and free of preemptive rights. Other than as set
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forth in this Agreement and the Xxxxxxx Disclosure Statement, immediately prior
to the Effective Time, (i) there will be no shares of capital stock or other
equity securities of Xxxxxxx outstanding and (ii) there will no outstanding
options, warrants, subscription rights (including any preemptive rights), calls,
or commitments or convertible securities of any character whatsoever outstanding
to which Xxxxxxx is a party or is bound, requiring or which could require the
issuance, sale or transfer by Xxxxxxx of any shares of capital stock of Xxxxxxx
or any securities convertible into or exchangeable or exercisable for, or rights
to purchase or otherwise acquire, any shares of capital stock of Xxxxxxx. There
are no stock appreciation rights or similar rights relating to Xxxxxxx. Xxxxxxx
does not currently have outstanding any bonds, debentures, notes, or other
obligations the holders of which have the right to vote (or convertible into or
exercisable for securities having the right to vote) with the stockholders of
Xxxxxxx on any matter; provided that, immediately prior to the Effective Date,
the Xxxxxxx Warrants and the Xxxxxxx Unit Purchase Warrants will be outstanding.
Xxxxxxx has not adopted a stockholder rights plan.
4.3 Authority.
(a) Xxxxxxx has the requisite corporate power and authority to enter into
this Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Xxxxxxx and the consummation by Xxxxxxx of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Xxxxxxx, subject to approval by its stockholders. This Agreement has been
duly executed and delivered by Xxxxxxx and subject to the authorization,
execution and delivery of this Agreement by Siam and SAC, constitutes a legal,
valid and binding obligation of Xxxxxxx, enforceable against it in accordance
with its terms, except as such enforceability may be limited by (i) bankruptcy
laws and other similar laws affecting creditors' rights generally and (ii)
general principles of equity, regardless of whether asserted in a proceeding in
equity or at law.
(b) The execution and delivery by Xxxxxxx of this Agreement does not, and
the consummation of the transactions contemplated hereby will not, (i) conflict
with, or result in a violation of, any provision of Xxxxxxx'x certificate or
articles of incorporation and bylaws, as amended to date, (ii) constitute or
result in a breach of or default (or an event which with notice or lapse of
time, or both, would constitute a default) under, or result in the termination
or suspension of, or accelerate the performance required by, or result in a
right of termination, cancellation or acceleration of any obligation or a loss
of a benefit under, any note, bond, mortgage, indenture, deed of trust, lease,
agreement or other instrument or obligation to which Xxxxxxx is a party or to
which the properties or assets of Xxxxxxx are subject, (iii) create any lien
upon any of assets of Xxxxxxx, or (iv) constitute, or result in, a violation of
any law applicable to Xxxxxxx or any of its properties or assets or of any
judgment, order or decree of any court or arbitrator to which Xxxxxxx or any of
its properties or assets is subject.
(c) No consent, approval, order or authorization of, notice to,
registration or filing with any governmental authority or other Person is
required to be obtained or made by Xxxxxxx in connection with the execution and
delivery of this Agreement by Xxxxxxx or the consummation by Xxxxxxx of the
transactions contemplated hereby, except, if required, for the filing of the
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Oklahoma Certificate with the Oklahoma Secretary and as set forth in Xxxxxxx
Disclosure Schedule.
4.4 Financial Statements.
(a) Copies of (i) the audited balance sheets of Xxxxxxx as of December 31,
2003 and December 31, 2004, and the related audited statements of operations,
stockholders' equity and cash flows for the years then ended, and (ii) the
unaudited balance sheet of Xxxxxxx as of September 30, 2005 (the "Xxxxxxx
September Balance Sheet") and the unaudited statements of operations,
stockholders' equity and cash flows for the nine-month period then ended
(collectively, the "Xxxxxxx Financial Statements") have heretofore been
furnished to Siam. The audited financial statements included in the Xxxxxxx
Financial Statements (including the related notes) have been prepared in
accordance with United States generally accepted accounting principles
consistently applied ("GAAP") during the periods involved (except as may be
indicated therein or in the notes thereto), and the Xxxxxxx Financial Statements
present fairly, in all material respects, the financial position of Xxxxxxx as
of the respective dates set forth therein, and the results of its operations and
cash flows for the respective periods set forth therein (subject, in the case of
any unaudited interim financial statements, to normal year-end adjustments).
(b) The books and records of Xxxxxxx are being maintained in material
compliance with applicable legal and accounting requirements.
(c) Except as and to the extent reflected, disclosed or reserved against in
the Memorandum (including the Xxxxxxx Financial Statements and the notes
thereto), or in the Xxxxxxx Disclosure Schedule, as of December 31, 2004,
Xxxxxxx had no liabilities, whether absolute, accrued, contingent or otherwise,
material to the financial condition or prospects of Xxxxxxx which were required
by GAAP (consistently applied) to be disclosed in Xxxxxxx'x consolidated
financial statements as of December 31, 2004 or the notes thereto. Since that
date, Xxxxxxx has not incurred any material liabilities, except in the ordinary
course of business and consistent with past practice, except as related to the
transactions contemplated by this Agreement or as disclosed in the Memorandum
(including Xxxxxxx'x unaudited financial statements as of and for the nine month
period ending September 30, 2005) or the Xxxxxxx Disclosure Schedule.
4.5 Absence of Certain Changes or Event.
Except as disclosed in the Memorandum or the Xxxxxxx Disclosure Schedule,
there has not been any material adverse change in the business, financial
condition or results of operations of Xxxxxxx since December 31, 2004 and, to
the Knowledge of Xxxxxxx, so far as Xxxxxxx can now forsee, no facts or
conditions exist which Xxxxxxx believes will cause such a material adverse
change in the future. As used herein, "Knowledge" with respect to any Party,
means the actual knowledge of the senior executive officers (or individuals
performing similar functions) of such Person, after reasonable inquiry.
11
4.6 Litigation.
There are no legal actions (i) pending or, to the Knowledge of Xxxxxxx,
threatened in writing against Xxxxxxx or the transactions contemplated by this
Agreement and which, if determined adversely to Xxxxxxx, would have a Xxxxxxx
Material Adverse Effect or (ii) pending or, to the Knowledge of Xxxxxxx,
threatened in writing against any current employee, officer or director of
Xxxxxxx that in any way relates to Xxxxxxx and which, if determined adversely to
Xxxxxxx, would have a Xxxxxxx Material Adverse Effect. To the Knowledge of
Xxxxxxx, it is not subject to any order, judgment, writ, injunction or decree of
any governmental authority which if enforced against Xxxxxxx would have a
Xxxxxxx Material Adverse Effect.
4.7 Taxes. Xxxxxxx has timely filed all material tax returns and reports
required to be filed by it, after giving effect to any filing extension properly
granted by a governmental authority having authority to do so ("Xxxxxxx Tax
Return"). Each such Xxxxxxx Tax Return is, in all material respects, true and
complete. Xxxxxxx has paid, within the time and manner prescribed by law, all
material taxes that are due and payable. To the Knowledge of Xxxxxxx, no Xxxxxxx
Tax Return is the subject of any investigation, audit or other proceeding by any
federal, state or local tax authority.
4.8 Contracts.
To the Knowledge of Xxxxxxx, (i) it is not in default under or breach of
any material contract to which it is a party; and (ii) no event or condition has
occurred which, after notice or lapse of time or both, would constitute (A) a
default under or breach of any such material contract on the part of Xxxxxxx or,
to the Knowledge of Xxxxxxx, any other party thereto, or (B) permit the
modification, cancellation or termination of any such material contract, or (C)
result in the creation of any lien upon, or any Person acquiring any right to
acquire, any assets of Xxxxxxx. To the Knowledge of Xxxxxxx, it has not received
in writing any claim or threat that it has breached any of the terms and
conditions of any such material contract.
4.9. Employee Benefit Plans.
Except as set forth in the Memorandum or Xxxxxxx Disclosure Schedule,
Xxxxxxx does not maintain or contribute to any "employee pension benefit plan"
(the "Xxxxxxx Pension Plans"), as such term is defined in Section 3 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), "employee
welfare benefit plan," as such term is defined in Section 3 of ERISA, stock
option plan, stock purchase plan, deferred compensation plan, cafeteria plan,
severance plan, bonus plan, employment agreement or other similar plan, program
or arrangement. Xxxxxxx has not contributed to, or been required to contribute
to, any "Multiemployer Plan", as such term is defined in Section 3(37) of ERISA.
4.10 Compliance With Applicable Xxx.Xx the Knowledge of Xxxxxxx, it has complied
in all material respects with all existing applicable federal, state and local
laws and regulations to which it may be subject, except where the failure to so
comply did not, and would have not , a Xxxxxxx Material Adverse Effect, and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand or notice has been filed or commenced or, to the Knowledge of Xxxxxxx,
has been threatened in writing, against Xxxxxxx alleging any failure to so
comply, any of which, if determined adversely to Xxxxxxx would have a Material
Adverse Effect.
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4.11 Intellectual Property.
(a) Xxxxxxx owns, or has the right to use pursuant to valid license,
sublicense, agreement, or permission, all intellectual property rights used in
and necessary for the operation of its business as presently conducted. Except
as set forth in the Xxxxxxx Disclosure Schedule, (i) all material intellectual
property rights (other than licensed rights) are owned free and clear of royalty
obligations, liens and encumbrances, (ii) the execution and delivery of this
Agreement and the closing of the transactions contemplated hereby will not alter
or impair any such rights, (iii) to the Knowledge of Xxxxxxx, the use of such
intellectual property rights by Xxxxxxx does not infringe or violate the
intellectual property rights of any other Person, and (iv) Xxxxxxx has not
granted any Person any rights, pursuant to written license agreement or
otherwise, to use such intellectual property. Xxxxxxx has taken, and shall
continue to take through the Closing Date, all necessary action to maintain and
protect each item of intellectual property that it owns or uses.
