EXHIBIT 2.1
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MERGER AGREEMENT AND PLAN OF REORGANIZATION
February 1, 2002
by and among
RxBazaar, Inc., a Delaware corporation ("RxBazaar"),
SB Merger Corp., a Delaware corporation ("SB Merger") ,
and
RxB Acquisition Corp., a Delaware corporation ("Mergerco").
MERGER AGREEMENT AND PLAN OF REORGANIZATION made as of the 1st day
of February, 2002, by and among RxBazaar, Inc., a Delaware corporation
("RxBazaar"), having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, SB Merger Corp., a Delaware corporation having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("SB
Merger") and RxB Acquisition Corp., a Delaware corporation having its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Mergerco").
WHEREAS, SB Merger is authorized to issue 2,000,000
shares of common stock, par value $.001 per share (the "SB Merger Common
Stock"), of which 253,750 shares are issued and outstanding on the date hereof
(the "Outstanding SB Merger Shares"), and 500,000 shares of preferred stock, par
value $.001 per share (the "SB Merger Preferred Stock"), none of which are
issued and outstanding on the date hereof;
WHEREAS, RxBazaar is authorized to issue 60,000,000
shares of its common stock, par value $.001 par value ("RxBazaar Common
Stock"), and 10,000,000 shares of preferred stock, par value $.001 per share
(the "RxBazaar Preferred Stock"), of which the number of shares issued and
outstanding, and the number reserved for issuance pursuant to the exercise of
outstanding options and warrants and conversion of preferred stock, are as set
forth on Section 2(a) of the RxBazaar Schedule;
WHEREAS, Mergerco is a wholly-owned subsidiary of SB
Merger and is authorized to issue 100 shares of its common stock, $.001 par
value ("Mergerco Shares"), all of which Mergerco Shares are owned by SB Merger,
and
WHEREAS, the respective Boards of Directors of RxBazaar,
SB Merger and Mergerco deem it advisable and generally to the advantage
and welfare of RxBazaar and Mergerco and their respective shareholders that
Mergerco be merged with and into RxBazaar under the terms and conditions
hereinafter set forth (the "Merger"), the Merger to be effected pursuant to the
Delaware General Corporation Law (the "DGCL") and to be a tax free
reorganization under Section 368(a)(1)(A) of the Internal Revenue Code of 1986,
as amended (the "Code"),
NOW, THEREFORE, in consideration of the premises, the
parties hereto do mutually agree as follows:
1. Vote on Merger
(a) As soon as practicable after the date hereof, but in no event after
June 30, 2002, SB Merger shall cause a special meeting of its shareholders to be
held to consider and vote upon the transactions contemplated by this agreement,
including but not limited to the Merger, the change of SB Merger's name to
"RxBazaar, Inc.," the authorization of additional shares of SB Merger Common
Stock, amendments to SB Merger Corp.'s certificate of incorporation and by-laws,
and adoption of a stock option plan allowing for the granting of options to
purchase up to 1,500,000 shares of SB Merger Common Stock (collectively, the
"Shareholder Matters"). SB Merger shall promptly take such actions as may be
necessary to effect the foregoing, including filing and using its commercially
reasonable best efforts to cause to be declared effective a Post-Effective
Amendment to its Form SB-2 Registration Statement, File No. 333-39044 (the
"Post-Effective Amendment") pursuant to Rule 419 ("Rule 419") under the
Securities Act of 1933, as amended (the "Securities Act").
(b) As soon as practicable after the date hereof, but in no event after
June 30, 2002, RxBazaar shall obtain the written consent of its shareholders to
approve the Merger.
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(c) As soon as practicable after the date hereof, but in no event after
June 30, 2002, Mergerco shall obtain the written consent of its shareholder to
approve the Merger.
(d) If the Merger and the other Shareholder Matters are approved by the
shareholders of SB Merger in accordance with the laws of the State of Delaware
and the requirements of Rule 419, subject to the further conditions and
provisions of this Agreement, a closing of the transactions contemplated by this
Agreement shall be held (the "Closing"), and a certificate of merger and all
other documents or instruments deemed necessary or appropriate by the parties
hereto to effect the Merger shall be executed and filed with the Secretary of
State of the State of Delaware as promptly as possible thereafter. The
certificate of merger (the "Certificate of Merger") so filed shall be in the
form as the Boards of Directors of RxBazaar and Mergerco shall mutually approve.
The date and time that such Certificate of Merger is accepted for filing by the
Secretary of State of Delaware shall be the "Effective Time."
(e) Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable provisions of
the DGCL. Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time all the property, rights, privileges, powers and
franchises of RxBazaar and Mergerco shall vest in RxBazaar as the surviving
corporation in the Merger (referred to hereinafter sometimes as the "Surviving
Corporation"), and all debts, liabilities and duties of RxBazaar and Mergerco
shall become the debts, liabilities and duties of the Surviving Corporation.
(f) Certificate of Incorporation; Bylaws
(1) At the Effective Time, the Certificate of Incorporation of
RxBazaar, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation of the
Surviving Corporation.
(2) The Bylaws of RxBazaar, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving
Corporation until thereafter amended.
(g) Directors and Officers. The initial directors of the Surviving
Corporation shall be the directors of RxBazaar immediately prior to the
Effective Time, until their respective successors are duly elected or appointed
and qualified. The initial officers of the Surviving Corporation shall be the
officers of RxBazaar immediately prior to the Effective Time, until their
respective successors are duly appointed.
(h) Effect on Capital Stock. Subject to the terms and conditions of
this Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Mergerco, RxBazaar or the holders of any of the following
securities, the following shall occur:
(1) Conversion of RxBazaar Common Stock. Each share of RxBazaar
Common Stock issued and outstanding immediately prior to the Effective Time will
be canceled and extinguished and automatically converted (subject to Sections
1(h)(6) and 1(h)(7)) into the right to receive .7 (the "Common Stock Exchange
Ratio") shares of SB Merger Common Stock upon surrender of the certificate
representing such share of RxBazaar Common Stock in the manner provided in
Section 1(j) (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit (and bond, if required) in the manner provided in
Section 1(l)).
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(2) Conversion of RxBazaar Series A Preferred Stock. Each share of
Series A Preferred Stock, $0.001 par value per share, of RxBazaar (the "RxBazaar
Series A Shares") issued and outstanding immediately prior to the Effective
Time, will be canceled and extinguished and automatically converted (subject to
Sections 1(h)(6) and 1(h)(7)) into the right to receive, for each share of
RxBazaar Common Stock into which such RxBazaar Series A Share was convertible
immediately prior to the Effective Time, .7 (the "Series A Exchange Ratio")
shares of Series B Preferred Stock, par value $.01 per share, of SB Merger ("SB
Merger Series B Preferred Stock") upon surrender of the certificate representing
such share of RxBazaar Series A Share in the manner provided in Section 1(j) (or
in the case of a lost, stolen or destroyed certificate, upon delivery of an
affidavit (and bond, if required) in the manner provided in Section 1(l)).
(3) Conversion of RxBazaar Series B Preferred Stock. Each share of
Series B Preferred Stock, $0.001 par value per share, of RxBazaar (the "RxBazaar
Series B Shares" and together with the RxBazaar Series A Shares, the "RxBazaar
Preferred Shares"; the shares of RxBazaar Common Stock and RxBazaar Preferred
Shares are referred to herein sometimes collectively as the "RxBazaar Shares")
issued and outstanding immediately prior to the Effective Time, will be canceled
and extinguished and automatically converted (subject to Sections 1(h)(6) and
1(h)(7)) into the right to receive one share of SB Merger Series A Preferred
Stock upon surrender of the certificate representing such share of RxBazaar
Series B Stock in the manner provided in Section 1(j) (or in the case of a lost,
stolen or destroyed certificate, upon delivery of an affidavit (and bond, if
required) in the manner provided in Section 1(l)). The SB Merger Series A
Preferred Stock, together with the SB Merger Series B Preferred Stock and the SB
Merger Common Stock, are referred to hereinafter sometimes as the "SB Merger
Shares."
