EXHIBIT 2.1
AMENDED and RESTATED
AGREEMENT AND PLAN OF MERGER
by and among
AMERICAN UNITED GLOBAL, INC.,
LIFETIME HEALTHCARE SERVICES, INC.
and
LIFETIME ACQUISITION CORP.
DATED AS OF JUNE 16, 2003
TABLE OF CONTENTS
ARTICLE I - THE MERGER
Section 1.01 The Merger; Effective Time......................................................................3
Section 1.02 Conversion of the Securities....................................................................3
Section 1.03 Closing.........................................................................................4
Section 1.04 Effect of the Merger............................................................................4
Section 1.05 Certificate of Incorporation and Bylaws; Directors and Officers.................................4
Section 1.06 Further Actions.................................................................................5
Section 1.07 Restrictions on Resale..........................................................................5
Section 1.08 Exchange of Certificates........................................................................6
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF AUGI
Section 2.01 Organization, Standing and Power................................................................6
Section 2.02 Capitalization..................................................................................7
Section 2.03 Authority for Agreement.........................................................................7
Section 2.04 Issuance of AUGI Shares.........................................................................7
Section 2.05 SEC Reports; Financial Statements...............................................................7
Section 2.06 Governmental Consent............................................................................8
Section 2.07 Litigation......................................................................................8
Section 2.08 Interested Party Transactions...................................................................8
Section 2.09 Compliance with Applicable Laws.................................................................8
Section 2.10 No Undisclosed Liabilities......................................................................9
Section 2.11 Tax Returns and Payment.........................................................................9
Section 2.12 Tax-Free Reorganization.........................................................................9
Section 2.13 Full Disclosure.................................................................................9
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF LIFETIME.
Section 3.01 Organization, Standing and Power...............................................................10
Section 3.02 Capitalization.................................................................................10
Section 3.03 Authority for Agreement........................................................................10
Section 3.04 Subsidiaries...................................................................................10
Section 3.05 Lifetime Agreements............................................................................10
Section 3.06 No Undisclosed Liabilities.....................................................................10
Section 3.07 Finders' Fees..................................................................................11
ARTICLE IV - CERTAIN COVENANTS AND AGREEMENTS
Section 4.01 Covenants of Lifetime..........................................................................11
Section 4.02 Covenants of AUGI..............................................................................11
Section 4.03 Covenants of the Parties.......................................................................12
ARTICLE V - CONDITIONS PRECEDENT
Section 5.01 Conditions Precedent to the Parties' Obligations...............................................13
Section 5.02 Conditions Precedent to the Obligations of AUGI................................................13
Section 5.03 Conditions Precedent to the Obligations of Lifetime............................................15
ARTICLE VI - TERMINATION, AMENDMENT AND WAIVER
Section 6.01 Termination....................................................................................15
Section 6.02 Effect of Termination..........................................................................16
ARTICLE VII - CONFIDENTIALITY
Section 7.01 Confidentiality................................................................................16
ARTICLE VIII - INDEMNIFICATION
Section 8.01 Indemnification by AUGI .......................................................................16
Section 8.02 Indemnification by Lifetime....................................................................16
Section 8.03 Indemnification of Exchange Agent..............................................................17
Section 8.04 Survival of Indemnification....................................................................17
ARTICLE IX - MISCELLANEOUS
Section 9.01 Non-survival of Representations and Warranties.................................................18
Section 9.02 Expenses.......................................................................................18
Section 9.03 Applicable Law.................................................................................18
Section 9.04 Notices........................................................................................19
Section 9.05 Entire Agreement...............................................................................20
Section 9.06 Assignment.....................................................................................20
Section 9.07 Headings; References...........................................................................20
Section 9.08 Counterparts...................................................................................20
Section 9.09 No Third Party Beneficiaries...................................................................20
Section 9.10 Severability; Enforcement......................................................................20
Section 9.11 Rules of Construction..........................................................................21
Section 9.12 Exhibits.......................................................................................21
Section 9.13 Interpretation.................................................................................21
EXHIBITS
Certificate of Merger....................................................................................A
Certificate of Designation of Series B-2 Convertible Preferred Stock.....................................B
Certificate of Designation of Series B-3 Convertible Preferred Stock.....................................C
AUGI Financial Statements................................................................................D
Closing Agreement .......................................................................................E
Registration Rights Agreement ...........................................................................F
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER dated as of June 16,
2003 (the "Agreement") by and among American United Global, Inc., a corporation
formed under the laws of the State of Delaware ("AUGI"), Lifetime Healthcare
Services, Inc., a corporation formed under the laws of the State of Delaware
("Lifetime") and Lifetime Acquisition Corp., a corporation newly formed under
the laws of the State of Delaware and a wholly owned and operated subsidiary of
AUGI ("Merger Sub") AUGI, Lifetime and Merger Sub are sometimes referred to
herein individually as a "Party" and collectively as the "Parties. This
Agreement amends and restates in its entirety that certain Agreement and Plan of
Merger dated as of April 7, 2003 by and among the Parties hereto (the "Prior
Agreement"), which Prior Agreement is hereby rendered null and void ab initio.
PREAMBLE
WHEREAS, AUGI, Lifetime and Merger Sub have determined that a business
combination between the Parties is advisable and in the best interests of their
respective companies and stockholders, and presents an opportunity for their
respective companies to achieve long-term strategic and financial benefits;
WHEREAS, AUGI has proposed to acquire Lifetime in a merger transaction
pursuant to the terms and subject to the conditions of this Agreement and in
accordance with the GCL (as hereinafter defined), Lifetime shall become a wholly
owned subsidiary of AUGI (the "Merger") through the merger of Merger Sub with
and into Lifetime;
WHEREAS, In the Merger all issued and outstanding shares of capital stock
of Lifetime (the "Lifetime Shares") held by the stockholders of Lifetime (the
"Lifetime Stockholders") shall be cancelled and converted into the right to
receive an aggregate of 467,500 shares of Series B-2 Convertible Preferred Stock
of AUGI (the "Merger Shares"), which Merger Shares are convertible into shares
of AUGI's common stock, par value $.01 per share (the "Common Shares");
WHEREAS, prior to "Effective Date" (as hereinafter defined) of the Merger,
AUGI intends to declare and make a dividend, consisting of an aggregate of
232,500 shares of AUGI Series B-3 Convertible Preferred Stock to all record
holders of its then issued and outstanding Common Shares;
WHEREAS, the obligation of the Parties to effect the Merger is subject to
the conditions set forth in Article V hereof;
WHEREAS, the Parties intend that the Merger qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the parties intend this Agreement to qualify as a
"plan of reorganization" within the meaning of Treasury Regulation Sections
1.368-2(g) and 1.368-3(a).
WHEREAS, AUGI, Lifetime and Merger Sub are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act").
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein, the Parties hereto, intending
to be legally bound, hereby agree as follows:
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
"Applicable Law" means any domestic or foreign law, statute, regulation,
rule, policy, guideline or ordinance applicable to the businesses of the
Parties, the Merger and/or the Parties.
"Conversion Shares" shall mean that number of Common Shares of AUGI that
are required to be issued upon conversion into Common Shares of all, and not
less than all, of (a) the Merger Shares issued on the Effective Date of the
Merger, and (b) the Dividend Shares issued or declared to be issued prior to the
Effective Date of the Merger, as contemplated by this Agreement.