(b) The Xxxxxxx Disclosure Schedule identifies (i) each material patent,
trademark, trade name, service name or copyright with respect to any of
Xxxxxxx'x intellectual property rights, all material applications and
registration statements therefor and renewals thereof (and sets forth true and
complete copies of all such material patents, registrations and applications (as
amended to date)) and (ii) all material intellectual property rights that
Xxxxxxx uses pursuant to license, sublicense, agreement, or permission, all of
which, to the Knowledge of Xxxxxxx, are valid and in full force and effect, and
the execution and delivery of this Agreement and the closing of the transactions
contemplated hereby will not alter or impair any such rights.
(c) Xxxxxxx has at all times used reasonable efforts to protect all trade
secrets related to its intellectual property.
4.12 Properties. Except as set forth in the Xxxxxxx Disclosure Schedule, Xxxxxxx
has good and marketable title to all of its material assets and properties,
whether real or personal, tangible or intangible, listed on the Xxxxxxx
September Balance Sheet or the Xxxxxxx Disclosure Schedule, subject to no
encumbrances, liens, mortgages, security interests or pledges, except (i) those
items that secure liabilities reflected in Xxxxxxx September Balance Sheet or
the notes thereto or that secure liabilities incurred in the ordinary course of
business since the date of Xxxxxxx September Balance Sheet, (ii) statutory liens
for amounts not yet delinquent or which are being contested in good faith and
(iii) such title imperfections that are not, in the aggregate, material to the
financial condition or operations of Xxxxxxx. Xxxxxxx, as lessee, has the right
under valid and subsisting leases to occupy, use, possess and control all real
property material to its business and operations and listed on the Xxxxxxx
Disclosure Schedule as presently occupied, used, possessed and controlled by
Xxxxxxx pursuant to such leases.
4.13 Insurance. The operations and all insurable properties and assets of
Xxxxxxx are insured for its benefit against all risks which, in the reasonable
judgment of Xxxxxxx'x management, should be insured against, in each case under
policies or bonds issued by insurers of recognized responsibility, in such
amounts with such deductibles and against such risks and losses as are, in the
reasonable judgment of Xxxxxxx'x management, adequate for the business engaged
13
in by Xxxxxxx. To the Knowledge of Xxxxxxx, it has not received any notice of a
cancellation or material amendment of any such insurance policy or bond.
4.14 Disclosure. The representations and warranties of Xxxxxxx herein, or in any
document, exhibit, statement, certificate or schedule furnished by or on behalf
of Xxxxxxx to Siam as required by this Agreement, do not contain and will not
contain any untrue statement of a material fact and do not omit and will not
omit to state any material fact necessary in order to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading.
4.15 Brokers.
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger or the other
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Xxxxxxx or any shareholder of Xxxxxxx., except for the Placement
Agent and as disclosed on the Xxxxxxx Disclosure Schedule.
4.16 Employees.
The Memorandum sets forth the names and current annual salary (or rate of
pay) now payable by Xxxxxxx to each of its executive officers and directors. The
Memorandum (including the Xxxxxxx Financial Statements) identifies any material
bonus, stock option, stock purchase, profit sharing or employment agreements of
Xxxxxxx applicable to such executive officers and directors. All compensation,
including, without limitation, salary, bonuses, perquisites and termination
payments (as a result of a termination prior to the date hereof) payable to all
officers, directors and employees of Xxxxxxx, which if not paid in accordance
with such employment agreements, plans and arrangements would have a Xxxxxxx
Material Adverse Effect, has been paid or provided for. Xxxxxxx is not a party
to a collective bargaining agreement, and, except as set forth in the
Memorandum, Xxxxxxx'x employee relations are satisfactory.
To the Knowledge of Xxxxxxx, it is in compliance in all material respects
with all existing applicable laws respecting labor, employment, fair employment
practices, terms and conditions of employment, workers' compensation,
occupational safety, plant closings and wages and hours, except where the
failure to so comply did not, and would have not , a Xxxxxxx Material Adverse
Effect. Except as set forth in the Memorandum, Xxxxxxx is not a party to any
collective bargaining or other labor union contract applicable to persons
employed by Xxxxxxx, and no collective bargaining agreement or other labor union
contract is being negotiated by Xxxxxxx. There is no labor dispute, strike,
slowdown or work stoppage against Xxxxxxx pending or, to the Knowledge Xxxxxxx,
threatened which may interfere with Xxxxxxx'x operations in any respect that
would have a Xxxxxxx Material Adverse Effect. To the Knowledge of Xxxxxxx,
Xxxxxxx has not engaged in any unfair labor practices within the meaning of the
National Labor Relations Act or any other existing applicable federal or state
laws. To the Knowledge of Xxxxxxx, no executive officer or key employee of
Xxxxxxx is in violation of any term of any employment contract, non-disclosure
agreement, non-competition agreement, or any restrictive covenant to a former
employer relating to the right of any such employee to be employed by Xxxxxxx
because of the nature of the business conducted or presently proposed to be
14
conducted by it or to the use of trade secrets or proprietary information of
others, to the extent that any such violation would have a Xxxxxxx Material
Adverse Effect.
4.17 Directors and Officers.
The Memorandum contains a complete and accurate list of all directors and
executive officers of Xxxxxxx as of the time immediately prior to the Effective
Time.
4.18 Environmental Matters.
Except as would not have a Xxxxxxx Material Adverse Effect or as disclosed
on the Xxxxxxx Disclosure Schedule:
(a) To the Knowledge of Xxxxxxx, it (i) is in compliance with all, and is
not subject to any liability with respect to any, existing applicable federal or
state environmental Laws, (ii) holds or has applied for all environmental
permits necessary to conduct its current operations, and (iii) is in compliance
in all material respect with such environmental permits.
(b) To the Knowledge of Xxxxxxx, no written notice, demand, letter, claim
or request for information alleging that Xxxxxxx may be in violation of, or
liable under, any existing applicable federal or state environmental law has
been n received by it.
(c) Xxxxxxx has not
(i) entered into or agreed to any consent decree or order or is
subject to any judgment, decree or judicial order relating to
(A) compliance with such environmental laws or such environmental
permits or
(B) the investigation, sampling, monitoring, treatment,
remediation, removal or cleanup of "Hazardous Materials," as defined in such
environmental laws, and, to the Knowledge of Xxxxxxx, no investigation,
litigation or other proceeding is pending or threatened in writing with respect
thereto
(ii) agreed to be an indemnitor in connection with any material claim
threatened or asserted in writing by any third-party indemnitee for any
liability under any any existing applicable environmental law.
(d) To the Knowledge of Xxxxxxx, none of the real property owned or leased
by it is listed or, proposed for listing on the "National Priorities List" under
the federal Comprehensive Environmental Response, Compensation, and Liability
Act, as updated through the date hereof, or any similar state list of sites
requiring investigation or cleanup.
15
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SIAM AND SAC
Except as set forth in the disclosure schedule attached hereto as Exhibit B
(the "Siam Disclosure Schedule"), Siam and SAC, jointly and severally, represent
and warrant to Xxxxxxx that the statements contained in this Article V are true
and complete as of the date of this Agreement (or if made as of a specified
date, as of such date) and will be true and complete as of the Closing Date (or,
if made as of a specified date, as of such date), except to the extent that any
such representation and warranty speaks as of an earlier date. Unless the
context otherwise requires, all references to Siam contained in this Article V
shall be read to include Siam together with its direct or indirect subsidiaries
(including SAC).
5.1 Organization and Qualification.
(a) Siam is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and has the requisite corporate
power and authority to carry on its business as it is now being conducted. There
is no pending or threatened proceeding for the dissolution or liquidation of
Siam.
(b) SAC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. SAC was formed solely for the
purpose of the Merger and has no business, assets, liabilities, contracts or
commitments, other than as set forth in this Agreement. There is no pending or
threatened proceeding for the dissolution of SAC.
(c) Except for SAC, Siam (i) does not, directly or indirectly, own any
interest in any corporation, partnership, joint venture, limited liability
Xxxxxxx, partnership (general or limited) or other Person and (ii) is not
subject to any obligation or requirement to provide funds to or to make any
investment (in the form of a loan, capital contribution or otherwise) in or to
any Person.
(d) Siam is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
properties owned or leased by it makes such qualification or licensing
necessary, except for any such jurisdiction where the failure to so qualify or
be licensed, individually and in the aggregate for all such jurisdictions, would
not reasonably be expected to have a Siam Material Adverse Effect. For purposes
of this Agreement, as to Siam, "Siam Material Adverse Effect" means an action,
event or occurrence if it has, or could a material adverse effect on the
business, financial condition or results of operations of Siam.
(e) Siam has provided, or promptly following the date of this Agreement,
will provide to Xxxxxxx complete and accurate copies of (i) the Articles or
Certificate of Incorporation and Bylaws of Siam and SAC, each as amended to date
and as currently in effect, and (ii) minutes and other records of the meetings
and other proceedings of the Board of Directors, any Committees of the Board and
shareholders of Siam and SAC. Neither Siam nor SAC is in violation of any
provisions of its Articles or Certificate of Incorporation or Bylaws, each as
amended to date.
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5.2 Capitalization.
(a) The authorized capital stock of Siam consists of 25,000,000 shares of
Siam Common Stock, $.001 par value per share. The issued and outstanding capital
stock of Siam consists entirely of 8,000,000 shares of Siam Common Stock. All
issued and outstanding shares of Siam Common Stock are validly issued and
outstanding, fully paid and nonassessable and free of preemptive rights. Other
than such shares of Siam Common Stock, there are no shares of capital stock or
other equity securities of Siam outstanding and no outstanding options,
warrants, subscription rights (including any preemptive rights), calls, or
commitments, or convertible notes or instruments of any character whatsoever
outstanding to which Siam is a party or is bound, requiring or which could
require the issuance, sale or transfer by Siam of any shares of capital stock of
Siam or any securities convertible into or exchangeable or exercisable for, or
rights to purchase or otherwise acquire, any shares of capital stock of Siam.