(4) Options and Warrants. At the Effective Time, each outstanding
option and each outstanding warrant to purchase shares of RxBazaar Common Stock
(each, an "RxBazaar Stock Option"), whether or not vested, shall by virtue of
the Merger be assumed by SB Merger. Each RxBazaar Stock Option so assumed by SB
Merger under this Agreement will be (or become) exercisable for a number of
shares of SB Merger Common Stock equal to (A) the number of shares for which the
RxBazaar Stock Option was exercisable immediately prior to the Effective Time
times (B) the Common Stock Exchange Ratio, at a per share exercise price equal
to (X) the per-share exercise of such assumed RxBazaar Stock Option divided by
(Y) the Common Stock Exchange Ratio. SB Merger shall reserve a sufficient number
of shares of SB Merger Common Stock for issuance upon exercise of the assumed
RxBazaar Stock Options. Such reserved shares shall be "Eligible SB Merger
Shares" for the purposes of Section 1(h)(7)(i) below.
(5) Capital Stock of Mergerco. Each share of Common Stock, $0.01
par value per share, of Mergerco (the "Mergerco Common Stock") issued and
outstanding immediately prior to the Effective Time shall be converted into one
validly issued, fully paid and nonassessable share of Common Stock, $0.01 par
value per share, of the Surviving Corporation. Each certificate evidencing
ownership of shares of Mergerco Common Stock shall evidence ownership of such
shares of capital stock of the Surviving Corporation.
(6) Adjustments to Exchange Ratio. The Exchange Ratio shall be
adjusted to reflect appropriately the effect of any share split, reverse share
split, share dividend (including any dividend or distribution of securities
convertible into SB Merger Common Stock or RxBazaar Common Stock),
reorganization, recapitalization, reclassification or other like change with
respect to any SB Merger Shares or RxBazaar Common Stock occurring on or after
the date hereof and prior to the Effective Time, other than (A) the proposed
1-for-5 reverse stock split of RxBazaar as shown on Section 2(a) of the RxBazaar
Schedule and (B) an 8-for-5 stock split effected in the form of a common stock
dividend that SB Merger intends to effect prior to the Effective Time.
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(7) Fractional Shares. No fraction of an SB Merger Share will be
issued by virtue of the Merger, but in lieu thereof the number of shares of SB
Merger Shares shall be rounded up to the nearest whole number.
(i) Additional Merger Consideration. The "Additional Merger
Consideration," as defined herein, may become payable as follows:
(1) Additional Merger Consideration Defined. The "Additional Merger
Consideration" shall consist of a fraction equal to .4286 shares of SB Merger
Common Stock for each Eligible SB Merger Share. "Eligible SB Merger Shares"
consist of: (A) shares of SB Merger Common Stock issued in respect of shares of
RxBazaar Common Stock issued and outstanding as of the Effective Time; (B)
shares of SB Merger Series B Stock issued in respect of shares of RxBazaar
Series A Stock issued and outstanding as of the Effective Time; and (C) shares
of SB Merger Common Stock reserved for issuance upon exercise or conversion of
RxBazaar Stock Options assumed by SB Merger pursuant to Section 1(h)(4) above.
(2) Conditions for Payment. Subject to paragraph (3) below, the
Additional Merger Consideration will become payable as follows: if SB Merger's
consolidated income before taxes (excluding extraordinary charges for NOLs or
charges associated with the payment of Additional Merger Consideration)
("Pre-Tax Earnings"), as reflected in SB Merger's periodic reports filed with
the Securities and Exchange Commission, is equal to or greater than $2,150,000
for the four fiscal quarters ending March 31, 2003, then the Additional Merger
Consideration will be paid. If the Additional Merger Consideration has not been
paid pursuant to paragraph (2) above, then if Pre-Tax Earnings, as reflected in
SB Merger's periodic reports filed with the Securities and Exchange Commission,
for the four fiscal quarters ending March 31, 2004 is equal to or greater than
$3,225,000, then the remaining Additional Merger Consideration will be paid.
(3) Effect of Raising Additional Equity. SB Merger shall be
required to increase Pre-Tax Earnings set forth in paragraph (2) above by $0.10
for every additional gross dollar of equity investment in excess of $3,000,000
received by RxBazaar after the date hereof or by SB Merger after the Effective
Time.
(4) Payable Upon Change of Control. The Additional Merger
Consideration shall become payable upon a Change of Control of SB Merger, but
only if and to the extent that (a) the Change of Control occurs before March 31,
2004 and (b) payment of the Additional Merger Consideration would not have the
effect of reducing the value of the consideration to be received by holders of
SB Merger Series A Preferred Stock below any liquidation preference payment to
which the holders would be entitled if the Change of Control were deemed to be a
liquidation under the terms of the SB Merger Series A Preferred Stock,
regardless of whether the Change of Control in fact constitutes a liquidation
under such terms. A "Change of Control" of SB Merger means any (i) merger,
consolidation or stock sale which results in the voting securities of SB Merger
outstanding immediately prior thereto representing immediately thereafter
(either by remaining outstanding or by being converted into voting securities of
the surviving or acquiring entity) less than a majority of the combined voting
power of the voting securities of SB Merger or such surviving or acquiring
entity outstanding immediately after such merger or consolidation; or (ii) sale
of all or substantially all the assets of SB Merger to any person other than a
wholly-owned subsidiary.
(5) Payable to Record Holders. Any Additional Merger Consideration
payable on account of Eligible SB Merger Shares shall be payable only to (i) the
holders of record of the Eligible SB Merger Shares as of the Effective Time, and
(ii) holders of record of RxBazaar Stock Options as of the Effective Time as
follows: If a record holder of an RxBazaar Stock Option as of the Effective
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Time exercises the RxBazaar Stock Option between the Effective Time and the date
on which any Additional Merger Consideration becomes payable, then the
Additional Merger Consideration shall be paid to such record holder in respect
of each Eligible SB Merger Share issued upon such exercise. If any RxBazaar
Stock Option has not been exercised as of the date on which the Additional
Merger Consideration becomes payable, then from and after such date the RxBazaar
Stock Option shall be exercisable for (A) the number of Eligible SB Merger
Shares issuable pursuant to Section 1(h)(4) above plus (B) the Additional Merger
Consideration payable in respect of each such Eligible SB Merger Share.
(6) Fractional Shares. No fraction of a share of SB Merger Common
Stock will be issued in connection with payment of any Additional Merger
Consideration, but in lieu thereof the number of shares of SB Merger Common
Stock issued in any payment of Additional Merger Consideration shall be rounded
up to the nearest whole number.
(j) Surrender of Certificates
(1) Exchange Agent. RxBazaar shall select a bank or trust company
to act as the exchange agent (the "Exchange Agent") in the Merger.
(2) SB Merger to Provide SB Merger Shares. As promptly as
practicable after the Effective Time, SB Merger shall make available to the
Exchange Agent for exchange in accordance with this Article I, that number of SB
Merger Shares as is issuable pursuant to Section 1(h) in exchange for
outstanding shares of RxBazaar Common Stock and RxBazaar Preferred Stock and any
dividends or distributions to which holders of shares of RxBazaar Common Stock
and RxBazaar Preferred Stock may be entitled pursuant to Section 1(j)(4).