"Dividend Shares" shall mean an aggregate of 232,500 shares of Series B-3
Convertible Preferred Stock of AUGI which shall be issued as a dividend to the
record holders of AUGI Common Shares on the "Dividend Record Date" (as that term
is hereinafter defined).
"Dollar" and "$" means lawful money of the United States of America.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United States
of America as promulgated by the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board or any successor
Institutes concerning the treatment of any accounting matter.
"GCL" means the General Corporation Law of the State of Delaware.
"Knowledge" means the knowledge after reasonable inquiry.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest, encumbrance or other adverse claim of any
kind in respect of such property or asset.
"Material Adverse Effect" with respect to any entity or group of entities
means any event, change or effect that has or would have a materially adverse
effect on the financial condition, business or results of operations of such
entity or group of entities, taken as a consolidated whole.
"Person" means any individual, corporation, partnership, trust or
unincorporated organization or a government or any agency or political
subdivision thereof.
"Stock Purchase Agreement" means that certain agreement dated as of March
21, 2003, as amended through the date of this Agreement, by and among Lifetime,
Redwood Investment Associates, LP and New York Medical, Inc. ("NYMI") providing
for the acquisition of NYMI by Lifetime, including the exhibits thereto.
"Surviving Entity" shall mean Lifetime as the surviving entity in the
Merger as provided in Section 1.03.
"Tax" (and, with correlative meaning, "Taxes" and "Taxable") means:
(i) any income, alternative or add-on minimum tax, gross receipts tax,
sales tax, use tax, ad valorem tax, transfer tax, franchise tax, profits
tax, license tax, withholding tax, payroll tax, employment tax, excise tax,
severance tax, stamp tax, occupation tax, property tax, environmental or
windfall profit tax, custom, duty or other tax, impost, levy, governmental
fee or other like assessment or charge of any kind whatsoever together with
any interest or any penalty, addition to tax or additional amount imposed
with respect thereto by any governmental or Tax authority responsible for
the imposition of any such tax (domestic or foreign), and
(ii) any liability for the payment of any amounts of the type
described in clause (i) above as a result of being a member of an
affiliated, consolidated, combined or unitary group for any Taxable period,
and
(iii) any liability for the payment of any amounts of the type
described in clauses (i) or (ii) above as a result of any express or
implied obligation to indemnify any other person.
"Tax Return" means any return, declaration, form, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
ARTICLE I
THE MERGER
SECTION 1.01 THE MERGER; EFFECTIVE TIME.
(i) The Merger........At the Effective Time and subject to and upon
the terms and conditions of this Agreement, the Merger Sub shall, and AUGI
shall cause the Merger Sub to, merge with and into Lifetime in accordance
with the provisions of the GCL, the separate corporate existence of the
Merger Sub shall cease and Lifetime shall continue as the Surviving Entity.
The Effective Time of the Merger shall occur upon the filing with the
Secretary of State of the State of Delaware of a Certificate of Merger (the
"Certificate of Merger") substantially in the form of Exhibit A and
executed in accordance with the applicable provisions of the GCL, or at
such later time as may be agreed to by AUGI and Lifetime and specified in
the Certificate of Merger subject to the satisfaction or waiver of each of
the conditions set forth in Article V (the "Effective Time"). The date on
which the Effective Time occurs is referred to as the "Effective Date."
Provided that this Agreement has not been terminated pursuant to Article
VI, the Parties will cause the Certificate of Merger to be filed as soon as
practicable after the Closing.
Upon the terms and subject to the conditions set forth in this Agreement
and in accordance with the GCL, at the Effective Time, all Lifetime Shares shall
be converted into the right to receive the Merger Shares.
(ii) Exchange Agent. AUGI's corporate counsel, ▇▇▇▇▇▇▇, Savage,
Kaplowitz, Wolf & Marcus, LLP, shall act as the exchange agent (the
"Exchange Agent") for the purpose of exchanging Lifetime Shares for the
Merger Shares. At or prior to the Effective Date (as hereinafter defined),
AUGI shall deliver to the Exchange Agent certificates evidencing an
aggregate of 467,500 shares of AUGI Series B-2 Convertible Preferred Stock.
The rights, preferences and privileges of the Merger Shares, including the
terms upon which such Merger Shares are convertible into Common Shares, are
set forth in the form of Certificate of Designation for such Series B-2
Preferred Shares attached hereto as Exhibit B (the "Certificate - Merger
Shares").
SECTION 1.02 CONVERSION OF SECURITIES.
(i) Conversion of Lifetime Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of AUGI, Merger Sub, Lifetime
or the holders of any of their respective securities:
(a) Each of the 1,071 issued and outstanding Lifetime Shares
issued and outstanding immediately prior to the Effective Time,
including any rights with respect thereto, shall be converted into and
represent the right to receive, and shall be exchangeable for, that
number of Merger Shares being the quotient obtained by dividing the
467,500 by 1,071 (the "Conversion Rate"), or approximately 436.507
Merger Shares for each issued and outstanding Lifetime Share. In the
event and to the extent that, for any reason, the aggregate number of
issued and outstanding Lifetime Shares as at the Effective Time of the
Merger shall be other than 1,071 Lifetime Shares, the Conversion Rate
shall be appropriately adjusted in that 467,500 shall be divided by
the then appropriate number of issued and outstanding Lifetime Shares.
(b) All Lifetime Shares shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive
the Merger Shares to be issued pursuant to this Section 1.02(i)(a)
upon the surrender of such certificate in accordance with Section
1.08.
(c) Each Lifetime Share that immediately prior to the Effective
Time is held by Lifetime as a treasury share shall be cancelled and
retired without payment of any consideration therefor and without any
conversion thereof into a right to receive the Merger Shares.
(ii) Conversion of Merger Sub Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of AUGI, Merger Sub,
Lifetime or the holders of any of their respective securities, each share
of capital stock of Merger Sub outstanding immediately prior to the
Effective Time shall be converted into one share of the common stock of the
Surviving Entity and the share of common stock of the Surviving Entity so
issued in such conversion shall constitute the only outstanding share of
capital stock of the Surviving Entity and the Surviving Entity shall be a
wholly owned subsidiary of AUGI.
(iii) Conversion Shares to be Reserved. Subject to the terms and
conditions set forth in this Agreement, at and after the Closing, AUGI
shall reserve such number of Conversion Shares, including any adjustments
by reason of the anti-dilution provisions contained in the Certificate -
Merger Shares and the Certificate - Dividend Shares (collectively, the
"Certificates") therefor.
(iv) Exemption from Registration. The Parties intend that the Merger
Shares to be conveyed by AUGI to the Lifetime shall be exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) of
the Securities Act and the rules and regulations promulgated thereunder.
SECTION 1.03 CLOSING.
The closing of the Merger (the "Closing") will take place at the offices of
▇▇▇▇▇▇▇, Savage, Kaplowitz, Wolf & Marcus, LLP, counsel to AUGI ("GSK"), at ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, within one (1) business day
following the satisfaction or waiver of the conditions precedent set forth in
Article V or at such other date as AUGI and Lifetime shall agree (the "Closing
Date"), but in no event shall the Closing Date occur later than June 17, 2003.
SECTION 1.04 EFFECT OF THE MERGER.
The Merger shall have the effect set forth in Sections 259 and 261 of the
GCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time, all the properties, rights, privileges, powers and
franchises of Lifetime and Merger Sub shall vest in the Surviving Entity, and
all debts, liabilities and duties of Lifetime and Merger Sub shall become the
debts, liabilities and duties of the Surviving Entity.
SECTION 1.05 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS.