There are no stock appreciation rights or similar rights relating to Siam. Siam
does not have outstanding any bonds, debentures, notes, or other obligations the
holders of which have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the stockholders of Siam on any
matter. Siam has not adopted a stockholder rights plan.
(b) The authorized capital of SAC consists of 25,000,000 shares of common
stock, $.01 par value per share, of which 100 shares are issued and outstanding
and held by Siam. Other than such outstanding shares, there are no shares of
capital stock or other equity securities of SAC outstanding and no outstanding
options, warrants, subscription rights (including any preemptive rights), calls,
or commitments, or convertible notes or instruments of any character whatsoever
outstanding to which Siam or SAC is a party or is bound, requiring or which
could require the issuance, sale or transfer by Siam or SAC of any shares of
capital stock of SAC, any securities convertible into or exchangeable or
exercisable for, or rights to purchase or otherwise acquire, any shares of
capital stock of SAC. There are no stock appreciation rights or similar rights
relating to SAC. SAC does not have outstanding any bonds, debentures, notes, or
other obligations the holders of which have the right to vote (or convertible
into or exercisable for securities having the right to vote) with the
stockholders of SAC on any matter. SAC has not adopted a stockholder rights
plan.
(c) Upon completion of the Merger and consummation of the Placement (as
defined in Section 7.9 hereof, (A) the authorized capital stock of Siam will
consist of 50.0 million shares of Siam Common Stock and 5.0 million shares of
`blank check" preferred stock, par value $.01 per share; and (B) 12.0 million
shares of Siam Common Stock will be outstanding, consisting of 420,000 shares
held by the pre-existing shareholders of Siam, 4.0 million shares held by
investors pursuant to the Placement and 7.58 million shares issued pursuant to
the terms of the Merger.
(d) Upon completion of the Merger, other than the 2,000,000 Siam Warrants
and 80,000 Siam Unit Purchase Warrants, there will be no outstanding options,
warrants, subscription rights (including any preemptive rights), calls, or
commitments, or convertible notes or instruments of any character whatsoever to
which Siam is a party or is bound, requiring or which could require the
issuance, sale or transfer by Siam of any shares of capital stock of Siam or any
securities convertible into or exchangeable or exercisable for, or rights to
purchase or otherwise acquire, any shares of capital stock of Siam.
17
(e) All of the shares of Siam Common Stock issued and outstanding
immediately prior to the Effective Time (i) have been issued in compliance with
the Securities Act and applicable state securities laws pursuant to registration
or qualification under such laws or in reliance upon exemptions from
registration or qualification thereunder and (ii) were issued and are currently
held by Persons who are not deemed "underwriters" under applicable federal
securities laws.
(f) The list of all record holders of Siam Common Stock included in Siam
Disclosure Schedule is complete and accurate.
5.3 Authority.
(a) Each of Siam and SAC has the requisite corporate power and authority to
enter into this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated thereby. The execution and delivery of
this Agreement by Siam and SAC and the consummation by Siam and SAC of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of Siam and SAC. This Agreement has been duly
executed and delivered by Siam and SAC and constitutes a legal, valid and
binding obligation of Siam and SAC, enforceable against each of them in
accordance with its terms. No vote or approval of the shareholders of Siam is
required in connection with the Merger.
(b) The execution and delivery by Siam and SAC of this Agreement does not,
and the consummation of the transactions contemplated thereby will not, (i)
conflict with, or result in a violation of, any provision of the Articles of
Incorporation or Bylaws of Siam or SAC, each as amended to date, (ii) constitute
or result in a breach of or a default under, or an event which with notice or
lapse of time, or both, would constitute a default under, or result in the
termination or suspension of, or accelerate the performance required by, or
result in a right of termination, cancellation or acceleration of any obligation
or a loss of a benefit under, any note, bond, mortgage, indenture, deed of
trust, lease, agreement or other instrument or obligation to which Siam is a
party or to which the properties or assets of Siam or SAC are subject, (iii)
create any lien upon any of the properties or assets of Siam or SAC, or (iv)
constitute, or result in, a violation of any law applicable to Siam or SAC or
any of the properties or assets of either of them or of any judgment, order or
decree of any court or arbitrator to which Xxxxxxx or any of its properties or
assets is subject.
(c) No consent, approval, order or authorization of, notice to,
registration or filing with any governmental authority or other Person is
necessary in connection with the execution and delivery of this Agreement by
Siam and SAC or the consummation by Siam and SAC of the transactions
contemplated by this Agreement, except for (i) filing of the articles of merger
with the Nevada Secretary and, if required, a certificate of merger or
consolidation with the Oklahoma Secretary; (ii) the filing of a Schedule 14f-1
with the Securities and Exchange Commission (the "SEC"); and (iii) the filing of
a current report on Form 8-K with the SEC announcing completion of the Merger.
(d) The shares of Siam Common Stock to be issued to holders of Xxxxxxx
Common Stock pursuant to the Merger Agreement have been duly authorized and,
18
upon effectiveness of the Merger and issuance in accordance with the provisions
of the Merger Agreement, will be validly issued, fully-paid and nonassessable,
free of any statutory or preemptive rights. The Siam Warrants and the Siam Unit
Purchase Warrants to be issued by Siam pursuant to the Merger Agreement have
been duly authorized by all necessary corporate action of Siam and, upon
effectiveness of the Merger and issuance in accordance with the provisions of
the Merger Agreement, will validly issued binding obligations of Siam in
accordance with their respective terms.
5.4 SEC Filings; Financial Statements.
(a) Except as disclosed in the Siam Disclosure Schedule, Siam has timely
filed and made available to Xxxxxxx all forms, reports, schedules, statements
and other documents required to be filed by Siam with the SEC (collectively, the
"Siam SEC Reports"). The Siam SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act, as the case may be, and (ii) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing) contain any untrue statement of a material fact
or omit to state a material fact required to be stated in such Siam SEC Reports
or necessary in order to make the statements in such Siam SEC Reports, in light
of the circumstances under which they were made, not misleading. None of Siam's
subsidiaries is required to file any forms, reports, schedules, statements or
other documents with the SEC. The financial records of Siam have been prepared
in compliance with SEC rules on internal financial controls.
(b) Each of the financial statements (including, in each case, any related
notes), contained in Siam SEC Reports, including any Siam SEC Reports filed
after the date of this Agreement until the Closing, complied, as of its
respective filing date, in all material respects with all applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved and presented fairly the financial position of
Siam as at the respective dates and the results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
(c) Between December 31, 2004 and the date hereof, except as disclosed in
the Siam SEC Reports, there has not been any change in the business, operations
or financial condition of Siam that has had or reasonably would be expected to
have a Siam Material Adverse Effect.
(d) Siam and SAC do not have any liability or obligation (absolute,
accrued, contingent or otherwise), other than those set forth on Siam's audited
balance sheet as of June 30, 2005 and those arising under this Agreement.
5.5 Brokers.
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger or the other
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Siam, SAC or any shareholder of Siam.
19
5.6 Ownership of SAC, No Prior Activities.
As of the date hereof and as of the Effective Time, except for obligations
or liabilities incurred in connection with its incorporation or organization and
the transactions contemplated by this Agreement and except for this Agreement
and any other agreements or arrangements contemplated hereby, SAC has not and
will not have incurred, directly or indirectly, any obligations or liabilities
or engaged in any business activities of any type or kind whatsoever or entered
into any agreements or arrangements with any Person.
5.7 Litigation There are no legal actions (i) pending or, to the Knowledge of
Siam, threatened against Siam, SAC or the transactions contemplated by this
Agreement or (ii) pending or, to the Knowledge of Siam, threatened against any
current employee, officer or director of Siam that, in any way relates to Siam.
Siam is not subject to any order, judgment, writ, injunction or decree of any
governmental authority.
5.8 Taxes.Except as disclosed on the Siam Disclosure Schedule, Siam has timely
filed all material tax returns and reports required to be filed by it, after
giving effect to any filing extension properly granted by any United States
federal, state, local or foreign governmental authority having authority to do
so ("Siam Tax Return"). Except as disclosed on the Siam Disclosure Schedule,
each such Siam Tax Return is true complete in all material respects. Except as
disclosed on the Siam Disclosure Schedule, Siam has paid, within the time and
manner prescribed by applicable United States federal, state, local or foreign
law, all material taxes, penalties and interest that are due and payable. Except
as disclosed on the Siam Disclosure Schedule, no Siam Tax Return is the subject
of any investigation, audit or other proceeding by any United States federal,
state or local or foreign tax authority.
5.9 No Employees; Labor Matters Neither Siam nor SAC has any employees or
consultants. No unfair labor practice, or race, sex, age, disability or other
discrimination, complaint is pending, nor is any such complaint, to the
Knowledge of Siam, threatened against Siam before the United States National
Labor Relations Board, the United States Equal Employment Opportunity Commission
or any other United States federal, state local or foreign governmental
authority, and no grievance is pending, nor is any grievance, to the knowledge
of Siam, threatened against Siam or SAC.
5.10 Benefit PlansSiam has not adopted nor is it party to any bonus, pension,
profit sharing, deferred compensation, incentive compensation, stock ownership,
stock purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other employee benefit
plan, arrangement or understanding (whether or not legally binding) providing
benefits to any current or former employee, officer or director of Siam or any
Person affiliated with Siam under Section 414(b), (c), (m) or (o) of the Code,
except to the extent permitted in Section 6.1(b)(i) hereof, and under any
similar provisions of foreign law to which Siam is or may be subject.
