EXHIBIT 2.2
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
PALWEB CORPORATION,
PP FINANCIAL, INC.
AND
PACE HOLDING, INC.
Dated as of January 21, 2000
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated as of
the 21st day of January, 2000, is entered into by and among Palweb Corporation,
a Delaware corporation ("Palweb"), PP Financial, Inc., a Texas corporation and
wholly owned subsidiary of Palweb ("Sub"), Pace Holding, Inc., an Oklahoma
corporation ("Target") and the Shareholder. Palweb, Sub, Target and the
Shareholder are referred to collectively herein as the "Parties" and
individually as a "Party."
RECITALS
A. The board of directors of each of Palweb, Sub and Target have
determined that it is in the best interests of Palweb, Sub and Target, and their
respective shareholders, to approve the merger of Target with and into Sub with
Sub being the surviving corporation, upon the terms and subject to the
conditions set forth in this Agreement (the "Merger") and have approved and
adopted the Merger upon the terms and conditions set forth in this Agreement.
B. For federal income tax purposes, it is intended that the
Merger qualify as a "reorganization" within the meaning of Section 368(a)(1)(A)
and Section 368(a)(2)(D) of the Code, and that this Agreement constitute a plan
of reorganization for purposes of Section 368(a).
C. The Parties desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and to
prescribe various conditions to the Merger.
D. Terms capitalized but not otherwise defined herein have the
meanings ascribed to them in Section 13.
TERMS AND CONDITIONS
In consideration of the foregoing recitals and the mutual covenants,
representations and warranties contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
1. THE MERGER.
1.1 THE MERGER. Subject to the terms and conditions set forth in
this Agreement, at the Effective Time, Target shall be merged with and into Sub
in accordance with the provisions of this Agreement.
1.2 EFFECT OF THE MERGER. Upon the effectiveness of the Merger,
the separate existence of Target shall cease and Sub, as the surviving
corporation in the Merger (the "Surviving Corporation"), shall continue its
corporate existence under the laws of the State of Texas. The Merger shall have
the effects specified in this Agreement, the TBCA and the OGCA.
1.3 GOVERNING INSTRUMENTS, DIRECTORS AND OFFICERS OF SURVIVING
CORPORATION.
(a) The certificate of incorporation of Sub, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation until duly amended in
accordance with its terms and applicable law.
(b) The by-laws of Sub, as in effect immediately prior to
the Effective Time, shall be the by-laws of the Surviving Corporation
until duly amended in accordance with their terms and applicable law.
(c) The directors and officers of Sub at the Effective
Time shall be the directors and officers, respectively, of the
Surviving Corporation from the Effective Time until their respective
successors have been duly elected or appointed in accordance with the
certificate of incorporation and by-laws of the Surviving Corporation
and applicable law.
1.4 EFFECT ON SECURITIES.
(a) PALWEB AND SUB SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder
thereof, each share of Palweb Common Stock and all other securities of
Palweb outstanding immediately prior to the Effective Time and each
share of Sub Common Stock and all other securities of Sub outstanding
immediately prior to the Effective Time shall remain outstanding and
continue unaffected by the Merger, and each certificate or other
instrument evidencing ownership of any such shares or other securities
shall continue to evidence ownership of the same number of shares or
other securities of Palweb and Sub.
(b) TARGET SECURITIES.
(i) TARGET COMMON STOCK. At the Effective Time, by
virtue of the Merger and without any action on the part of any
holder thereof, each share of Target Common Stock that is
issued and outstanding immediately prior to the Effective Time
shall be converted into the right to receive 655.265 shares of
validly issued, fully paid and nonassessable Palweb Common
Stock (for a total of 50,000,000 shares of Palweb Common
Stock). Each share of Target Common Stock, when so converted,
shall automatically be canceled and retired, shall cease to
exist and shall no longer be outstanding, and the holder of
any certificate representing any such shares shall cease to
have any rights with respect thereto, except the right to
receive the shares of Palweb Common Stock, to be issued in
exchange therefor.
(ii) TARGET TREASURY STOCK. At the Effective Time, by
virtue of the Merger, any and all shares of Target Common
Stock that are issued and held as treasury stock shall be
canceled and retired and shall cease to exist, and no shares
of
3
Palweb Common Stock or other consideration shall be paid or
payable in exchange therefor.
(iii) NO OTHER SECURITIES. At the Effective Time, the
provisions of any other plan, program or arrangement providing
for the issuance or grant of any other interest in respect of
the capital stock of the Target or any Subsidiary of Target
shall become null and void, and Target shall take all
necessary actions to ensure that, following the Effective
Time, no holder of rights or any participant in any plan,
program or arrangement shall have any right thereunder to
acquire any equity securities of Target, Sub, Palweb or any
direct or indirect Subsidiary thereof.
1.5 PAYMENT OF THE MERGER CONSIDERATION. Certificates representing
the Palweb Common Stock constituting the Merger Consideration shall be delivered
by Palweb to the Shareholder at the Closing (against surrender by the
Shareholder of certificates representing Target Common Stock) or as otherwise
provided in Section 1.6 below. The Palweb Common Stock issued in connection with
this Agreement will be "restricted securities" under the Securities Act and Rule
144 promulgated thereunder and may only be sold or otherwise transferred by the
holder thereof pursuant to an effective registration statement under the
Securities Act or an exemption from the registration requirements of the
Securities Act. Certificates representing the Palweb Common Stock shall bear a
legend indicating such restrictions.
1.6 EXCHANGE OF CERTIFICATES; DISTRIBUTIONS WITH RESPECT TO
UNEXCHANGED SHARES. Target shall use reasonable efforts to cause the Shareholder
to deliver for cancellation at the Closing all certificates representing Target
Common Stock. Until surrendered as provided in this Agreement, each certificate
representing Target Common Stock shall be deemed at any time after the Effective
Time to represent solely the right to receive upon such surrender the Merger
Consideration as provided by this Agreement. No dividends or other distributions
will be paid by Palweb to the holder of any unsurrendered certificate
representing Target Common Stock until such certificate or agreement has been
duly surrendered. Subject to the effect, if any, of applicable escheat and other
laws, following surrender of any certificate representing Target Common Stock,
Palweb shall cause to be delivered to the Person entitled thereto, without
interest, the amount of dividends or other distributions theretofore paid with
respect to the Palweb Common Stock so withheld as of any date subsequent to the
Effective Time and prior to such date of delivery.
