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EXHIBIT 10.24(11)
RESTATED AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 13, 1998 AND
AMONG THE COMPANY, ROWALE CORP.
AND THE FRESH JUICE COMPANY, INC.
Exhibit 21
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RESTATED AGREEMENT AND PLAN OF MERGER
By and Among
SARATOGA BEVERAGE GROUP, INC.
ROWALE CORP.
and
THE FRESH JUICE COMPANY, INC.
Dated as of October 13, 1998
Exhibit 22
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RESTATED AGREEMENT AND PLAN OF MERGER
RESTATED AGREEMENT AND PLAN OF MERGER dated as of October 13, 1998,
by and among Saratoga Beverage Group, Inc., a Delaware corporation ("Parent"),
Rowale Corp., a Delaware corporation and wholly owned subsidiary of Parent
("Sub"), and The Fresh Juice Company, Inc., a Delaware corporation (the
"Company").
WHEREAS, Parent, Sub and the Company previously entered into an
agreement and plan of merger, dated as of August 14, 1998 (the "First
Agreement"); and
WHEREAS, the Board of Directors of Parent and the Company have
determined to amend the terms of the First Agreement; and
WHEREAS, the Boards of Directors of Parent and the Company have
determined that it is in the best interests of their respective companies and
their stockholders to consummate the business combination transaction provided
for herein in which Sub will, subject to the terms and conditions set forth
herein, merge with and into the Company (the "Merger"); and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties and covenants in connection with the Merger.
NOW, THEREFORE, in consideration of the mutual covenants;
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
I. ARTICLE
THE MERGER
A. THE MERGER. Subject to the terms and conditions of this Agreement, in
accordance with the Delaware General Corporation Law ("DGCL"), at the Effective
Time (as hereinafter defined), Sub shall merge with and into the Company. The
Company shall become the surviving corporation (hereinafter sometimes called the
"Surviving Corporation") in the Merger, and shall continue its corporate
existence under the laws of the State of Delaware. The name of the Surviving
Corporation shall be The Fresh Juice Company, Inc. Upon consummation of the
Merger, the separate corporate existence of Sub shall terminate.
B. PLAN OF MERGER. This Agreement shall constitute an agreement of
merger for purposes of the DGCL.
Exhibit 23
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C. EFFECTIVE TIME. As promptly as practicable after all of the conditions set
forth in Article VII shall have been satisfied or, if permissible, waived by the
party entitled to the benefit of the same, the Company and Sub shall duly
execute and file a certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware (the "Delaware Secretary") in
accordance with Section 251 of the DGCL. The Merger shall become effective on
the date (the "Effective Date") and at such time (the "Effective Time") as the
Certificate of Merger is filed with the Delaware Secretary or at such later date
and time as is specified in the Certificate of Merger.
D. EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger shall
be as provided herein and as set forth in Section 259 of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, (i) all the property, rights, privileges, powers and franchises of Sub
shall vest in the Surviving Corporation, (ii) all debts, liabilities,
obligations, restrictions, disabilities and duties of Sub and the Company shall
become the debts, liabilities, obligations, restrictions, disabilities and
duties of the Surviving Corporation and (iii) the Surviving Corporation shall
become a wholly owned subsidiary of Parent.
E. CONVERSION OF COMPANY COMMON STOCK.
1. At the Effective Time, each share of the common stock, par value
$.01 per share, of the Company (the "Company Common Stock") issued and
outstanding immediately prior to the Effective Time (other than (i)
shares of Company Common Stock held in the Company's treasury or
directly or indirectly by Parent, Sub or the Company, and (ii)
Dissenting Shares (as such term is defined in Section 1.06 hereof))
shall, by virtue of this Agreement and without any action on the part
of the holder thereof, be converted into the right to receive and be
exchangeable for $2.244 per share in cash (the "Cash Per Share Price")
and 0.33 shares of Class A Common Stock, par value $.01 per share (the
"Parent Common Stock"), of Parent (the "Stock Per Share Price" and,
together with the Cash Per Share Price, the "Per Share Price"). By way
of example, a holder of 1,000 shares of Company Common Stock will
receive $2,244.00 in cash and 330 shares of Parent Common Stock.
2. Each share of Company Common Stock converted into the Per Share Price
pursuant to this Article I shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each certificate
(each a "Certificate," and collectively, the "Certificates") previously
representing any such shares of Company Common Stock shall thereafter
represent the right to receive (i) cash equal to the Cash Per Share Price
multiplied by the number of shares of Company Common Stock represented by
such Certificate and (ii) shares of Parent Common Stock equal to the Stock
Per Share Price multiplied by the number of shares of Company Common Stock
represented by such Certificate (in the aggregate, the "Merger
Consideration") or the right to perfect their right to receive payment for
their shares pursuant to the DGCL and Section 1.06 hereof. Certificates
previously representing shares of Company Common Stock shall be exchanged
for the Merger Consideration upon the surrender of such Certificates in
accordance with Section 2.02 hereof, without any interest
Exhibit 24
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thereon, subject to applicable law and the provisions of this Agreement
relating to Dissenting Shares (as hereinafter defined).
3. If, between the date of this Agreement and the date of payment of any
portion of the Merger Consideration payable hereunder, the outstanding
shares of Parent Common Stock shall be changed into a different number of
shares by reason of any reclassification, recapitalization or exchange of
shares or if a stock split, combination, stock dividend, stock rights or
extraordinary dividend thereon shall be declared with a record date within
said period, the Stock Per Share Price shall be correspondingly adjusted.
No fractional shares of Parent Common Stock will be issued and, in lieu
thereof, any stockholder entitled to receive a fractional share of Parent
Common Stock shall be paid in cash an amount equal to the value of such
fractional shares, which shall be calculated as the fraction of the share
of Parent Common Stock that would otherwise be issued multiplied by $3.35.
4. The Company (i) will grant no additional options or restricted stock or
similar rights under its 1996 Incentive Stock Option Plan (the "Option
Plan") or otherwise on or after the date of this Agreement and (ii) has
suspended, pending the termination of this Agreement without the Merger
being consummated, the Option Plan without prejudice to the rights of the
holder of options awarded pursuant thereto. The Company will use
reasonable diligence and timely efforts to obtain the consent of each
holder of an option or restricted stock right (whether or not then
exercisable or vested) to the cancellation or conversion into shares of
Company Common Stock of his, her or its options or warrants in exchange
for, at the Effective Time, a number of shares of Parent Common Stock
equal to (A) the Stock Per Share Price (B) multiplied by the difference
between $3.35 and the exercise price thereof, (C) divided by $1.106, and
(D) multiplied by the number of shares of Company Common Stock subject
thereto. By way of example, a holder of options to purchase 1,000 shares
of Company Common Stock at an exercise price of $3.00 will receive 104
shares of Parent Common Stock.
5. Each share of Company Common Stock held in the treasury of the Company,
and each share of Company Common Stock owned directly or indirectly by
Parent, Sub or the Company, shall be canceled and retired without payment
of any consideration therefor. Each share of common stock, par value $.01
per share, of Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one validly issued, fully paid and
nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
F. RIGHTS WITH RESPECT TO DISSENTING SHARES.
1. Notwithstanding anything in this Agreement to the contrary and
unless otherwise provided by applicable law, shares of Company Common
Stock that are issued and outstanding immediately prior to the
Effective Time and that are owned by stockholders who have properly
exercised and perfected their rights of appraisal within the meaning of
Section 262 of the DGCL (the
Exhibit 25
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"Dissenting Shares"), shall not be converted into the right to receive the
Per Share Price, unless and until such stockholders shall have failed to
perfect or shall have effectively withdrawn or lost their right of
appraisal and payment under applicable law. If any such stockholder shall
have failed to perfect or shall have effectively withdrawn or lost such
right of appraisal, each share of Company Common Stock held by such
stockholder shall thereupon be deemed to have been converted into the
right to receive and become exchangeable for the Per Share Price, at the
Effective Time, pursuant to Section 1.05(a) hereof.
2. The Company shall give Parent (i) prompt notice of any demands for
appraisal received by the Company, withdrawals of such demands, and any
other instruments served in connection with such demands pursuant to the
DGCL and received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under
the DGCL consistent with the obligations of the Company thereunder. The
Company shall not, except with the prior written consent of Parent, (x)
make any payment with respect to any demands for appraisal, (y) offer to
settle or settle any such demands or (z) waive any failure to timely
deliver a written demand for appraisal in accordance with the DGCL.
G. CERTIFICATE OF INCORPORATION. Unless otherwise agreed to by the parties prior
to the Effective Time, at and after the Effective Time, the Certificate of
Incorporation of Sub shall be the Certificate of Incorporation of the Surviving
Corporation, until thereafter amended as provided by law and the Certificate of
Incorporation.
H. BYLAWS. Unless otherwise agreed to by the parties prior to the Effective
Time, at and after the Effective Time, the Bylaws of Sub shall be the Bylaws of
the Surviving Corporation, until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such Bylaws.
I. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. As of the Effective
Time, the board of directors of the Surviving Corporation shall consist of one
(1) member whom shall be designated by Parent in writing prior to the Effective
Time. The director so designated shall hold office in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation until his
or her respective successors are duly elected or appointed and qualified. The
board of directors of the Surviving Corporation shall elect the officers of the
Surviving Corporation.
J. BOARD OF DIRECTORS OF PARENT. As of the Effective Time, the board of
directors of Parent shall be the Board of Directors in office prior to the
Effective Time, plus one (1) designee of the Company. The directors in office
shall hold office in accordance with the Certificate of Incorporation and Bylaws
of the Parent until his or her respective successor(s) is (are) duly elected or
appointed and qualified. The designee of the Company to the Board of Directors
of Parent shall not serve after the 1999 Annual Meeting of Stockholders of
Parent unless such designee is nominated by the Nominating Committee of the
Board of Directors of Parent. The board of directors of the Parent shall elect
the officers of the Parent.
Exhibit 26
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K. ADDITIONAL ACTIONS. If, at any time after the Effective Time, the Surviving
Corporation shall consider or be advised that any further assignments or
assurances in law or any other acts are necessary or desirable (a) to vest,
perfect or confirm, of record or otherwise, in the Surviving Corporation, title
to and possession of any property or right of the Company acquired or to be
acquired by reason of, or as a result of, the Merger, or (b) otherwise to carry
out the purposes of this Agreement, the Company and its proper officers and
directors shall be deemed to have granted to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such proper deeds,
assignments and assurances in law and to do all acts necessary or proper to
vest, perfect or confirm title to and possession of such property or rights in
the Surviving Corporation and otherwise to carry out the purposes of this
Agreement; and the proper officers and directors of the Surviving Corporation
are fully authorized in the name of the Company or otherwise to take any and all
such action.
L. COMPANY ACTION. The Company represents and warrants that (i) the Board of
Directors of the Company has duly approved the execution of this Agreement, and
the Merger, and has resolved to recommend approval of the Merger by the
Company's stockholders, (ii) the persons or entities listed on Exhibit A-1
attached hereto own an aggregate of 2,688,889 issued and outstanding shares of
Company Common Stock and (iii) each such person or entity listed on Exhibit A
has executed and delivered a Voting, Standstill and Proxy Agreement, in
substantially the form annexed hereto as Exhibit B (the "Voting Agreement").
M. PARENT ACTION. Parent represents and warrants that (i) each of the Board of
Directors of Parent and Sub has duly approved the execution of this Agreement,
and the Merger, and has resolved to recommend approval of the Merger by Parent's
stockholders, (ii) the persons listed on Exhibit A-2 attached hereto own an
aggregate of 371,325 issued and outstanding shares of Parent Common Stock and
522,955 issued and outstanding shares of Parent Class B Common Stock (as
hereinafter defined) and (iii) each such person listed on Exhibit A-2 has
executed and delivered the Voting Agreement, in substantially the form annexed
hereto as Exhibit ▇.
▇. ▇▇▇▇▇ AGREEMENT AND ▇▇▇▇▇ AGREEMENT. ▇▇▇▇▇▇ ▇▇▇▇▇, Parent and the Company
shall have entered into an Employment Termination, Non-Competition and
Consulting Agreement, in substantially the form annexed hereto as Exhibit C (the
"Bogen Agreement"). ▇▇▇▇▇▇ ▇▇▇▇▇, Parent and the Company shall have entered into
an Employment Termination and Non-Competition Agreement, in substantially the
form annexed hereto as Exhibit D (the "▇▇▇▇▇ Agreement").
O. FINANCING; EQUITY FINANCING. Parent has delivered to the Company a commitment
letter or letters (the "Commitment Letter(s)"), in form and on terms reasonably
satisfactory to the Company, from a responsible financing source or sources,
indicating its or their willingness, subject to the conditions set forth
therein, to lend (the "Financing") Parent an amount sufficient, together with
Parent's cash and cash equivalents, to fund the Cash Per Share Price plus
expenses related to the transactions contemplated hereby. In addition, Parent
intends to issue such number of shares of its common stock to investors, which
may include one or more non-officer
Exhibit 27
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directors or other affiliates of the Company, as is necessary to
consummate the Financing.