5.11 Contracts and Commitments.
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(a) Except for this Agreement and the agreements and transactions
specifically contemplated by this Agreement, neither Siam nor SAC is a party to
or subject to, nor plans to enter into:
(i) any agreement or other commitment requiring any payments or
performance of services by Siam or SAC;
(ii) any agreement or other commitments containing covenants limiting
the freedom of Siam or SAC to compete in any line of business or with any Person
or in any geographic location or to use or disclose any information in their
possession;
(iii) any license agreement (as licensor or licensee) or royalty
agreement;
(iv) any agreement of indemnification, other than indemnification
rights, if any, granted in the Bylaws of Siam;
(v) any agreement or undertaking pursuant to which Siam is: (A)
borrowing or is entitled to borrow any money; (B) lending or has committed
itself to lend any money; or (C) a guarantor or surety with respect to the
obligations of any Person;
(vi) any powers of attorney granted by Siam; and
(vii) any leases of real or personal property.
(b) Siam is not in breach of, or in default, under of any contract and
there does not exist any event or condition that, after notice or lapse of time
or both, would constitute an event of default or breach under any contract on
the part of Siam or, to the Knowledge of Siam, any other party thereto or would
permit the modification, cancellation or termination of any contract or result
in the creation of any lien upon, or any Person acquiring any right to acquire,
any assets of Siam or SAC. Siam has not received in writing any claim or threat
that Siam or SAC has breached any of the terms and conditions of any contract.
(c) The consent of, or the delivery of notice to or filing with, any party
to a contract is not required for the execution and delivery by Siam of this
Agreement or the consummation of the transactions contemplated under the
Agreement.
5.12 Books and Records.
The books and records of Siam have been maintained and preserved in
accordance with applicable regulations and business practices. The corporate
minutes books of Siam and SAC are complete and correct and the minutes and
consents contained therein accurately reflect actions taken at a duly called and
held meeting or by sufficient consent without a meeting. All actions by Siam and
SAC which required director or shareholder approval are reflected on the
respective corporate minute books.
5.13 Assets.
21
Siam has no fixtures, furniture, equipment, inventory, intellectual
property, accounts receivable or other assets, other than cash and its interest
in this Agreement, except as reflected in its 10-QSB Report for the period ended
September 30, 2005.
5.14 Xxxxxxxxxx.Xx Siam's Knowledge, Siam has complied in all material respects
with all applicable United States federal, state and local laws and regulations,
Canadian federal, provincial or municipal laws and regulations or other foreign
laws and regulations to which it or its business may be subject, and no action,
suit, proceeding, hearing, investigation, charge, complaint, claim, demand or
notice has been filed or commenced against or, to Siam's Knowledge, has been
threatened against Siam alleging any failure to so comply.
5.15 Disclosure.
The representations and warranties of Siam and SAC herein, or in any
document, exhibit, statement, certificate or schedule furnished by or on behalf
of Siam or SAC to Xxxxxxx as required by this Agreement, do not contain and will
not contain any untrue statement of a material fact and do not omit and will not
omit to state any material fact necessary in order to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading.
5.16 Environmental Matters.
Except as would not have a Siam Material Adverse Effect:
(a) To the Knowledge of Siam, it (i) is in compliance with all, and is not
subject to any liability with respect to any, existing applicable U.S. federal
or state and Canadian federal or provincial environmental laws, (ii) holds or
has applied for all environmental permits necessary to conduct its current
operations, and (iii) is in compliance in all material respect with such
environmental permits.
(b) To the Knowledge of Siam, no written notice, demand, letter, claim or
request for information alleging that Xxxxxxx may be in violation of, or liable
under, any existing applicable U.S. federal or state or Canadian federal or
provincial environmental law has been n received by it.
(c) Siam has not
(i) entered into or agreed to any consent decree or order or is
subject to any judgment, decree or judicial order relating to
(A) compliance with such environmental laws or such environmental
permits or
(B) the investigation, sampling, monitoring, treatment,
remediation, removal or cleanup of "Hazardous Materials," as defined in such
environmental laws, and, to the Knowledge of Siam, no investigation, litigation
or other proceeding is pending or threatened in writing with respect thereto
22
(ii) agreed to be an indemnitor in connection with any material claim
threatened or asserted in writing by any third-party indemnitee for any
liability under any existing applicable environmental law.
(d) To the Knowledge of Siam none of the real property owned or leased by
it is listed or, proposed for listing on the "National Priorities List" under
the U.S. federal Comprehensive Environmental Response, Compensation, and
Liability Act, as updated through the date hereof, or any similar U.S. state or
Canadian federal or provincial list of sites requiring investigation or cleanup.
ARTICLE VI
PRE-CLOSING COVENANTS
6.1 Operation of Siam.
(a) Siam, between the date of this Agreement and the Effective Time, shall
not conduct any business or activities except:
(viii) maintaining its books of account and records in the usual and
ordinary manner, and in conformity with its past practices;
(ix) paying accounts payable and other obligations when they become
due and payable in the ordinary course of business consistent with past
practices, except to the extent disputed in good faith;
(x) paying all taxes when due and filing all Siam Tax Returns on or
before the due date therefor, except to the extent disputed in good faith and by
proper proceedings;
(xi) making appropriate provisions in its books of account and records
for taxes relating to its operations during such period (regardless of whether
such taxes are required to be reflected in a tax return having a due date on or
prior to the Closing Date);
(xii) withholding all taxes required to be withheld and remitted by or
on behalf of Siam in connection with amounts paid or owing to any Siam personnel
or other Person, and paying such taxes to the proper governmental authority or
set aside such taxes in accounts for such purpose;
(xiii) making all required filings on a timely basis with the SEC or
any other United States federal, state or local or foreign regulatory body,
including, without limitation, making all filings under the Securities Act and
the Exchange Act, on a timely basis so as to maintain Siam's status as a
reporting Xxxxxxx in good standing under the Exchange Act; and
(xiv) complying with the listing requirements of, and take all steps
reasonably necessary to maintain Siam's listing on, the OTC Bulletin Board.
23
(b) Without the prior written consent of Xxxxxxx, between the date of this
Agreement and the Effective Time (or termination of this Agreement), neither
Siam nor SAC shall, except as expressly required or contemplated by this
Agreement or as contemplated by the Placement:
(i) issue any capital stock or any options, warrants or other rights
to subscribe for or purchase any capital stock or any securities convertible
into or exchangeable or exercisable for, or rights to purchase or otherwise
acquire, any shares of the capital stock of Siam or SAC;
(ii) directly or indirectly redeem, purchase, sell or otherwise
acquire any capital stock of Siam, except as specifically contemplated by this
Agreement, except to reduce the number of currently outstanding shares of Siam
Common Stock through a reverse stock split or through the acceptance by Siam for
cancellation of certificates representing currently outstanding shares of Siam
Common Stock surrendered by the holders thereof;
(iii) hire any employee or retain any consultant;
(iv) borrow or agree to borrow any funds, incur any indebtedness or
directly or indirectly guarantee or agree to guarantee the obligations of
others, or draw or borrow on any lines of credit that may be available to Siam;
(v) enter into any oral or written agreement, contract, lease or other
commitment;
(vi) place or allow to be placed a lien on any of the assets of Siam
or SAC;
(vii) cancel, discount or otherwise compromise any indebtedness owing
to Siam or any claims which Siam may possess or waive any rights of material
value;
(viii) sell or otherwise dispose of any assets of Siam;
(ix) commit any act or omit to do any act which will cause a breach of
this Agreement or any other material agreement, contract, lease or commitment;
(x) violate any United States, Canadian or other foreign federal,
state, provincial or local law, ordinance, regulation or governmental approval,
including, without limitation, any United States federal or state securities
laws;
(xi) make any loan, advance, distribution or payment of any type or to
any Person;
(xii) amend its Certificate or Articles of Incorporation or Bylaws;
(xiii) merge or consolidate with, or agree to merge or consolidate
with, or purchase substantially all of the assets of, or otherwise acquire any
business or any Person or division thereof;
(xiv) make any tax election or settle or compromise any tax liability,
other than in the ordinary course of business consistent with past practices;
24
(xv) lease or purchase or agree to lease or purchase any assets or
properties;
(xvi) take any action or series of actions that results in or is
likely to result in (i) the delisting of the Siam Common Stock from trading on
the OTC Bulletin Board, or (ii) Siam losing its status as a reporting Xxxxxxx in
good standing under the Exchange Act; or
(xvii) enter into any negotiations, commitments or agreements that
would result in undertaking any of the actions specified in this Subsection
6.1(b).
6.2 Operation of Xxxxxxx.
(a) Between the date of this Agreement and the Effective Time, Xxxxxxx
shall:
(i) maintain its books of account and records in the usual and
ordinary manner, and in conformity with its past practices;
(ii) pay accounts payable and other obligations when they become due
and payable in the ordinary course of business consistent with past practices
except to the extent disputed in good faith;
(iii) conduct its business, if any, in the ordinary course consistent
with past practices, or as required by this Agreement;
(iv) pay all taxes when due and file all Xxxxxxx Tax Returns on or
before the due date therefor, except to the extent disputed in good faith;
(v) make appropriate provisions in its books of account and records
for taxes relating to its operations during such period (regardless of whether
such taxes are required to be reflected in a tax return having a due date on or
prior to the Closing Date); and
(vi) withhold all taxes required to be withheld and remitted by or
on behalf of Xxxxxxx in connection with amounts paid or owing to any Xxxxxxx
personnel or other person, and pay such taxes to the proper governmental
authority or set aside such taxes in accounts for such purpose.