(3) Exchange Procedures. As soon as practicable after the Effective
Time, SB Merger shall cause the Exchange Agent to mail to each holder of record
(as of the Effective Time) of a certificate or certificates (the
"Certificates"), which immediately prior to the Effective Time represented
outstanding RxBazaar Shares whose shares were converted into the right to
receive SB Merger Shares pursuant to this Agreement, and any dividends or other
distributions pursuant to Section 1(j)(4), (i) a letter of transmittal in
customary form (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall contain such other provisions as SB
Merger may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing SB
Merger Shares and any dividends or other distributions pursuant to Section
1(j)(4). Upon surrender of Certificates for cancellation to the Exchange Agent
or to such other agent or agents as may be appointed by SB Merger, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, the holders of such Certificates shall be
entitled to receive in exchange therefor certificates representing the number of
whole SB Merger Shares into which their RxBazaar Shares were converted at the
Effective Time and any dividends or distributions payable pursuant to Section
1(j)(4), and the Certificates so surrendered shall forthwith be canceled. Until
so surrendered, outstanding Certificates will be deemed from and after the
Effective Time, for all corporate purposes, subject to Section 1(j)(4) as to the
payment of dividends, to evidence only the ownership of the number of full SB
Merger Shares into which such RxBazaar Shares shall have been so converted and
any dividends or distributions payable pursuant to Section 1(j)(4).
(4) Distributions With Respect to Unexchanged Shares and Additional
Merger Consideration. No dividends or other distributions declared or made after
the date of this Agreement with respect to SB Merger Shares with a record date
after the Effective Time will be paid to the holders of any unsurrendered
Certificates with respect to the SB Merger Shares represented thereby until the
holders of record of such Certificates shall surrender such Certificates.
Subject to applicable
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law, following surrender of any such Certificates, the Exchange Agent shall
promptly deliver to the record holders thereof, without interest, certificates
representing whole SB Merger Shares issued in exchange therefor along with the
amount of any such dividends or other distributions with a record date after the
Effective Time payable with respect to such whole SB Merger Shares. Upon the
Surviving Corporation's becoming obligated to pay any Additional Merger
Consideration pursuant to Section (i) above, subject to applicable law, the
Exchange Agent shall deliver to the persons entitled to receive Additional
Merger Consideration certificates representing the Additional Merger
Consideration along with the amount of such dividends or other distributions
with a record date after the Effective Time that would have been payable with
respect to the number of whole SB Merger Shares represented by the Additional
Merger Consideration had such shares been issued and outstanding at all times
from and after the Effective Time.
(5) Transfers of Ownership. If SB Merger Shares are to be issued in
a name other than that in which the Certificates surrendered in exchange
therefor are registered, it will be a condition of the issuance thereof that the
Certificates so surrendered will be properly endorsed and otherwise in proper
form for transfer and that the persons requesting such exchange will have paid
to SB Merger or any agent designated by it any transfer or other taxes required
by reason of the issuance of SB Merger Shares in any name other than that of the
registered holder of the Certificates surrendered, or established to the
satisfaction of SB Merger or any agent designated by it that such tax has been
paid or is not payable.
(6) Required Withholding. Each of the Exchange Agent, SB Merger and
the Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of RxBazaar Shares such amounts as may be required to be
deducted or withheld therefrom under the Code or under any provision of state,
local or foreign tax law. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as
having been paid to the person to whom such amounts would otherwise have been
paid.
(7) No Liability. Notwithstanding anything to the contrary in this
Section 1(j)(7), neither the Exchange Agent, SB Merger, the Surviving
Corporation nor any party hereto shall be liable to a holder of SB Merger Shares
or RxBazaar Shares for any amount properly paid to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(k) No Further Ownership Rights in RxBazaar Shares. All SB Merger
Shares issued in accordance with the terms hereof shall be deemed to have been
issued in full satisfaction of all rights pertaining to such RxBazaar Shares,
and there shall be no further registration of transfers on the records of the
Surviving Corporation of RxBazaar Shares which were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason, they shall be canceled
and exchanged as provided in this Article I.
(l) Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, certificates
representing the SB Merger Shares into which the RxBazaar Shares represented by
such Certificates were converted pursuant to Section 1(h) and any dividends or
distributions payable pursuant to Section 1(j)(4); provided, however, that SB
Merger may, in its discretion and as a condition precedent to the issuance of
such certificates representing the SB Merger Shares, cash and other
distributions, require the owner of such lost, stolen or destroyed Certificates
to deliver a bond in such sum as it may reasonably direct as indemnity against
any claim that may be made against SB Merger, the Surviving Corporation or the
Exchange Agent with respect to the Certificates alleged to have been lost,
stolen or destroyed.
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(m) Tax Consequences. The parties hereto intend that the Merger shall
constitute a reorganization within the meaning of Section 368 of the Code. The
parties hereto adopt this Agreement as a "plan of reorganization" within the
meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax
Regulations.
(n) Taking of Necessary Action; 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 Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of RxBazaar and Mergerco, then RxBazaar and Mergerco will cause
their respective current officers to take all such lawful and necessary action.
SB Merger shall cause Mergerco to perform all of its obligations relating to
this Agreement and the transactions contemplated hereby.
2. Representations and Warranties by RxBazaar. RxBazaar represents and
warrants, except as set forth in RxBazaar's Disclosure Schedule attached hereto
(the "RxBazaar Schedule"), as follows:
(a) RxBazaar is a duly organized and validly existing corporation in
good standing under the laws of the State of Delaware, authorized to issue the
RxBazaar Common Stock and the RxBazaar Preferred Stock. The issued and
outstanding capital stock of RxBazaar consists only of the shares set forth in
Section 2(a) of the RxBazaar Schedule, and except as set forth thereon there are
no issued or outstanding rights, options or warrants to purchase RxBazaar Common
Stock or any issued or outstanding securities of any nature convertible into
RxBazaar Common Stock. The issued and outstanding shares of RxBazaar Common
Stock and RxBazaar Preferred Stock have all been issued pursuant to an
appropriate exemption from the registration requirements of the Securities Act
and from any applicable registration requirements of the various states.
(b) RxBazaar has full power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. This Agreement and the
transactions contemplated hereby have been duly approved by the Board of
Directors of RxBazaar. This Agreement has been duly executed and delivered by
RxBazaar and constitutes a valid and binding obligation of RxBazaar, enforceable
against RxBazaar in accordance with its terms, except that such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights.
(c) RxBazaar is qualified as a foreign corporation in all jurisdictions
where its business or ownership of assets or properties so requires, except
where the failure to be so qualified would not have a material adverse effect on
the business or financial condition of RxBazaar (an "RxBazaar Material Adverse
Effect"). The business of RxBazaar does not require it to be registered as an
investment company or investment adviser as such terms are defined under the
Investment Company Act of 1940 and the Investment Advisers Act of 1940, each as
amended.
(d) RxBazaar has no subsidiaries other than FPP Distribution, Inc., an
Ohio corporation (the "Subsidiary") and a wholly-owned subsidiary of RxBazaar.
The Subsidiary is a duly organized and validly existing corporation in good
standing under the laws of the State of Ohio, with full power and authority to
own its properties and to engage in its business as presently conducted and is
qualified as a foreign corporation in all jurisdictions where its business or
ownership of assets or properties so requires.
(e) The consolidated financial statements of RxBazaar, consisting of
its balance sheet as at December 31, 2000, its statement of operations for the
year ended December 31, 2000, its
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statement of stockholders' equity for the year ended December 31, 2000, and its
statement of cash flows for the year ended December 31, 2000, all together with
accompanying notes, have been prepared in accordance with GAAP, are true,
complete, and accurate in all material respects and fairly present the
consolidated financial position, results of operations and other information
purported to be shown therein of RxBazaar, at the date and for the respective
periods to which they apply. The unaudited financial statements of RxBazaar,
consisting of its balance sheet as at September 30, 2001 and its statements of
operations for the nine months ended September 30, 2001, have been prepared in
accordance with generally accepted accounting principles (except for the absence
of footnotes thereto and except that they are subject to normal year-end
adjustments), are true, complete, and accurate in all material respects and
fairly present the consolidated financial position, results of operations and
other information purported to be shown therein of RxBazaar, at the date and for
the respective periods to which they apply. The financial statements of RxBazaar
referred to above in this Section 2(e) are hereinafter collectively referred to
as the "RxBazaar Financial Statements." Since December 31, 2000, the business of
RxBazaar has been operated in all material respects only in the ordinary course
and there has not been any RxBazaar Material Adverse Effect except as set forth
in the RxBazaar Financial Statements.