II. ARTICLE
PAYMENT OF MERGER CONSIDERATION
A. PARENT TO MAKE CASH AVAILABLE. On or prior to the Effective Time, Parent
shall deposit, or shall cause to be deposited, with American Stock Transfer &
Trust Company or such other bank or trust company selected by Parent and
reasonably acceptable to the Company (the "Exchange Agent"), in trust for the
benefit of the holders of Certificates, for exchange in accordance with this
Article II, sufficient cash to pay in full the cash payments (such cash being
hereinafter referred to as the "Exchange Fund") to be issued pursuant to Section
1.05 and paid pursuant to Section 2.02(a) in exchange for outstanding shares of
Company Common Stock.
B. EXCHANGE OF SHARES.
1. As soon as practicable after the Effective Time, and in no event
later than three (3) business days thereafter, the Exchange Agent shall
(and Parent shall cause the Exchange Agent to so) mail to each holder
of record of a Certificate or Certificates a form letter of transmittal
and instructions for use in effecting the surrender of the Certificates
in exchange for (i) cash equal to the Cash Per Share Price multiplied
by the number of shares of Company Common Stock represented by such
Certificate or Certificates and (ii) shares of Parent Common Stock
equal to the Stock Per Share Price multiplied by the number of shares
of Company Common Stock represented by such Certificate or
Certificates, plus in each case cash in lieu of fractional shares of
Parent Common Stock, valued in accordance with Section 1.05(c) hereof.
Such letter of transmittal and instructions shall be in the form agreed
to by Parent and the Company prior to the Closing. Upon surrender of a
Certificate for exchange and cancellation to the Exchange Agent,
together with such letter of transmittal, duly executed, the holder of
such Certificates shall be entitled to receive in exchange therefor a
check representing the amount of cash which such holder has the right
to receive in respect of the Certificate so surrendered pursuant to the
provisions of this Article II, and the Certificate so surrendered shall
forthwith be canceled. No interest will be paid or accrued on the cash
paid for the Company Common Stock, unpaid dividends and distributions,
if any, payable to holders of Certificates. Notwithstanding the time
of surrender of the Certificates, record holders ("Record Holders") of
Company Common Stock shall be deemed stockholders of Parent for all
purposes from the Effective Time, except that Parent shall withhold the
payment of dividends from any Record Holder until such Record Holder
effects the exchange of Certificates for Parent Common Stock. (Such
Record Holder shall receive such withheld dividends, without interest,
upon effecting the share exchange.)
Exhibit 28
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2. After the Effective Time, there shall be no transfers on the stock
transfer books of the Company of the shares of Company Common Stock which
were issued and outstanding immediately prior to the Effective Time.
3. Any portion of the Exchange Fund that remains unclaimed by the
stockholders of the Company for six (6) months after the Effective Time
shall be transferred to the Surviving Corporation. Any stockholders of the
Company who have not theretofore complied with this Article II shall
thereafter look only to Parent and the Surviving Corporation for payment
of their Merger Consideration, without any interest thereon.
Notwithstanding the foregoing, none of the Surviving Corporation, the
Company, Parent, Sub, the Exchange Agent or any other person shall be
liable to any former holder of shares of Company Common Stock for any
amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
4. In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if required by Parent,
the posting by such person of a bond in such amount as Parent may direct
as indemnity against any claim that may be made against it with respect to
such Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate, the Merger Consideration deliverable in
respect thereof pursuant to this Agreement.
C. LISTING OF SHARES. Parent shall cause the Parent Common Stock to be issued in
connection with the Merger to be listed on Nasdaq SmallCap Market or any other
national securities exchange or quotation system, if any, upon which the Parent
Common Stock is trading or is being quoted at the Effective Time.
III. ARTICLE
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Sub as follows,
subject only to the exceptions specifically disclosed under appropriate section
headings in the Company's schedules:
A. CORPORATE ORGANIZATION.
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company
has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified would not have a Material
Adverse
Exhibit 29
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Effect (as defined below) on the Company. As used in this Agreement, the
term "Material Adverse Effect" means, with respect to Parent, the Company
or the Surviving Corporation, as the case may be, any change or effect
that is or is reasonably expected to be materially adverse to the
business, properties, assets, liabilities, financial condition or results
of operations of such party and its Subsidiaries, taken as a whole. As
used in this Agreement, the word "Subsidiary" means any corporation,
partnership or other organization, whether incorporated or unincorporated,
which is or was consolidated with such party or with which such party is
or was consolidated for financial reporting purposes. The Certificate of
Incorporation and Bylaws of the Company, copies of which have previously
been delivered to Parent, are true and complete copies of such documents
as in effect as of the date of this Agreement.
2. Except as set forth on Schedule 3.01, the Company has no direct or
indirect Subsidiaries. Except as set forth on Schedule 3.01, the Company
does not own, control or hold with the power to vote, directly or
indirectly of record, beneficially or otherwise, any capital stock or any
equity or ownership interest in any corporation, partnership, associate,
joint venture or other entity, except for less than five percent (5%) of
any equity security registered under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
3. The minute books of each of the Company and its Subsidiaries contains
true, accurate and complete records of all meetings and other corporate
actions held or taken by its stockholders and board of directors
(including committees thereof).
B. CAPITALIZATION.
1. The authorized capital stock of the Company consists of
30,000,000 shares of Company Common Stock and 7,000,000 shares of
preferred stock, par value $.01 per share ("Company Preferred Stock"). As
of the date of this Agreement, there are (x) 6,467,731 shares of Company
Common Stock issued and outstanding and (y) such shares of Company Common
Stock issuable upon exercise of outstanding options or warrants as set
forth in Schedule 3.02 annexed hereto. No Company Preferred Stock has ever
been issued. Except as set forth on Schedule 3.02, all of the issued and
outstanding shares of Company Common Stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive
rights with no personal liability attaching to the ownership thereof. The
authorized and issued and outstanding capital stock of each Subsidiary of
the Company is set forth on Schedule 3.02. All of the issued and
outstanding shares of capital stock of each Subsidiary of the Company are
owned by the Company, have been duly authorized and validly issued and are
fully paid, non-assessable and free of preemptive rights with no personal
liability attaching to the ownership thereof. Except as set forth in
Schedule 3.02 hereto, the Company does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any
shares of Company Common Stock or any other equity security
Exhibit 30
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of the Company or any of its Subsidiaries or any securities representing
the right to purchase or otherwise receive any shares of Company Common
Stock or any other equity security of the Company or any of its
Subsidiaries other than as provided for in this Agreement. There are no
bonds, debentures, notes or other indebtedness of the Company having the
right to vote (or convertible into, or exchangeable for securities having
the right to vote) on any matters on which stockholders of the Company may
vote.
2. Except as contemplated herein or disclosed on Schedule 3.02 hereto,
there are no agreements or understandings, with respect to the voting of
any shares of Company Common Stock or capital stock of any Subsidiary of
the Company or which restrict the transfer of such shares, to which the
Company or any of its Subsidiaries is a party and, to the knowledge of the
Company, there are no such agreements or understandings to which the
Company or any of its Subsidiaries is not a party with respect to the
voting of any such shares or which restrict the transfer of such shares,
other than applicable federal and state securities laws.
3. All dividends on Company Common Stock which have been declared prior to
the date of this Agreement have been paid in full.
C. AUTHORITY; NO VIOLATION.
1. The Company has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation by the Company of the transactions contemplated by this
Agreement have been duly and validly approved by the Board of Directors
of the Company. Subject to the requirements of applicable law, the
Board of Directors of the Company has directed that this Agreement and
the transactions contemplated hereby be submitted to the Company's
stockholders for approval at a meeting of such stockholders (the
"Company Stockholder Meeting") and has voted to recommend to its
stockholders that its stockholders approve and adopt this Agreement and
the transactions contemplated thereby and, except for the adoption of
this Agreement by the requisite vote of the Company's stockholders and
the filing of the Certificate of Merger, no other corporate proceedings
on the part of the Company are necessary to approve this Agreement and
to consummate the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by the Company and
(assuming the due authorization, execution and delivery by Parent and
Sub) constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
2. Except as set forth in Schedule 3.03 hereto, neither the execution and
delivery of this Agreement by the Company, nor the consummation by the
Company of the transactions contemplated hereby, nor compliance by the
Company with any of the terms or provisions hereof, will (i) violate,
conflict with or result in a breach of any provision of the Certificate of
Incorporation or Bylaws
Exhibit 31
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of the Company, (ii) assuming that the consents and approvals referred to
in Section 3.04 hereof are duly obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to the Company or any of its Subsidiaries, or any of their
respective properties or assets, or (y) violate, conflict with, result in
a breach of any provisions of or the loss of any benefit under, constitute
a default (or any event, which, with notice or lapse of time, or both
would constitute a default) under, result in the termination of or a right
of termination or cancellation under, accelerate the performance required
by, or result in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the properties or assets of the
Company or any of its Subsidiaries under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which the Company or
any of its Subsidiaries is a party, or by which the Company or any of its
Subsidiaries or any of their respective properties or assets may be bound
or affected, except (in the case of clause (y) above) for such violations,
conflicts, beaches or defaults which, either individually or in the
aggregate, will not have a Material Adverse Effect on the Company.
D. CONSENTS AND APPROVALS. Except for (a) the filing with the Securities and
Exchange Commission (the "SEC") of a Registration Statement on Form S-4
registering the issuance of the shares of Parent Common Stock to be issued in
connection with the Merger and containing a joint proxy statement in definitive
form relating to the Company Stockholder Meeting and the Parent Stockholder
Meeting (as hereinafter defined) and the transactions contemplated hereby (the
"Registration Statement") and the declaration of the effectiveness thereof by
the SEC, (b) the approval of this Agreement by the requisite vote of the
stockholders of the Company and Parent, respectively, (c) the filing of the
Certificate of Merger with the Delaware Secretary pursuant to the DGCL to effect
the Merger and (d) such filings, authorizations, consents or approvals as may be
set forth in Schedule 3.04 hereto, no consents or approvals of, or filings or
registrations with, any court, administrative agency or commission or other
governmental authority or instrumentality (each a "Governmental Entity") or with
any third party are necessary in connection with the execution and delivery by
the Company of this Agreement and the consummation by the Company of the Merger
and the other transactions contemplated hereby.
Exhibit 32
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E. FINANCIAL STATEMENTS.
1. The Company has previously delivered to Parent copies of the
audited consolidated balance sheets of the Company as of November 30,
1995, November 30, 1996 and November 30, 1997, and the related
consolidated statements of income, changes in stockholders' equity and
cash flows for the fiscal years 1996 through 1997, inclusive, included
in the Company's Annual Report on Form 10-KSB for the fiscal year ended
November 30, 1997 filed with the SEC under the Exchange Act. The
Company has also previously delivered to Parent copies of the unaudited
consolidated balance sheets of the Company as of May 31, 1998, and the
related unaudited consolidated statements of income and cash flows for
the six months ended May 31, 1998, included in the Company's Quarterly
Report on Form 10-QSB for the quarter ended May 31, 1998 filed with the
SEC under the Exchange Act. The audited consolidated financial
statements and unaudited consolidated interim financial statements of
the Company and its Subsidiaries included or incorporated by reference
in the Company SEC Reports (as hereinafter defined) filed on or after
November 30, 1995 have been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied during the
periods involved (except as may be indicated in the notes thereto or,
in the case of the unaudited statements, as permitted by Form 10-QSB),
complied as of their respective dates in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, and fairly present the
consolidated financial position of the Company and its Subsidiaries as
of the dates thereof and the consolidated income and retained earnings
and sources and applications of funds for the periods then ended
(subject, in the case of any unaudited interim financial statements, to
the absence of footnotes required by GAAP and normal year-end
adjustments).
2. Except as set forth on Schedule 3.05(b) hereto for liabilities incurred
since May 31, 1998 in the ordinary course of business consistent with past
practice and as otherwise set forth on Schedule 3.05(b) hereto, the
Company does not have any liabilities or obligations of any nature
whatsoever (whether absolute, accrued, contingent or otherwise) which are
not adequately reserved or reflected on the balance sheet of the Company
included in its Quarterly Report on Form 10-QSB for the quarter ended May
31, 1998, except for liabilities or obligations which in the aggregate do
not exceed $100,000, and there do not exist any circumstances that could
reasonably be expected to result in such liabilities or obligations.
F. FAIRNESS OPINION. The Company has received the opinion of Ladenburg
▇▇▇▇▇▇▇▇ & Company to the effect that, as of the date of such opinion, the
Per Share Price is fair to the Company's stockholders from a financial
point of view, and such opinion has not been amended or rescinded as of
the date of this Agreement.
G. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in Schedule 3.07
hereto, since May 31, 1998, there has not been any Material
Exhibit 33
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Adverse Effect on the Company (including without limitation any loss of
employees or customers that has had a Material Adverse Effect, or that is
reasonably likely to have a Material Adverse Effect, on the Company) and,
to the best knowledge of the Company, no fact or condition exists which
will cause such a Material Adverse Effect on the Company in the future.
H. LEGAL PROCEEDINGS. Except as set forth in Schedule 3.08 hereto, neither
the Company nor any of its Subsidiaries is a party to any, and there are
no pending or, to the best knowledge of the Company, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against or
affecting the Company or any of its Subsidiaries or any property or asset
of the Company or any of its Subsidiaries, before any court, arbitrator or
administrative, Governmental Entity, domestic or foreign, which would,
either individually or in the aggregate, have a Material Adverse Effect on
the Company, and no facts or circumstances have come to the Company's
attention which have caused it to believe that such a claim, action,
proceeding or investigation against or affecting the Company or any of its
Subsidiaries could reasonably be expected to occur. Neither the Company
nor any of its Subsidiaries nor any property or asset of the Company or
any of its Subsidiaries is subject to any order, writ, judgment,
injunction, decree, determination or award which restricts its ability to
conduct business in any area in which it presently does business or has or
could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect on the Company.