(b) Without the prior written consent of Siam, which consent shall not be
unreasonably withheld, conditioned or delayed, between the date of this
Agreement and the Effective Time (or termination of this Agreement), Xxxxxxx
shall not, except in the ordinary course of business consistent with past
practice, or as required or permitted by this Agreement, including, without,
limitation, to effect and consummate the Placement:
(i) issue any capital stock or any options, warrants or other rights
to subscribe for or purchase any capital stock or any securities convertible
into or exchangeable or exercisable for, or rights to purchase or otherwise
acquire, any shares of the capital stock of Xxxxxxx;
(ii) directly or indirectly redeem, purchase, sell or otherwise
acquire any capital stock of Xxxxxxx;
25
(iii) grant any increase in the compensation payable, or to become
payable, to any Xxxxxxx personnel or enter into any bonus, insurance, pension,
severance, change-in-control or other benefit plan, payment, agreement or
arrangement for or with any Xxxxxxx personnel, except as required by any
existing employment agreements or employment plans to which Xxxxxxx is a party
or otherwise bound;
(iv) agree to borrow any funds, incur any indebtedness or directly or
indirectly guarantee or agree to guarantee the obligations of others, or draw or
borrow on any lines of credit that may be available to Xxxxxxx, except as may be
required or reasonably necessary in order to consummate the transactions
contemplated by this Agreement or the Placement;
(v) place or allow to be placed a lien on any of the assets of
Xxxxxxx;
(vi) sell or otherwise dispose of any assets of Xxxxxxx;
(vii) commit any act or omit to do any act which will cause a breach
of this Agreement or any other material agreement, contract, lease or commitment
to which Xxxxxxx is party;
(xv) violate any law or governmental approval, including, without
limitation any federal or state securities laws;
(xvi) make any loan, advance, distribution or payment of any type or
to any Person;
(xvii) amend its Articles or Certificate of Incorporation or Bylaws;
(xviii) consolidate with, or agree to merge or consolidate with, or
purchase substantially all of the assets of, or otherwise acquire any business
or any Person or division thereof;
(xix) make any tax election or settle or compromise any tax liability,
other than in the ordinary course of business consistent with past practices;
(xx) lease or purchase or agree to lease or purchase any assets or
properties; or
(xxi) enter into any negotiations, commitments or agreements that
would result in undertaking any of the actions specified in this Subsection
6.2(b).
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Access to Information.
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(a) From the date hereof to the Effective Time, Xxxxxxx shall afford, and
shall cause its officers, directors, employees, representatives and agents to
afford, to Siam and its executive officers, counsel, accountants and other
representatives, reasonable access during normal business hours, on reasonable
advance notice, to Xxxxxxx'x officers, employees, agents, representatives,
properties, books, records and contracts, and shall furnish to Siam all
financial, operating and other data and information as Siam, through its
executive officers, counsel, accountants or other representative, may reasonably
request.
(b) From the date hereof to the Effective Time, Siam shall afford, and
shall cause its officers, directors, employees, representatives and agents to
afford, to Xxxxxxx and its officers, employees, counsel, accountants or other
representatives, reasonable access during normal business hours to Siam's
officers, employees, agents, representatives, properties, books, records and
contracts, and shall furnish to Xxxxxxx all financial, operating and other data
and information as Xxxxxxx, through its officers, employees, counsel,
accountants or other representative , may reasonably request.
(c) No investigation pursuant to Section 7.1(a) shall affect any
representations or warranties of the Parties herein or the conditions to the
obligations of the Parties.
7.2 Expenses and TaxesExcept to the extent otherwise set forth herein, each of
the Parties shall pay its respective costs incurred in connection with the
preparation, negotiation, execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, the fees of the attorneys, accountants and advisors.
7.3 News Releases.
Except as required by applicable law, any news releases or other public
disclosure pertaining to the transactions contemplated hereby shall be delivered
to the other Party for review and comment in writing at least two (2) Business
Days prior to the dissemination thereof.
7.4 Additional Agreements.
Subject to the terms and conditions of this Agreement, each Party 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
law to consummate and make effective the transactions contemplated by this
Agreement. If at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement or to vest
the Surviving Corporation with full title to all properties, assets, rights,
approvals, immunities and franchises of either of the constituent corporations,
the proper officers and directors of each Party shall take all such necessary or
desirable action.
7.5 Notification of Certain Matters.
(a) Xxxxxxx shall give prompt notice to Siam of any material inaccuracy in
any representation or warranty made by it herein, or any material failure of
Xxxxxxx to comply with or satisfy any covenant or condition or agreement to be
complied with or satisfied by Xxxxxxx under this Agreement; provided, however,
that no such notification shall affect the representations or warranties or
27
covenants or agreements of Xxxxxxx or the conditions to the obligations of Siam
hereunder.
(b) Siam shall give prompt notice to Xxxxxxx of any material inaccuracy in
any representation or warranty made by it herein, or any material failure of
Siam to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations or warranties or covenants
or agreements of Siam or the conditions to the obligations of Xxxxxxx hereunder.
(c) Xxxxxxx and Siam shall each promptly advise the other orally and in
writing of any change or event having, or which, insofar as can reasonably be
foreseen, in the future would have, a Xxxxxxx or a Siam Material Adverse Effect,
as applicable, or any adverse effect on the right or ability of any Party to
enter into and complete the Merger and other transactions contemplated hereby.
7.6 Confidentiality.
(a) Each Party shall hold, and shall cause its officers, employees, agents
and representatives, including, without limitation, attorneys, accountants,
consultants and financial advisors who obtain such information to hold, in
confidence, and not use for any purpose other than evaluating the transactions
contemplated by this Agreement, any confidential information of another Party
obtained through the investigations permitted hereunder, which for the purposes
hereof shall not include any information which (i) is or becomes generally
available to the public, other than as a result of disclosure by a Party or one
of its affiliates in violation of its obligations under this Section 7.6, (ii)
becomes available to a Party on a non-confidential basis from a source, other
than the Party which alleges the information is confidential or its affiliates,
which has represented that such source is entitled to disclose it, (iii) was
known to a Party on a non-confidential basis prior to its disclosure to such
Party hereunder; (iv) is compelled by legal process or the order of a court or
other governmental authority having jurisdiction to be disclosed, provided the
Party so required to disclose such information complies with Section 7.6(b)
hereof, or is required to be disclosed in connection with the prosecution or
defense any litigation between or among the Parties hereto. If this Agreement is
terminated, at the request of a Party, the other Party shall deliver, and cause
its officers, employees, agents, and representatives, including, without
limitation, attorneys, accountants, consultants and financial advisors who
obtain confidential information of the requesting Party pursuant to
investigations permitted hereunder, to deliver to the requesting Party all such
confidential information that is written (including copies or extracts thereof).
(b) If a Party or a Person to whom a Party transmits confidential
information of another Party is requested or becomes legally compelled (by oral
questions, interrogatories, requests for information or documents, subpoena,
criminal or civil investigative demand or similar process) to disclose any of
such confidential information, such Party or other Person will provide the other
Party with prompt written notice so that such Party may seek a protective order
or other appropriate remedy or waive compliance with Section 7.6(a). If such
protective order or other remedy is not obtained, or if the applicable Party
waives compliance with Section 7.6(a), the Party or Person subject to the
request will furnish only that portion of such confidential information which is
28
legally required and will exercise reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded such confidential
information.
7.7 Consents and Filings.
The Parties shall, promptly after execution of this Agreement, make all
required filings and submissions with respect to the Merger and the Placement.
Each Party will take all reasonable actions to obtain any other consent,
authorization, order or approval of, or any exemption by, any Person required to
be obtained or made in connection with the Merger, the Placement, and the other
transactions contemplated by this Agreement. Each Party will cooperate with and
promptly furnish information to the other Party in connection with obtaining
such consents or making any such filings and will promptly furnish to the other
Party a copy of all filings made with a governmental authority.
7.8 Siam SEC Filings.
Between the date hereof and the Closing Date, Xxxxxxx shall cooperate with
Siam in connection with the preparation and filing of, and provide to Siam for
inclusion or incorporation by reference in, any reports, filings or schedules to
be filed by Siam with the SEC (the "Siam Filings"). Without limiting the
foregoing, Xxxxxxx shall take all commercially reasonable actions reasonably
requested by Siam to enable Siam to include or incorporate by reference in the
Siam Filings, any financial statement of Xxxxxxx, including, without limitation,
and any auditors' report thereon. Siam agrees that (i) at least five (5)
Business Days prior to filing, Siam shall furnish Xxxxxxx with copies of all
proposed Siam Filings relating to, disclosing or describing the transactions
contemplated by this Agreement or the Placement, and (ii) it shall not make any
Siam Filing described in the immediately preceding clause (i) without the prior
written consent of Xxxxxxx, which consent shall not be unreasonably withheld,
conditioned or delayed.
7.9 Xxxxxxx PlacementVaughan proposes enter into one or more subscription
agreements with investors (the "Placement") pursuant to which the investors
shall agree to purchase 1,000,000 units of Xxxxxxx Common Stock and Xxxxxxx
Warrants (the "Units"), each Unit to consist of four (4) shares of Xxxxxxx
Common Stock and two Xxxxxxx Warrants substantially on the terms set forth in
the Memorandum, the closing of which shall occur immediately prior the Effective
Time.
7.10 Indemnification.
From and after the Effective Time, Xxxxxxx shall (to the fullest extent
permitted by applicable law) indemnify, defend and hold harmless each person who
is now, or who becomes prior to the Effective Time, an executive officer or
director of Siam and/or SAC (the "Indemnified Parties") against any and all
losses, damages, costs, expenses, liabilities or judgments, or amounts that are
paid in settlement of, or in connection with, any claim, action, suit,
proceeding or investigation based on or arising out the Placement ("Indemnified
Liabilities"), except to the extent that any claim for indemnification hereunder
is based upon or arises out of (i) the breach of any representation, warranty or
covenant of Siam or SAC contained herein or (ii) an untrue or alleged untrue
statement of a material fact contained in the Memorandum, or an omission or
29
alleged omission of a material fact required to be stated in the Memorandum or
necessary to make the statements therein (in light of the circumstances under
which they were made) not misleading, and such untrue or alleged untrue
statement or such omission or alleged omissions based solely upon information
regarding Siam or SAC set forth in a report or other information filed by Siam
with the SEC or furnished in writing to Xxxxxxx by Siam or SAC.