(f) There are no material liabilities (including, but not limited to
material tax liabilities) or material claims against RxBazaar or the Subsidiary
(whether such liabilities or claims are contingent or absolute, direct or
indirect, matured or unmatured) not described in the RxBazaar Financial
Statements, other than liabilities incurred in the ordinary course of business
since the date of the RxBazaar Financial Statements.
(g) All federal, state, county and local income, excise, property and
other material tax returns required to be filed by RxBazaar and the Subsidiary
have been filed and all required taxes, fees assessments have been paid or an
adequate reserve therefor has been established as described in the RxBazaar
Financial Statements. All tax returns filed by RxBazaar and the Subsidiary are
true, correct and complete. The income tax returns of RxBazaar have never been
audited by any authority empowered to do so, where any such audit could
reasonably be expected to have a RxBazaar Material Adverse Effect. All taxes
required by law to be withheld or collected have been so withheld or collected
and, to the extent required, paid to the proper governmental body.
(h) Except as described in the RxBazaar Financial Statements, RxBazaar
and the Subsidiary each has good and marketable title in all material respects
to all its furniture, fixtures, equipment and other owned assets as set forth in
the RxBazaar Financial Statements and such assets are owned free and clear of
all material security interests, pledges, liens, restrictions and encumbrances
of every kind and nature, except as set forth in the RxBazaar Financial
Statements.
(i) The accounts receivable, net of reserves, set forth in the RxBazaar
Financial Statements represent amounts due for goods sold or services rendered
by RxBazaar or the Subsidiary in the ordinary course of business and, except as
reserved for in the RxBazaar Financial Statements, are, to the best knowledge of
RxBazaar, collectable in all material respects in the ordinary course of
business.
(j) Copies of all written material agreements, contracts, arrangements,
understandings and commitments, including, without limitation, real estate
leases and loan agreements (collectively, "Contracts"), to which RxBazaar or the
Subsidiary is a party, by which RxBazaar or the Subsidiary is bound, or from
which RxBazaar or the Subsidiary is entitled to receive substantial benefits,
and a summary of the provisions of each oral material contract, have been
delivered to Mergerco. There is no default by RxBazaar or the Subsidiary under
any such Contract that could reasonably be expected to have a RxBazaar Material
Adverse Effect. The validity and enforceability of and rights of RxBazaar and
the Subsidiary contained in each such Contract shall not be materially adversely
affected by the Merger or the transactions contemplated hereby.
-9-
(k) There are no legal, administrative, arbitral or other proceedings,
claims, actions or governmental investigations of any nature against RxBazaar or
the Subsidiary which could reasonably be expected to have a RxBazaar Material
Adverse Effect or which challenge the validity or propriety of the transactions
contemplated by this Agreement and, to RxBazaar's knowledge, there is no
reasonable basis for any such proceeding, claim, action or governmental
investigation. Neither RxBazaar nor the Subsidiary is a party to or bound by any
order, judgment or decree which could reasonably be expected to have a RxBazaar
Material Adverse Effect.
(l) Since December 31, 2000, there have been (i) no bonuses or
extraordinary compensation paid to any of the officers or directors of RxBazaar
or the Subsidiary, (ii) no loans made to or any other transactions with any of
the officers or directors of RxBazaar or the Subsidiary or their families, (iii)
no dividends or other distributions declared or paid by RxBazaar, and (iv) no
purchase by RxBazaar of any of its capital shares.
(m) Since December 31, 2001, RxBazaar has not issued or committed
itself to issue, and until after the Effective Time will not issue or commit
itself to issue any RxBazaar Common Stock or any options, rights, warrants, or
other securities convertible into RxBazaar Common Stock except pursuant to
options, rights, warrants or other convertible securities issued and outstanding
as of the date hereof except as contemplated by this Agreement.
(n) Each of RxBazaar and the Subsidiary have maintained casualty and
liability policies and other insurance policies with respect to its business
which are appropriate and customary for businesses similar to RxBazaar and the
Subsidiary in size, industry and risk profile. Copies of all of the policies of
insurance and bonds presently in force with respect to RxBazaar and the
Subsidiary, including without limitation those covering properties, buildings,
machinery, equipment, worker's compensation, officers and directors and public
liability, shall be delivered to SB Merger upon written request. All such
insurance is outstanding and in full force and effect, with all premiums thereon
duly paid and RxBazaar and the Subsidiary have not received any notice of
cancellation of any such policies.
(o) RxBazaar and the Subsidiary do not have any patents, patent
applications, trademark registrations or applications therefor, copyright
registrations or applications therefor, or other registered intellectual
property.
(p) Since inception, RxBazaar and the Subsidiary have each in all
material respects operated its business and conducted its affairs in compliance
with all applicable laws, rules and regulations, except where the failure to so
comply could not reasonably be expected to have a RxBazaar Material Adverse
Effect. Each of RxBazaar and the Subsidiary have all licenses, permits, orders,
and approvals from all governmental bodies required for the conduct of its
businesses and is not in violation of any such license, permit, order, or
approval, where the lack of such license, permit, etc. would have an RxBazaar
Material Adverse Effect. All such licenses, permits, orders and approvals are in
full force and effect, and no suspension or cancellation thereof has been
threatened.
(q) Except as described in the RxBazaar Financial Statements, since
December 31, 2000 there have been no loans, leases or other Contracts
outstanding between RxBazaar or the Subsidiary and any officer or director of
RxBazaar or the Subsidiary or any person or entity related to any officer or
director of RxBazaar or the Subsidiary.
(r) Since December 31, 1996, neither RxBazaar, any promoter, officer or
director of RxBazaar or the Subsidiary, nor any person intended to become an
officer or director of RxBazaar or the Subsidiary, has been the subject of:
-10-
(1) a petition under the Federal bankruptcy laws or any other
insolvency law nor has a receiver, fiscal agent or similar officer been
appointed by a court for the business or property of such person, or any
partnership in which he was a general partner at or within five years before the
time of such filing, or any corporation or business association of which he was
an executive officer at or within five years before the time of such filing;
(2) a conviction in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations which do not relate to
driving while intoxicated);
(3) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining him from, or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States
Commodity Futures Trading Commission or an associated person of any of the
foregoing, or as an investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance
company, or engaging in or continuing any conduct or practice in connection
with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation of
Federal, state or other securities laws or commodities laws;
(4) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any Federal, state or local authority barring,
suspending or otherwise limiting for more than 60 days the right of such person
to engage in any activity described in the preceding sub-paragraph, or to be
associated with persons engaged in any such activity;
(5) a finding by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission (the "Commission") to have
violated any securities law, regulation or decree and the judgment in such civil
action or finding by the Commission has not been subsequently reversed,
suspended or vacated; or
(6) a finding by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
(s) RxBazaar and the Subsidiary have no pension plan, profit sharing or
similar employee benefit plan.
(t) Except for the consent and approval of the shareholders of SB
Merger, Mergerco and RxBazaar and the filing of the Certificate of Merger, no
consents or approvals of, or filings or registrations with, any third party or
any public body or authority are necessary in connection with (i) the execution
and delivery by RxBazaar of this Agreement and (ii) the consummation by RxBazaar
of the Merger and the other transactions contemplated hereby.
-11-
(u) RxBazaar does not know of any person who rendered any service in
connection with the introduction of SB Merger, Mergerco or RxBazaar to each
other, and knows of no claim for a "finder's fee" or similar type of fee in
connection with the Merger and the other transactions contemplated hereby.