1.7 EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective immediately when the certificates of merger ("Certificates of Merger")
in accordance with the TBCA and the OGCA are accepted for filing by the
respective Secretaries of State of Texas and Oklahoma or at such time thereafter
as is provided in the Certificates of Merger (the "Effective Time"). The
Certificates of Merger shall be filed, and the Effective Time shall occur, on
the Closing Date immediately after the Closing.
1.8 TAKING OF FURTHER ACTION. If, at any time after the Effective
Time, any further action is necessary or desirable to carry out the purposes of
this Agreement and to vest the Surviving
4
Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of either of Sub or Target, the
officers and directors of the Surviving Corporation are fully authorized, in
the name of the Surviving Corporation or otherwise to take, and shall take,
all such lawful and necessary action.
2. REPRESENTATIONS AND WARRANTIES OF TARGET. As a material inducement to
Palweb and Sub to enter into this Agreement and consummate the transactions
contemplated herein, Target represents and warrants to Palweb and Sub, as of the
date of this Agreement, as follows:
2.1 ORGANIZATION, POWER AND QUALIFICATION. Target and its
Subsidiary are each a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Oklahoma. Except as provided on
SCHEDULE 2.1, Target and its Subsidiary are duly authorized to conduct business
and are in good standing under the law of each jurisdiction where such
qualification is required, except where the lack of such qualification would not
have a material adverse effect on the financial condition of the Target and its
Subsidiary taken as a whole or on the ability of the Parties to consummate the
transactions contemplated by this Agreement. Except as provided on SCHEDULE 2.1,
Target and its Subsidiary have all requisite corporate power and authority to
own, lease and operate its Assets and to carry on its business or businesses as
presently conducted. Target has delivered to Palweb complete and correct copies
of the Organizational Documents of Target and its Subsidiary, as currently in
effect.
2.2 AUTHORITY; POWER; BINDING EFFECT. The execution, delivery and
performance of this Agreement by Target have been authorized by all necessary
action on the part of Target and the Shareholder and no other proceedings
(corporate or other) on the part of Target are necessary to authorize the
execution, delivery and performance of this Agreement. Target has the requisite
right, power, authority and capacity to execute and deliver this Agreement and
to carry out the transactions contemplated hereby and to take any and all other
actions required to be taken by it pursuant to this Agreement. This Agreement
has been duly executed and delivered by Target and, assuming the due execution
and delivery of this Agreement by Palweb and Sub, constitutes the legal, valid
and binding obligation of Target enforceable against Target in accordance with
its terms and conditions.
2.3 NO VIOLATION; CONSENTS. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated hereby, by
Target will, directly or indirectly, with or without notice or the passage of
time, except as contemplated by this Agreement or as set forth in SCHEDULE 2.3:
(a) violate or conflict with any provision of the Organizational Documents of
Target or its Subsidiary; (b) violate any provision of any law of any
Governmental Entity applicable to Target or its Subsidiary; (c) conflict with,
violate or result in a breach of or constitute (with due notice or lapse of
time) a default under any contract, lease, loan agreement, mortgage, security
agreement, indenture, or other agreement or instrument to which Target or its
Subsidiary is a party or by which Target or its Subsidiary is bound or to which
any of their Assets are subject; (d) result in the imposition of any Encumbrance
on Target or its Subsidiary or any of their Assets; or (e) require any
authorization, consent, approval or other action by or notice to or filing with
any Person or Governmental Entity.
5
2.4 OWNERSHIP OF TARGET'S CAPITAL STOCK. To Target's Knowledge,
the Shareholder is the lawful record and beneficial owner of all of Target's
issued and outstanding capital stock comprised solely of 76,305 shares of common
stock, par value $0.01 per share (referred to herein as the "Target Common
Stock"), free and clear of any Encumbrances except as set forth on SCHEDULE 2.4,
and all of such shares have been duly authorized and are validly issued, fully
paid and nonassessable. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights or other contracts or commitments that could require the Target to issue,
sell or otherwise cause to become outstanding any of its capital stock.
2.5 FINANCIAL STATEMENTS. True and complete copies of the audited
consolidated balance sheets and statements of income, changes in stockholders'
equity, and cash flow of Target and its Subsidiary, as of and for the years
ended September 30, 1997, and 1998 (the "Audited Financial Statements"), are
attached hereto as SCHEDULE 2.5(A). True and complete copies of the unaudited
consolidated balance sheet and statement of income, changes in stockholders'
equity, and cash flow of Target and its Subsidiary, as of and for the year ended
September 30, 1999 (the "Unaudited Financial Statements"), are attached hereto
as SCHEDULE 2.5(B). The unaudited interim consolidated balance sheet and
statement of income, changes in stockholders' equity and cash flow of Target and
its Subsidiary (the "Interim Balance Sheet") as of and for the two months ended
November 30, 1999 (the "Interim Balance Sheet Date") (collectively, the "Interim
Financial Statements") are attached hereto as SCHEDULE 2.5(C). The Audited
Financial Statements and the Unaudited Financial Statements fairly present the
financial condition of Target and its Subsidiary as of their respective dates
and fairly present the results of operations and cash flows of Target and its
Subsidiary for the periods indicated (subject, in the case of the Interim
Financial Statements, to non-material changes resulting from audit and customary
year-end adjustments).
2.6 ABSENCE OF UNDISCLOSED LIABILITIES. Neither Target nor its
Subsidiary has any Liabilities (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for taxes, except for (i) Liabilities set forth on the face of the
Interim Balance Sheet (excluding the notes thereto); (ii) Liabilities arising in
the Ordinary Course of Business under any agreement, contract, commitment, lease
or plan specifically set forth in SCHEDULE 2.6 (or not required to be disclosed
under Section 2.6 because of the term or amount involved); and (iii) current
Liabilities incurred in the Ordinary Course of Business since the Interim
Balance Sheet Date.