Pursuant to the Merger:
(i) The Certificate of Incorporation and Bylaws of AUGI as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation and Bylaws of AUGI following the Merger.
(ii) The directors of AUGI subsequent to the Merger shall be the
current members of AUGI's Board of Directors, until the earlier of their
death, resignation or removal or until their respective successors are duly
appointed and qualified. The officers of AUGI subsequent to the Merger
shall be the current officers of AUGI.
SECTION 1.06 FURTHER ACTIONS.
If, at any time after the Effective Time, the Surviving Entity considers or
is advised that any deeds, bills of sale, assignments, assurances or any other
actions or things are necessary or desirable to vest, perfect or confirm (of
record or otherwise) in the Surviving Entity its right, title or interest in, to
or under any of the rights, properties, or assets of either Lifetime or Merger
Sub, or otherwise to carry out the intent and purposes of this Agreement, the
officers and directors of the Surviving Entity will be authorized to execute and
deliver, in the name and on behalf of each of Lifetime and Merger Sub, all such
deeds, bills of sale, assignments and assurances and to take and do, in the name
and on behalf of each of Lifetime and Merger Sub, all such other actions and
things as the Board of Directors of the Surviving Entity may determine to be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, properties or assets in the Surviving
Entity or otherwise to carry out the intent and purposes of this Agreement.
SECTION 1.07 RESTRICTIONS ON RESALE
(i) The Merger Shares. The Merger Shares will not be registered under
the Securities Act, or the securities laws of any state, and cannot be
transferred, hypothecated, sold or otherwise disposed of until; (i) a
registration statement with respect to such securities is declared
effective under the Securities Act, or (ii) AUGI receives an opinion of
counsel for the stockholder, reasonably satisfactory to counsel for AUGI,
that an exemption from the registration requirements of the Securities Act
is available.
The certificates representing the number of Merger Shares for which the
Lifetime Shares shall have been issued pursuant to this Agreement shall contain
a legend substantially as follows:
"THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL
A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE
UNDER SUCH ACT, OR AMERICAN UNITED GLOBAL, INC. RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO COUNSEL FOR AMERICAN
UNITED GLOBAL, INC. THAT AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT IS AVAILABLE."
(ii) The Conversion Shares. Except as set forth in Section 4.02, the
Conversion Shares will not be registered under the Securities Act, or the
securities laws of any state, and cannot be transferred, hypothecated, sold
or otherwise disposed of until; (i) a registration statement with respect
to such securities is declared effective under the Securities Act, or (ii)
AUGI receives an opinion of counsel for the stockholder, reasonably
satisfactory to counsel for AUGI, that an exemption from the registration
requirements of the Securities Act is available.
The certificates representing the number of Conversion Shares into which
the Merger Shares may be converted shall contain a legend substantially as
follows:
"THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL
A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE
UNDER SUCH ACT, OR AMERICAN UNITED GLOBAL, INC. RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO COUNSEL FOR AMERICAN
UNITED GLOBAL, INC. THAT AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT IS AVAILABLE."
"PURSUANT TO THE AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
DATED AS OF JUNE 16, 2OO3 BY AND AMONG AMERICAN UNITED GLOBAL, INC.,
LIFETIME HEALTHCARE SERVICES, INC. AND LIFETIME ACQUISITION CORP., THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE MAY NOT BE
OFFERED, SOLD, SOLD SHORT OR OTHERWISE DISPOSED OF, EXCEPT IN
ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN A LOCK-UP
AGREEMENT BY AND BETWEEN THE HOLDER HEREOF AND AMERICAN UNITED GLOBAL,
INC."
SECTION 1.08 EXCHANGE OF CERTIFICATES.
(i) EXCHANGE OF CERTIFICATES. After the Effective Time and pursuant to
a customary letter of transmittal or other instructional form provided by
the Exchange Agent to the Lifetime Stockholders, the Lifetime Stockholders
shall be required to surrender all their Lifetime Shares to the Exchange
Agent, and the Lifetime Stockholders shall be entitled upon such surrender
to receive in exchange therefor certificates representing the proportionate
number of Merger Shares into which the Lifetime Shares theretofore
represented by the stock transfer forms so surrendered shall have been
exchanged pursuant to this Agreement. Until so surrendered, each
outstanding certificate which, prior to the Effective Time, represented
Lifetime Shares shall be deemed for all corporate purpose, subject to the
further provisions of this Article I, to evidence the ownership of the
number of whole Merger Shares for which such Lifetime Shares have been so
exchanged. No dividend payable to holders of Merger Shares of record as of
any date subsequent to the Effective Time shall be paid to the owner of any
certificate which, prior to the Effective Time, represented Lifetime
Shares, until such certificate or certificates representing all the
relevant Lifetime Shares, together with a stock transfer form, are
surrendered as provided in this Article I or pursuant to letters of
transmittal or other instructions with respect to lost certificates
provided by the Exchange Agent.
(ii) FULL SATISFACTION OF RIGHTS. All Merger Shares for which the
Lifetime Shares shall have been exchanged pursuant to this Article I shall
be deemed to have been issued in full satisfaction of all rights pertaining
to the Lifetime Shares.
(iii) EXCHANGE OF CERTIFICATES. All certificates representing Lifetime
Shares converted into the right to receive Merger Shares pursuant to this
Article I shall be furnished to AUGI subsequent to delivery thereof to the
Exchange Agent pursuant to this Agreement.
(iv) CLOSING OF TRANSFER BOOKS. On the Effective Date, the stock
transfer book of Lifetime shall be deemed to be closed and no transfer of
Lifetime Shares shall thereafter be recorded thereon.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF AUGI
Except as set forth in the schedules to this Agreement, disclosure in any
one of which shall apply to any and all representations and warranties made in
this Agreement, and except as otherwise disclosed in writing to Lifetime, AUGI
hereby represents and warrants to Lifetime, as of the date of this Agreement and
as of the Effective Time, as follows:
SECTION 2.01 ORGANIZATION, STANDING AND POWER.
AUGI is a company duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has corporate power and authority to
conduct its business as presently conducted by it and to enter into and perform
this Agreement and to carry out the transactions contemplated by this Agreement.
AUGI is duly qualified to do business as a foreign corporation doing business in
each state in which it owns or leases real property and where the failure to be
so qualified and in good standing would not have a Material Adverse Effect on
AUGI or its business. Other than its equity interest in Western Power &
Equipment Corp., the shares of which are to be distributed to the stockholders
of AUGI (the "AUGI Stockholders") as of the Record Date therefor, AUGI does not
have an ownership interest in any corporation, partnership (general or limited),
limited liability company or other entity, whether foreign or domestic
(collectively such ownership interests including capital stock).
SECTION 2.02 CAPITALIZATION.
There are 42,700,000 shares of capital stock of AUGI authorized, consisting
of 40,000,000 Common Shares, $0.01 par value per share, and 2,700,000 shares of
preferred stock (the "Preferred Shares"). The Preferred Shares are divided into
series as follows: (i) 1,200,000 are authorized for issuance as 12.5% Series A
preferred shares (the "Series A Preferred Shares"); and (ii) 1,500,000 are
authorized for issuance as Series B preferred shares (the "Series B Preferred
Shares"); which Series B Preferred Shares are issuable with such rights,
privileges and designations as the board of directors of AUGI may from time to
time determine. As at the date of this Agreement, there are: (a) 1,997,624
Common Shares issued and outstanding, (b) no Series A Preferred Shares issued
and outstanding, (c) an aggregate of 407,094 Series B-1 Preferred Shares issued
and outstanding, (d) no Series B-2 Preferred Shares issued and outstanding, and
(e) no Series B-3 Preferred Shares issued and outstanding.