I. TAXES AND TAX RETURNS.
1. For purposes of this Agreement, the terms "Tax" and "Taxes" shall mean
any and all taxes, charges, fees, levies or other assessments, including,
without limitation, all net income, gross income, gross receipts, premium,
sales, use, ad valorem, value added, transfer, franchise, profits,
license, withholding, payroll, employment, excise, estimated, severance,
stamp, occupation, property or other taxes, fees, assessments or charges
of any kind whatsoever, together with any interest and any penalties
(including penalties for failure to file in accordance with applicable
information reporting requirements), and additions to tax by any
authority, whether federal, state, or local or domestic or foreign. The
term "Tax Return" shall mean any report, return, form, declaration or
other document or information required to be supplied to any authority in
connection with Taxes. The term "Code" shall mean the Internal Revenue
Code of 1986, as amended.
2. Each of the Company and its Subsidiaries (the "Taxpayers") has filed
all Tax Returns that were required to be filed. All such Tax Returns were
when filed, and continue to be, correct and complete in all material
respects. All Taxes owed by the Taxpayers (whether or not shown on any Tax
Return) have been timely paid. Except as set forth on Schedule 3.09(b)
annexed hereto, none of the Taxpayers currently is the beneficiary of any
extension of time within which to file any Tax Return. No claim has ever
been made by an authority in a jurisdiction where any of the Taxpayers
does not file Tax Returns that it is or
Exhibit 34
15
may be subject to taxation by that jurisdiction. There are no liens with
respect to Taxes on any of the assets or property of any of the Taxpayers,
except for liens with respect to Taxes not yet payable.
3. Each of the Taxpayers has withheld or collected and paid all Taxes
required to have been withheld or collected and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, an other third party, or otherwise.
4. There is no dispute or claim concerning any Tax Liability of any of the
Taxpayers either (A) claimed or raised by any authority in writing or (B)
as to which any of the Taxpayers or the directors and officers (and
employees responsible for Tax matters) of any of the Taxpayers has
knowledge. There are no proceedings with respect to Taxes pending, except
as set forth on Schedule 3.09(d) annexed hereto.
5. Schedule 3.09(e) annexed hereto sets forth an accurate, correct and
complete list of all federal, state, local, and foreign Tax Returns filed
with respect to the Taxpayers for taxable periods ended on or after
November 30, 1991, indicates those Tax Returns that have been audited and
indicates those Tax Returns that currently are the subject of audit. The
Company has delivered to the Parent correct and complete copies of all
federal income Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by or on behalf of any of the
Taxpayers since December 1, 1991. To the knowledge of the Taxpayers and
their directors and officers (and employees responsible for Tax matters),
no other audit or investigation with respect to Taxes is pending or has
been threatened.
6. None of the Taxpayers have waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
7. None of the assets of any of the Taxpayers are assets that Sub or the
Parent is or shall be required to treat as being owned by another person
pursuant to the provisions of Section 168(f)(8) of the Internal Revenue
Code of 1954, as amended and in effect immediately before the enactment of
the Tax Reform Act of 1986, or is "tax-exempt use property" within the
meaning of Section 168(h)(1) of the Code.
8. None of the Taxpayers has agreed to make, nor is it required to make,
any adjustments under Section 481(a) of the Code by reason of a change in
accounting method or otherwise.
9. None of the Taxpayers is a party to any contract, arrangement or plan
that has resulted or would result, separately or in the aggregate, in the
payment of any "excess parachute payments" within the meaning of Section
280G of the Code, or the payment of any consideration which would not be
deductible by reason of Section 162(m) of the Code.
Exhibit 35
16
10. None of the Taxpayers has been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii).
11. None of the Taxpayers is a party to any agreement, whether written or
unwritten, providing for the payment of Tax liabilities, payment for Tax
losses, entitlements to refunds or similar Tax matters.
12. No ruling with respect to Taxes relating to any of the Taxpayers has
been requested by or on behalf of the Taxpayers.
13. None of the Taxpayers (A) has never been a member of an affiliated
group (within the meaning of Section 1504 of the Code, or any similar
group as defined for state, local or foreign tax purposes) filing a
consolidated federal (or combined or unitary state, local or foreign)
income Tax Return or (B) has any liability for the taxes of any Person
(other than the Taxpayers) under Reg. Section 1.1502-6 (or any similar
provision of state, local or foreign Law), as a transferee or successor,
by contract, or otherwise.
14. The unpaid Taxes of the Taxpayers (A) did not, as of the most recent
fiscal quarter end, exceed the reserves for Tax liability (rather than any
reserve for deferred Taxes established to reflect timing differences
between book and Tax income) on their respective books at such time and
(B) do not exceed that reserve as adjusted for the passage of time through
the Effective Date in accordance with the past custom and practice of the
Taxpayers in filing their Tax Returns.
15. Schedule 3.09 sets forth the following information with respect to
each of the Company and its Subsidiaries as of the most recent practicable
date (as well as on an estimated pro forma basis as of the Effective Date
giving effect to the consummation of the transactions contemplated
hereby): (A) the basis of each of the Company and its Subsidiaries in its
assets; and (B) the amount of any net operating loss, net capital loss,
unused investment or other credit, unused foreign tax, or excess
charitable contribution allocable to each of the Company and its
Subsidiaries.
16. None of the Company or its Subsidiaries has filed an election, consent
or agreement under Section 341(f) of the Code.
17. For purposes of this Section 3.09, references to the Taxpayers shall
also refer to any predecessor companies.
J. EMPLOYEE BENEFIT PLANS.
1. Schedule 3.10 hereto sets forth a true and complete list of all
Plans maintained or contributed to by the Company or any of its
Subsidiaries during the five (5) years preceding this Agreement. The term
"Plans" for purposes of
Exhibit 36
17
this Article III means all employee benefit plans, arrangements or
agreements that are maintained or contributed to, or that were maintained
or contributed to at any time during the five (5) years preceding the date
of this Agreement, by the Company or any of its Subsidiaries, or by any
trade or business, whether or not incorporated (an "ERISA Affiliate"), all
of which together with the Company would be deemed a "single employer"
within the meaning of Section 4001 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
2. The Company has heretofore delivered to Parent true and complete copies
of each of the Plans and all related documents, including but not limited
to (i) all required Forms 5500 and all related schedules for such Plans
(if applicable) for each of the last two (2) years, (ii) the actuarial
report for such Plan (if applicable) for each of the last two (2) years,
and (iii) the most recent determination letter from the IRS (if
applicable) for such plan.
3. (i) Except as may be provided in Schedule 3.10 hereto, each of the
Plans has been operated and administered in all material respects in
accordance with applicable laws, including but not limited to ERISA and
the Code, (ii) each of the Plans intended to be "qualified" within meaning
of Section 401(a) of the Code has been maintained so as to qualify from
the effective date of such Plan to the Effective Time, (iii) with respect
to each Plan which is subject to Title IV of ERISA, the present value of
"benefit liabilities" (within the meaning of Section 4001(a)(16) of ERISA)
under such Plan, based upon the actuarial assumptions currently used by
the Plan for IRS funding purposes did not, as of its latest valuation
date, exceed the then current value of the assets of such Plan allocable
to such accrued benefits, and there has been no "accumulated funding
deficiency" (whether or not waived), (iv) no Plan provides benefits,
including without limitation death, medical or other benefits (whether or
not insured), with respect to current or former employees of the Company,
any of its Subsidiaries or any ERISA Affiliate beyond their retirement or
other termination of service, other than (u) coverage mandated by
applicable law, (v) life insurance death benefits payable in the event of
the death of a covered employee, (w) disability benefits payable to
disabled former employees, (x) death benefits or retirement benefits under
any "employee pension plan," as that term is defined in Section 3(2) of
ERISA, (y) deferred compensation benefits accrued as liabilities on the
books of the Company, any of its Subsidiaries or any ERISA Affiliate or
(z) benefits the full cost of which is borne by the current or former
employee (or his beneficiary), (v) with respect to each Plan subject to
Title IV of ERISA no liability under Title IV of ERISA has been incurred
by the Company, any of its Subsidiaries or any ERISA Affiliate that has
not been satisfied in full, no condition exists that presents a material
risk to the Company, any of its Subsidiaries or any ERISA Affiliate of
incurring a material liability to or on account of such Plan, and there
has been no "reportable event" (within the meaning of Section 1013 of
ERISA and the regulations thereunder), (vi) none of the Company, any of
its Subsidiaries or any ERISA Affiliate has ever maintained or contributed
to a "multiemployer pension plan," as such term is defined in Section
3(37) of ERISA, (vii) all contributions or other amounts payable by the
Company or any of its Subsidiaries as of the Effective Time with respect
to each
Exhibit 37
18
Plan in respect of current or prior plan years have been paid or accrued
in accordance with GAAP and Section 412 of the Code, (viii) none of the
Company, any of its Subsidiaries or any ERISA Affiliate has engaged in a
transaction in connection with which the Company, any of its Subsidiaries
or any ERISA Affiliate has any material liability for either a civil
penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax
imposed pursuant to Section 4975 or 4976 of the Code, (ix) consummation of
the transactions contemplated hereby will not cause any amounts payable
under any of the Plans to fail to be deductible for federal income tax
purposes under Sections 280G or 162(m) of the Code, and (x) there are no
pending or, to the best knowledge of the Company, threatened or
anticipated claims (other than routine claims for benefits) by, on behalf
of or against any of the Plans or any trusts related thereto.
4. With respect to any Plan that is a welfare plan (within the meaning of
Section 3(1) of ERISA (i) no such Plan is funded through a "welfare
benefit fund," as such term is defined in Section 419(a) of the Code, and
(ii) each such Plan complies in all material respects with the applicable
requirements of Section 4980B(f) of the Code, Part 6 of Subtitle B of
Title I of ERISA and any applicable state continuation coverage
requirements ("COBRA").
5. Except as prohibited by law (including Section 411(d)(6) of the Code),
each Plan may be amended, terminated, modified or otherwise revised by the
Company, any of its Subsidiaries or its ERISA Affiliates as of the
Effective Time to eliminate, without material effect, any and all future
benefit accruals under any Plan (except claims incurred under any welfare
plan).
6. Except as set forth on Schedule 3.10, since May 31, 1998, neither the
Company nor any of its Subsidiaries has entered into, adopted or amended
in any respect any collective bargaining agreement or adopted or amended
any bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation, insurance or other similar plan,
agreement, trust, fund or arrangement for the benefit of employees
(whether or not legally binding).
K. SEC REPORTS. The Company has previously delivered to Parent an accurate and
complete copy of each (a) final registration statement, prospectus, report,
schedule and definitive proxy statement of the Company filed since January 1,
1993 with the SEC pursuant to the Exchange Act or the Securities Act of 1933, as
amended (the "Securities Act") (collectively, the "Company SEC Reports"), and
(b) communication mailed by or on behalf of the Company to its stockholders
since January 1, 1993. The Company has timely filed (either by the required
filing date or pursuant to Rule 12b-25 promulgated under the Exchange Act) all
Company SEC Reports and other documents required to be filed by it under the
Securities Act and the Exchange Act and, as of their respective dates, all
Company SEC Reports complied with all of the rules and regulations of the SEC
with respect thereto. As of their respective dates, no such Company SEC Reports
or communications 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
Exhibit 38
19
circumstances in which they were made, not misleading. The Company has made
available to Parent true and complete copies of all amendments and modifications
to all agreements, documents and other instruments which previously had been
filed with the SEC by the Company and which are currently in effect.
L. COMPANY INFORMATION.
The information supplied by the Company relating to the Company and its
Subsidiaries contained in the Registration Statement to be sent to the
stockholders of the Company in connection with the Company Stockholder Meeting,
or in any other document filed with any other regulatory agency in connection
herewith, will not contain, on the date of mailing of the Registration Statement
and on the date of the Company Stockholder Meeting, 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
in which they are made, not false or misleading or necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Company Stockholder Meeting which shall have become false or
misleading. The Registration Statement will comply in all material respects with
the provisions of the Securities Act and the Exchange Act and the rules and
regulations thereunder and the rules and regulations of the SEC with respect
thereto. Nothing in this Section 3.12 relates to any information concerning
Parent or Sub or their businesses, contracts, litigation, stockholders,
directors or officers.
M. COMPLIANCE WITH APPLICABLE LAW; CERTAIN AGREEMENTS. Except as set forth in
Schedule 3.13 hereto, each of the Company and its Subsidiaries holds all
material licenses, franchises, permits and authorizations necessary for the
lawful conduct of its business under and pursuant to all, and has complied with
and is not in conflict with, or in default or violation of any (a) statute,
code, ordinance, law, rule, regulation, order, writ, judgment, injunction or
decree, published policies and guidelines of any Governmental Entity, applicable
to the Company or Subsidiary or by which any property or asset of the Company or
Subsidiary is bound or affected or (b) any note, bond, mortgage, indenture, deed
of trust, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or Subsidiary is a party or by
which the Company or Subsidiary or any property or asset of the Company or
Subsidiary is bound or affected, except for any such non-compliance, conflicts,
defaults or violations that would not, individually or in the aggregate, have a
Material Adverse Effect; and the Company neither knows of, nor has received
notice of, any material violations of any the above. In addition to the
foregoing, the Company has in place, and is in compliance with, plans regarding
Hazard Analysis Critical Control Points for each facility of the Company.