2.7 CONTRACTS AND COMMITMENTS.
(a) SCHEDULE 2.7 lists all written contracts and other
written agreements to which Target or its Subsidiary is a party the
performance of which will involve consideration in excess of $25,000.
(b) Each of the agreements, contracts, commitments,
leases, plans and other instruments, documents and undertakings set
forth in SCHEDULE 2.7 (or not required to be
6
listed thereon because of the terms thereof), is enforceable in
accordance with its terms. Except as set forth in SCHEDULE 2.7,
Target and its Subsidiary are, and, to Target's Knowledge, all other
parties thereto are, in compliance with the provisions thereof and,
to Target's Knowledge, no event has occurred which with or without
the giving of notice or lapse of time, or both, would constitute a
default thereunder. Target has delivered to Palweb true, correct and
complete copies of each of the written, and a correct and complete
summary of each of the oral, agreements, contracts, commitments,
leases, plans and other instruments, documents and undertakings set
forth in SCHEDULE 2.7.
2.8 TITLE TO ASSETS. Target and its Subsidiary have good and
marketable title to, or a valid leasehold interest in, the Assets, free and
clear of all Encumbrances excepting only (i) the Liabilities expressly reflected
or reserved against on the face of the Interim Balance Sheet (rather than any
notes thereto) and (ii) Permitted Encumbrances.
2.9 CONDUCT OF TARGET SINCE THE INTERIM BALANCE SHEET DATE. Except
as set forth in SCHEDULE 2.9, since the Interim Balance Sheet Date, Target and
its Subsidiary have conducted their businesses only in the Ordinary Course of
Business and have not, except in the Ordinary Course of Business suffered any
material adverse change in their business, operations, Assets, prospects or
condition (financial or otherwise).
2.10 LITIGATION; DECREES. To Target's Knowledge, there are no
judicial or administrative actions, proceedings or investigations pending or
threatened that question the validity of this Agreement or any action taken or
to be taken by Target or the Shareholder in connection with this Agreement.
Except as set forth in SCHEDULE 2.10: (i) there are no lawsuits, claims,
administrative or other Proceedings or investigations pending or, to Target's
Knowledge, threatened by, against or affecting Target or its Subsidiary or any
of their Assets; and (ii) there are no judgments, orders or decrees of any
Governmental Entity binding on Target or its Subsidiary or any of their Assets.
2.11 COMPLIANCE WITH LAW; PERMITS. To Target's Knowledge, except as
set forth in SCHEDULE 2.11, Target and its Subsidiary have materially complied
with each Law of any Governmental Entity to which Target and its Subsidiary or
their business, operations or Assets are subject and are not currently in
violation, or alleged by any Governmental Entity to have violated, of any of the
foregoing. Target and its Subsidiary own, hold, possess or lawfully use in the
operation of their businesses all Permits which are required for it to conduct
their businesses as now conducted or for the ownership and use of the Assets, in
material compliance with all Laws.
2.12 TAX MATTERS.
(a) Target and its Subsidiary have filed all Income Tax
Returns that they were required to file. All such Income Tax Returns
were correct and complete in all material respects. All Income Taxes
owed by Target and its Subsidiary (whether or not shown on any Income
Tax Return) have been paid.
7
(b) There is no material dispute or claim concerning any
Income Tax liability of Target or its Subsidiary either (i) claimed or
raised by any authority in writing; or (ii) as to which the Shareholder
and the directors and officers of Target or its Subsidiary have
Knowledge based upon personal contact with any agent of such authority.
(c) Target and its Subsidiary are not a party to any
Income Tax allocation or sharing agreement.
2.13 COMMISSIONS OR FINDERS FEES. Neither Target nor any Person
acting on behalf of Target has agreed to pay a commission, finder's fee or
similar payment in connection with this Agreement or any matter related hereto
to any Person.
2.14 INTELLECTUAL PROPERTY. SCHEDULE 2.14 identifies each patent or
registration which has been issued to Target or its Subsidiary with respect to
any of its Intellectual Property, identifies each pending patent application or
application for registration which Target or its Subsidiary has made with
respect to any of its Intellectual Property, and identifies each license,
agreement or other permission which Target or its Subsidiary has granted to any
third party with respect to any of its Intellectual Property.
2.15 YEAR 2000 PROBLEM. Target and its Subsidiary have reviewed the
areas within their businesses and operations which could be adversely affected
by, and have developed or are developing a program to address on a timely basis,
the "Year 2000 Problem" (that is, the risk that computer applications used by
Target or its Subsidiary may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date on or
after December 31, 1999), and have, to the extent possible, made related inquiry
of material suppliers and vendors.
2.16 DISCLOSURE. With respect to this Agreement, the Schedules and
Exhibits to this Agreement and the other agreements contemplated by this
Agreement, to the Knowledge of Target, Target has not made any untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements made, in light of the circumstances under which they were
made, not misleading.
3. REPRESENTATIONS AND WARRANTIES OF PALWEB AND SUB. As a material
inducement to Target to enter into this Agreement and consummate the
transactions contemplated herein, Palweb and Sub represent and warrant to
Target, as of the date of this Agreement, as follows:
3.1 ORGANIZATION.
(a) Palweb is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power and authority to own, lease and operate its Assets
and to carry on its business as presently conducted.
8
(b) Sub is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas and has the requisite
corporate power and authority to own, lease and operate its Assets and to carry
on its business as presently conducted.