Except as disclosed on Schedule 2.02(a) hereto, no Shares have been
reserved for issuance to any Person, and there are no other outstanding rights,
warrants, options or agreements for the purchase of Shares except as provided in
this Agreement. Except as disclosed on Schedule 2.02(b) hereto, no Person is
entitled to any rights with respect to the issuance or transfer of the Merger
Shares or the Conversion Shares. All outstanding Shares are validly issued,
fully paid, non-assessable, not subject to pre-emptive rights and have been
issued in compliance with all state and federal securities laws or other
Applicable Law.
SECTION 2.03 AUTHORITY FOR AGREEMENT.
The execution, delivery, and performance of this Agreement by AUGI has been
duly authorized by all necessary corporate action, and this Agreement, upon its
execution by the Parties, will constitute the valid and binding obligation of
AUGI enforceable against it in accordance with and subject to its terms, except
as enforceability may be affected by bankruptcy, insolvency or other laws of
general application affecting the enforcement of creditors' rights. Except as
set forth above or in Schedule 2.03 attached hereto, the execution and
consummation of the transactions contemplated by this Agreement and compliance
with its provisions by AUGI will not violate any provision of Applicable Law and
will not conflict with or result in any breach of any of the terms, conditions,
or provisions of, or constitute a default under, AUGI's Certificate of
Incorporation or Bylaws, as the case may be and in each case as amended, or, in
any material respect, any indenture, lease, loan agreement or other agreement or
instrument to which AUGI is a party or by which it or any of its properties are
bound, or any decree, judgment, order, statute, rule or regulation applicable to
AUGI except to the extent that any breach or violation of any of the foregoing
would not constitute or result in a Material Adverse Effect on AUGI taken as a
whole.
SECTION 2.04 ISSUANCE OF AUGI SHARES
The Merger Shares issuable to the Lifetime Stockholders as the holders of
the Lifetime Shares will when issued pursuant to this Agreement be duly and
validly authorized and issued, fully paid and non-assessable. The Conversion
Shares issuable to the current Lifetime Stockholders as the then holders of the
Merger Shares will when issued pursuant to the Certificate - Merger Shares be
duly and validly authorized and issued, fully paid and non-assessable.
SECTION 2.05 SEC REPORTS; FINANCIAL STATEMENTS.
(i) AUGI has made available to Lifetime (through reference to
documents filed with the Securities Exchange Commission ("SEC") by its
Electronic Data Gathering Analysis and Retrieval ("▇▇▇▇▇") or otherwise) a
correct and complete copy of each report, schedule and registration
statement filed by AUGI with the SEC since its inception (the "SEC
Reports"), which are all the forms, reports and documents (other than
preliminary material) required to be filed by AUGI with the SEC since
inception. With the exception of any Forms 3, 4 and 5 and any Schedule 13D
filed by AUGI on behalf of the AUGI Stockholders, the SEC Reports (a) were
prepared in compliance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (b) 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
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(ii) Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the SEC Reports was prepared
in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto and
except that unaudited statements do not contain footnotes in substance or
form required by GAAP, as is permitted by the Exchange Act). Such financial
statements fairly present, or will fairly present, the consolidated
financial position of AUGI as at the dates thereof and the consolidated
results of their operations and their consolidated cash flows for the
periods then ended, subject, in the case of unaudited interim financial
statements, to normal, recurring year-end audit adjustments.
(iii) To the Knowledge of AUGI, except as disclosed in the
consolidated financial statements contained in the SEC Reports or on
Schedule 2.05 hereof, there has been no material change in the financial
condition, operations or business of AUGI since January 31, 2003.
(iv) The financial statements of AUGI for the fiscal year ended July
31, 2002 as filed with the SEC on Form 10-K and the financial statements of
AUGI for the quarters ended October 30, 2002 and January 31, 2003 as filed
with the SEC on Form 10-Q (collectively, the "AUGI Financial Statements")
and included among the SEC Reports are attached hereto as Exhibit D.
(v) Except as otherwise disclosed in the consolidated financial
statements contained in the SEC Reports, AUGI does not have any material
liabilities.
SECTION 2.06 GOVERNMENTAL CONSENT
No consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party to
any agreement with AUGI, is required by or with respect to AUGI in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for such consents, waivers, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under (i) applicable securities laws, or (ii) the GCL.
SECTION 2.07 LITIGATION
Except as disclosed on Schedule 2.07 hereof, there is no action, suit,
investigation, audit or proceeding pending against, or to the best knowledge of
AUGI threatened against or affecting, AUGI or any of its assets or properties
before any court or arbitrator or any governmental body, agency or official.
SECTION 2.08 INTERESTED PARTY TRANSACTIONS
Except as set forth in Schedule 2.08 (a) attached hereto, AUGI is not
indebted to any officer or director of AUGI (except for compensation and
reimbursement of expenses incurred in the ordinary course of business), and no
such person is indebted to AUGI, except as disclosed on Schedule 2.08 (b) hereof
or in the SEC Reports.
SECTION 2.09 COMPLIANCE WITH APPLICABLE LAWS.
The business of AUGI has not been, and is not being, conducted in violation
of any Applicable Law, except for possible violations which individually or in
the aggregate have not had and are not reasonably likely to have a Material
Adverse Effect. No investigation or review by any governmental entity with
respect to AUGI is pending or, to the Knowledge of AUGI, threatened, nor has any
governmental entity indicated an intention to conduct the same, except for
investigations or reviews which individually or in the aggregate would not have,
nor be reasonably likely to have, a Material Adverse Effect.
SECTION 2.10 NO UNDISCLOSED LIABILITIES.
Except as set forth on Schedule 2.10 hereto, there are no liabilities or
debts of AUGI of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances which could reasonably be expected to result
in such a liability or debt.
SECTION 2.11 TAX RETURNS AND PAYMENT
AUGI has duly and timely filed all material Tax Returns required to be
filed by it and has duly and timely paid all Taxes shown thereon to be due,
except as reflected in the SEC Reports and except for Taxes being contested in
good faith. Except as disclosed in the SEC Reports, there is no material claim
for Taxes that is a lien against the property of AUGI other than liens for Taxes
not yet due and payable, none of which Taxes is material. AUGI has not received
notification of any audit of any Tax Return of AUGI being conducted or pending
by a Tax authority where an adverse determination could have a Material Adverse
Effect, no extension or waiver of the statute of limitations on the assessment
of any Taxes has been granted by AUGI which is currently in effect, and AUGI is
not a party to any agreement, contract or arrangement with any Tax authority or
otherwise, which may result in the payment of any material amount in excess of
the amount reflected on the SEC Reports.
SECTION 2.12 TAX-FREE REORGANIZATION
None of AUGI, Merger Sub nor any entity affiliated therewith: (i) has
undertaken the obligation to investigate as to whether AUGI, Merger Sub or any
entity affiliated therewith has taken or agreed to take any action that would
prevent the Merger from qualifying as a reorganization within the meaning of
Section 368 of the Code; or (ii) makes any representation or warranty as to the
qualification of the Merger as a reorganization within the meaning of Section
368 of the Code. Based on the foregoing, to the knowledge of AUGI and Merger Sub
none of AUGI, Merger Sub nor any entity affiliated therewith has taken or agreed
to take any action or is aware of any fact or circumstance that would prevent
the Merger from qualifying as a reorganization within the meaning of Section 368
of the Code.