N. CERTAIN CONTRACTS.
1. Except as set forth in Schedule 3.14 hereto, neither the
Company nor any of its Subsidiaries is a party to or bound by any
contract, arrangement, commitment or understanding (whether written or
oral): (i) with respect to the employment of any director, officer or
employee, or with respect to the employment of any consultant which
cannot be terminated with a payment of
Exhibit 39
20
less than $25,000, (ii) which, upon the consummation of the transactions
contemplated by this Agreement, will result in any payment (whether of
severance pay or otherwise) becoming due from the Company or any of its
Subsidiaries to any officer or employee thereof, (iii) which is a material
contract (as defined in Item 601(b)(10) of Regulation S-B of the SEC) to
be performed after the date of this Agreement that has not been filed or
incorporated by reference in the Company SEC Reports, (iv) which is a
consulting or other agreement (including agreements entered into in the
ordinary course and data processing, software programming and licensing
contracts) not terminable on ninety (90) days or less notice and involves
the payment of more than $25,000 per annum, (v) which restricts the
conduct of any line of business by the Company or any of its Subsidiaries,
(vi) with or to a labor union or guild (including any collective
bargaining agreement), or (vii) (including any stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan)
any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement, or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement. The Company has previously
delivered to Parent true and complete copies of all employment, consulting
and deferred compensation agreements which are in writing and to which the
Company is a party. Each contract, arrangement, commitment or
understanding of the type described in this section is referred to herein
as a "Company Contract".
2. Except as set forth in Schedule 3.14(b) hereto, (i) each Company
Contract is legal, valid and binding upon the Company or a Subsidiary of
the Company, as the case may be, assuming due authorization of the other
party or parties thereto, and in full force and effect, (ii) the Company
or Subsidiary, as the case may be, has in all material respects performed
all obligations required to be performed by it to date under each such
Company Contract, and (iii) no event or condition exists which constitutes
or, after notice or lapse of time or both, would constitute, a default on
the part of the Company or Subsidiary, as the case may be, under any such
Company Contract.
3. Neither the Company nor its Subsidiaries has made any express warranty
to any person or entity with respect to any product it manufactures or
sells or has manufactured or sold or has made or agreed to make any
indemnification payment, or replacement with respect to any product
warranty claim, except for (i) the warranties and/or agreement(s) to
indemnify or replace product of which true and correct copies have been
delivered to Parent, (ii) the warranties applicable under the Uniform
Commercial Code as in effect from time to time in the jurisdictions in
which its products are sold and (iii) any other warranties under other
state or federal laws.
O. AGREEMENTS WITH REGULATORY AGENCIES. Neither the Company nor any of its
Subsidiaries is subject to any cease-and-desist or other order issued by, or is
a party to any written agreement, consent agreement or memorandum of
understanding, commitment letter or similar undertaking (each a "Regulatory
Exhibit 40
21
Agreement") with any Regulatory Agency or other Governmental Entity that
restricts the conduct of its business in any material respect, nor has the
Company or any of its Subsidiaries been notified by any Regulatory Agency or
other Governmental Entity that it is considering issuing or requesting any
Regulatory Agreement.
P. ENVIRONMENTAL MATTERS.
1. The Company and its Subsidiaries are, and have been, in material
compliance with all applicable environmental laws and with all rules,
regulations, standards and requirements of the United States Environmental
Protection Agency (the "EPA") and of state and local agencies with
jurisdiction over pollution or protection of the environment.
2. There is no suit, claim, action or proceeding pending or, to the best
knowledge of the Company, threatened, before any Governmental Entity or
other forum in which the Company or any of its Subsidiaries have been or,
with respect to threatened proceedings, may be named as a defendant,
responsible party or potentially responsible party (i) for alleged
noncompliance (including by any predecessor), with any environmental law,
rule, regulation, standard or requirement or (ii) relating to the release
into or presence in the Environment (as hereinafter defined) of any
Hazardous Materials (as hereinafter defined) or Oil (as hereinafter
defined) whether or not occurring at or on a site owned, leased or
operated by the Company or any of its Subsidiaries.
3. Neither the Company nor any of its Subsidiaries has received any notice
regarding a matter on which a suit, claim, action or proceeding as
described in subsection (b) of this Section 3.16 could reasonably be
based. No facts or circumstances have come to the Company's attention
which have caused either to believe that a material suit, claim, action or
proceeding as described in subsection (b) of this Section 3.16 could
reasonably be expected to occur.
4. Except as set forth in the Environmental Site Assessment Reports
described in Schedule 3.16(d) hereto, during the period of the ownership
or operation by the Company or any of its Subsidiaries of any of their
respective current properties, there has been no release or presence in
the Environment of Hazardous Material or Oil in, on, under or affecting
such property. To the best knowledge of the Company, prior to the period
of the ownership or operation by the Company or any of its Subsidiaries of
any of their respective current properties or any previously owned or
operated properties, there was no release or presence in the Environment
of Hazardous Material or Oil in, on, under or affecting any such property.
5. The following definitions apply for purposes of this Agreement: (i)
"Hazardous Material" means any pollutant, contaminant, or hazardous
substance or hazardous material as defined in or pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et seq., or any other federal, state or local
environmental law,
Exhibit 41
22
regulation or requirement; (ii) "Oil" means oil or petroleum of any kind
or origin or in any form, as defined in or pursuant to the Federal Clean
Water Act, 33 U.S.C. Section 1251 et seq., or any other federal, state or
local environmental law, regulation or requirement; and (iii)
"Environment" means any soil, surface waters, groundwaters, stream
sediments, surface or subsurface strata, and ambient air and any other
environmental medium.
Q. PROPERTIES.
1. Schedule 3.17 hereto contains a true, complete and correct list and a
brief description (including carrying value) of all real properties owned
by the Company or any of its Subsidiaries. Except as set forth in Schedule
3.17 hereto, the Company or its Subsidiaries has good and marketable title
to all the real property and other property owned by it and included in
the balance sheet of the Company for the period ended May 31, 1998, and
owns such property subject to no encumbrances, liens, mortgages, security
interests, pledges or title imperfections except for (i) those items that
secure liabilities that are reflected in such balance sheet or the notes
thereto, (ii) statutory liens for amounts not yet delinquent or which are
being contested in good faith, (iii) with respect to owned real property,
title imperfections noted in title reports, and (iv) those items that do
not, individually or in the aggregate, have a Material Adverse Effect on
the Company or which do not and will not interfere with the use of the
property as currently used or contemplated to be used by the Company or
its Subsidiaries, or the conduct of the business of the Company or its
Subsidiaries.
2. Neither the Company nor any of its Subsidiaries has received any notice
of a material violation of any applicable zoning or environmental
regulation, ordinance or other law, order, regulation or requirement
relating to its operations or its properties and, to the knowledge of the
Company, there is no such violation. Except as set forth in Schedule 3.17
hereto, all buildings and structures owned and used by the Company or any
of its Subsidiaries conform in all material respects with all applicable
ordinances, codes or regulations, except to the extent such noncompliance
does not or will not have a Material Adverse Effect on the Company and
which does not or will not interfere with the use of any property as
currently used or contemplated to be used by the Company or its
Subsidiaries, or the conduct of the business of the Company or its
Subsidiaries. Except as set forth in Schedule 3.17 hereto, to the
knowledge of the Company, all buildings and structures leased and used by
the Company or any of its Subsidiaries conform in all material respects
with all applicable ordinances, codes or regulations, except to the extent
such noncompliance does not or will not have a Material Adverse Effect on
the Company and which does not or will not interfere with the use of any
property as currently used or contemplated to be used by the Company or
its Subsidiaries, or the conduct of the business of the Company or its
Subsidiaries.
3. Schedule 3.17 contains a true, complete and correct list of all leases
pursuant to which the Company or any of its Subsidiaries leases any real
or personal property, either as lessee or as lessor (the "Company
Leases").
Exhibit 42
23
Assuming due authorization of the other party or parties thereto, each of
the Company Leases is valid and binding on the Company or Subsidiary, as
the case may be, and, to the best of the Company's knowledge, valid and
binding on and enforceable against all other respective parties to such
leases, in accordance with their respective terms. Except to the extent
such breaches, defaults or events of default do not or will not have a
Material Adverse Effect on the Company and which do not or will not
interfere with the use of any property as currently used or contemplated
to be used by the Company or its Subsidiaries, or the conduct of the
business of the Company or its Subsidiaries, there are not under such
Company Leases any existing breaches, defaults or events of default by the
Company or any of its Subsidiaries, nor has the Company or any of its
Subsidiaries received notice of, or made a claim with respect to, any
breach or default by any other party to such Company Leases. Each of the
Company and its Subsidiaries enjoys quiet and peaceful possession of all
such leased properties occupied by it as lessee.
4. All of the real properties, leasehold improvements and items of
equipment and other material personal property owned, leased, or licensed
by the Company or any of its Subsidiaries, or in which any of those
parties hold an interest, are in good maintenance, repair and operating
condition, ordinary wear and tear excepted, are adequate for the purpose
for which they are now being or are anticipated to be used, and, to the
best of the Company's knowledge, are free from any material defects.
R. INSURANCE. The Company has made available to Parent true and complete copies
of all material policies of insurance of the Company or any of its Subsidiaries
currently in effect. All of the policies relating to insurance maintained by the
Company or any of its Subsidiaries with the respect to its material properties
and the conduct of its business in any material respect (or any comparable
policies entered into as a replacement thereof) are in full force and effect and
neither the Company nor any of its Subsidiaries has received any notice of
cancellation with respect thereto. All life insurance policies on the lives of
any of the current and former officers of the Company or any of its Subsidiaries
which are maintained by the Company or any of its Subsidiaries or which are
otherwise included as assets on the books of the Company (i) are, or will at the
Effective Time be, owned by the Company or any of its Subsidiaries, free and
clear of any claims thereon by the officers or members of their families, except
with respect to the death benefits thereunder, as to which the Company agrees
that there will not be an amendment prior to the Effective Time without the
consent of Parent, and (ii) are accounted for properly on the books of the
Company in accordance with GAAP. The Company does not have any material
liability for unpaid premium or premium adjustments not properly reflected on
the Company's May 31, 1998 balance sheet. The Company and its Subsidiaries have
been and are adequately insured with respect to their respective property and
the conduct of their respective business in such amounts and against such risks
as are substantially similar in kind and amount to that customarily carried by
parties similarly situated who own properties and engage in businesses
substantially similar to that of the Company (including without limitation
liability insurance and blanket bond insurance). All claims under any policy or
bond have been duly and timely filed.
Exhibit 43
24
S. TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in the Company SEC
Reports or otherwise set forth on Schedule 3.19 hereto, since April 1, 1996,
neither the Company nor any of its Subsidiaries has entered into any transaction
or series of transactions, in which the amount involved exceeded $10,000, with
any executive officer, director or greater-than-5% stockholder of the Company or
any "associate" (as defined in Rule 14a-1 under the Exchange Act) of any such
officer or director or "affiliates" (as defined in Rule 144(a)(1) of the
Securities Act) of any such officer, director or stockholder.
T. LABOR MATTERS. Neither the Company nor any of its Subsidiaries is a party to
any collective bargaining or other labor union or guild contract nor has the
Company or any of its Subsidiaries been approached since November 30, 1997 by
any collective bargaining or other labor union or guild seeking to enter into a
contract with the Company or any of its Subsidiaries. There is no pending or, to
the best knowledge of the Company, threatened, labor dispute, strike or work
stoppage against the Company or any of its Subsidiaries which may interfere with
the business activities of the Company or any of its Subsidiaries. None of the
Company, any of its Subsidiaries or their respective representatives or
employees has committed any unfair labor practices in connection with the
operation of the business of the Company or any of its Subsidiaries, and there
is no pending or, to the best knowledge of the Company, threatened charge or
complaint against the Company or any of its Subsidiaries by the National Labor
Relations Board or any comparable state agency. Except as set forth on Schedule
3.20 hereto, to its knowledge, neither the Company nor its Subsidiaries has
hired any illegal aliens as employees. To its knowledge, neither the Company nor
its Subsidiaries has discriminated on the basis of race, age, sex or otherwise
in its employment conditions or practices with respect to its employees. There
are no race, age, sex or other discrimination complaints pending, or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries by any employee, former or current, before any domestic (federal,
state or local) or foreign board, department, commission or agency nor, to the
knowledge of the Company, does any basis therefor exist. There are no pending
or, to the knowledge of the Company, threatened representation questions
respecting any employees.
U. INTELLECTUAL PROPERTY. The Company and its Subsidiaries own or possess valid
and binding licenses and other rights to use without payment of any material
amount all material patents, copyrights, trade secrets, trade names, service
marks, trademarks, software and other intellectual property used in its
business, which are set forth in Schedule 3.21 hereto; neither the Company nor
any of its Subsidiaries has received any notice of conflict with respect thereto
that asserts the right of others. The Company and its Subsidiaries have
performed in all material respects all the obligations required to be performed
by it with respect to the items of intellectual property set forth in Schedule
3.21 hereto and are not in default under any contract, agreement, arrangement or
commitment relating to any of the foregoing.