(v) No employees of RxBazaar or the Subsidiary are on strike or
threatening any strike or work stoppage. RxBazaar and the Subsidiary have no
obligations under any collective bargaining or labor union agreements. Neither
RxBazaar nor the Subsidiary is involved in any material controversy with any of
its employees or any organization representing any of its employees.
(w) None of the information supplied or to be supplied by or about
RxBazaar and the Subsidiary for inclusion in the Post-Effective Amendment to be
furnished to the SB Merger shareholders concerning the Merger contains or will
contain any untrue statement of a material fact or omit or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
(x) The execution and delivery by RxBazaar of this Agreement, the
consummation and performance the transactions herein contemplated, and
compliance with the terms of this Agreement by RxBazaar will not conflict with,
result in a breach of or constitute a default under any indenture, mortgage,
deed of trust or other material agreement, instrument or Contract to which
RxBazaar or the Subsidiary is now a party or by which it or any of its assets or
properties is bound or the Articles of Incorporation, as amended, or the bylaws
of RxBazaar or the Subsidiary, in each case as amended, or any law, order, rule
or regulation, writ, injunction, judgment, or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over RxBazaar or the Subsidiary or any of its business or properties, which
conflict, breach or default could reasonably be expected to have a RxBazaar
Material Adverse Effect.
3. Representations and Warranties Relating to SB Merger and Mergerco.
Mergerco and SB Merger, jointly and severally, represent and warrant as follows:
(a) Mergerco is a duly organized and validly existing corporation in
good standing under the laws of the State of Delaware, authorized to issue only
the Mergerco Shares. The issued and outstanding capital stock of Mergerco
consists only of the Mergerco Shares all of which are fully paid and
nonassessable and which are owned by SB Merger. There are no issued or
outstanding rights, options or warrants to purchase Mergerco Shares or any
issued or outstanding securities of any nature convertible into Mergerco Shares.
The Mergerco Shares have all been issued pursuant to an appropriate exemption
from the registration requirements of the Securities Act and from any applicable
registration requirements of the various states.
(b) Mergerco has been organized solely for the purpose of consummating
the Merger and, since its inception, Mergerco has had no business activity of
any nature other than those related to its organization or as contemplated by
this Agreement.
(c) Mergerco has full power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. This Agreement and the
transactions contemplated hereby have been duly approved by the Boards of
Directors of SB Merger and Mergerco, and by the shareholder of Mergerco. This
Agreement has been duly executed and delivered by Mergerco, and constitutes a
valid and binding obligation of Mergerco, enforceable against Mergerco in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights.
-12-
(d) Mergerco is qualified as a foreign corporation in all jurisdictions
where its business or ownership of assets or properties so requires, except
where the failure to be so qualified would not have a material adverse effect on
the business or financial condition of Mergerco (a "Mergerco Material Adverse
Effect"). The business of Mergerco does not require it to be registered as an
investment company or investment adviser as such terms are defined under the
Investment Company Act and the Investment Advisers Act of 1940, each as amended.
(e) Mergerco has no subsidiaries.
(f) Except for (i) the incurring of expenses of its organization, (ii)
the issuance of the Mergerco Shares to SB Merger, (iii) the incurring of
expenses relating to this Agreement and the consummation of the transactions
contemplated by this Agreement, and (iv) the consummation of the Merger,
Mergerco has had no business and no financial or other transactions of any
nature whatsoever.
(g) Mergerco has no liabilities (including, but not limited to, tax
liabilities) nor are there any claims against Mergerco (whether such liabilities
or claims are contingent or absolute, direct or indirect, and matured or
unmatured) except for liabilities for its organization expenses or expenses
incurred in connection with the Merger.
(h) All federal, state, county and local income, excise, property or
other tax returns required to be filed by Mergerco have been filed and all
required taxes, fees or assessments have been paid.
(i) Mergerco has no fixtures, furniture, equipment, inventory or
accounts receivable.
(j) Mergerco has no Contracts or commitments to which it is a party,
except for this Agreement and other documents and instruments contemplated
hereby in connection with the Merger.
(k) There are no legal, administrative, arbitral or other proceedings,
claims, actions or governmental investigations of any nature against Mergerco,
or challenging the validity or propriety of the transactions contemplated by
this Agreement and, to Mergerco's and SB Merger's best knowledge, there is no
reasonable basis for any other proceeding, claim, action or governmental
investigation against Mergerco. Mergerco is not a party to or bound by any
order, judgment or decree which could reasonably be expected to have a Mergerco
Material Adverse Effect.
(l) Since the inception of Mergerco there have been (i) no salaried or
otherwise compensated employees and no bonuses paid to any officer or director
of Mergerco; (ii) no loans made to or any transactions with any officer or
director of Mergerco; (iii) no dividends or other distributions declared or paid
by Mergerco; and (iv) no purchase by Mergerco of any Mergerco Shares.
(m) Since its inception, Mergerco has not issued or committed itself to
issue, and until after the Effective Time will not issue or commit itself to
issue any Mergerco Shares or any options, rights, warrants, or other securities
convertible into Mergerco Shares except for the issuance of the Mergerco Shares
to SB Merger.
(n) Mergerco has no patents, patent applications, trademarks, trademark
registrations, trade names, copyrights, copyright registrations or applications
therefore.
-13-
(o) Since its inception, Mergerco has in all material respects
conducted its affairs in compliance with all applicable laws, rules and
regulations except where the failure to so comply could not reasonably be
expected to have a Mergerco Material Adverse Effect.
(p) Since December 31, 1996, no officer or director of Mergerco has
been the subject of:
(1) a petition under the Federal bankruptcy laws or any other
insolvency law nor has a receiver, fiscal agent or similar officer been
appointed by a court for the business or property of such person, or any
partnership in which he was a general partner at or within two years before the
time of such filing, or any corporation or business association of which he was
an executive officer at or within two years before the time of such filing;
(2) a conviction in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations which do not relate to
driving while intoxicated);
(3) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining him from, or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States
Commodity Futures Trading Commission or an associated person of any of the
foregoing, or as an investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance
company, or engaging in or continuing any conduct or practice in connection
with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation of
Federal, state or other securities laws or commodities laws;
(4) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any Federal, state or local authority barring,
suspending or otherwise limiting for more than 60 days the right of such person
to engage in any activity described in the preceding sub-paragraph, or to be
associated with persons engaged in any such activity;
(5) a finding by a court of competent jurisdiction in a civil
action or by the Commission to have violated any securities law, regulation or
decree and the judgment in such civil action or finding by the Commission has
not been subsequently reversed, suspended or vacated; or
(6) a finding by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
(q) Mergerco has no pension plan, profit sharing or similar employee
benefit plan.
-14-
(r) Except for the consent and approval of the shareholders of SB
Merger, Mergerco and RxBazaar and the filing of the Articles of Merger, no
consents or approvals of, or filings or registrations with, any third party or
any public body or authority are necessary in connection with (i) the execution
and delivery by Mergerco of this Agreement and (ii) the consummation by Mergerco
of the Merger and the other transactions contemplated hereby.
(s) Mergerco knows of no person who rendered any service in connection
with the introduction of SB Merger, Mergerco or RxBazaar to each other, and that
they know of no claim for a "finder's fee" or similar type of fee in connection
with the Merger and the other transactions contemplated hereby.
(t) Mergerco has no employees.
(u) None of the information supplied or to be supplied by or about
Mergerco for inclusion in the Post-Effective Amendment to be furnished to the SB
Merger shareholders concerning the Merger contains or will contain any untrue
statement of a material fact or omit or omits to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
(v) The execution and delivery by Mergerco of this Agreement, the
consummation and performance of the transactions herein contemplated, and
compliance with the terms of this Agreement by Mergerco will not conflict with,
result in a breach of or constitute a default under any indenture, mortgage,
deed of trust or other agreement, instrument or Contract to which Mergerco is
now a party or by which it or any of its assets or properties is bound or the
Articles of Incorporation, as amended, or the bylaws of Mergerco, in each case
as amended, or any law, order, rule or regulation, writ, injunction, judgment or
decree of any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over Mergerco or any of its business or properties,
which conflict, breach or default could reasonably be expected to have a
Mergerco Material Adverse Effect.