3.2 AUTHORITY; POWER; BINDING EFFECT. The execution, delivery and
performance of this Agreement and the agreements, instruments and documents
contemplated hereby (collectively, the "Other Agreements") by Palweb and Sub
have been authorized by all necessary corporate action on the part of Palweb and
Sub and no other proceedings (corporate or other) on the part of Palweb and Sub
are necessary to authorize the execution, delivery and performance of this
Agreement and the Other Agreements. Palweb and Sub have the requisite power and
authority to execute and deliver this Agreement and the Other Agreements, to
consummate the transactions contemplated hereby and thereby and to take any and
all other actions required to be taken by it pursuant to the provisions of this
Agreement and the Other Agreements. This Agreement and the Other Agreements have
been duly executed and delivered by Palweb and Sub and, assuming the due
execution and delivery of this Agreement by Target and Shareholder, or the other
applicable parties to the Other Agreements, this Agreement and the Other
Agreements constitute the legal, valid and binding obligation of Palweb and Sub
enforceable against it in accordance with its terms and conditions.
3.3 PALWEB COMMON STOCK. The Palweb Common Stock to be delivered
in connection with the Merger as provided in this Agreement has been duly
authorized by Palweb and, when delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable, free and clear
of any Encumbrances (other than the restrictions on transfer contemplated by
this Agreement), and no shareholder of Palweb will have any preemptive right of
subscription or purchase in respect thereof.
3.4 NO VIOLATION; CONSENTS. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated herein by
Palweb and Sub will, directly or indirectly, with or without notice or the
passage of time, except as contemplated by this Agreement: (a) violate or
conflict with any provision of the Organizational Documents of Palweb or Sub;
(b) violate any provision of any Law of any Governmental Entity applicable to
Palweb or Sub; (c) conflict with, violate or result in a breach of or constitute
(with due notice or lapse of time) a default under any contract, lease, loan
agreement, mortgage, security agreement, indenture, or other agreement or
instrument to which Palweb or Sub is a party or by which Palweb or Sub is bound
or to which any of their Assets is subject; (d) result in the imposition of any
Encumbrance on Palweb or Sub or any of their Assets; or (e) require any
authorization, consent, approval or other action by or notice to or filing with
any Person or Governmental Entity.
3.5 COMMISSION DOCUMENTS AND OTHER REPORTS. Palweb has filed all
periodic reports required to be filed by it with the Commission (the "Palweb
Commission Documents"). As of their respective dates, the Palweb Commission
Documents complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, and none of the Palweb Commission Documents contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make
9
the statements therein, in light of the circumstances under which they were
made, not misleading. Since the date of the last filed Palweb Commission
Document, Palweb has not suffered a material adverse change in its condition
(financial or otherwise). The consolidated financial statements of Palweb
included in the Palweb Commission Documents complied as to form in all
material respects with the applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto, were
prepared in accordance with GAAP (except, in the case of the unaudited
statements, as permitted by the regulations of the Commission) consistently
applied throughout the periods involved (except as may be indicated therein
or in the notes thereto) and fairly present the consolidated financial
position, results of operations and cash flows of Palweb and its consolidated
Subsidiary as of the dates or for the periods indicated therein, subject, in
the case of the unaudited statements, to normal non-material changes
resulting form audit, customary year-end adjustments and the absence of
footnote disclosure.
3.6 COMMISSIONS OR FINDERS FEES. Palweb, Sub and any Person acting
on behalf of them have not agreed to pay a commission, finder's fee or similar
payment in connection with this Agreement or any matter related hereto to any
Person.
3.7 DISCLOSURE. With respect to this Agreement, the Schedules and
Exhibits to this Agreement and the other agreements contemplated by this
Agreement, to the Knowledge of Palweb and Sub, Palweb and Sub have not made any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
4. OTHER COVENANTS AND AGREEMENTS.
4.1 TAX-FREE REORGANIZATION. It is intended that the Merger be
treated as a reorganization within the meaning of Section 368(a) of the Code.
Subject to the terms and conditions hereof, the Parties shall use their
reasonable best efforts to cause the merger to be treated as a reorganization
within the meaning of Section 368(a) of the Code.
4.2 REGISTRATION OF PALWEB COMMON STOCK OWNED BY PACECO FINANCIAL
SERVICES, INC. Upon the request of Target's Subsidiary, Paceco Financial
Services, Inc., Palweb will use its best efforts to register the Palweb Common
Stock owned by Paceco Financial Services, Inc., for sale pursuant to the
Securities Act of 1933, as amended and any applicable state securities laws, and
Palweb and Paceco Financial Services, Inc., agree to cooperate and to take all
actions that may be necessary or appropriate to fully effect such registration
of such Palweb Common Stock.
5. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of each Party under this Agreement to consummate the
transactions contemplated hereby will be subject to the satisfaction, at or
prior to Closing, of all of the following conditions, any one or more of which
may be waived in whole or in part at the option of Palweb or Target:
10
5.1 GOVERNMENTAL AND THIRD PARTY CONSENTS AND APPROVALS. All
consents, approvals, waivers permits and authorizations required to be obtained
prior to the Effective Time from, any Governmental Entity or other Person
(including, without limitation, those set forth in SCHEDULES 2.3) in connection
with the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall have been made or obtained (as the case
may be).
5.2 NO ADVERSE PROCEEDINGS. No temporary restraining order,
preliminary or permanent injunction or other order preventing the consummation
of the Merger shall have been issued by any Governmental Entity and remain in
effect, and no proceedings seeking the issuance of such an order or injunction,
or seeking relief against Palweb, Sub or Target if the Merger is consummated,
shall be pending or threatened which, in the good faith judgment Palweb's, Sub's
or Target's respective Board of Directors (acting upon the written opinion of
their respective outside counsel), has a reasonable probability of resulting in
such order, injunction or relief and any such relief would have a material
adverse effect on such Party.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PALWEB AND SUB. The obligations
of Palweb and Sub under this Agreement to consummate the transactions
contemplated hereby will be subject to the satisfaction, at or prior to Closing,
of all of the following conditions (any one or more of which may be waived in
whole or in part at the option of Palweb):
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Target made in this Agreement or in any Exhibit, Schedule or
document delivered pursuant hereto must have been true and correct in all
material respects as of the date hereof.
6.2 PERFORMANCE BY TARGET. All of the covenants and obligations
that Target is required to perform or to comply with pursuant to this Agreement
must have been duly performed and complied with in all material respects.