Without limiting the foregoing, in the event any such claim, action, suit,
proceeding or investigation (each, a "Proceeding") is brought against an
Indemnified Party (whether arising before or after the Effective Time), such
Indemnified Party shall promptly notify Xxxxxxx thereof in writing and
reasonable detail, accompanied by copies of the pleadings or other documents
received by such Indemnified Party in connection with the Proceeding. Upon
receipt of such notice, Xxxxxxx shall have the right to assume and control the
defense or settlement thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve Xxxxxxx of its
indemnification obligation hereunder, except that to the extent such failure
shall have prejudiced Xxxxxxx. An Indemnified Party shall have the right to
employ separate counsel in any such Proceeding, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party or Parties
unless: (i) Xxxxxxx shall have failed promptly to assume the defense or
settlement of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in such defense or settlement or (ii) the named parties
to any such Proceeding include both such Indemnified Party and Xxxxxxx, and
there would be, under applicable standards of professional conduct, a conflict
of interest if the same counsel were to represent such Indemnified Party and
Xxxxxxx (in which case, if such conflict exists and such Indemnified Party
notifies Xxxxxxx in writing that it elects to employ separate counsel, the
reasonable fees and expenses of one separate counsel shall be at Xxxxxxx'x
expense and Xxxxxxx will pay such fees and expenses promptly as statements
therefor are received by Xxxxxxx); provided that the Indemnified Parties as a
group may retain only one law firm to represent them with respect to each such
Proceeding. Siam shall use all reasonable efforts to assist in the defense of
any Proceeding, provided that Xxxxxxx shall not be liable for any settlement of
any such Proceeding effected without its written consent, which consent shall
not be unreasonably withheld.
ARTICLE VIII
CLOSING DELIVERIES AND CONDITIONS TO CLOSING
8.1 Documents to be Delivered by Siamat the Closing,
Siam shall deliver to Xxxxxxx the following:
(a) A certificate, executed by an executive officer of Siam in such detail
as Xxxxxxx shall reasonably request, certifying that all representations and
warranties of Siam and SAC made herein were true and complete when made and are
true and complete as of the Effective Time, as if then made, and that all
covenants of Siam and SAC herein required to be complied with on or prior to the
Effective Time, have been complied with. The delivery of such certificate shall
constitute a representation and warranty of Siam as to the statements set forth
therein.
30
(b) Copies of the resolutions adopted by (i) the Board of Directors and
stockholder of SAC, and (ii) the Board of Directors of Siam, adopting and
approving this Agreement, the Merger and the transactions contemplated hereby,
and (iii) the Board of Directors and stockholders of Siam, adopting and
approving the amendments to the Articles of Incorporation of Siam necessary to
effect the changes to Siam's capitalization represented by Siam in Section
5.2(c) hereof and changing Siam's corporate name to "Xxxxxxx Foods, Inc." to
become effective immediately after the Effective Time, certified by their
respective Secretaries, and duplicate execution copies of the articles of
amendments to the articles of incorporation and articles of merger to be filed
by Siam and SAC to effect the Merger and such changes to Siam's articles of
incorporation.
(c) Factual certificates, in a form and substance reasonably satisfactory
to Xxxxxxx and its counsel, confirming and supporting the representations of
Siam contained in Section 5.2 hereof.
(d) An opinion of counsel to Siam and SAC, dated as of the Closing Date, in
a form and substance reasonably acceptable to Xxxxxxx, with respect to the
matters of set forth in Exhibit C to this Agreement.
(e) Such other customary certificates or documents as may be reasonably
required by Xxxxxxx.
(f) All audited financial statements of Siam required to be included in the
Form 8-K Current Report required to be filed by Siam with the SEC with respect
to the Merger and the Placement pursuant to the Exchange Act and the applicable
rules and regulation thereunder, which financial statements shall be reasonably
satisfactory to Xxxxxxx and its counsel and accountants.
(g) A true and complete copy of the certificate or articles of amendment of
Siam's Certificate or Articles of Incorporation of Siam effecting the amendments
referred to in Section 8.1(b) hereof as filed with Nevada Secretary of State,
duly certified by such officer.
8.2 Documents to be Delivered by Xxxxxxx At the Closing, Xxxxxxx shall deliver
to Siam the following:
(a) A certificate, executed by the President of Xxxxxxx, in such detail as
Siam shall reasonably request, certifying that all representations and
warranties of Xxxxxxx made herein were true and complete when made and are true
and complete as of the Effective Time, as if then made, and that all covenants
of Xxxxxxx herein required to be complied with on or prior to the Effective
Time, have been complied with. The delivery of such certificate shall constitute
a representation and warranty of Xxxxxxx as to the statements set forth therein.
(b) A copy of the resolutions adopted by the Board of Directors and, if
legally required, stockholders of Xxxxxxx adopting and approving this Agreement,
the Merger, and the transactions contemplated hereby, certified by the Secretary
of Xxxxxxx.
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(d) An opinion of counsel for Xxxxxxx, dated as of the Closing Date, with
respect to such matters, as may be reasonably requested by Siam.
8.3 Conditions to Obligations of Each Party Each Party's obligations to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver at or prior to the Closing, of each of the following
conditions:
(a) No temporary restraining order, preliminary or permanent injunction or
other order issued by any governmental authority or other material legal
restraint or prohibition issued or promulgated by a governmental authority
preventing the consummation of the transactions contemplated by this Agreement
shall be in effect or shall be threatened, and there shall not be any law or
regulation enacted or deemed applicable to the transactions contemplated by this
Agreement that makes consummation of such transactions illegal.
(b) The Merger Certificates shall have been duly executed by SAC and
Xxxxxxx, as and to the extent required by the Corporation Laws, and filed
concurrently with the Closing.
(c) Xxxxxxx shall have successfully completed the offering of the Units
pursuant to the Placement.
8.4 Conditions to Obligations of Siam and SAC The obligation of Siam and SAC to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver, at or prior to the Closing, of each of the following
conditions:
(a) Each of the representations and warranties of Xxxxxxx set forth in this
Agreement (i) that are not qualified by materiality must have been true and
correct in all material respects as of the Closing Date, and (ii) that are
qualified by materiality must have been true and correct as of the Closing Date;
except, in each case, for inaccuracies that would not individually or in the
aggregate have a Xxxxxxx Material Adverse Effect.
(b) All of the obligations, covenants and agreements with which Xxxxxxx is
required to comply or that Xxxxxxx is required to perform under this Agreement
at or prior to the Closing shall have been complied with and performed in all
material respects.
(c) The documents required to be delivered by Xxxxxxx pursuant to Section
8.2 hereof shall have been delivered simultaneously with the Closing.
(d) The stockholders of Xxxxxxx named as signatories to the form of Lockup
and Trading Restriction Agreement among Siam and such stockholders attached
hereto as Exhibit D (the "Xxxxxxx Lockup Agreement") shall have duly executed
and delivered the Xxxxxxx Lockup Agreement.
8.5 Conditions to Obligations of Xxxxxxx The obligation of Xxxxxxx to consummate
the transactions contemplated by this Agreement are subject to the satisfaction
or waiver, at or prior to the Closing, of each of the following conditions:
(a) Each of the representations and warranties of Siam and SAC set forth in
this Agreement (i) that are not qualified by materiality must have been true and
correct in all material respects as of the Closing Date, and (ii) that are
qualified by materiality must have been true and correct as of the Closing Date;
32
except, in each case, for inaccuracies that would not individually or in the
aggregate have a material adverse effect on Siam.
(b) All of the obligations, covenants and agreements with which Siam or SAC
is required to comply or that Siam or SAC is required to perform under this
Agreement at or prior to the Closing shall have been complied with and performed
in all material respects.
(c) The documents required to be delivered by Siam pursuant to Section 8.1
hereof shall have been delivered simultaneously with the Closing.
(d) The stockholders of Siam named as signatories to the form of Lockup and
Trading Restriction Agreement among Siam and such stockholders attached hereto
as Exhibit D (the "Siam Lockup Agreement") shall have duly executed and
delivered the Siam Lockup Agreement.
(e) Xxxxxxx shall have paid the sum of $400,000 to Nite Capital, L.P.
(f) The condition precedent specified in Section 2.10(c) to be satisfied by
Siam shall have been satisfied by Siam to the satisfaction Xxxxxxx, in its sole
discretion.
ARTICLE IX
NO SOLICITATION; TERMINATION
9.1 No Solicitation.
Unless and until this Agreement shall have been terminated prior to the
Closing Time pursuant to and in compliance with Section 9.2 hereof, neither Siam
nor Xxxxxxx shall (whether directly or indirectly through its respective
advisors, agents or other intermediaries), nor shall Xxxxxxx or Siam authorize
or permit any of its respective officers, directors, agents, employees,
representatives, advisors or affiliates to (i) solicit, initiate, encourage
(including by way of furnishing information) or take any action to facilitate
the submission of any inquiries, proposals or offers (whether or not in writing)
from any Person (other than Siam or Xxxxxxx, as the case may be, and its
respective affiliates) relating to (A) any acquisition or purchase of any of the
assets of Xxxxxxx or Siam, as the case may be, or of any class of equity
securities of Xxxxxxx or Siam, as the case may be (other than the securities as
contemplated in the Placement), (B) any tender offer (including a self tender
offer) or exchange offer, (C) any merger, consolidation, business combination,
sale of substantially all assets, recapitalization, liquidation, dissolution or
similar transaction involving Xxxxxxx or Siam or SAC, as the case may be, or (D)
any other transaction the consummation of which would or would reasonably be
expected to impede, interfere with, prevent or materially delay the Merger or
which would or would reasonably be expected to materially dilute the benefits to
the other Party hereto of the transactions contemplated by this Agreement
(collectively, "Acquisition Proposals"), or agree to, recommend or endorse any
Acquisition Proposals, (ii) enter into or execute any agreement with respect to
any of the foregoing or (iii) enter into or participate in any discussions or
negotiations regarding any of the foregoing, or furnish to any other Person any
information with respect to its business, properties or assets in connection
with the foregoing, or otherwise cooperate in any way with, or participate in or
assist, facilitate, or encourage, any effect or attempt by any other person
33
(other than Xxxxxxx or Siam, as the case may be, and its respective affiliates)
to do or seek any of the foregoing. If either Siam or Xxxxxxx is contacted by a
third party with respect to an Acquisition Proposal, it shall immediately notify
the other Party hereto of the identity of the third party and the nature of the
Acquisition Proposal.