4. Representations and Warranties Relating to SB Merger. SB Merger and
Mergerco, jointly and severally, represent and warrant as follows:
(a) SB Merger is a duly organized and validly existing corporation in
good standing under the laws of the State of Delaware, authorized to issue only
2,000,000 shares of SB Merger Common Stock and 500,000 shares of preferred
stock, $.01 par value, the rights, powers and designations of which have not
been established by the Board of Directors of SB Merger. Immediately prior to
the Effective Time, there will be issued and outstanding, after giving effect to
an 8-for-5 stock split effected in the form of a stock dividend that SB Merger
intends to effect prior to the Effective Time, 406,000 shares of SB Merger
Common Stock, all of which will be fully paid and nonassessable (the
"Outstanding SB Merger Shares"). Except as contemplated by this Agreement, there
are no issued or outstanding options, warrants or other rights, contingent or
otherwise, to purchase or acquire shares of SB Merger Common Stock or any issued
or outstanding securities of any nature convertible into shares of SB Merger
Common Stock. The issued and outstanding shares of SB Merger Common Stock have
all been issued pursuant to an effective registration statement or an
appropriate exemption from the registration requirements of the Securities Act
and from any applicable registration requirements of the various states.
(b) Since its inception, the business of SB Merger has been limited to
the search for an acquisition or merger partner and, except for transactions
related thereto or related to its status as a publicly held company, it has not
engaged in any other business or activity.
-15-
(c) SB Merger has full power and authority to enter into this Agreement
and, subject to obtaining the approval of its shareholders, to consummate the
transactions contemplated hereby. This Agreement and the transactions
contemplated hereby have been duly approved by the Board of Directors of SB
Merger. This Agreement has been duly executed and delivered by SB Merger and
constitutes a valid and binding obligation of SB Merger enforceable against SB
Merger in accordance with its terms, except that such enforcement may be subject
to bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights.
(d) SB Merger is qualified as a foreign corporation in all
jurisdictions where its business or ownership of assets or properties so
requires, except where the failure to be so qualified would not have a material
adverse effect on the business or financial condition of SB Merger (an "SB
Merger Material Adverse Effect"). The business of SB Merger does not require it
to be registered as an investment company or investment adviser as such terms
are defined under the Investment Company Act of 1940 and the Investment Advisers
Act of 1940, each as amended.
(e) SB Merger has no subsidiaries except for Mergerco.
(f) The financial statements of SB Merger, consisting of its balance
sheets as at December 31, 2000, and its statement of operations, its statement
of stockholders' equity and its statement of cash flows for the year ended
December 31, 2000, all together with accompanying notes, as set forth in SB
Merger's Registration Statement on Form SB-2, have been audited by independent
public accountants and fairly present the consolidated financial position,
results of operations and other information purported to be shown therein of SB
Merger, at the date and for the respective periods to which they apply. The
unaudited financial statements of SB Merger, consisting of its balance sheet as
at September 30, 2001 and 2000, its statement of income, statement of
stockholders' equity and statement of cash flows for the nine months ended
September 30, 2001, as set forth in SB Merger's Quarterly Report on Form 10-QSB
for the quarter ended September 30, 2001 (the "Form 10-QSB," and collectively
with the Registration Statement, the "SEC Reports"), have been prepared in
accordance with generally accepted accounting principles, have been adjusted for
all normal and recurring accruals, and fairly present the consolidated financial
position, results of operations and other information purported to be shown
therein of SB Merger, at the date and for the respective periods to which they
apply. The audited financial statements and the unaudited financial statements
of SB Merger are hereinafter referred to as the "SB Merger Financial
Statements." The SB Merger Financial Statements have been delivered to RxBazaar.
(g) The business of SB Merger, as described in the SEC Reports, has
only been operated in the ordinary course. There has not been any material
change in the financial condition of SB Merger from that set forth in the Form
10-QSB except for (i) transactions in the ordinary course of business, (ii)
transactions relating to this Agreement, and (iii) the incurring of expenses or
liabilities relating to this Agreement.
(h) There are, and at the Effective Time will be, no liabilities
(including, but not limited to, tax liabilities) or claims against SB Merger
(whether such liabilities or claims are contingent or absolute, direct or
indirect, and matured or unmatured) not appearing on the SB Merger Financial
Statements, except for (i) liabilities for expenses incurred relating to this
Agreement and the consummation of the transactions contemplated by this
Agreement and (ii) liabilities and commitments incurred or made in the ordinary
course of SB Merger's business or taxes incurred on earnings since September 30,
2001, each as listed on the SB Merger Disclosure Schedule attached hereto.
(i) All federal, state, county and local income, excise, property or
other tax returns required to be filed by SB Merger have been filed and all
required taxes, fees or assessments have
-16-
been paid or an adequate reserve therefor has been set up in the SB Merger
Financial Statements. SB Merger's income tax returns have never been audited by
any authority empowered to do so.
(j) SB Merger has no fixtures, furniture, equipment, inventory or
accounts receivable.
(k) SB Merger has no material Contracts to which it is a party, except
those between the parties hereto, and as described in the SEC Reports and except
filing and other requirements associated with SB Merger's initial public
offering of securities and its status as a publicly held company.
(l) There are no legal, administrative, arbitral or other proceedings,
claims, actions or governmental investigations of any nature against SB Merger,
or challenging the validity or propriety of the transactions contemplated by
this Agreement and, to Mergerco's and SB Merger's best knowledge, there is no
reasonable basis for any such proceeding, claim, action or governmental
investigation. SB Merger is not a party to or bound by any order, judgment or
decree which will, or might reasonably be expected to have a SB Merger Material
Adverse Effect.
(m) There have been: (i) no salaried or otherwise compensated employees
and no bonuses paid to any officer or director of SB Merger; (ii) no loans made
to or transactions with any officer or director of SB Merger other than loans by
officers to provide working capital described in the SEC Reports, which shall
not exceed $10,000 at the Effective Time; (iii) no cash dividends or other cash
distributions declared or paid by SB Merger; and (iv) no purchase by SB Merger
of any SB Merger Shares.
(n) Since December 31, 2000, SB Merger has not issued or committed
itself to issue, and prior to the Effective Time will not issue or commit itself
to issue any additional common shares (other than the outstanding SB Merger
Shares) or any options, rights, warrants, or other securities convertible into
common shares, except as contemplated by this Agreement.
(o) SB Merger has furnished to RxBazaar true and complete copies,
including exhibits and, as applicable, amendments thereto, of (i) SB Merger's
Registration Statement, including all post-effective amendments thereto, for its
initial public offering; (ii) the Prospectus contained therein; and (iii) each
Quarterly Report on Form 10-QSB and each Annual Report on Form 10-KSB issued by
SB Merger since its inception. None of such filings contained any untrue
statement of a material fact or omitted to state any 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 at the time of
such filings.
(p) SB Merger has no patents, patent applications, trademarks,
trademark registrations, trade names, copyrights, copyright registrations or
applications therefor.
(q) Since its inception, SB Merger has in all material respects
operated its business and conducted its affairs in compliance with all
applicable laws, rules and regulations.