SECTION 2.13 FULL DISCLOSURE.
The SEC Reports and the representations and warranties of AUGI contained in
this Article II of this Agreement do not contain or will not contain, any untrue
statement of a material fact, or omit to state a material fact required to be
stated herein or therein or necessary to make the statements herein or therein,
in the light of the circumstances under which they were made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LIFETIME
Except as set forth in the schedules to this Agreement, disclosure in any
one of which shall apply to any and all representations and warranties made in
this Agreement, and except as otherwise disclosed in writing to AUGI and Merger
Sub, Lifetime hereby represents and warrants to AUGI and Merger Sub, as of the
date of this Agreement and as of the Effective Time, as follows:
SECTION 3.01 ORGANIZATION, STANDING AND POWER.
Lifetime is a privately held corporation duly organized under the laws of
the State of Delaware, and has full corporate power and authority to conduct its
business as presently conducted by it and to enter into and perform this
Agreement and to carry out the transactions contemplated by this Agreement.
Lifetime is duly qualified to do business as a foreign corporation doing
business in each state or other jurisdiction in which it owns or leases real
property and where the failure to be so qualified and in good standing would
have a Material Adverse Effect. Other than as provided in Section 3.04 below,
Lifetime does not have any ownership interest in any corporation, partnership
(general or limited), limited liability company or other entity, whether foreign
or domestic (collectively such ownership interests including capital stock).
SECTION 3.02 CAPITALIZATION.
There are 1,500 Lifetime Shares authorized, consisting of 1,500 shares of
common stock (the "Lifetime Common Shares"), no par value per share. As of the
date of this Agreement, there were 1,071 issued and outstanding Lifetime Common
Shares. Except as disclosed on Schedule 3.02 (a) hereto, no Lifetime Shares have
been reserved for issuance to any Person, and there are no other outstanding
rights, warrants, options or agreements for the purchase of Lifetime Shares
except as provided in this Agreement. Except as disclosed on Schedule 3.02(b)
hereto, no Person is entitled to any rights with respect to the conversion,
exchange or delivery of the Lifetime Shares. The Lifetime Shares have been
issued in compliance with all Applicable Law.
Lifetime will, prior to the Closing, have caused to be cancelled all 429
Lifetime Common Shares issued to and in the name of the ▇▇▇▇▇ Family Irrevocable
Stock Trust (the "Trust") in return for no consideration to the Trust, subject
to receipt by Lifetime of the Trust's written consent to such cancellation.
.
SECTION 3.03 AUTHORITY FOR AGREEMENT.
The execution, delivery and performance of this Agreement by Lifetime has
been duly authorized by all necessary corporate action, and this Agreement
constitutes the valid and binding obligation of Lifetime, enforceable against it
in accordance with its terms, except as enforceability may be affected by
bankruptcy, insolvency or other laws of general application affecting the
enforcement of creditors' rights. The execution and consummation of the
transactions contemplated by this Agreement and compliance with its provisions
by Lifetime will not violate any provision of Applicable Law and will not
conflict with or result in any breach of any of the terms, conditions, or
provisions of, or constitute a default under, any of their respective
certificates of incorporation or bylaws, or, in any material respect, any
indenture, lease, loan agreement or other agreement instrument to which Lifetime
is a party or by which it or any of its properties are bound, or any decree,
judgment, order, statute, rule or regulation applicable to Lifetime, except to
the extent that any breach or violation of any of the foregoing would not
constitute or result in a Material Adverse Effect.
SECTION 3.04 SUBSIDIARIES
Except as disclosed on Schedule 3.04 hereof, Lifetime has no subsidiaries.
SECTION 3.05 LIFETIME AGREEMENTS
Except as provided on Schedule 3.05 hereof, Lifetime is not a party to any
material agreements.
SECTION 3.06 NO UNDISCLOSED LIABILITIES.
Except for such liabilities incurred in connection with the Lifetime
Agreements, including but not limited to professional fees, there are no
material liabilities or debts of Lifetime of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, and there
is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability or debt.
SECTION 3.07 FINDERS' FEES
Lifetime has not incurred, nor will it incur, directly or indirectly, any
liability for brokers' or finders' fees or agents' commissions or investment
bankers' fees or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
SECTION 3.08 NO BREACH OR DEFAULT
There are no defaults or breaches in the performance of any material
covenant or of any material representation or warranty by any of the parties to
any of the Lifetime Material Agreements, including without limitation, Redwood
Investment Associates, LP (the "Lifetime Material Agreements").
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
SECTION 4.01 COVENANTS OF LIFETIME
(i) General. Lifetime covenants and agrees that, during the period
from the date of this Agreement until the Closing Date, Lifetime shall,
other than as contemplated by this Agreement or for the purposes of
effecting the Merger and Closing pursuant to this Agreement or other than
to the extent no Material Adverse Effect would be incurred, conduct its
business as presently operated and solely in the ordinary course, and
consistent with such operation, and, in connection therewith, incur no
material liabilities without the written consent of AUGI, which consent
shall not be unreasonably withheld.
(ii) Agreements. Lifetime will exercise its best efforts to enter into
and consummate the Lifetime Agreements referenced in Section 3.05 above.
(iii) Cancellation of Lifetime Common Shares. Lifetime covenants and
agrees that it will prior to the Closing of the Merger have caused to be
cancelled all 429 Lifetime Common Shares surrendered thereto by the Trust
as of April 25, 2003. Lifetime further covenants and agrees that it will
have issued no consideration to the Trust in return therefor.
SECTION 4.02 COVENANTS OF AUGI
(i) Closing Agreement. On the Effective Date of the Merger, AUGI,
certain of the Lifetime Stockholders, the Trust, Redwood Investments
Associates, L.P., ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇") shall
execute and deliver a closing agreement in substantially the form of
Exhibit E annexed hereto and made a part hereof (the "Closing Agreement").
(ii) Cessation of Business. With the exception of AUGI's ownership of
shares of common stock of Western Power and Equipment Corporation AUGI
shall, at the Effective Time, have no other business operations.
(iii) Registration of Conversion Shares. AUGI shall register for
re-sale the Conversion Shares issuable upon the conversion of the Merger
Shares and shall file a registration statement with respect to such
registration with the SEC no later than thirty (30) days after the Closing
Date; provided, however, that Lifetime shall prior thereto have caused all
Lifetime Stockholders to enter into a registration rights agreement with
AUGI (the "Registration Rights Agreement") substantially in the form
appended hereto as Exhibit F.
(iv) Lock Up Agreement. AUGI shall prior to Closing enter into a
lock-up agreement (the "Lock-up Agreement") to be executed by and among
itself and all Lifetime Stockholders, which shall restrict the re-sale of
Conversion Shares issuable upon the conversion of the Merger Shares for a
period of 210 days after the Closing Date.
(v) Dividend Shares... On a date which shall be not less than one (1)
day prior to the Effective Date of the Merger, the board of directors of
AUGI shall set a record date (the "Dividend Record Date") and resolve that
a dividend of an aggregate of 232,500 Dividend Shares be made to all
holders of record of AUGI Common Shares as at such Dividend Record Date,
which Dividend Record Date shall be set as soon thereafter as feasible. The
rights, preferences and privileges of the Dividend Shares, including the
terms upon which such Dividend Shares are convertible into Common Shares
are set forth in the form of Certificate of Designations for the Series B-3
Preferred Shares, constituting the Dividend Shares, and annexed hereto as
Exhibit C and made a part hereof (the "Certificate - Dividend Shares"). The
holders of securities of Lifetime (including the Lifetime Stockholders)
shall not be entitled to receive any of the 232,500 Dividend Shares.