9.2 Termination.
This Agreement may be terminated at any time prior to the Effective Time:
(a) by mutual written consent of each of the Parties hereto at any time
prior to the Closing;
(b) by Siam, in the event of a material breach by Xxxxxxx of any provision
of this Agreement for which written notice has been given to Xxxxxxx and which
breach has not been cured prior to December 31, 2005 (the "Termination Date");
provided, however that the right to terminate this Agreement under this Section
9.2(b) shall not be available to Siam, if Siam or SAC has materially breached or
failed to perform any provision of this Agreement and such breach or failure
remains uncured;
(c) by Xxxxxxx, in the event of a material breach by Siam or SAC of any
provision of this Agreement, which breach has not been cured prior to the
Termination Date; provided, however, that the right to terminate this Agreement
under this Section 9.2(c) shall not be available to Xxxxxxx, if Xxxxxxx has
materially breached or failed to perform any provision of this Agreement Siam or
Xxxxxxx, if the Closing shall not have occurred by the Termination Date;
provided, however, the right to terminate this Agreement under this Section
9.2(d) shall not be available (i) to any Party whose failure to fulfill any
obligation hereunder has been the cause of, or results in, the failure of the
Closing to have occurred on or before the Termination Date, or (ii) any failure
by Siam or SAC to deliver (or have available for immediately delivery) all
documents required to be delivered by Siam pursuant to Section 8.1 of this
Agreement, or (iv) any failure by Siam or SAC to comply with all pre-closing
covenants of Siam or SAC contained in Section 6.1 or Article VII of this
Agreement;
(d) by Siam or Xxxxxxx, if the other Party pursues or otherwise enters into
negotiations with respect to an Acquisition Proposal or enters into any
agreement or understanding with respect to an Acquisition Proposal; or
(e) by SIAM or Xxxxxxx if the Merger is not effected on or before January
31, 2006, unless the Parties mutually agree in writing to extend the Termination
Date.
9.3 Effect of TerminationExcept for the provisions of Sections 7.2, 7.3, 7.6,
9.4 and the provisions of Article X hereof, each of which shall survive any
termination of this Agreement, in the event of termination of this Agreement
pursuant to Section 9.2, this Agreement shall forthwith become void and of no
further force and effect and the Parties shall be released from any and all
obligations hereunder; provided, however, that, except as specifically provided
in Section 9.4 below, nothing herein shall relieve any Party from liability for
the breach of any of its obligations under this Agreement.
34
ARTICLE X
GENERAL PROVISIONS
10.1 Amendment. This Agreement may not be amended, except by an instrument in
writing signed on behalf of each of the Parties.
10.2 Waiver.
At any time prior to the Effective Time, whether before or after approval
of this Agreement and the Merger by Xxxxxxx'x stockholders, any Party may (i)
extend the time for the performance of any of the obligations or other acts of
any other Party hereto or (ii) waive compliance with any of the agreements of
any other Party or with any conditions to its own obligations. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of the Party making the waiver or granting the extension by a
duly authorized officer of such Party. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
10.3 Assignment and Binding Effect. Neither this Agreement nor any of the rights
or obligations hereunder may be assigned by Xxxxxxx without the prior written
consent of Siam or assigned by Siam, without the prior written consent of
Xxxxxxx. Any attempted assignment by a Party, without the requisite consent of
the Party shall be null and void AB INITIO. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and assigns, and no other Person shall have any
right, benefit or obligation hereunder, except for Nite Capital, LP which shall
be deemed a third party beneficiary under Section 8.5(e). 10.4 Governing
Law.Except as to matters relating to the internal laws of a jurisdiction, this
Agreement shall be governed by, and construed in accordance with, the law of the
State of Oklahoma, without giving effect to the choice of law principles
thereof.
10.5 Entire Agreement.This Agreement constitutes the entire agreement between
the Parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties with respect to such subject matter.
10.6 Severability.
In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, then to the
maximum extent permitted by law, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
instrument.
10.7 Titles.
The titles, captions or headings of the Articles and Sections herein are
for convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
35
10.8 Multiple Counterparts.This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
10.9 NoticesUnless applicable law requires a different method of giving notice,
any and all notices, demands or other communications required or desired to be
given hereunder by any Party shall be in writing. Assuming that the contents of
a notice meet the requirements of the specific Section of this Agreement which
mandates the giving of such notice, a notice shall be validly given or made to
another Party if served either personally or if deposited in the United States
mail, certified or registered, postage prepaid, or if transmitted by facsimile
or other electronic written transmission device or if sent by overnight courier
service, and if addressed to the applicable Party as set forth below. If such
notice, demand or other communication is served personally, service shall be
conclusively deemed given at the time of such personal service. If such notice,
demand or other communication is given by mail, service shall be conclusively
deemed given three (3) Business Days hours after the deposit thereof in the
United States mail. If such notice, demand or other communication is given by
overnight courier, or electronic transmission, service shall be conclusively
deemed given at the time of confirmation of delivery. The addresses for the
Parties are as follows:
If to Xxxxxxx: Xxxxxxx Foods, Inc.
000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxxx
Attention: Xx. Xxxx X. Xxxxxxx,
President and Chief Executive Officer
Fax: (402)
With a copy to: Morse, Zelnick, Rose & Lander LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
If to Siam or SAC: Siam Imports, Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to: Batcher Xxxxxxx & Xxxxx, LLP
0000 Xxxxxx Xxxx, #000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
Any Party may change such Party's address for the purpose of receiving notices,
demands and other communications as herein provided, by a written notice given
in the aforesaid manner to the other Parties.
10.9 Joint Drafting.
36
10.10 This Agreement shall be deemed to have been drafted jointly by the Parties
hereto, and no inference or interpretation against a Party shall be made solely
by virtue of such Party allegedly having been the draftsperson of this
Agreement.
10.11 Incorporation by Reference.
All Exhibits and Schedules attached hereto or to be delivered in connection
herewith are incorporated herein by this reference.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
37
IN WITNESS WHEREOF, each of Siam, SAC and Xxxxxxx has caused this Agreement
to be executed as of the date first written above by its officer thereunto duly
authorized.
SIAM IMPORTS, INC.
By:
--------------------------------------------------
Name:
Title:
SIAM ACQUISITION CORP..
By:
--------------------------------------------------
Name:
Title:
XXXXXXX FOODS, INC.
By:
--------------------------------------------------
Xxxx X. Xxxxxxx,
President and Chief Executive Officer
38
EXHIBIT A
XXXXXXX DISCLOSURE SCHEDULE
TO
AGREEMENT AND PLAN OF MERGER
AMONG
SIAM IMPORTS, INC.,
SIAM ACQUISITION CORP
AND
XXXXXXX FOODS, INC.
Dated as of November ___, 2005 (the "Merger Agreement")
As Further Supplemented by Disclosure in the Memorandum
Capitalized terms used herein without definition have meanings ascribed to them
in the Merger Agreement.
4.1 Organization and Qualification
(a) No exception.
(b) Xxxxxxx has a wholly owned subsidiary, Xxxxxxx Transportation, Inc.
d/b/a Xxxxxxx Fresh Logistics, Inc. and as contemplated by the Memorandum, will
become the parent of Allison's Gourmet Kitchens, Limited Partnership.
(c) No exception.
(d) (Minutes to be provided, as requested).
4.2 Capitalization
Xxxxxxx'x articles of incorporation will be amended to authorize 20,000,000
shares of common stock and otherwise are required by the Merger Agreement. The
Board of Directors will authorize the split of shares so that shares of common
stock in the hands of the stockholders, after giving to the Placement, will
increase to 11,580,000 shares.
4.3 Authorization
(a) Resolutions are being adopted.
(b) (i) No exception
(ii) Cleveland County Industrial Authority and mortgage and primary
lenders must consent.
(iii) No exception
(iv) No exception.
(c) No exception
4.4 Financial Statements
No exception
4.5 Absence of Certain Changes or Event
None
4.6 Litigation
None
4.7 Taxes
No exception
4.8 Contracts
No exception
4.9 Employee Benefit Plans
Xxxxxxx Foods 401(k) Plan
4.10 Compliance with Applicable Law
No exception
4.11 Intellectual Property
(a) No exception
(b) The following trademarks:
Fresh Fixins (Xxxxxxx has applied for registration with the US Patent and
Trademark Office of its Fresh Fixins trademark, and has been informed that
it is being published for opposition.)
Serve Fresh
Deli Fresh
Fresh Toss
(c) No exception
4.12 Properties
No exception not disclosed in the notes (particularly Note 8) to the
December 31, 2004 Consolidated Financial Statements.
4.13 Insurance
No exception
4.14 Disclosure
No exception
4.15 Brokers
Except for The Merit Group, which is entitled to a 5% commission. under a
Financial Services Agreement dated August 11, 2004, and a merger and acquisition
fee payable to Nite Captial LP.