V. SUBSTANTIAL SUPPLIERS AND CUSTOMERS. Except as set forth on Schedule 3.22
hereto, since November 30, 1997, none of the top ten (10) suppliers (by dollar
volume) or the top ten (10) customers (by dollar volume) of the Company and its
Exhibit 44
25
Subsidiaries, taken as a whole, has substantially reduced the use or supply of
the products or goods made available for purchase by the Company or its
Subsidiaries in their business or has ceased, or threatened to cease, to use or
to supply such products or goods, and the Company does not have any reason to
believe that any such supplier or customer will do so.
W. BROKER'S FEES. Neither the Company nor any of its officers or directors, has
employed any broker or finder or incurred any liability for any broker's fees,
commissions or finder's fees in connection with any of the transactions
contemplated by this Agreement, except pursuant to an agreement dated June 5,
1998, as amended by a letter agreement dated October 7, 1998, between the
Company and Ladenburg ▇▇▇▇▇▇▇▇ & Company.
X. DISCLOSURE. No representation or warranty contained in this Agreement or any
schedule to this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements herein
or therein, in light of the circumstances in which they are made, not
misleading.
IV. ARTICLE
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub hereby represent and warrant to the Company as follows:
A. CORPORATE ORGANIZATION.
1. Each of Parent and Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Each of Parent and Sub has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it
is now being conducted, and is duly licensed or qualified to do business
in each jurisdiction in which the nature of the business conducted by it
or the character or location of the properties and assets owned or leased
by it makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified would not have a Material Adverse
Effect on Parent. The Certificate of Incorporation and Bylaws of each of
Parent and Sub, copies of which have previously been delivered to the
Company, are true and complete copies of such documents as in effect as of
the date of this Agreement.
2. Parent has no direct or indirect Subsidiaries other than Sub and is the
sole stockholder of Sub. Sub has no direct or indirect Subsidiaries.
Neither Parent nor Sub owns, controls or holds with the power to vote,
directly or indirectly of record, beneficially or otherwise, any capital
stock or any equity or ownership interest in any corporation, partnership,
association, joint venture or other entity, except for (i) Parent's
ownership of Sub, (ii) Parent's ownership of Company Common Stock and
(iii) less than five percent (5%) of any equity security registered under
the Exchange Act.
Exhibit 45
26
3. The minute books of each of Parent and Sub contain true, complete and
accurate records of all meetings and other corporate actions held or taken
by their respective stockholders and boards of directors (including
committees of their respective boards of directors).
B. CAPITALIZATION.
1. The authorized capital stock of Parent consists of 50,000,000 shares of
Parent Common Stock, 2,000,000 shares of Class B common stock, par value
$.01 per share ("Parent Class B Common Stock"), of Parent and 5,000,000
shares of preferred stock, par value $.01 per share, of Parent. As of
September 15, 1998, 2,646,139 shares of Parent Common Stock, 522,955
shares of Parent Class B Common Stock and no shares of preferred stock of
Parent were issued and outstanding. As of September 15, 1998, options and
warrants exercisable to purchase 559,839 and 30,000 shares of Parent
Common Stock, respectively, were outstanding, and a promissory note
convertible into 428,571 shares of Parent Common Stock was outstanding.
All of the issued and outstanding shares of Parent Common Stock have been
duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights with no personal liability attaching to the
ownership thereof.
2. The authorized capital stock of Sub consists of 1,500 shares of common
stock, without par value ("Sub Common Stock"), of Sub. As of the date
hereof, 100 shares of Sub Common Stock are outstanding. All of the issued
and outstanding shares of capital stock of Sub are owned by Parent, have
been duly authorized and validly issued and are fully paid, non-assessable
and free of preemptive rights with no personal liability attaching to the
ownership thereof.
3. Except as described in Section 4.02(a) hereof, neither Parent nor Sub
has or is bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase
or issuance of any shares of Parent Common Stock, Sub Common Stock or any
other equity security of Parent or Sub or any securities representing the
right to purchase or otherwise receive any shares of Parent Common Stock,
Sub Common Stock or any other equity security of Parent or Sub other than
as provided for in this Agreement. Except as described in Section 4.02(a)
hereof, there are no bonds, debentures, notes or other indebtedness of
Parent or Sub having the right to vote (or convertible into, or
exchangeable for securities having the right to vote) on any matters on
which stockholders of Parent or Sub may vote.
4. Except as contemplated herein, there are no agreements or
understandings, with respect to the voting of any shares of Parent Common
Stock or Sub Common Stock or which restrict the transfer of such shares,
to which Parent or Sub is a party and, to the knowledge of Parent, there
are no such agreements or understandings to which Parent or Sub is not a
party with
Exhibit 46
27
respect to the voting of any such shares or which restrict the transfer of
such shares, other than applicable federal and state securities laws.
5. All dividends on Parent Common Stock or Sub Common Stock which have
been declared prior to the date of this Agreement have been paid in full.
C. AUTHORITY; NO VIOLATION.
1. Each of Parent and Sub have full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by
Parent and Sub and the consummation by Parent and Sub of the transactions
contemplated hereby have been duly and validly approved by the Board of
Directors of Parent and Sub, respectively. Except for the filing of the
Certificate of Merger, no other corporate proceedings on the part of
Parent or Sub are necessary to approve this Agreement and to consummate
the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by Parent and Sub and (assuming the due
authorization, execution and delivery by the Company) constitutes a valid
and binding obligation of Parent and Sub, enforceable against Parent and
Sub in accordance with its terms.
2. Neither the execution and delivery of this Agreement by each of Parent
and Sub, nor the consummation by either Parent or Sub, as the case may be,
of the transactions contemplated hereby, nor compliance by either Parent
or Sub with any of the terms or provisions hereof, will (i) violate,
conflict with or result in a breach of any provision of the Certificate of
Incorporation or Bylaws of Parent, or Sub, as the case may be, or (ii)(x)
violate any statute, code, ordinance, rule, regulations, judgment, order,
writ, decree or injunction applicable to the Parent or Sub or any of their
respective properties or assets, or (y) violate, conflict with, result in
a breach of any provisions of or the loss of any benefit under, constitute
a default (or any event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right
of termination or cancellation under, accelerate the performance required
by, or result in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which Parent or Sub
is a party, or by which they or any of their respective properties or
assets may be bound or affected, except (in the case of clause (y) above)
for such violations, conflicts, breaches or defaults which, either
individually or in the aggregate, will not have a Material Adverse Effect
on Parent.
D. CONSENTS AND APPROVALS. Except for (a) the filing with the SEC of the
Registration Statement and the declaration of the effectiveness thereof by the
SEC, (b) the approval of this Agreement by the requisite vote of the
stockholders of Parent and
Exhibit 47
28
the Company, respectively, and (c) the filing of the Certificate of Merger with
the Delaware Secretary pursuant to the DGCL to effect the Merger, no consents or
approvals of or filings or registrations with any Governmental Entity or with
any third party are necessary in connection with the execution and delivery by
Parent and Sub of this Agreement and the consummation by Parent and Sub of the
Merger and the other transactions contemplated hereby.
E. BROKER'S FEES. Neither Parent nor Sub, nor any of their respective officers
or directors, has employed any broker or finder or incurred any liability for
any broker's fee, commission or finder's fee in connection with any of the
transactions contemplated by this Agreement, except as set forth in Schedule
4.05 hereto.
F. FINANCIAL STATEMENTS.
1. Parent has previously delivered to the Company copies of the audited
consolidated balance sheets of the Company as of December 31, 1995,
December 31, 1996 and December 31, 1997, and the related consolidated
statements of income, changes in stockholders' equity and cash flows for
the fiscal years 1996 through 1997, inclusive, included in the Company's
Annual Report on Form 10-KSB for the fiscal year ended December 31, 1997
filed with the SEC under the Exchange Act. Parent has also previously
delivered to the Company copies of the unaudited consolidated balance
sheets of Parent as of June 30, 1998, and the related unaudited
consolidated statements of income and cash flows for the quarter ended
June 30, 1998, included in Parent's Quarterly Report on Form 10-QSB for
the quarter ended June 30, 1998 filed with the SEC under the Exchange Act.
The audited consolidated financial statements and unaudited consolidated
interim financial statements of Parent and its Subsidiaries included or
incorporated by reference in the Parent SEC Reports (as hereinafter
defined) filed on or after December 31, 1995 have been prepared in
accordance with GAAP consistently applied during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-QSB), complied as of their
respective dates in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, and fairly present the consolidated financial position of
Parent and its Subsidiaries as of the dates thereof and the consolidated
income and retained earnings and sources and applications of funds for the
periods then ended (subject, in the case of any unaudited interim
financial statements, to the absence of footnotes required by GAAP and
normal year-end adjustments).
2. Except for liabilities incurred since June 30, 1998 in the ordinary
course of business consistent with past practice, Parent does not have any
liabilities or obligations of any nature whatsoever (whether absolute,
accrued, contingent or otherwise) which are not adequately reserved or
reflected on the balance sheet of Parent included in its Quarterly Report
on Form 10-QSB for the quarter ended June 30, 1998, except for liabilities
or obligations which in the aggregate do not exceed $50,000, and there do
not exist any circumstances that could reasonably be expected to result in
such liabilities or obligations.
Exhibit 48
29
G. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1998, there has not been
any Material Adverse Effect on Parent (including without limitation any loss of
employees or customers that has had a Material Adverse Effect, or that is
reasonably likely to have a Material Adverse Effect, on Parent) and, to the best
knowledge of Parent, no fact or condition exists which will cause such a
Material Adverse Effect on Parent in the future.
H. LEGAL PROCEEDINGS. Except as set forth in Schedule 4.08 hereto, neither
Parent nor Sub is a party to any, and there are no pending or, to the best
knowledge of Parent, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of any
nature against or affecting Parent or Sub or any property or asset of Parent or
Sub, before any court, arbitrator or administrative, Governmental Entity,
domestic or foreign, which would, either individually or in the aggregate, have
a Material Adverse Effect on Parent, and no facts or circumstances have come to
Parent's attention which have caused it to believe that such a claim, action,
proceeding or investigation against or affecting Parent or Sub could reasonably
be expected to occur. Neither Parent nor Sub nor any property or asset of Parent
or Sub is subject to any order, writ, judgment, injunction, decree,
determination or award which restricts its ability to conduct business in any
area in which it presently does business or has or could reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect on
Parent.
I. TAXES AND TAX RETURNS.
1. Each of Parent and its Subsidiaries (the "Parent Taxpayers") has filed
all Tax Returns that were required to be filed. All such Tax Returns were
when filed, and continue to be, correct and complete in all material
respects. All Taxes owed by the Parent Taxpayers (whether or not shown on
any Tax Return) have been timely paid. Except as set forth on Schedule
4.09(a) annexed hereto, none of the Parent Taxpayers currently is the
beneficiary of any extension of time within which to file any Tax Return.
No claim has ever been made by an authority in a jurisdiction where any of
the Parent Taxpayers does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no liens with respect
to Taxes on any of the assets or property of any of the Parent Taxpayers,
except for liens with respect to Taxes not yet payable.
2. Each of the Parent Taxpayers has withheld or collected and paid all
Taxes required to have been withheld or collected and paid in connection
with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, an other third party, or otherwise.
3. There is no dispute or claim concerning any Tax Liability of any of the
Parent Taxpayers either (A) claimed or raised by any authority in writing
or (B) as to which any of the Parent Taxpayers or the directors and
officers (and employees responsible for Tax matters) of any of the Parent
Taxpayers has knowledge. There are no proceedings with respect to Taxes
pending.
Exhibit 49
30
4. Schedule 4.09(a) annexed hereto sets forth an accurate, correct and
complete list of all federal, state, local, and foreign Tax Returns filed
with respect to the Parent Taxpayers for taxable periods ended on or after
December 31, 1992, indicates those Tax Returns that have been audited and
indicates those Tax Returns that currently are the subject of audit.
Parent has delivered to the Company correct and complete copies of all
federal income Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by or on behalf of any of the
Parent Taxpayers since January 1, 1993. To the knowledge of the Parent
Taxpayers and their directors and officers (and employees responsible for
Tax matters), no other audit or investigation with respect to Taxes is
pending or has been threatened.
5. None of the Parent Taxpayers have waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
6. None of the Parent Taxpayers has agreed to make, nor is it required to
make, any adjustments under Section 481(a) of the Code by reason of a
change in accounting method or otherwise.
7. None of the Parent Taxpayers is a party to any agreement, whether
written or unwritten, providing for the payment of Tax liabilities,
payment for Tax losses, entitlements to refunds or similar Tax matters.
8. No ruling with respect to Taxes relating to any of the Parent Taxpayers
has been requested by or on behalf of the Parent Taxpayers.
9. None of the Parent Taxpayers is a party to any contract, arrangement or
plan that has resulted or would result, separately or in the aggregate, in
the payment of any "excess parachute payments" within the meaning of
Section 280G of the Code, or the payment of any consideration which would
not be deductible by reason of Section 162(m) of the Code.
10. Except as set forth on Schedule 4.09(j), none of the Parent Taxpayers
(A) has never been a member of an affiliated group (within the meaning of
Section 1504 of the Code, or any similar group as defined for state, local
or foreign tax purposes) filing a consolidated federal (or combined or
unitary state, local or foreign) income Tax Return or (B) has any
liability for the taxes of any Person (other than the Parent Taxpayers)
under Reg. Section 1.1502-6 (or any similar provision of state, local or
foreign Law), as a transferee or successor, by contract, or otherwise.