SECTION 4.03 COVENANTS OF THE PARTIES
(i) Tax-free Reorganization. The Parties intend that the Merger
qualify as a Tax-free reorganization under Sections 368(a) of the Code, as
amended, and the Parties will take the position for all purposes that the
Merger shall qualify as a reorganization under such Section. In addition,
the Parties covenant and agree that they will not engage in any action, or
fail to take any action, which action or failure to take action would
reasonably be expected to cause the Merger to fail to qualify as a Tax-free
"reorganization" under Section 368(a) of the Code, whether or not otherwise
permitted by the provisions of this Agreement;
(ii) Announcement. Neither Lifetime, on the one hand, nor AUGI on the
other hand, shall issue any press release or otherwise make any public
statement with respect to this Agreement or the transactions contemplated
hereby without the prior consent of the other Party (which consent shall
not be unreasonably withheld), except as may be required by applicable law
or securities regulation. Notwithstanding anything in this Section 4.03 to
the contrary, the Parties will, to the extent practicable, consult with
each other before issuing, and provide each other the opportunity to review
and comment upon, any such press release or other public statements with
respect to this Agreement and the transactions contemplated hereby whether
or not required by Applicable Law.
(iii) Notification of Certain Matters. Lifetime shall give prompt
notice to AUGI, and AUGI shall give prompt notice to Lifetime, of:
(a) The occurrence, or nonoccurrence, of any event the
occurrence, or nonoccurrence, of which would be reasonably likely to
cause any representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect at or prior to the
Effective Time; and
(b) Any material failure of Lifetime on the one hand, or AUGI, on
the other hand, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder.
(iv) Reasonable Best Efforts. Before Closing, upon the terms and
subject to the conditions of this Agreement, the Parties agree to use their
respective reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable (subject to applicable laws) to consummate and make effective the
Merger and other transactions contemplated by this Agreement as promptly as
practicable including, but not limited to:
(a) The preparation and filing of all forms, registrations and
notices required to be filed to consummate the Merger, including
without limitation, any approvals, consents, orders, exemptions or
waivers by any third party or governmental entity; and
(b) The satisfaction of the other Party's conditions precedent to
Closing.
(v) Access to Information
(a) Inspection by Lifetime. AUGI will make available for
inspection by Lifetime, during normal business hours and in a manner
so as not to interfere with normal business operations, all of AUGI's
records (including tax records), books of account, premises, contracts
and all other documents in AUGI's possession or control that are
reasonably requested by Lifetime to inspect and examine the business
and affairs of AUGI. AUGI will cause its managerial employees and
regular independent accountants to be available upon reasonable
advance notice to answer questions of Lifetime concerning the business
and affairs of AUGI. Lifetime will treat and hold as confidential any
information they receive from AUGI in the course of the reviews
contemplated by this Section 4.03(v). No examination by Lifetime will,
however, constitute a waiver or relinquishment by Lifetime of its
rights to rely on AUGI's covenants, representations and warranties
made herein or pursuant hereto.
(b) Inspection by AUGI. Lifetime will make available for
inspection by AUGI, during normal business hours and in a manner so as
not to interfere with normal business operations, all of Lifetime's
records (including tax records), books of account, premises, contracts
and all other documents in Lifetime's possession or control that are
reasonably requested by AUGI to inspect and examine the business and
affairs of Lifetime. Lifetime will cause its managerial employees and
regular independent accountants to be available upon reasonable
advance notice to answer questions of AUGI concerning the business and
affairs of Lifetime. AUGI will treat and hold as confidential any
information they receive from Lifetime in the course of the reviews
contemplated by this Section 4.03 (v). No examination by AUGI will,
however, constitute a waiver or relinquishment by AUGI of its rights
to rely on Lifetime's covenants, representations and warranties made
herein or pursuant hereto.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01 CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS.
The obligations of the Parties as provided herein shall be subject to each
of the following conditions precedent, unless waived by both AUGI and Lifetime:
(i) Consents, Approvals. The Parties shall have obtained all necessary
consents and approvals of their respective boards of directors, their
stockholders (including any applicable classes thereof) and all consents,
approvals and authorizations required under their respective charter
documents, and all material consents, including any material consents and
waivers by the Parties' respective lenders and other third-parties, if
necessary, to the consummation of the transactions contemplated by this
Agreement.
(ii) Absence of Certain Litigation. No action or proceeding shall be
threatened or pending before any governmental entity or authority which, in
the reasonable opinion of counsel for the Parties, is likely to result in a
restraint, prohibition or the obtaining of damages or other relief in
connection with this Agreement or the consummation of the Merger.
SECTION 5.02 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF AUGI
The obligations of AUGI as provided herein shall be subject to each of the
following conditions precedent, unless waived by AUGI:
(i) Consents And Approvals. Lifetime shall have obtained all material
consents, including any material consents and waivers by Lifetime's lenders
and other third-parties, if necessary, to the consummation of the
transactions contemplated by this Agreement.
(ii) Representations and Warranties. The representations and
warranties by Lifetime in Article III herein shall be true and accurate in
all material respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made at and
as of the Closing Date, except to the extent that any changes therein are
specifically contemplated by this Agreement or the same shall not have a
Material Adverse Effect.
(iii) Performance. Lifetime shall have performed and complied in all
material respects with all agreements to be performed or complied with by
it pursuant to this Agreement prior at or prior to the Closing or the same
shall not have a Material Adverse Effect.
(iv) Proceedings and Documents. All corporate, company and other
proceedings in connection with the transactions contemplated by this
Agreement and all documents and instruments incident to such transactions
shall be reasonably satisfactory in substance and form to AUGI and its
counsel, and AUGI and its counsel shall have received all such counterpart
originals (or certified or other copies) of such documents as they may
reasonably request.
(v) Certificate of Good Standing. Lifetime shall have delivered to
AUGI a certificate as to the good standing of Lifetime certified by the
Secretary of State of the State of Delaware on or within two (2) business
days prior to the Closing Date.
(vi) Material Changes. Except as contemplated by this Agreement, since
the date hereof, Lifetime shall not have suffered a Material Adverse
Effect.
(vii) DVI Facility. The Loan and Security Agreement dated December 29,
2000 between DVI Business Credit Corporation and New York Medical, Inc.
(the "DVI Facility") shall have been duly amended on terms and conditions
satisfactory to AUGI, including the grant of a waiver for certain defaults
of New York Medical, Inc. under such facility, and AUGI shall receive
written confirmation that the expiration date of such DVI Loan Facility is
December 29, 2003.
(viii) Due Diligence. AUGI shall have completed to its own
satisfaction due diligence in relation to Lifetime.
(ix) Registration Rights Agreement. AUGI shall have received signed
signature pages of the Registration Rights Agreement from each of the
Lifetime Stockholders.
(x) Lock-Up Agreement. AUGI shall have received a fully executed copy
of the Lock-Up Agreement from each of the Lifetime Stockholders.
(xi) Dividend Shares...The board of directors of AUGI shall have
declared a dividend of the Dividend Shares to all record holders of AUGI
Common Shares as at the Dividend Record Date, and the Certificate -
Dividend Shares shall have been filed with the Secretary of State of the
State of Delaware.