(r) Except as set forth in the SEC Reports or otherwise disclosed
pursuant hereto, there are no loans, leases or other contracts outstanding
between SB Merger and any officer or director of SB Merger or any person related
to any officer or director of SB Merger
(s) Since December 31, 1996, no officer or director of SB Merger has
been the subject of
-17-
(1) a petition under the Federal bankruptcy laws or any other
insolvency law nor has a receiver, fiscal agent or similar officer been
appointed by a court for the business or property of such person, or any
partnership in which he was a general partner at or within two years before the
time of such filing, or any corporation or business association of which he was
an executive officer at or within two years before the time of such filing;
(2) a conviction in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations which do not relate to
driving while intoxicated);
(3) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining him from, or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States
Commodity Futures Trading Commission or an associated person of any of the
foregoing, or as an investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance
company, or engaging in or continuing any conduct or practice in connection
with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation of
Federal, state or other securities laws or commodities laws;
(4) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any Federal, state or local authority barring,
suspending or otherwise limiting for more than 60 days the right of such person
to engage in any activity described in the preceding sub-paragraph, or to be
associated with persons engaged in any such activity;
(5) a finding by a court of competent jurisdiction in a civil
action or by the Commission to have violated any securities law, regulation or
decree and the judgment in such civil action or finding by the Commission has
not been subsequently reversed, suspended or vacated; or
(6) a finding by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
(t) SB Merger has no pension plan, profit sharing or similar employee
benefit plan.
(u) Except for the consent and approval of the shareholders of SB
Merger, Mergerco and RxBazaar and the filing of the Certificate of Merger, and
the effectiveness of the Registration Statement, no consents or approvals of, or
filings or registrations with, any third party or any public body or authority
are necessary in connection with (i) the execution and delivery by SB Merger of
this Agreement and (ii) the consummation of the Merger and the other
transactions contemplated hereby.
-18-
(v) SB Merger knows of no person who rendered any service in connection
with the introduction of SB Merger, Mergerco or RxBazaar to each other, which is
being compensated through a separate agreement between itself and RxBazaar, and
they know of no claim for a "finder's fee" or similar type of fee in connection
with the Merger and the other transactions contemplated hereby.
(w) None of the information supplied or to be supplied by or about SB
Merger for inclusion in the Post-Effective Amendment to be furnished to SB
Merger shareholders concerning the Merger contains or will contain any untrue
statement of a material fact or omit or omits to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
(x) The execution and delivery by SB Merger of this Agreement, the
consummation and performance of the transactions herein contemplated, and
compliance with the terms of this Agreement by SB Merger will not conflict with,
result in a breach of or constitute default under any indenture, mortgage, deed
of trust or other agreement, instrument or Contract to which SB Merger is now a
party or by which it or any of its assets or properties is bound or the
Certificate of Incorporation, as amended, or the bylaws of SB Merger, in each
case as amended, or any law, order, rule or regulation, writ, injunction,
judgment or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over SB Merger or any of its business
or properties.
5. Rights and Liabilities of Surviving Corporation. At and after the
Effective Time, RxBazaar, as the surviving corporation, shall succeed to and
possess, without further act or deed, all of the estate, rights, privileges,
powers, and franchises, both public and private, and all of the property, real,
personal, and mixed, of each of the constituent corporations; all debts due to
either of the constituent corporations on whatever account shall be vested in
RxBazaar; all claims, demands, property, rights, privileges, powers, and
franchises and every other interest of either of the constituent corporations
shall be as effectively the property of RxBazaar as they were of the respective
constituent corporations; the title to any real estate by deed or otherwise in
either of the constituent corporations shall not revert or be in any way
impaired by reason of the merger, but shall be vested in RxBazaar; all rights of
creditors and all liens upon any property of either of the constituent
corporations shall be preserved unimpaired, limited in lien to the property
affected by such lien at the Effective Time; all debts, liabilities, and duties
of the respective constituent corporations shall thenceforth attach to RxBazaar
and may be enforced against it to the same extent as if such debts, liabilities,
and duties had been incurred or contracted by it; and RxBazaar shall indemnify
and hold harmless SB Merger and the officers and directors of each of the
constituent corporations against all such debts, liabilities, and duties and
against all claims and demands arising out of the Merger. At and after the
Effective Time, SB Merger shall continue to indemnify all prior officers and
directors of SB Merger to the maximum extent permitted by the Certificate of
Incorporation and Bylaws of SB Merger. To the extent the Surviving Corporation
obtains insurance covering its officers and directors, then it will maintain
such coverage for the present officers and directors of SB Merger for a period
of five years from and after the Effective Time, if and to the extent that
maintaining such coverage does not in management's reasonable discretion result
in material additional expense to RxBazaar.
6. Reasonable Efforts; Notification. (a) Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things necessary, proper or advisable to consummate and make
effective the Merger and the other transactions contemplated by this Agreement,
including using commercially reasonable efforts to accomplish the following: (i)
the obtaining of all necessary actions or nonactions, waivers, consents,
approvals, orders and authorizations from governmental entities and the making
of all necessary registrations, declarations and filings (including
registrations, declarations and filings with governmental
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entities, if any) and (ii) the execution or delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement.
(b) Each of RxBazaar and SB Merger shall give prompt notice to the
other of any representation or warranty made by it contained in this Agreement
becoming untrue or inaccurate in any material respect, or any failure of such
party to comply with or satisfy in any respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement, in each
case, such that the conditions set forth in Section 8 or 9 could reasonably be
expected to not be satisfied; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the parties
or the conditions to the obligations of the parties under this Agreement.
7. Further Assurances of Title. As and when requested by RxBazaar or by its
successors or assigns, Mergerco shall execute and deliver or cause to be
executed and delivered all such deeds and instruments and will take or cause to
be taken all such further action as RxBazaar may deem necessary or desirable in
order to invest in and confirm to RxBazaar title to and possession of its
property acquired by RxBazaar by reason or as a result of the Merger and
otherwise to carry out the intent and purposes hereof, and the officers and
directors of Mergerco and RxBazaar are fully authorized in the name of Mergerco,
RxBazaar or otherwise to take any and all such action.
8. Conditions to Obligations to Mergerco and SB Merger. The obligation of
Mergerco and SB Merger to consummate the Merger is subject to satisfaction of
the following conditions prior to the Effective Time:
(a) That the shareholders of SB Merger, at a meeting of its
shareholders duly called and held, shall have approved the Merger and all other
Shareholder Matters, all subject to the consummation of the Merger.
(b) RxBazaar shall have delivered to SB Merger audited financial
statements as at and for the years ended December 31, 2001 and 2000 and such
financial statements shall evidence no RxBazaar Material Adverse Change from the
date of RxBazaar Financial Statements. Except as disclosed in or as contemplated
by this Agreement or in the RxBazaar Schedule, that no material adverse change
in the aggregate shall have occurred in the consolidated financial condition of
RxBazaar since December 31, 2001.
(c) That RxBazaar shall have performed and complied in all material
respects with the provisions and conditions of this Agreement to be performed
and complied with, and that the representations and warranties made by RxBazaar
in this Agreement are true and correct in all material respects, both when made
and as of the Effective Time subject to RxBazaar making such modifications to
the RxBazaar Disclosure Schedule as may be necessary provided that no such
modification shall constitute an RxBazaar Material Adverse Effect.
(d) That this Agreement and the transactions contemplated hereby
shall have been approved by appropriate corporate action of RxBazaar, including
by written consent of the shareholders of RxBazaar, and that corporate votes and
resolutions to that effect in form and substance reasonably satisfactory to
Mergerco and its counsel have been delivered to Mergerco.
(e) That Mergerco and SB Merger shall have received an opinion from
counsel to RxBazaar substantially in the form of Exhibit 8(e) hereto.
(f) RxBazaar shall have raised a minimum of $3,000,000 of gross
proceeds from January 1, 2002 through the Effective Time, either a private
placement of RxBazaar Series B Preferred
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Stock or other funding, including the sale of shares of RxBazaar Series B
Preferred Stock at a price of at least $2.00 per share.
Compliance with the provisions of subparagraphs (b) through (d) and (f) of
this paragraph shall be evidenced by the certificate of the President and
Secretary of RxBazaar.