6.3 CLOSING DOCUMENTS. Target or the Shareholder must have
delivered to Palweb all of the documents set forth in Sections 8.2 and 8.4.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF TARGET. The obligation of Target
under this Agreement to consummate the transactions contemplated hereby is
subject to the satisfaction, at or prior to the Closing, of each the following
conditions (any of which may be waived in whole or in part at the option of
Target):
7.1 REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Palweb and Sub made in this Agreement or in any Exhibit, Schedule
or document delivered pursuant hereto must have been true and correct in all
material respects as of the date hereof.
7.2 PERFORMANCE BY PALWEB AND SUB. All of the covenants,
agreements and obligations that Palweb and Sub are required to perform or to
comply with pursuant to this Agreement at or prior to the Closing must have been
duly performed and complied with in all material respects.
11
7.3 CLOSING DOCUMENTS. Palweb must have delivered to Target or the
Shareholder all of the documents set forth in Sections 8.3 and 8.4.
8. CLOSING.
8.1 CLOSING DATE. The closing of the transactions contemplated by
this Agreement (the "Closing") shall occur on the date of the execution of this
Agreement (the "Closing Date").
8.2 DOCUMENTS TO BE DELIVERED BY TARGET AND SHAREHOLDER. At the
Closing, Target and the Shareholder will deliver to Palweb the following:
(a) EVIDENCE OF GOVERNMENTAL AND THIRD-PARTY CONSENTS AND
APPROVALS. Evidence in form reasonably satisfactory to Palweb of the
receipt of each of the governmental and third-party consents, approvals
and waivers.
(b) TARGET STOCK CERTIFICATES. Certificates evidencing
outstanding shares of Target Common Stock as contemplated by Section
1.5.
(c) OTHER DOCUMENTS. Such additional certificates,
instruments, documents, information and materials as Palweb may
reasonably request.
8.3 DOCUMENTS TO BE DELIVERED BY PALWEB AND SUB. At the Closing,
Palweb and/or Sub will deliver to Target or the Shareholder the following:
(a) MERGER CONSIDERATION. Certificates representing the
Palweb Common Stock constituting the Merger Consideration shall be
delivered to the Shareholder in the amounts and manner as set forth in
Section 1.5.
(b) OTHER DOCUMENTS. Such additional certificates,
instruments, documents, information and materials as Target may
reasonably request.
8.4 CONCURRENT CONDITIONS. The performance or tender of
performance at Closing of all matters applicable to a Party under this Agreement
shall be deemed concurrent conditions and no Party shall be required at Closing
to perform, or tender performance of, the obligations of such Party hereunder
unless, coincident therewith, each other Party from whom performance is required
under this Agreement performs or tenders performance of its obligations
hereunder.
9. INDEMNIFICATION BY SHAREHOLDER.
9.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY
INVESTIGATION. All representations, warranties, covenants and obligations in
this Agreement, any Schedules attached hereto pursuant to Section 2 or otherwise
and any certificate or agreement delivered pursuant to this Agreement will
survive the Closing to the extent provided in Section 9.3 below. Shareholder
will
12
indemnify and will pay to the Palweb the amount of any Damages to the extent
provided in Sections 9.3 and 9.4. The right to indemnification based on
Breach of the representations, warranties, covenants and obligations of a
Party in this Agreement will not be affected by any investigation conducted
by the other Party; provided however, notwithstanding anything herein to the
contrary, a Party shall not be liable for any damages arising from a Breach
which the other Party, or any of their respective officers, counsel or other
representatives, had actual Knowledge was incorrect or false prior to the
Closing Date. For purposes hereof, Palweb shall be deemed to have actual
Knowledge of the facts set forth in the Schedules and the content of the
documents described in the Schedules hereto to the extent that true and
complete copies thereof have been provided to Palweb. In addition,
notwithstanding anything herein to the contrary, it is understood and
acknowledged that no claims for Damages may be made as a result of an adverse
change after the Closing to the business conducted by Target that results
from the consummation of the transactions contemplated herein (but provided
such adverse change is not the result of the Breach of any specific
representation, warranty or covenant of Target herein) or the actions or
inactions of Palweb following the Closing, including, without limitation, any
changes in accounting policies or changes to the business formerly conducted
by Target.
9.2 DAMAGES.
(a) Damages means the amount of any loss, liability,
obligation, debt, claim, damage or expense (including costs of
investigation and defense and reasonable attorneys' fees), incurred by
Palweb or its directors, officers, employees, agents, advisors,
stockholders, controlling persons, and Affiliates arising, directly or
indirectly, from and in connection with:
(i) any Breach of any representation or warranty
made by Target in this Agreement, the Schedules or any other
certificate or document delivered by Target pursuant to this
Agreement; and
(ii) any Breach by Target of any covenant or
obligation of Target in this Agreement.
(b) Damages also means the amount of any loss, liability,
obligation, debt, claim, damage or expense (including costs of
investigation and defense and reasonable attorneys' fees) incurred by
Palweb or its directors, officers, employees, agents, advisors,
stockholders, controlling persons, and Affiliates after the Closing
Date arising from the defense, compromise, settlement or disposition
(including any judgement of a court of competent jurisdiction or award
of an arbitrator) of each of the proceedings, claims, actions,
threatened claims and disputes identified in SCHEDULE 2.10 or any
update or supplement thereto.
(c) The amount of any Damages shall be reduced by the
amount of any judgment or settlement payment or other payment, if any,
actually received by Palweb or Sub from a third party in connection
with the resolution or settlement of the applicable disputed matter.
13
9.3 TIME LIMITATIONS. Any claims for payment of Damages must be
asserted by written notice from Palweb to the Shareholder not later than the
first anniversary of the Closing Date.
9.4 LIMITATIONS ON AMOUNT. Palweb will not be entitled to the
payment of any Damages unless and until the amount of Damages exceeds $50,000,
and then Palweb will only be entitled to payment of any Damages in excess of
$50,000.