4.16 Employees
No exception
4.17 Directors and Officers
No exception
4.18 In January 0000, Xxxxxxx was notified by the City of Moore, Oklahoma that
Xxxxxxx would have to obtain a waste water permit. In February 0000, Xxxxxxx
received a notice that its plant's waste water was not satisfactory. In June,
0000, Xxxxxxx began construction of a waste water treatment system. The system
was completed in January, 2005 at a cost of approximately $800,000. Xxxxxxx
believes that the system is effective in treating the waste water released from
the plant and is in compliance with waste water requirements of the City of
Xxxxx.
EXHIBIT B
SIAM DISCLOSURE SCHEDULE
EXHIBIT C
FORM OF LEGAL OPINION OF COUNSEL TO SIAM
(Subject to customary qualification and exceptions)
1. Siam is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Nevada and has the requisite corporate
power and authority necessary to own, lease and operate its properties and to
conduct its business as it is now being conducted. Xxxxxxx is not required to be
qualified to do business in any jurisdiction.
2. Siam has no subsidiaries, other than SAC, and does not, directly or
indirectly, own any equity, debt or similar interest in, or has the right to
vote any interest in, any corporation, partnership, joint venture or other
business association or entity, other than SAC. To our knowledge, Siam is not
subject to any obligation or requirement to provide funds or to make any
investment (in the form of a loan, capital contribution or otherwise) in or to
any corporation, partnership, joint venture, limited liability company, or other
business association or entity.
3. SAC is a corporation validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority to carry on its business as currently conducted.
4. Each of Siam and SAC has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Agreement and Plan of
Merger dated as of November __, 2005 among Xxxxxxx, Siam and SAC (the "Merger
Agreement") to which it is a party and each instrument required thereby to be
executed and delivered by it at or prior to the Closing pursuant to the Merger
Agreement (collectively, with the Merger Agreement, the "Transaction
Documents.". The execution and delivery of, and the performance by Xxxxxxx and
SAC of their respective obligations under, the Transaction Documents to which
either of them is a party, have been duly and validly authorized and approved by
all requisite corporate action.
5. Each of Siam and SAC has duly and validly executed and delivered the
Transaction Documents to which it is a party and, the Transaction Documents
constitute the legal, valid and binding obligations of Siam and SAC, enforceable
in accordance with their respective terms.
6. The execution and delivery of, and performance by each Siam and SAC of
their respective obligations under the Transaction Documents to which it is a
party do not conflict with or constitute a breach by, or default under, (i) any
provision of its Articles of Incorporation or Bylaws, each as amended to date
and currently in effect, (ii) any judgment, order or decree of any court or
arbitrator to which it is subject, or (iii) any contract, agreement or other
arrangement, whether written or oral, to which it is a party or by which its
assets are bound (a "Siam Contract").
8. To our knowledge, are no actions, suits, proceedings or investigations
pending or threatened against Xxxxxxx, SAC or any properties or assets of
Xxxxxxx or SAC which question the validity of the transactions contemplated by
the Transaction Documents.
9. The shares of Siam Common Stock to be issued to holders of Xxxxxxx
Common Stock pursuant to the Merger Agreement have been duly authorized and,
upon effectiveness of the Merger and issuance in accordance with the provisions
of the Merger Agreement, will be validly issued, fully-paid and nonassessable,
free of any statutory or preemptive rights. The Siam Warrants and the Siam Unit
Purchase Warrants to be issued by Siam pursuant to the Merger Agreement have
been duly authorized by all necessary corporate action of Siam and, upon
effectiveness of the Merger and issuance in accordance with the provisions of
the Merger Agreement, will validly issued binding obligations of Siam in
accordance with their respective terms.
10. (a) Upon completion of the Merger and consummation of the Placement (as
defined in Section 7.9 of the Merger Agreement), (A) the authorized capital
stock of Siam will consist of 50.0 million shares of Siam Common Stock and 5.0
million shares of `blank check" preferred stock; and (B) 12.0 million shares of
Siam Common Stock will be outstanding, consisting of 420,000 shares held by the
pre-existing shareholders of Siam, 4.0 million shares held by investors pursuant
to the Placement and 7.58 million shares issued pursuant to the terms of the
Merger.
(b) Upon completion of the Merger, there will be no outstanding options,
warrants (other than the Siam Warrants and the Siam Unit Purchase Warrants),
subscription rights (including any preemptive rights), calls, or commitments, or
convertible notes or instruments of any character whatsoever to which Siam is a
party or is bound, requiring or which could require the issuance, sale or
transfer by Siam of any shares of capital stock of Siam or any securities
convertible into or exchangeable or exercisable for, or rights to purchase or
otherwise acquire, any shares of capital stock of Siam.
11. All of the issued and outstanding shares of Siam Common Stock have been
offered, issued and sold by Xxxxxxx in transactions exempt from the registration
requirements of the Securities Act and the rules thereunder and in compliance
with applicable state securities laws. The outstanding shares of Siam were
issued to, and are currently held, by persons who are not deemed "underwriters"
under applicable federal securities laws.
12. No consent, approval, order, authorization or other action of, notice
to, or registration, declaration or filing with, to any governmental authority
(including, without limitation, the SEC) or any other Person is required in
connection with the execution and delivery of the Transaction Documents or the
consummation by Xxxxxxx of the transactions contemplated by the Transaction
Documents, except such as have been obtained or made or as otherwise set forth
in or specifically contemplated by the Merger Agreement.
13. Upon the filing of the Merger Certificates with the Secretaries by SAC
and, by Xxxxxxx, if legally required. the Merger will become effective in
accordance with and the effects set forth in the Merger Agreement and the
applicable Corporation Laws.
14. To our knowledge, Siam has filed all reports required to be filed by it
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
since the effective date of Xxxxxxx'x registration statement under the Exchange
Act (collectively, the "SEC Documents") on a timely basis, or has received a
valid extension of such time of filing. As of their respective dates, the SEC
Documents complied in all material respects as to form with the requirements of
the Exchange Act and the rules and regulations of the Commission promulgated
thereunder.
EXHIBIT D
FORM OF LOCKUP AND TRADING RESTRICTION AGREEMENTS
LOCK-UP AGREEMENT
____________, 2005
Xxxxxxx Foods, Inc.
000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxx
Vice President and Chief Financial Officer
RE: XXXXXXX FOODS, INC., A NEVADA CORPORATION, FORMERLY KNOWN AS SIAM
IMPORTS, INC.
Gentlemen:
In consideration of the consummation today of the merger (the "Merger") of
Siam Acquisition Corp., a Nevada corporation and wholly-owned subsidiary of
Xxxxxxx Foods, Inc., a Nevada corporation formerly known as Siam Imports, Inc. (
"Issuer"), with and into Xxxxxxx Foods, Inc., an Oklahoma corporation
("Xxxxxxx-Oklahoma"), the undersigned ( "Stockholder") hereby covenants and
agrees as follows:
1. Stockholder will not, during the period (the "Restricted Period") ending
on the earlier to occur of (a) 180 days from the date hereof and (b) 45 days
after the effective date of a registration statement filed by us with the U.S.
Securities and Exchange Commission ("SEC") under the Securities Act of 1933, as
amended, covering securities of Issuer issued to investors in a private
placement of securities offered by Xxxxxxx-Oklahoma (the "Placement Securities")
in exchange for the Placement Securities,
(i) offer, pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of
Issuer's common stock listed on Schedule A hereto, representing in the
aggregate 50.0% of the shares of Issuer's common stock deemed to be
beneficially owned by the Stockholder in accordance with the rules and
regulations of the SEC at the close of business on the date hereof (the
"Restricted Shares"); or
(ii) enter into any swap, option, futures, forward or other agreement
that transfers, in whole or in part, any of the economic consequences of
ownership of the Restricted Shares, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of common stock or
such other securities, in cash or otherwise.
The remaining 50.0% of Issuer's shares of common stock beneficially held by the
Stockholder, subject to the completion of legal due diligence, shall not be
subject to the trading restrictions and lockup created hereby.
2. The provisions of Paragraph 1 above are in addition to the restrictions,
if any, imposed by the rules and regulation of the SEC applicable to
Stockholder.
3. Stockholder hereby represents and warrants to Issuer that (a)
Stockholder is not a party to any agreement or understanding that would cause a
breach of this letter agreement if such agreement or understanding were entered
into during the Restrictive Period and (b) Stockholder has full power and
authority to enter into this letter agreement.
4. In furtherance of the foregoing, Issuer and any duly appointed transfer
agent for the registration or transfer of the Restricted Shares herein are
hereby authorized to decline to make any transfer of securities, if such
transfer would constitute a violation or breach of this Agreement or the rules
and regulations of the SEC.
5. All obligations of each Stockholder hereunder will be binding upon the
successors, assigns, heirs or personal representatives of the Stockholders.
6. THIS LOCK-UP AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF OKLAHOMA, WITHOUT GIVING EFFECT TO THE CHOICE OF
LAWS PRINCIPLES THEREOF.
Very truly yours*,
(If an entity)
------------------------------------------------
by:
---------------------------------------------
Print Name:
-------------------------------------
Title:
------------------------------------------
(If an individual)
------------------------------------------------
Print Name:
-------------------------------------
SCHEDULE A TO LOCKUP AGREEMENT
To be executed in respect of Issuer by Nite Capital, LP and its affiliates and
other each Person or related group of Persons that holds, legally and/or
beneficially, more than 5% of the Issuer's outstanding voting securities as of
the time immediately prior to the Effective Time of the Merger, as such terms
are defined the Agreement and Plan of Merger.
To be executed by Messrs Xxxx Xxxxxxx and Xxxxxx Xxxxxx, as the control persons
of the Issuer immediately following the Effective Time of the Merger