11. The unpaid Taxes of the Parent Taxpayers (A) did not, as of the most
recent fiscal quarter end, exceed the reserves for Tax liability (rather
than any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) on their respective books at such
time and (B) do not exceed that reserve as adjusted for the passage of
time through the Effective Date in accordance with the past custom and
practice of the Parent Taxpayers in
Exhibit 50
31
filing their Tax Returns. None of Parent or Sub has filed an election,
consent or agreement under Section 341(f) of the Code.
12. For purposes of this Section 4.09, references to the Parent Taxpayers
shall also refer to any predecessor companies.
J. EMPLOYEE BENEFIT PLANS.
1. Schedule 4.10 hereto sets forth a true and complete list of all Plans
maintained or contributed to by Parent or Sub during the five (5) years
preceding this Agreement. The term "Plans" for purposes of this Article IV
means all employee benefit plans, arrangements or agreements that are
maintained or contributed to, or that were maintained or contributed to at
any time during the five (5) years preceding the date of this Agreement,
by Parent or Sub, or by any ERISA Affiliate, all of which together with
Parent would be deemed a "single employer" within the meaning of Section
4001 of ERISA.
2. Parent has heretofore delivered to the Company true and complete copies
of each of the Plans and all related documents, including but not limited
to (i) all required Forms 5500 and all related schedules for such Plans
(if applicable) for each of the last two (2) years, (ii) the actuarial
report for such Plan (if applicable) for each of the last two (2) years,
and (iii) the most recent determination letter from the IRS (if
applicable) for such plan.
3. (i) Each of the Plans has been operated and administered in all
material respects in accordance with applicable laws, including but not
limited to ERISA and the Code, (ii) each of the Plans intended to be
"qualified" within meaning of Section 401(a) of the code has been
maintained so as to qualify from the effective date of such Plan to the
Effective Time, (iii) with respect to each Plan which is subject to Title
IV of ERISA, the present value of "benefit liabilities" (within the
meaning of Section 4001(a)(16) of ERISA) under such Plan, based upon the
actuarial assumptions currently used by the Plan for IRS funding purposes
did not, as of its latest valuation date, exceed the then current value of
the assets of such Plan allocable to such accrued benefits, and there has
been no "accumulated funding deficiency" (whether or not waived), (iv) no
Plan provides benefits, including without limitation death, medical or
other benefits (whether or not insured), with respect to current or former
employees of Parent, Sub or any ERISA Affiliate beyond their retirement or
other termination of service, other than (u) coverage mandated by
applicable law, (v) life insurance death benefits payable in the event of
the death of a covered employee, (w) disability benefits payable to
disabled former employees, (x) death benefits or retirement benefits under
any "employee pension plan," as that term is defined in Section 3(2) of
ERISA, (y) deferred compensation benefits accrued as liabilities on the
books of Parent, Sub or any ERISA Affiliate or (z) benefits the full cost
of which is borne by the current or former employee (or his beneficiary),
(v) with respect to each Plan subject to Title IV of ERISA no liability
under Title IV of ERISA has been incurred by Parent, Sub or any ERISA
Affiliate that has not been satisfied in full, no condition exists that
presents a material risk to Parent,
Exhibit 51
32
Sub or any ERISA Affiliate of incurring a material liability to or on
account of such Plan, and there has been no "reportable event" (within the
meaning of Section 1013 of ERISA and the regulations thereunder), (vi)
none of Parent, Sub or any ERISA Affiliate has ever maintained or
contributed to a "multiemployer pension plan," as such term is defined in
Section 3(37) of ERISA, (vii) all contributions or other amounts payable
by Parent or Sub as of the Effective Time with respect to each Plan in
respect of current or prior plan years have been paid or accrued in
accordance with GAAP and Section 412 of the Code, none of Parent, any of
its Subsidiaries or any ERISA Affiliate has engaged in a transaction in
connection with which Parent, Sub or any ERISA Affiliate has any material
liability for either a civil penalty assessed pursuant to Section 409 or
502(i) of ERISA or a tax imposed pursuant to Section 4975 or 4976 of the
Code, (ix) consummation of the transactions contemplated hereby will not
cause any amounts payable under any of the Plans to fail to be deductible
for federal income tax purposes under Sections 280G or 162(m) of the Code,
and (x) there are no pending or, to the best knowledge of Parent,
threatened or anticipated claims (other than routine claims for benefits)
by, on behalf of or against any of the Plans or any trusts related
thereto.
4. With respect to any Plan that is a welfare plan (within the meaning of
Section 3(1) of ERISA (i) no such Plan is funded through a "welfare
benefit fund," as such term is defined in Section 419(a) of the Code, and
(ii) each such Plan complies in all material respects with the applicable
requirements of Section 4980B(f) of the Code, Part 6 of Subtitle B of
Title I of ERISA and any applicable state COBRA requirements.
5. Except as prohibited by law (including Section 411(d)(6) of the Code),
each Plan may be amended, terminated, modified or otherwise revised by
Parent, Sub or its ERISA Affiliates as of the Effective Time to eliminate,
without material effect, any and all future benefit accruals under any
Plan (except claims incurred under any welfare plan).
6. Since December 31, 1997, neither Parent nor Sub has entered into,
adopted or amended in any respect any collective bargaining agreement or
adopted or amended any bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation, insurance or other similar
plan, agreement, trust, fund or arrangement for the benefit of employees
(whether or not legally binding).
K. SEC REPORTS. Parent has previously delivered to the Company an accurate and
complete copy of each (a) final registration statement, prospectus, report,
schedule and definitive proxy statement of Parent filed since Parent's initial
public offering in June 1993 with the SEC pursuant to the Exchange Act or the
Securities Act (collectively, the "Parent SEC Reports"), and (b) communication
mailed by or on behalf of the Parent to its stockholders since June 1, 1993.
Parent has timely filed (either by the required filing date or pursuant to Rule
12b-25 promulgated under the Exchange Act) all Parent SEC Reports and other
documents required to be filed by it under the Securities Act and the Exchange
Act and, as of their respective dates, all Parent SEC
Exhibit 52
33
Reports complied with all of the rules and regulations of the SEC with respect
thereto. As of their respective dates, no such Parent SEC Reports or
communications 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 in which they were
made, not misleading. Parent has made available to the Company true and complete
copies of all amendments and modifications to all agreements, documents and
other instruments which previously had been filed with the SEC by Parent and
which are currently in effect. Since June 30, 1998, there has not been any
Material Adverse Effect on Parent and, to the best knowledge of Parent, no fact
or condition exists which will, or is reasonably likely to, cause such a
Material Adverse Effect on Parent in the future.
L. PARENT AND SUB INFORMATION. The information supplied by Parent and Sub
relating to Parent and Sub contained in the Registration Statement to be sent to
the stockholders of Parent in connection with the Parent Stockholder Meeting, or
in any other document filed with any other regulatory agency in connection
therewith, will not contain, on the date of mailing of the Registration
Statement and on the date of the Parent Stockholder Meeting, 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 in which they are made, not false or misleading or necessary
to correct any statement in any earlier communication with respect to the
solicitation of proxies for the Parent Stockholder Meeting which shall have
become false or misleading. The Registration Statement will comply in all
material respects with the provisions of the Securities Act and the Exchange Act
and the rules and regulations thereunder and the rules and regulations of the
SEC with respect thereto. Nothing in this Section 4.12 relates to any
information concerning the Company, its Subsidiaries or their respective
business, contracts, litigation, stockholders, directors or officers.
M. COMPLIANCE WITH APPLICABLE LAW; CERTAIN AGREEMENTS. Each of Parent and Sub
holds all material licenses, franchises, permits and authorizations necessary
for the lawful conduct of its business under and pursuant to all, and has
complied with and is not in conflict with, or in default or violation of any (a)
statute, code, ordinance, law, rule, regulation, order, writ, judgment,
injunction or decree, published policies and guidelines of any Governmental
Entity, applicable to Parent or Sub or by which any property or asset of Parent
or Sub is bound or affected or (b) any note, bond, mortgage, indenture, deed of
trust, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or Sub is a party or by which Parent or
Sub or any property or asset of Parent or Sub is bound or affected, except for
any such non-compliance, conflicts, defaults or violations that would not,
individually or in the aggregate, have a Material Adverse Effect; and Parent
neither knows of, nor has received notice of, any material violations of any the
above.
N. CERTAIN CONTRACTS.
1. Neither Parent nor Sub is a party to or bound by any contract,
arrangement, commitment or understanding (whether written or oral): (i)
which, upon the consummation of the transactions contemplated by this
Agreement, will
Exhibit 53
34
result in any payment (whether of severance pay or otherwise) becoming due
from Parent or Sub to any officer or employee thereof, (ii) which is a
material contract (as defined in Item 601(b)(10) of Regulation S-B of the
SEC) to be performed after the date of this Agreement that has not been
filed or incorporated by reference in the Parent SEC Reports, (iii) which
restricts the conduct of any line of business by Parent or Sub, (iv) with
or to a labor union or guild (including any collective bargaining
agreement), or (v) (including any stock option plan, stock appreciation
rights plan, restricted stock plan or stock purchase plan) any of the
benefits of which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement, or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
contemplated by this Agreement. Parent has previously delivered to the
Company true and complete copies of all employment, consulting and
deferred compensation agreements which are in writing and to which Parent
or Sub is a party. Each contract, arrangement, commitment or understanding
of the type described in this section is referred to herein as a "Parent
Contract".
2. (i) Each Parent Contract is legal, valid and binding upon Parent or
Sub, as the case may be, assuming due authorization of the other party or
parties thereto, and in full force and effect, (ii) Parent or Sub has in
all material respects performed all obligations required to be performed
by it to date under each such Parent Contract, and (iii) no event or
condition exists which constitutes or, after notice or lapse of time or
both, would constitute, a default on the part of Parent or Sub under any
such Parent Contract.
3. Neither Parent nor Sub has made any express warranty to any person or
entity with respect to any product it manufactures or sells or has
manufactured or sold or has made or agreed to make any indemnification
payment, or replacement with respect to any product warranty claim, except
for the warranties and/or agreement(s) to indemnify or replace product of
which true and correct copies have been delivered to the Company, (ii) the
warranties applicable under the Uniform Commercial Code as in effect from
time to time in the jurisdictions in which its products are sold and (iii)
any other warranties under other state or federal laws.
O. AGREEMENTS WITH REGULATORY AGENCIES. Neither Parent nor Sub is subject to any
cease-and-desist or other order issued by, or is a party to any Regulatory
Agreement with any Regulatory Agency or other Governmental Entity that restricts
the conduct of its business in any material respect, nor has Parent or Sub been
notified by any Regulatory Agency or other Governmental Entity that it is
considering issuing or requesting any Regulatory Agreement.
Exhibit 54
35
P. ENVIRONMENTAL MATTERS.
1. Parent and Sub are, and have been, in material compliance with all
applicable environmental laws and with all rules, regulations,
standards and requirements of the EPA and of state and local agencies
with jurisdiction over pollution or protection of the environment.
2. There is no suit, claim, action or proceeding pending or, to the
best knowledge of Parent, threatened, before any Governmental Entity or
other forum in which Parent or Sub have been or, with respect to
threatened proceedings, may be named as a defendant, responsible party
or potentially responsible party (i) for alleged noncompliance
(including by any predecessor), with any environmental law, rule,
regulation, standard or requirement or (ii) relating to the release
into or presence in the Environment of any Hazardous Materials or Oil
whether or not occurring at or on a site owned, leased or operated by
Parent or Sub.
3. Neither Parent nor Sub has received any notice regarding a matter on
which a suit, claim, action or proceeding as described in subsection of
this Section 4.16 could reasonably be based. No facts or circumstances
have come to Parent's attention which have caused either to believe
that a material suit, claim, action or proceeding as described in
subsection (b) of this Section 4.16 could reasonably be expected to
occur.
4. During the period of the ownership or operation by Parent or Sub of
any of their respective current properties, there has been no release
or presence in the Environment of Hazardous Material or Oil in, on,
under or affecting such property. To the best knowledge of Parent,
prior to the period of the ownership or operation by Parent or Sub of
any of their respective current properties or any previously owned or
operated properties, there was no release or presence in the
Environment of Hazardous Material or Oil in, on, under or affecting any
such property.
Q. PROPERTIES.
1. Schedule 4.17(a) hereto contains a true, complete and correct list
and a brief description (including carrying value) of all real
properties owned by Parent or Sub. Parent or Sub has good and
marketable title to all the real property and other property owned by
it and included in the balance sheet of Parent for the period ended
June 30, 1998, and owns such property subject to no encumbrances,
liens, mortgages, security interests, pledges or title imperfections
except for (i) those items that secure liabilities that are reflected
in such balance sheet or the notes thereto, (ii) statutory liens for
amounts not yet delinquent or which are being contested in good faith,
(iii) with respect to owned real property, title imperfections noted in
title reports, and (iv) those items that do not, individually or in the
aggregate, have a Material Adverse Effect on Parent or which do not and
will not interfere with the use of the property as currently used
Exhibit 55
36
or contemplated to be used by Parent or Sub, or the conduct of the
business of Parent or Sub.