10. INDEMNIFICATION BY PALWEB AND SUB. Palweb and Sub, jointly and
severally, will indemnify and will pay to the Shareholder the amount of any
loss, liability, obligation, debt, claim, damage, expense (including costs of
investigation and defense and reasonable attorneys' fees), directly or
indirectly, from and in connection with (a) any Breach of any representation or
warranty made by Palweb or Sub in this Agreement or any Schedule or update to a
schedule delivered by Palweb or Sub or in any certificate delivered by Palweb
pursuant to this Agreement, or (b) any Breach by Palweb or Sub of any covenant
or obligation of Palweb in this Agreement. Palweb and Sub will have no liability
(for indemnification or otherwise) with respect to any representation or
warranty made, or covenant or obligation to be performed and complied with,
unless on or before the first anniversary of the Closing Date, the Shareholder
notifies Palweb of a claim specifying the factual basis of that claim in
reasonable detail to the extent then known by the Shareholder.
11. REMEDIES EXCLUSIVE. Except as otherwise provided in Section 12.1
relating to specific performance the remedies provided for in Sections 9 and 10
above shall be the exclusive remedies of the Parties and the Shareholder with
respect to this Agreement and all or any aspect of the transactions contemplated
herein.
12. MISCELLANEOUS PROVISIONS.
12.1 SPECIFIC PERFORMANCE. Each of the Parties acknowledges and
agrees that the other Parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are Breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent Breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof, in addition to
any other remedy to which they may be entitled, at law or in equity. If any
action is brought by a Party to specifically enforce this Agreement, the
Breaching Party shall waive any defense that there is an adequate remedy at law.
12.2 NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered or certified mail, return receipt
requested, or (c) when received by the addressee, if sent by a nationally
recognized overnight delivery service (receipt requested), in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a Party may designate by notice to the other
Parties):
14
(a) Palweb and Sub: 0000 X. Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: 214/745-4578
Attention: Xxxx X. Xxxxxx
With a Copy to: Xxxxx & Xxxxxxx
0000 Xxx-Xxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Facsimile No.: 405/239-6651
Attention: Xxxxxxx X. Xxxxxxx
(b) Target and Shareholder: 0000 X. XxXxx
Xxxxxx, XX 00000
Facsimile No.: 405/360-5354
Attention: Xxxx X. Xxxx
With a Copy to: Andrews, Davis, Legg, Bixler,
Xxxxxxx & Price
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Facsimile No.:405/235-8786
Attention: Xxx Xxxxxxx
12.3 WAIVER. The rights and remedies of the Parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any Party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one Party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other Parties; (b) no waiver that
may be given by a Party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one Party will be deemed to
be a waiver of any obligation of such Party or of the right of the Party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
12.4 ENTIRE AGREEMENT AND AMENDMENT. This Agreement supersedes all
prior agreements between the Parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the Parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the Party to be charged with the amendment.
15
12.5 FURTHER ASSURANCES. The Parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as any other Party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to herein.
12.6 GOVERNING LAW. This Agreement, including without limitation,
the interpretation, construction and validity hereof, shall be governed by the
laws of the State of Oklahoma, without regard to its conflict of laws
principles.
12.7 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
12.8 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which will be deemed an original copy of the
Agreement and all of which, when taken together will be deemed to constitute one
and the same agreement.
12.9 ASSIGNMENTS, SUCCESSORS AND NO THIRD PARTY RIGHTS. No Party
may assign any of its rights or obligations under this Agreement without the
prior consent of the other Party. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the Parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the Parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement, except as set forth immediately below with respect to third party
beneficiary rights of the Shareholder. This Agreement and all of its provisions
and conditions are for the sole and exclusive benefit of the Parties to this
Agreement and their successors and assigns; provided, however, that the
Shareholder shall be deemed to be third party beneficiaries to the rights of
Target under this Agreement and with respect to any provision hereunder for the
Shareholder's benefit (including, without limitation, Section 10).
12.10 CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS.
(a) Unless the context otherwise requires, (i) all
references to Sections or Schedules are to Sections or Schedules of or
to this Agreement; (ii) each term defined in this Agreement has the
meaning assigned to it; (iii) "or" is disjunctive but not necessarily
exclusive; and (iv) words in the singular include the plural and vice
versa. All references to "$" or dollar amounts will be to lawful
currency of the United States of America.
(b) No provision of this Agreement will be interpreted in
favor of, or against, any of the Parties hereto by reason of the extent
to which any such Party or its counsel participated in the drafting
thereof or by reason of the extent to which any such provision is
inconsistent with any prior draft hereof or thereof.
16
(c) Any reference to any Law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise.
(d) The word "including" means "including, without
limitation," and does not limit the preceding words or terms.
(e) All words used in this Agreement will be construed to
be of such gender or number as the circumstances require.
12.11 JURISDICTION AND VENUE. The Parties intend that all disputes
concerning this Agreement shall be resolved by arbitration as provided below,
unless arbitration shall be held by a court of competent jurisdiction to be
unenforceable. In such event, the Parties agree that any suit, action or
proceeding with respect to this Agreement may be brought in the Oklahoma state
courts of competent jurisdiction in Cleveland County, Oklahoma or in the United
States District Court in which the City of Xxxxxx is located. ALL PARTIES HEREBY
IRREVOCABLY WAIVE ANY OBJECTIONS WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
PERSONAL JURISDICTION OR VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT BROUGHT IN ANY SUCH COURT AND HEREBY FURTHER
IRREVOCABLY WAIVE ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
12.12 DISPUTE RESOLUTION. Except as otherwise provided in this
Section 12.12, in the event of any dispute, controversy or claim arising out of
or relating to this Agreement or the Breach thereof, the Parties shall meet
promptly (through representatives with authority to resolve the dispute). If the
Parties cannot resolve the dispute within 30 days, the Parties shall arbitrate
the dispute in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, by a sole arbitrator, but the arbitration proceeding
may not revoke or revise any provision of this Agreement. All arbitrators
selected shall be independent third parties and shall have knowledge and
experience in the matters addressed by the claim. Except as set forth in this
Section 12.12, arbitration shall be the sole and exclusive remedy between the
Parties with respect to any dispute, protest, controversy or claim arising out
of or relating to this Agreement, provided, the arbitrator shall not have the
power or authority to award consequential, incidental or punitive damages.