9. Conditions to Obligations of RxBazaar. The obligations of RxBazaar to
consummate the Merger are subject to satisfaction of the following conditions
prior to the Effective Time:
(a) INTENTIONALLY OMITTED
(b) That the Merger and all other Shareholder Matters, including
without limitation the amendment to SB Merger certificate of incorporation
designating the Series A Preferred Stock and Series B Preferred Stock of SB
Merger, shall have been approved by the shareholders of SB Merger on terms
satisfactory to RxBazaar, all subject to the consummation of the Merger.
(c) That SB Merger's Board of Directors and officers shall have
resigned seriatim subject to the consummation of the Merger.
(d) That no material transactions shall have been entered into by
Mergerco or SB Merger other than transactions in the ordinary course of business
since December 31, 2001, other than as referred to in this Agreement, except
with the prior written consent of RxBazaar.
(e) That no material adverse change shall have occurred in the
financial condition of either Mergerco or SB Merger since December 31, 2001,
other than as referred to in this Agreement.
(f) That Mergerco and SB Merger shall each have performed and complied
in all material respects with the provisions and conditions of this Agreement to
be performed and complied with and that the representations and warranties made
by Mergerco and SB Merger herein are true and correct in all material respects,
both when made and as of the Effective Time.
(g) SB Merger shall have complied fully with the applicable securities
or "blue sky" laws of any state or other governmental body in connection with
the Merger.
(h) That SB Merger shall have complied with all applicable provisions
of Rule 419 under the Securities Act, including the effectiveness of the
Post-Effective Amendment with the Commission and the circulation of a
reconfirmation offer to each original investor in SB Merger.
(i) That the SEC shall have declared the Post-Effective Amendment
effective, no stop order suspending the effectiveness of the Post-Effective
Amendment or any part thereof shall have been issued and no proceeding for that
purpose, and no similar proceeding in respect of the prospectus included
therein, shall have been initiated or threatened in writing by the SEC.
(j) That RxBazaar shall have received an opinion from counsel to
Mergerco and SB Merger in substantially the form of Exhibit 9(j).
Compliance with the provisions of subparagraphs (b) through (i) of this
paragraph shall be evidenced by the certificate of the President and Secretary
of SB Merger and the certificate of the President and Secretary of Mergerco to
be delivered at Closing.
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10. Abandonment. This Agreement and the Merger may be abandoned (a) by
RxBazaar, on the one hand, or SB Merger and Mergerco, on the other hand, acting
by their respective Boards of Directors, in the event of the failure at the
Closing of any condition in favor of such party to which the consummation of the
Merger is subject, or (b) by the mutual consent of the parties, acting each by
its Board of Directors, at any time after such adoption by such shareholders and
prior to the Effective Time. In the event of abandonment of this Agreement, the
same shall become wholly void and of no effect and except as set forth in
Section 11(b) hereof, there shall be no further liability or obligation
hereunder on the part of any of the parties, their respective Boards of
Directors or any other party to this Agreement, provided, that the
Non-Disclosure Agreement dated as of January 25, 2002 between RxBazaar and SB
Merger (the "NDA Agreement") shall survive any termination and abandonment of
this agreement.
11. Closing or Termination
(a) In the event the Closing of this Agreement shall not take place by
July 28, 2002, then any party shall have the right to terminate this Agreement
in which event no party shall have any further right or obligation as against
any other, except as set forth in Section 11(b).
(b) In the event this Agreement fails to close on or before July 28,
2002 for any reason, then RxBazaar agrees to abide by the terms of the letter
agreement between SB Merger and RxBazaar dated January 30, 2002, regarding the
payment of break-up fees to SB Merger (such letter agreement as amended from
time to time, the "Fee Agreement"). The parties agree that the break-up fee
shall be construed as liquidated damages and shall be RxBazaar's sole liability
in connection with any termination or abandonment of this Agreement.
12. Delivery of Corporate Proceedings of SB Merger. At the Closing, SB
Merger shall deliver to RxBazaar's counsel the originals or certified copies of
all of the corporate proceedings of SB Merger, duly certified by its Secretary,
relating to this Agreement.
13. Delivery of Corporate Proceedings of Mergerco. At the Closing, Mergerco
shall deliver to RxBazaar's counsel the originals of all of the corporate
proceedings of Mergerco, duly certified by its Secretary, relating to this
Agreement.
14. Delivery of Corporate Proceedings of RxBazaar. At the Closing, RxBazaar
shall deliver to Mergerco's counsel a copy of its corporate proceedings relating
to this Agreement or taken pursuant to the provisions of this Agreement duly
certified by its Secretary or by its Assistant Secretary.
15. Further Agreements; 1934 Act Reporting. Within 15 days after the
Effective Time, SB Merger shall file an appropriate Form 8-K Current Report with
respect to the Merger pursuant to the Securities Exchange Act of 1934, as
amended. SB Merger shall thereafter file such audited and other financial
statements pursuant to the requirements of Form 8-K, such financial statements
to be filed within the time period set forth in Form 8-K.
16. Limitation of Liability. The representations and warranties made by any
party to this Agreement are intended to be relied upon only by the other parties
to this Agreement, and by no other person. Nothing contained in this Agreement
shall be deemed to confer upon any person not a party to this Agreement any
third party beneficiary rights or any other rights of any nature whatsoever, and
only to the extent expressly referred to herein.
17. Further Instruments and Actions. Each party shall deliver such further
instruments and take such further action as may be reasonably requested by any
other in order to carry out the intents and purposes of this Agreement.
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18. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, without reference to its
conflicts of laws principles, regardless of the laws that might otherwise govern
under applicable principles of conflicts of law thereof.
19. Rules of Construction. The parties hereto 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.
20. Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Any purported assignment in
violation of this Section 20 shall be void.
21. Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand, sent
via overnight courier, sent by facsimile, or mailed by first class certified or
registered mail, return receipt requested, postage prepaid:
If to RxBazaar: RxBazaar, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
With a copy to: ▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
If to SB Merger: SB Merger Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
With a copy to: Gusrae, ▇▇▇▇▇▇ & ▇▇▇▇▇, PLLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
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or to such other person or entity or at such other address as any party shall
designate by notice to the other in accordance with this Section 21.
Notices provided in accordance with this Section 21 shall be deemed
delivered (i) upon personal delivery with signature required, (ii) one Business
Day after they have been sent to the recipient by reputable overnight courier
service (charges prepaid and signature required) (iii) upon confirmation, answer
back received, of successful transmission of a facsimile message containing such
notice if sent between 9 a.m. and 5 p.m., local time of the recipient, on any
Business Day, and as of 9 a.m. local time of the recipient on the next Business
Day if sent at any other time, or (iv) three Business Days after deposit in the
mail. The term "Business Day" as used in this Section 21 shall mean any day
other than Saturday, Sunday or a day on which banking institutions are not
required to be open in Boston, Massachusetts. Copies of any notices hereunder
may be sent by email, but transmission by such means alone shall not constitute
delivery of notice under this Section 21.
22. Binding Agreement. This Agreement, along with the Fee Agreement and the
NDA Agreement, represents the entire agreement among the parties hereto with
respect to the matters described herein and is binding upon and shall inure to
the benefit of the parties hereto and their legal representatives, successors
and permitted assigns. This Agreement may not be assigned and, except as stated
herein, may not be altered or amended except in writing executed by the party to
be charged.
23. Counterparts. This Agreement may be executed in counterparts, all of
which, when taken together, shall constitute the entire Agreement.
24. Severability. The provisions of this Agreement shall be severable, so
that the unenforceability, validity or legality of any one provision shall not
affect the enforceability, validity or legality of the remaining provisions
hereof.
* * *
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IN WITNESS WHEREOF, the parties hereto have made and executed this
Agreement as of the day and year first above written.
RxBAZAAR, INC.
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Chairman and Chief Executive Officer
SB MERGER CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
RxB ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
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