2. Neither Parent nor Sub has received any notice of a material
violation of any applicable zoning or environmental regulation,
ordinance or other law, order, regulation or requirement relating to
its operations or its properties and, to the knowledge of Parent, there
is no such violation. All buildings and structures owned and used by
Parent or Sub conform in all material respects with all applicable
ordinances, codes or regulations, except to the extent such
noncompliance does not or will not have a Material Adverse Effect on
Parent and which does not or will not interfere with the use of any
property as currently used or contemplated to be used by Parent or Sub,
or the conduct of the business of Parent or Sub. To the knowledge of
Parent, all buildings and structures leased and used by Parent or Sub
conform in all material respects with all applicable ordinances, codes
or regulations, except to the extent such noncompliance does not or
will not have a Material Adverse Effect on Parent and which does not or
will not interfere with the use of any property as currently used or
contemplated to be used by Parent or Sub, or the conduct of the
business of Parent or Sub.
3. Schedule 4.17(c) contains a true, complete and correct list of all
leases pursuant to which Parent or Sub leases any real or personal
property, either as lessee or as lessor (the "Parent Leases"). Assuming
due authorization of the other party or parties thereto, each of the
Parent Leases is valid and binding on Parent or Sub, as the case may
be, and, to the best of Parent's knowledge, valid and binding on and
enforceable against all other respective parties to such leases, in
accordance with their respective terms. Except to the extent such
breaches, defaults or event of default do not or will not have a
Material Adverse Effect on Parent and which do not or will not
interfere with the use of any property as currently used or
contemplated to be used by Parent or Sub, or the conduct of the
business of Parent or Sub, there are not under such Parent Leases any
existing breaches, defaults or events of default by Parent or Sub, nor
has Parent or Sub received notice of, or made a claim with respect to,
any breach or default by any other party to such Parent Leases. Each of
Parent and Sub enjoys quiet and peaceful possession of all such leased
properties occupied by it as lessee.
4. All of the real properties, leasehold improvements and items of
equipment and other material personal property owned, leased, or
licensed by Parent or Sub, or in which any of those parties hold an
interest, are in good maintenance, repair and operating condition,
ordinary wear and tear excepted, are adequate for the purpose for which
they are now being or are anticipated to be used, and, to the best of
Parent's knowledge, are free from any material defects.
R. INSURANCE. Parent has made available to the Company true and complete copies
of all material policies of insurance of Parent or Sub currently in effect. All
of the policies relating to insurance maintained by Parent or Sub with the
respect to
Exhibit 56
37
its material properties and the conduct of its business in any material respect
(or any comparable policies entered into as a replacement thereof) are in full
force and effect and neither Parent nor Sub has received any notice of
cancellation with respect thereto. All life insurance policies on the lives of
any of the current and former officers of Parent or Sub which are maintained by
Parent or Sub or which are otherwise included as assets on the books of Parent
(i) are, or will at the Effective Time be, owned by Parent or Sub, free and
clear of any claims thereon by the officers or members of their families, except
with respect to the death benefits thereunder, as to which Parent agrees that
there will not be an amendment prior to the Effective Time without the consent
of the Company, and (ii) are accounted for properly on the books of Parent in
accordance with GAAP. Parent does not have any material liability for unpaid
premium or premium adjustments not properly reflected on Parent's June 30, 1998
balance sheet. Parent and Sub have been and are adequately insured with respect
to their respective property and the conduct of their respective business in
such amounts and against such risks as are substantially similar in kind and
amount to that customarily carried by parties similarly situated who own
properties and engage in businesses substantially similar to that of Parent
(including without limitation liability insurance and blanket bond insurance).
All claims under any policy or bond have been duly and timely filed.
S. TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in the Parent SEC
Reports, neither Parent nor Sub has entered into any transaction with any
executive officer, director or greater-than-5% stockholder of Parent or any
"associate" (as defined in Rule 14a-1 under the Exchange Act) of any such
officer or director or "affiliates" (as defined in Rule 144(a)(1) of the
Securities Act) of any such officer, director or stockholder.
T. LABOR MATTERS. Neither Parent nor Sub is a party to any collective bargaining
or other labor union or guild contract nor has Parent or Sub been approached
since December 31, 1997 by any collective bargaining or other labor union or
guild seeking to enter into a contract with Parent or Sub. There is no pending
or, to the best knowledge of Parent, threatened, labor dispute, strike or work
stoppage against Parent or Sub which may interfere with the business activities
of Parent or Sub. None of Parent, Sub or their respective representatives or
employees has committed any unfair labor practices in connection with the
operation of the business of Parent or Sub, and there is no pending or, to the
best knowledge of Parent, threatened charge or complaint against Parent or Sub
by the National Labor Relations Board or any comparable state agency. To its
knowledge, neither Parent nor Sub has discriminated on the basis of race, age,
sex or otherwise in its employment conditions or practices with respect to its
employees. There are no race, age, sex or other discrimination complaints
pending, or, to the knowledge of Parent, threatened against Parent or Sub by any
employee, former or current, before any domestic (federal, state or local) or
foreign board, department, commission or agency nor, to the knowledge of Parent,
does any basis therefor exist. There are no pending or, to the knowledge of
Parent, threatened representation questions respecting any employees.
U. INTELLECTUAL PROPERTY. Parent and Sub own or possess valid and binding
licenses and other rights to use without payment of any material amount all
material
Exhibit 57
38
patents, copyrights, trade secrets, trade names, service marks, trademarks,
software and other intellectual property used in its business, which are set
forth in Schedule 4.21 hereof; neither Parent nor Sub has received any notice of
conflict with respect thereto that asserts the right of others. Parent and Sub
have performed in all material respects all the obligations required to be
performed by it with respect to the items of intellectual property set forth in
Schedule 4.21 hereof and are not in default under any contract, agreement,
arrangement or commitment relating to any of the foregoing.
V. SUBSTANTIAL SUPPLIERS AND CUSTOMERS. Since December 31, 1997, none of the top
ten (10) suppliers (by dollar volume) or the top ten (10) customers (by dollar
volume) of Parent has substantially reduced the use or supply of the products or
goods made available for purchase by Parent and Sub in their business or has
ceased, or threatened to cease, to use or to supply such products or goods, or,
nor does Parent have any reason to believe that any such supplier or customer
will do so.
W. FINANCIAL ABILITY TO PERFORM. Parent has delivered to the Company prior to
the date of this Agreement a letter from a financing source acceptable to the
Company regarding its commitment to fund an amount sufficient to pay the Merger
Consideration. As of the date of this Agreement, Parent knows of no reason that
the financing source will not be able to consummate the Financing.
X. DISCLOSURE. No representation or warranty contained in this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements herein, in light of the
circumstances in which they are made, not misleading. No information material to
the Merger and which is necessary to make Parent's and Sub's representations and
warranties hereto contained not misleading, has been withheld from, or has not
been delivered in writing to the Company.
V. ARTICLE
COVENANTS RELATING TO CONDUCT OF BUSINESS
A. COVENANTS OF THE COMPANY. During the period from the date of this Agreement
and continuing until the Effective Time, except as expressly contemplated or
permitted by this Agreement or with the prior written consent of Parent, the
Company shall (and shall cause its Subsidiaries to) carry on its business in the
ordinary course consistent with past practice. The Company will (and shall cause
its Subsidiaries to) use all reasonable efforts to (x) preserve its business
organization, (y) keep available the present services of its employees and (z)
preserve for itself and Parent the goodwill of the customers of the Company and
its Subsidiaries and others with whom business relationships exist. Without
limiting the generality of the foregoing, and except as otherwise contemplated
by this Agreement or consented to in writing by Parent, the Company shall not
(and shall cause its Subsidiaries not to):
Exhibit 58
39
1. declare or pay any dividends on, or make other distributions in
respect of, any of its capital stock;
2. (i) split, combine or reclassify any shares of its capital stock; or
issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital
stock except upon the exercise or fulfillment of rights or options
issued or existing pursuant to employee benefit plans, programs or
arrangements, all to the extent outstanding and in existence on the
date of this Agreement, or (ii) repurchase, redeem or otherwise
acquire, any shares of the capital stock of the Company, or any
securities convertible into or exercisable for any shares of the
capital stock of the Company;
3. except in connection with the exercise of any of the options or
warrants of the Company outstanding as of the date of this Agreement,
issue, deliver or sell, or authorize or propose the issuance, delivery
or sale of, any shares of its capital stock or any securities
convertible into or exercisable for, or any rights, warrants or options
to acquire, any such shares, or enter into any agreement with respect
to any of the foregoing;
4. amend its Certificate of Incorporation or Bylaws;
5. except as set forth on Schedule 5.01(e), make any capital
expenditures in excess of $50,000 individually, or $150,000 in the
aggregate;
6. enter into any new line of business;
7. (i) acquire or agree to acquire, by merging or consolidating with,
or by purchasing a substantial equity interest in or a substantial
portion of the assets of or by any other manner, any business or any
corporation, partnership, association or other business organization or
division thereof or (ii) otherwise acquire any assets, other than in
the ordinary course of business, which would be material to the Company
and its Subsidiaries, taken as a whole;
8. take any action that is intended or would result in any of its
representations and warranties set forth in this Agreement being or
becoming untrue, or in any of the conditions to the Merger set forth in
Article VII not being satisfied, or in breach of any provision of this
Agreement except, in every case, as may be required by applicable law;
9. change its methods of accounting in effect at November 30, 1997,
except as required by changes in GAAP or regulatory accounting
principles as concurred to by the Company's independent auditors;
10. except as set forth on Schedule 5.01(j), (i) except as required by
applicable law or to maintain qualification pursuant to the Code, (x)
enter into, adopt, amend, renew or terminate any Plan or any agreement,
arrangement, plan or policy between the Company or any of its
Subsidiaries and one or more of its current or former directors,
officers or employees or (y) increase in any
Exhibit 59
40
manner compensation or fringe benefits of any director, officer or
employee or pay any benefit not required by any plan or agreement as in
effect as of the date hereof (including, without limitation, the
granting of stock options, stock appreciation rights, restricted stock,
restricted stock units or performance units or shares); provided,
however, that the Company or its Subsidiaries may increase the
compensation of non-officer employees in the ordinary course of
business consistent with past practice; or (ii) except for the Bogen
Agreement or the ▇▇▇▇▇ Agreement, enter into, modify or renew any
employment, severance or other agreement with any director, officer or
employee of the Company or any of its Subsidiaries or establish, adopt,
enter into, or amend any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement providing
for any benefit to any director, officer or employee (whether or not
legally binding);
11. other than (i) as set forth on Schedule 5.01(k), (ii) in the
ordinary course of business consistent with past practice or (iii) to
refinance existing debt with indebtedness under the Company's revolving
credit facility, incur any indebtedness for borrowed money, assume,
guarantee, endorse or otherwise as an accommodation become responsible
for the obligations of any other individual, corporation or other
entity;
12. other than (i) as set forth on Schedule 5.01(l) or (ii) in the
ordinary course of business consistent with past practice, sell, lease,
encumber, assign or otherwise dispose of, or agree to sell, lease,
encumber, assign or otherwise dispose of, any of its material assets,
properties or other rights or agreements;
13. make any Tax election or settle or compromise any material federal,
state, local or foreign Tax liability;
14. pay, discharge or satisfy any claim, liability or obligation, other
than the payment, discharge or satisfaction in the ordinary course of
business and consistent with past practice or as incurred in connection
with the Merger and the transactions expressly contemplated hereby,
subject to the limitation on fees set forth in Section 8.03(a) hereof,
of liabilities reflected or reserved against in the balance sheet for
the fiscal year ended November 30, 1997, or subsequently incurred in
the ordinary course of business and consistent with past practice;
15. except as set forth on Schedule 5.01(o), enter into or renew amend
or terminate, or give notice of a proposed renewal amendment or
termination, or make any commitment with respect to, regardless of
whether consistent with past practices, any lease, contract, agreement
or commitment (i) involving an aggregate payment by or to the Company
of more than $100,000, (ii) having a term of one year or more from the
time of execution or (iii) outside of the ordinary course of business
consistent with past practices;
16. waive any material right, whether in equity or at law; or
Exhibit 60
41
17. agree to do any of the foregoing.
B. COVENANTS OF PARENT AND SUB. During the period from the date of this
Agreement and continuing until the Effective Time, except (i) as expressly
contemplated or permitted by this Agreement or the Commitment Letter(s) or (ii)
with the prior written consent of the Company, Parent shall (and shall cause Sub
to) carry on its business in the ordinary course consistent with past practice.