Unless all the Parties to an arbitration otherwise consent in writing, the
location of the arbitration hearings and the place of entry of the award shall
be in Kansas City, Missouri. The Parties consent to jurisdiction of, and agree
that venue will lie in, any of the state and federal courts set forth in Section
12.11. The arbitration award shall be final and binding and shall not be
reviewable in any court on any grounds except corruption, fraud or undue means
of a Party or for evident partiality or corruption of the arbitrator. The
Parties intend to eliminate all other court review of the award and the
arbitration proceedings. Except for a proceeding to enforce or confirm an award
or a proceeding brought by all Parties to the dispute to vacate
17
or modify an award, the initiation of any suit relating to a dispute that is
arbitrable under this Agreement shall constitute a material Breach of this
Agreement. However, the Parties hereby acknowledge that Breach of this
Agreement may give rise to irreparable injury to the Parties, inadequately
compensable in monetary damages alone, and notwithstanding anything to the
contrary stated herein, the Parties shall be permitted to seek and obtain
specific performance as provided in Section 12.1.
12.13 PAYMENT OF EXPENSES. Each Party hereto shall pay its own
expenses incident to preparing for, entering into and carrying out this
Agreement and the transactions contemplated hereby.
13. DEFINITIONS.
13.1 DEFINITIONS. Capitalized terms used in this Agreement and not
defined elsewhere in this Agreement shall have the meanings ascribed to them in
this Section 13.1 (such meanings applicable to both the singular and plural
forms of the terms defined) as follows:
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended.
"ASSETS" means assets, rights, properties and goodwill of any kind or
type, tangible and intangible, real or personal, wheresoever located.
"BREACH" means a "Breach" of a representation, warranty, covenant,
obligation or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (i) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation or other provision, or
(ii) any claim by a third party which claim if true would result in a Breach of
a representation, warranty, covenant, obligation, or other provision.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor law, and the regulations promulgated thereunder.
"COMMISSION" means the United States Securities and Exchange
Commission, and any successor thereto.
"ENCUMBRANCE" means any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, mortgage, easement, servitude, right of way, encroachment,
receipt of income, or exercise of any other attribute of ownership.
18
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"GOVERNMENTAL ENTITY" means any domestic or foreign court, government
or governmental or regulatory agency, authority, entity or instrumentality.
"XXXX-XXXXX-XXXXXX ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the regulations thereunder.
"INCOME TAX" means any federal, state, local or foreign income Tax,
including any interest, penalty, or addition thereto, whether disputed or not.
"INCOME TAX RETURN" means any return, declaration, report, claim for
refund or information return or statement relating to Income Taxes, including
any schedule or attachment thereto, and including any amendments thereof.
"INTELLECTUAL PROPERTY" means all domestic or foreign letters patent
(including any reissue or re-examination thereof), patent applications
(including any continuation, division, renewal or substitute thereof), patent
licenses, inventions, software licenses, know-how licenses, trade names,
trademark registrations and applications, service xxxx registrations and
applications, common law trademarks and service marks, copyrights, copyright
registrations and applications, trade secrets, technical knowledge, know-how or
other confidential proprietary information capable of being set forth in
SCHEDULE 2.14 which is owned or used by Target.
"IRS" means the United States Internal Revenue Service.
"KNOWLEDGE" means an individual will be deemed to have "Knowledge,"
whether or not such term is capitalized herein, of a particular fact or other
matter if such individual is actually aware of such fact or other matter after
conducting a reasonable investigation. A person (other than an individual) will
be deemed to have "Knowledge" of a particular fact or other matter if any
individual who is serving, or who has served, as a director, executive officer,
partner, executor or trustee of such person (or in any similar capacity) has, at
any time prior to Closing, had Knowledge of such fact or other matter.
"LAWS" means all foreign, federal, state, county and local statutes,
laws (including common law), ordinances, regulations, rules, resolutions,
orders, codes, determinations, writs, injunctions, awards (including, without
limitation, awards of any arbitrator), judgments and decrees applicable to the
specified Person or to the businesses or assets and properties thereof
(including, without limitation, Laws relating to securities registration and
regulation, the sale, leasing, ownership or management of real property,
employment practices, terms and conditions, and wages and hours, building
standards land use and zoning, safety, health and fire prevention, and
environmental protection, including Environmental Laws).
19
"LEGAL REQUIREMENT" means any federal, state, local, municipal,
foreign, international, multinational or other administrative order,
constitution, law, ordinance, principal of common law, regulation, statute or
treaty.
"LIABILITIES" means any direct or indirect, or matured or unmatured,
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost,
expense, obligation or responsibility, whether absolute, fixed, contingent or
otherwise, known or unknown, asserted or unasserted, xxxxxx or inchoate,
liquidated or unliquidated, secured or unsecured.
"MERGER CONSIDERATION" means the shares of Palweb Common Stock that the
Shareholder shall have a right to receive upon conversion of the Target Common
Stock as provided in Section 1.4 hereof.
"OGCA" means the Oklahoma General Corporation Act, as amended, or any
successor law or regulations promulgated thereunder.
"ORDINARY COURSE OF BUSINESS" means an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of
such Person and is taken in the ordinary course of the normal
day-to-day operations of such Person;
(b) such action is not required to be authorized by the
board of directors of such Person (or by any Person or group of Persons
exercising similar authority); and
(c) such action is similar in nature and magnitude to
actions customarily taken, without any authorization by the board of
directors (or by any Person or group of Persons exercising similar
authority), in the ordinary course of the normal day-to-day operations
of other Persons that are in the same line of business as such Person.
"ORGANIZATIONAL DOCUMENTS" means the articles or certificate of
incorporation and the bylaws of a corporation and any amendment to any of the
foregoing.