(xii) Acquisition of NYMI. Lifetime shall have consummated the
acquisition of fifty-five percent (55%) of NYMI on terms satisfactory to
AUGI, and have provided documentation thereof to AUGI, which documentation
shall be satisfactory in form and substance to AUGI.
(xiii) Closing Agreement. The Closing Agreement shall have been duly
executed and delivered by the parties thereto.
SECTION 5.03 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF LIFETIME
The obligation of Lifetime on the Closing Date as provided herein shall be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions precedent, unless waived by Lifetime:
(i) Consents And Approvals. AUGI shall have obtained all material
consents, including any material consents and waivers of its respective
lenders and other third-parties, if necessary, to the consummation of the
transactions contemplated by this Agreement.
(ii) Representations And Warranties. The representations and
warranties by AUGI in Article II herein shall be true and accurate in all
material respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made at and
as of the Closing Date, except to the extent that any changes therein are
specifically contemplated by this Agreement or the same shall not have a
Material Adverse Effect.
(iii) Performance. AUGI shall have performed and complied in all
material respects with all agreements to be performed or complied with by
it pursuant to this Agreement prior to or at the Closing or the same shall
not have a Material Adverse Effect.
(iv) Proceedings And Documents. All corporate, company and other
proceedings in connection with the transactions contemplated by this
Agreement and all documents and instruments incident to such transactions
shall be reasonably satisfactory in substance and form to Lifetime and its
counsel, and Lifetime and its counsel shall have received all such
counterpart originals (or certified or other copies) of such documents as
they may reasonably request.
(v) Certificate of Good Standing. AUGI shall have delivered to
Lifetime a certificate as to the good standing of AUGI certified by the
Secretary of State of the State of Delaware on or within two (2) business
days prior to the Closing Date.
(vi) Material Changes. Except as contemplated by this Agreement, since
the date hereof, AUGI shall not have suffered a Material Adverse Effect.
(vii) Certificate of Designation. AUGI shall have filed the
Certificate - Merger Shares with the Secretary of State of the State of
Delaware.
(x) Due Diligence. Lifetime shall have completed to its own
satisfaction due diligence in relation to AUGI.
(xi) Registration Rights Agreement. The Registration Rights Agreement
shall have been entered into by AUGI.
(xii) Closing Agreement. The Closing Agreement shall have been duly
executed and delivered by the parties thereto.
(xiii) Optionee Waivers. The holders of all of the outstanding AUGI
stock options shall have executed and delivered written waivers of any
anti-dilution or other adjustment rights which might otherwise result from
the declaration of the AUGI stock dividend referred to herein.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
SECTION 6.01 TERMINATION.
This Agreement may be terminated and the Merger may be abandoned at any
time prior to the Effective Time by:
(i) The mutual written consent of the Boards of Directors of the
Parties;
(ii) Either AUGI, on the one hand, or Lifetime, on the other hand, if
any governmental entity or court of competent jurisdiction shall have
issued an order, decree or ruling or taken any other action (which order,
decree, ruling or other action the Parties shall use their commercially
reasonable best efforts to lift), which restrains, enjoins or otherwise
prohibits the Merger or the issuance of the Merger Shares pursuant to the
Merger and such order, decree, ruling or other action shall have become
final and non-appealable;
(iii) AUGI, if Lifetime shall have breached in any material respect
any of its representations, warranties, covenants or other agreements
contained in this Agreement, and the breach cannot be or has not been cured
within 15 calendar days after the giving of written notice by AUGI to
Lifetime;
(iv) Lifetime, if AUGI shall have breached in any material respect any
of its representations, warranties, covenants or other agreements contained
in this Agreement, and the breach cannot be or has not been cured within 15
calendar days after the giving of written notice by Lifetime to AUGI; or
(v) Without any action on the part of the Parties if required by
Applicable Law.
SECTION 6.02 EFFECT OF TERMINATION.
If this Agreement is terminated as provided in Section 6.01, written notice
of such termination shall be given by the terminating Party to the other Party
specifying the provision of this Agreement pursuant to which such termination is
made, this Agreement shall become null and void and there shall be no liability
on the part of AUGI or Lifetime, provided, that nothing in this Agreement shall
relieve any Party from any liability or obligation with respect to any willful
breach of this Agreement and provided, further, that termination shall not
affect accrued rights or liabilities of any party.
ARTICLE VII
CONFIDENTIALITY
SECTION 7.01 CONFIDENTIALITY
AUGI, on the one hand, and Lifetime, on the other hand, will keep
confidential all information and documents obtained from the other, including
but not limited to any information or documents provided pursuant to Section
4.03 hereof, which are designated by such Party as confidential (except for any
information disclosed to the public pursuant to a press release authorized by
the Parties) and in the event the Closing does not occur or this Agreement is
terminated for any reason, will promptly return such documents and all copies of
such documents and all notes and other evidence thereof, including material
stored on a computer, and will not use such information for its own advantage,
except to the extent that (i) the information must be disclosed by law, (ii) the
information becomes publicly available by reason other than disclosure by the
Party subject to the confidentiality obligation, (iii) the information is
independently developed without use of or reference to the other Party's
confidential information, (iv) the information is obtained from another source
not obligated to keep such information confidential, or (v) the information is
already publicly known or known to the receiving Party when disclosed as
demonstrated by written documentation in the possession of such Party at such
time.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01 INDEMNIFICATION BY AUGI
AUGI shall indemnify, defend and hold harmless each of Lifetime, any
subsidiary or affiliated thereof and each person who is now, or has been at any
time prior to the date hereof or who becomes prior to the Closing, an officer,
director or partner of Lifetime, any subsidiary or affiliated thereof or an
employee of Lifetime, any subsidiary or affiliated thereof and their respective
heirs, legal representatives, successors and assigns (the "Lifetime Indemnified
Parties") against all losses, claims, damages, costs, expenses (including
attorneys' fees), liabilities or judgments or amounts that are paid in
settlement of or in connection with any threatened or actual claim, action,
suit, proceeding or investigation based in whole or in part on or arising in
whole or in part out of (i) any breach of this Agreement by AUGI or any
subsidiary or affiliated thereof, including but not limited to failure of any
representation or warranty to be true and correct at or before the Closing, or
(ii) any act, omission or conduct of any officer, director or agent of AUGI or
any subsidiary or affiliated thereof prior to the Closing, whether asserted or
claimed prior to, at or after, the Closing, or (iii) relating to the
consummation of the transactions contemplated herein, and any action taken in
connection therewith ("Lifetime Indemnified Liabilities"). Any Lifetime
Indemnified Party wishing to claim indemnification under this Section 8.01, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify AUGI, but the failure so to notify shall not relieve AUGI from any
liability that it may have under this Section 8.01, except to the extent that
such failure would materially prejudice AUGI.
SECTION 8.02 INDEMNIFICATION BY LIFETIME
Lifetime shall indemnify, defend and hold harmless each of AUGI, any
subsidiary or affiliate thereof and each person who is now, or has been at any
time prior to the date hereof or who becomes prior to the Closing, an officer,
director or partner of AUGI, any subsidiary or affiliate thereof or an employee
of AUGI, any subsidiary or affiliate thereof and their respective heirs, legal
representatives, successors and assigns (the "AUGI Indemnified Parties") against
all losses, claims, damages, costs, expenses (including attorneys' fees),
liabilities or judgments or amounts that are paid in settlement of or in
connection with any threatened or actual claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out of
(i) any breach of this Agreement by Lifetime or any subsidiary or affiliate
thereof, including but not limited to failure of any representation or warranty
to be true and correct at or before the Closing, or (ii) any act, omission or
conduct of any officer, director or agent of Lifetime or any subsidiary or
affiliate thereof prior to the Closing, whether asserted or claimed prior to, at
or after, the Closing, or (iii) relating to the consummation of the transactions
contemplated herein, and any action taken in connection therewith ("AUGI
Indemnified Liabilities"). Any AUGI Indemnified Party wishing to claim
indemnification under this Section 8.02, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify Lifetime, but the
failure so to notify shall not relieve Lifetime from any liability that it may
have under this Section 8.02, except to the extent that such failure would
materially prejudice Lifetime.