"PERMITS" means all assignable franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate the properties and
assets and to carry on the business of any specified Person as it is now being
conducted.
"PERMITTED ENCUMBRANCES" means only those Encumbrances which do not and
will not materially interfere with the use of, impair, or reduce the value of
any Assets or Leased Real Property.
20
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, trust or any other entity,
association or organization including a Governmental Entity.
"PALWEB COMMON STOCK" means shares of common stock, par value $.10 per
share, of Palweb.
"PROCEEDING" means any action, arbitration, audit, hearing,
investigation, litigation, suit (whether civil, criminal, administrative,
investigative or informal), commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental Body or arbitrator.
"RECITALS" means the portion of this Agreement preceding Section 1.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor law, and the regulations promulgated thereunder.
"SHAREHOLDER" means Xxxx X. Xxxxxx the holder of all of the Target
Common Stock.
"SUBSIDIARY" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"TARGET COMMON STOCK" means shares of common stock, par value $0.01 per
share, of Target.
"TAX" and any derivatives thereof, means and includes any and all
federal, state, county, local, and foreign income (including gross, adjusted
gross and supplemental net income), payroll, Medicare, withholding, unemployment
insurance, social security, sales, use, service, service use, leasing, leasing
use, excise, recording, franchise, gross receipts, value added, alternative or
add-on minimum, estimated, occupation, real and personal property, stamp,
transfer, workers' compensation, severance, windfall profits, and environmental
(including taxes under Code Section 59(A)) and any other tax, charge, fee, levy
or assessment of the same or of a similar nature, including any and all
interest, penalties and additions thereto, whether disputed or not.
"TAX RETURN" means and includes any and all returns, forms,
declarations, reports, claims for refund and information returns and statements
relating to Taxes and any amendments thereto, and including any schedules or
attachments thereto.
"TBCA" means the Texas Business Corporation Act, as amended, or any
successor law, or regulations promulgated thereunder.
21
13.2 OTHER DEFINITIONS. Each of the following terms is defined in
the Section set forth opposite such term.
"Palweb" Recitals
"Palweb Commission Documents" Section 3.5
"Agreement" Recitals
"Audited Financial Statements" Section 2.5
"Certificates of Merger" Section 1.7
"Closing" Section 8.1
"Closing Date" Section 8.1
"Damages" Section 9.2
"Target" Recitals
"Effective Time" Section 1.7
"Financial Statements" Section 2.5
"Interim Balance Sheet" Section 2.5
"Interim Balance Sheet Date" Section 2.5
"Interim Financial Statements" Section 2.5
"Merger" Recitals
"Other Agreements" Section 3.2
"Party or Parties" Recitals
"Surviving Corporation" Section 1.2
"Unaudited Financial Statements" Section 2.5
Year 2000 Problem Section 2.15
22
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
"PALWEB"
PALWEB CORPORATION
By:
---------------------------
Title:
--------------------------
"SUB"
PP FINANCIAL, INC.
By:
---------------------------
Title:
--------------------------
"TARGET"
PACE HOLDING, INC.
By:
---------------------------
Title:
--------------------------
"SHAREHOLDER"
------------------------------
Xxxx X. Xxxxxx
23
SCHEDULE 2.1
None.
SCHEDULE 2.3
Paceco Financial Services, Inc. ("Paceco"), the subsidiary of Target,
has agreed to obtain the consent of the Oklahoma Department of Securities to the
Merger prior to the Closing of the Merger.
SCHEDULE 2.4
None.
SCHEDULE 2.5(A)
SCHEDULE 2.5(B)
SCHEDULE 2.5(C)
SCHEDULE 2.6
Certain liabilities to which Paceco is subject are disclosed in
Schedule 2.10.
SCHEDULE 2.7
(a) OFFICE LEASE.
Lease of office space dated January 1, 2000 between Subsidiary and
Onward, LLC providing for rent of $3,500 per month for a term of 24
months.
(b) EMPLOYMENT AGREEMENTS.
Employment Agreements between Subsidiary and the following employees:
Xxxxxxxx Xxxxx
Xxxxx XxXxxxx
(c) CONSULTING AGREEMENT.
Consulting Agreement between Subsidiary and L.O. and Xxxxxxxxx Xxxx
("Consultants") dated on or about November 1, 1997 providing for
monthly consulting fees of $2,500 per month, automobile expenses and
medical insurance for so long as either of the Consultants shall live.
(d) INVESTMENT CERTIFICATES PROMISSORY NOTES AND OTHER
INVESTMENTS.
Subsidiary is obligated on investment certificates, passbook savings
accounts, promissory notes and various other instruments entered into
in the ordinary course of business.
SCHEDULE 2.9
None.
SCHEDULE 2.10
(a) Oklahoma Department of Securities (File No. SE91493).
As a result of an examination of Paceco by the Oklahoma Department of
Securities ( the "DOS"), certain concerns have been raised involving certain
related party transactions and certain alleged failures to comply with the
Oklahoma Securities Act and regulations thereunder. The DOS has advised Paceco
that the renewal of the registration of Paceco's investment certificates will be
deferred until such concerns have been satisfied. Paceco is in the process of
responding to the concerns of the DOS. While such examination is pending, Paceco
by agreement with the DOS has suspended the offer or sale of investment
certificates except to its existing customers and has agreed not to renew or
otherwise offer or sell thirty month certificates. Paceco has represented to the
DOS that Paceco intends to wind down the offer and sale of investment
certificates over a twenty-four month period.
(b) SPRINGFIELD COACH BUILDERS, INC. VS. XXXX XXXXXXX, ET AL.
Paceco was named a defendant in this action in the District Court of
Oklahoma County on August 31, 1998. The suit alleges that Paceco converted a
limousine in which Paceco held a security interest by obtaining title through
fraudulent misrepresentations. Plaintiff seeks actual damages of a minimum of
$10,000 and punitive damages. Paceco believes it has meritorious defenses to the
action and intends to vigorously defend it. The case is in the early stages of
discovery.
SCHEDULE 2.11
See Schedule 2.10
SCHEDULE 2.14
None.