SECTION 8.03 INDEMNIFICATION OF EXCHANGE AGENT
(i) AUGI, Lifetime and Merger Sub (for the purposes of this Section
8.03, the "Indemnitors") agree to indemnify the Exchange Agent and its
partners, officers, directors, employees and agents (collectively, the
"Indemnitees") against, and hold them harmless of and from, any and all
loss, liability, cost, damage and expense, including without limitation,
reasonable counsel fees, which the Indemnitees may suffer or incur by
reason of any action, claim or proceeding brought against the Indemnitees
arising out of or relating in any way to the Exchange Agent's service in
such capacity, unless such action, claim or proceeding is the result of the
willful misconduct or gross negligence of the Indemnitees.
(ii) If the indemnification provided for in Section 8.03(1) is
applicable, but for any reason is held to be unavailable, the Indemnitors
shall contribute such amounts as are just and equitable to pay, or to
reimburse the Indemnitees for, the aggregate of any and all losses,
liabilities, costs, damages and expenses, including counsel fees, actually
incurred by the Indemnitees as a result of or in connection with, and any
amount paid in settlement of, any action, claim or proceeding arising out
of or relating in any way to any actions or omissions of the Indemnitors.
SECTION 8.04 SURVIVAL OF INDEMNIFICATION
All rights to indemnification under this Article 8 shall survive the
consummation of the Merger and the termination of this Agreement. The provisions
of this Article 8 are intended to be for the benefit of, and shall be
enforceable by, each AUGI Indemnified Party, each Lifetime Indemnified Party,
and his or her heirs and representatives and the Exchange Agent. No Party shall
enter into any settlement regarding the foregoing without prior approval of the
Lifetime Indemnified Party or the AUGI Indemnified Party, as the case may be or,
if related in any way to the duties of the Exchange Agent hereunder, the
Exchange Agent.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time, except as set forth in Article VIII. All such representations and
warranties will be extinguished on consummation of the Merger and none of the
Parties nor any of their officers, directors, members, employees or stockholders
shall be under any liability whatsoever with respect to any such representation
or warranty after such time. This Section 9.01 shall not limit any covenant or
agreement of the Parties which by its terms contemplates performance after the
Effective Time.
SECTION 9.02 EXPENSES.
Except as contemplated by this Agreement, all costs and expenses incurred
in connection with this Agreement and the consummation of the transactions
contemplated by this Agreement shall be paid by the Party incurring such
expenses.
SECTION 9.03 APPLICABLE LAW.
Except to the extent that the law of the State of Delaware is mandatorily
applicable to the Merger (which shall be governed by the GCL), this Agreement
shall be governed by the laws of the State of New York as applied to agreements
entered into and to be performed in such state.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
SECTION 9.04 NOTICES.
All notices and other communications under this Agreement shall be in
writing and shall be deemed to have been duly given or made as follows:
(i) If sent by registered or certified mail in the United States,
return receipt requested, upon receipt;
(ii) If sent by reputable overnight air courier (such as Federal
Express), 2 business days after being sent;
(iii) If sent by facsimile transmission, with a copy mailed on the
same day in the manner provided in clauses (i) or (ii) above, when
transmitted and receipt is confirmed by telephone; or
(iv) If otherwise actually personally delivered, when delivered.
All notices and other communications under this Agreement shall be sent or
delivered as follows:
If to Lifetime, to:
Lifetime Healthcare Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to AUGI, to:
American United Global, Inc.
▇/▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Wolf & Marcus, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, CEO
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇, Savage, Kaplowitz, Wolf & Marcus, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each Party may change its address by written notice in accordance with this
Section.
SECTION 9.05 ENTIRE AGREEMENT.
This Agreement (including the documents and instruments referred to in this
Agreement) contains the entire understanding of the Parties with respect to the
subject matter contained in this Agreement, and supersedes and cancels all prior
agreements, negotiations, correspondence, undertakings and communications of the
Parties, oral or written, respecting such subject matter.
SECTION 9.06 ASSIGNMENT.
Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned by any of the Parties (whether by
operation of law or otherwise) without the prior written consent of the other
Parties; provided that in no event may the right to indemnification provided by
Article VIII hereto be assigned by any of the Parties, with or without consent,
except by operation of law. Subject to the immediately foregoing sentence of
this Section 9.06, this Agreement will be binding upon, inure to the benefit of
and be enforceable by, the Parties and their respective successors and assigns.
SECTION 9.07 HEADINGS; REFERENCES.
The article, section and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All references herein to "Articles" or
"Sections" shall be deemed to be references to Articles or Sections of this
Agreement unless otherwise indicated.
SECTION 9.08 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which shall be considered one and
the same agreement.
SECTION 9.09 NO THIRD PARTY BENEFICIARIES.
Except as expressly provided by this Agreement, nothing herein is intended
to confer upon any person or entity not a Party to this Agreement any rights or
remedies under or by reason of this Agreement.
SECTION 9.10 SEVERABILITY; ENFORCEMENT.
Any term or provision of this Agreement that is invalid or unenforceable in
any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provisions shall be interpreted to be only so broad as is
enforceable.
SECTION 9.11 RULES OF CONSTRUCTION.
The Parties agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
SECTION 9.12 EXHIBITS.
All of the exhibits to this Agreement are hereby incorporated in this
Agreement and shall be deemed and construed to be a part of this Agreement for
all purposes.
SECTION 9.13 INTERPRETATION.
The words "include," "includes" and "including" when used herein shall be
deemed in each case to be followed by the words "without limitation." The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
[SIGNATURES ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
AMERICAN UNITED GLOBAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board and CEO
LIFETIME ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board and CEO
LIFETIME HEALTHCARE SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
List of Schedules
1.01(a) Lifetime - List of Lifetime Stockholders of Lifetime and number of Lifetime Shares held..........
1.01(b) Lifetime - List of Optionees and Option and/or Warrant Allocation................................
1.05 AUGI - Officers and Directors....................................................................
2.02(a) AUGI - Capitalization - AUGI Shares..............................................................
2.02(b) AUGI - Capitalization - Rights Relating to AUGI Shares...........................................
2.03 AUGI - Authority for Agreement...................................................................
2.05 AUGI - SEC Reports; Financial Statements.........................................................
2.07 AUGI - Litigation................................................................................
2.08(a) AUGI - Interested Party Transactions - Indebtedness of AUGI......................................
2.08(b) AUGI - Interested Party Transactions - Indebtedness to AUGI......................................
2.10 AUGI - No Undisclosed Liabilities................................................................
3.02(a) Lifetime - Capitalization - Lifetime Shares......................................................
3.02(b) Lifetime - Capitalization - Rights Relating to Lifetime Shares...................................
3.04 Lifetime - Subsidiaries..........................................................................
3.05 Lifetime - Lifetime Agreements...................................................................
4.02 AUGI Covenants - Employment Agreements...........................................................