Parent will (and shall cause Sub to) use all reasonable efforts to (x) preserve
its business organization, (y) keep available the present services of its
employees and (z) preserve for itself the goodwill of the customers of Parent
and Sub and others with whom business relationships exist. Without limiting the
generality of the foregoing, and except as otherwise contemplated by this
Agreement or Schedule 5.02 hereto or consented to in writing by the Company,
Parent shall not (and shall cause Sub not to):
1. declare or pay any dividends on, or make other distributions in
respect of, any of its capital stock;
2. split, combine or reclassify any shares of its capital stock; or
issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital
stock except upon the exercise or fulfillment of rights or options
issued or existing pursuant to employee benefit plans, programs or
arrangements, all to the extent outstanding and in existence on the
date of this Agreement or currently contemplated to be implemented on
or prior to the Closing Date;
3. except in connection with the exercise of any of the options or
warrants of Parent outstanding as of the date of this Agreement, issue,
deliver or sell, or authorize or propose the issuance, delivery or sale
of, any shares of its capital stock or any securities convertible into
or exercisable for, or any rights, warrants or options to acquire, any
such shares, or enter into any agreement with respect to any of the
foregoing;
4. amend its Certificate of Incorporation or Bylaws;
5. enter into any new line of business;
6. (i) acquire or agree to acquire, by merging or consolidating with,
or by purchasing a substantial equity interest in or a substantial
portion of the assets of or by any other manner, any business or any
corporation, partnership, association or other business organization or
division thereof or (ii) otherwise acquire any assets, other than in
the ordinary course of business, which would be material to Parent;
7. take any action that is intended or would result in any of its
representations and warranties set forth in this Agreement being or
becoming untrue, or in any of the conditions to the Merger set forth in
Article VII (including, without limitation, Section 7.01(d) hereof
relating to the Financing) not being
Exhibit 61
42
satisfied, or in breach of any provision of this Agreement except, in
every case, as may be required by applicable law;
8. change its methods of accounting in effect at December 31, 1997,
except as required by changes in GAAP or regulatory accounting
principles as concurred to by the Company's independent auditors;
9. other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise as an accommodation become responsible for the
obligations of any other individual, corporation or other entity;
10. sell, lease, encumber, assign or otherwise dispose of, or agree to
sell, lease, encumber, assign or otherwise dispose of, any of its
material assets, properties or other rights or agreements;
11. make any Tax election or settle or compromise any material federal,
state, local or foreign Tax liability;
12. waive any material right, whether in equity or at law; or
13. agree to do any of the foregoing.
Exhibit 62
43
C. NO SOLICITATION; NON-DISCLOSURE.
1. None of the Company, any of its Subsidiaries or any of their
respective directors, officers, employees, representatives, agents and
advisors or other persons controlled by the Company shall solicit or
hold discussions or negotiations with, or assist or provide any
information to, any person, entity or group (other than Parent, Sub and
their affiliates and representatives) concerning any merger, business
combination, disposition of a significant portion of its assets, or
acquisition of a significant portion of its capital stock or similar
transactions involving the Company; provided, however, that the Board
of Directors of the Company may furnish or cause to be furnished such
information to, and may participate in such discussions or negotiations
with, persons or entities who have made a bona fide proposal if the
Board of Directors of the Company believes, in good faith, after
consultation with its financial and legal advisors, that such bona fide
proposal represents a transaction which is more favorable to the
Company's stockholders from a financial point of view and is subject
only to reasonable conditions of closing which shall include financing
terms reasonably satisfactory to the Company and, in the opinion of
counsel to the Board of Directors of the Company, the fiduciary duty of
the Board of Directors under applicable law requires it to furnish or
cause to be furnished such information and/or participate in such
discussions or negotiations (a "Superior Offer"). The Company will
promptly communicate to Parent, Sub and their affiliates and
representatives the terms of any proposal, discussion, negotiation or
inquiry relating to a merger or disposition of a significant portion of
its capital stock or assets or similar transaction involving the
Company and the identity of the party making such proposal or inquiry,
which it may receive with respect to any such transaction. In the event
that the Board of Directors of the Company receives what it determines,
based on the opinion of counsel to the Board of Directors of the
Company, to be a Superior Offer, the Board of Directors may vote to
recommend such Superior Offer rather than pursuing the consummation of
the transactions contemplated hereunder or withdraw, modify or amend
its recommendation of this Agreement and the Merger, thus terminating
this Agreement in accordance with Section 8.01(h) hereof, but any such
termination may occur only (i) within twenty-one (21) days after such
Superior Offer is received and (ii) upon two (2) full business days
prior notice to Parent.
2. No party (or its representatives, agents, counsel, accountants or
investment bankers) hereto shall disclose to any third party, other
than either party's representatives, agents, counsel, accountants or
investment bankers or the potential lenders previously disclosed to the
Company and Parent in writing, any confidential or proprietary
information about the business, assets or operations of the other
parties to this Agreement or the transactions contemplated hereby,
except as may be required by applicable law. Disclosure of such
information by the Company or Parent with respect to obtaining
financing shall be made only if the recipient executes a reasonable and
appropriate agreement to hold such information confidential. The
parties hereto agree that the remedy at law for any breach of the
requirements of this subsection will be
Exhibit 63
44
inadequate and that any breach would cause such immediate and permanent
damage as would be impossible to ascertain, and, therefore, the parties
hereto agree and consent that in the event of any breach of this
subsection, in addition to any and all other legal and equitable
remedies available for such breach, including a recovery of damages,
the non-breaching parties shall be entitled to obtain preliminary or
permanent injunctive relief without the necessity of proving actual
damage by reason of such breach and, to the extent permissible under
applicable law, a temporary restraining order may be granted
immediately on commencement of such action.
VI. ARTICLE
ADDITIONAL AGREEMENTS
A. REGULATORY MATTERS.
1. The parties hereto shall cooperate with each other and use all
reasonable efforts promptly to prepare and file all necessary
documentation, to effect all applications, notices, petitions and
filings, and to obtain as promptly as practicable all permits,
consents, approvals and authorizations of all third parties and
Governmental Entities which are necessary or advisable to consummate
the transactions contemplated by this Agreement (including without
limitation the Merger). The Company and Parent shall have the right to
review in advance, and to the extent practicable each will consult with
the other on, in each case subject to applicable laws relating to the
exchange of information, all the information relating to the Company,
Parent or Sub, as the case may be, which appear in any filing made with
or written materials submitted to, any third party or any Governmental
Entity in connection with the transactions contemplated by this
Agreement. In exercising the foregoing right, each of the parties
hereto shall act reasonably and as promptly as practicable. The parties
hereto agree that they will consult with each other with respect to the
obtaining of all permits, consents, approvals and authorizations of all
third parties and Governmental Entities necessary or advisable to
consummate the transactions contemplated by this Agreement and each
party will keep the other apprised of the status of matters relating to
completion of the transactions contemplated herein.
2. Parent (or Sub as the case may be) shall, upon request, furnish the
Company with all information concerning themselves, their respective
directors, officers and stockholders and such other matters as may be
reasonably necessary or advisable in connection with the Registration
Statement made by or on behalf of the Company in connection with the
Merger and the other transactions contemplated hereby.
3. Parent (or Sub as the case may be) and the Company shall promptly
furnish each other with copies of written communications received by
Parent, Sub or the Company, as the case may be, from, or delivered by
any of
Exhibit 64
45
the foregoing to, any Governmental Entity in respect of the
transactions contemplated hereby.
B. SECURITIES LAWS MATTERS.
1. As soon as reasonably practicable after the date hereof, Parent
shall file the Registration Statement with the SEC under the Exchange
Act. Parent shall use all reasonable efforts to have the Registration
Statement cleared by the SEC as promptly as practicable after such
filing.
2. Parent, Sub and the Company shall cooperate with each other in the
preparation of the Registration Statement, and each shall notify the
other of the receipt of any comments of the SEC with respect to the
Registration Statement and of any requests by the SEC for any amendment
or supplement thereto or for additional information and shall provide
to the other parties promptly copies of all correspondence between the
party or any representative or agent of the party and SEC. Each party
shall review the Registration Statement prior to its being filed with
the SEC and shall review all amendments and supplements to the
Registration Statement and all responses to requests for additional
information and replies to comments prior to their being filed with, or
sent to, the SEC. The parties agree to use all reasonable efforts,
after consultation with each other, to respond promptly to all such
comments of and requests by the SEC.
3. Each of Parent and the Company further agrees to cause the
applicable proxy statement contained in the Registration Statement and
all required supplements thereto to be mailed to its stockholders
entitled to vote at the Parent Stockholder Meeting or the Company
Stockholder Meeting, as the case may be, at the earliest practicable
time.
C. COMPANY STOCKHOLDER MEETING; PARENT STOCKHOLDER MEETING.
1. In order to consummate the Merger, the Company shall take all steps
necessary to duly call, give notice of, convene and hold the Company
Stockholder Meeting as soon as reasonably practicable for the purpose
of voting upon the approval of this Agreement and the transactions
contemplated hereby and shall use all reasonable efforts to obtain such
approval and adoption. Subject to Sections 5.03 or 6.11 hereof, the
Company shall, through its Board of Directors, recommend to its
stockholders approval of this Agreement and the transactions
contemplated hereby.
2. In order to consummate the Merger, Parent shall take all steps
necessary to duly call, give notice of, convene and hold the Parent
Stockholder Meeting as soon as reasonably practicable for the purpose
of voting upon the approval of the issuance of the shares of Parent
Common Stock in the Merger and shall use all reasonable efforts to
obtain such approval and adoption. Parent shall, through its Board of
Directors, recommend to its stockholders approval of the issuance of
the shares of Parent Common Stock in the Merger.
Exhibit 65
46
D. ACCESS TO INFORMATION.
1. Upon reasonable notice to the Chief Executive Officers of the
parties and subject to applicable laws relating to the exchange of
information, the parties shall afford each other's officers, employees,
counsel, accountants, agents, advisors and other authorized
representatives, access, during normal business hours of the person(s)
to whom access is required, during the period prior to the Effective
Time, to all its properties, books, contracts, commitments and records
and, during such period, make available to the other party (i) when
applicable, a copy of each report, schedule, registration statement and
other document filed or received by it during such period pursuant to
the requirements of federal securities laws (other than reports or
documents which are not permitted to be disclosed under applicable
law), (ii) copies of all periodic reports regularly received by senior
management, and (iii) all other information concerning its business,
properties, assets and personnel as either party may reasonably
request.
2. In addition to any other confidentiality covenants and obligations
imposed under this Agreement, the parties agree to comply with the
confidentiality agreement dated as of March 30, 1998 between Parent and
the Company, as amended by that certain letter agreement dated April
24, 1998 between Parent and the Company (the "Confidentiality
Agreement"), which is incorporated herein by reference.
E. LEGAL CONDITIONS TO MERGER. Each of Parent, Sub and the Company shall use all
reasonable efforts (a) to take, or cause to be taken, all actions necessary,
proper or advisable to comply promptly with all legal requirements which may be
imposed on such party with respect to the Merger and, subject to the conditions
set forth in Article VII hereof, to consummate the transactions contemplated by
this Agreement and (b) to obtain (and to cooperate with the other party to
obtain) any consent, authorization, order or approval of or any exemption by,
any Governmental Entity and any other third party which is required to be
obtained by Parent, Sub or the Company in connection with the Merger and the
other transactions contemplated by this Agreement.
F. ADDITIONAL AGREEMENTS. If at any time after the Effective Time any further
action is necessary or desirable to carry out the purpose of this Agreement or
to vest the Surviving Corporation with full title to all properties, assets,
rights, approvals, immunities and franchises of any of the parties to the
Merger, the proper officers and directors of each party to this Agreement shall
take all such necessary action as may be reasonably requested by the Company or
Parent (without additional cost to them).
G. DISCLOSURE SUPPLEMENTS. Prior to the Effective Time, each party will
supplement or amend the Schedules hereto delivered in connection with the
execution of this Agreement to reflect any matter which, if existing, occurring
or known at the date of this Agreement, would have been required to be set forth
or described in such
Exhibit 66
47
Schedules or which is necessary to correct any information in such Schedules
which has been rendered inaccurate thereby. No supplement or amendment to such
Schedules shall have any effect for the purposes of determining satisfaction of
the conditions set forth in Sections 7.02(a) hereof or the compliance by the
Company with the covenants set forth in Section 5.01 hereof or for the purposes
of determining satisfaction of the conditions set forth in Sections 7.03(a)
hereof or the compliance by Parent or Sub with the covenants set forth in
Section 5.02 hereof.
H. CURRENT INFORMATION.
1. During the period from the date of this Agreement to the Effective
Time, each of the Company and Parent will cause its Chief Executive
Officer or one or more of his or her designated representatives to be
available to confer from time to time with representatives of the other
and to report the general status of their ongoing operations. Each such
party will promptly notify the other party of any material change in
the normal course of its business and of any governmental complaints,
investigations or hearings or the institution of significant litigation
involving them or their subsidiaries or properties and will keep the
other party reasonably informed of such events.
2. To the extent not covered by paragraph (a) above, the Company shall
give prompt notice to Parent, and Parent shall give prompt notice to
the Company, of (i) the occurrence or non-occurrence of any event which
would be reasonably likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate and (ii) any
failure of Parent, Sub or the Company, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it under this Agreement; provided, however, that
the delivery of any notice pursuant to this paragraph (b) shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
I. NO INCONSISTENT ACTIONS. Prior to the Effective Time, except as otherwise
permitted by this Agreement, no party will enter into any transaction or make
any agreement or commitment and will use reasonable efforts not to permit any
event to occur, which could reasonably be anticipated to result in (x) a denial
of the regulatory approvals referred to in Section 7.01(b) or (y) the imposition
of any condition or requirement that would materially adversely affect the
economic or business benefits to the Surviving Corporation of the transactions
contemplated by this Agreement.
Exhibit 67
48
J. INDEMNIFICATION OF DIRECTORS.
1. From and after the Effective Time, Parent and Surviving Corporation
shall each defend, indemnify and advance costs and expenses (including
reasonable attorneys' fees, disbursements and expenses) and hold
harmless each present and former director and officer of the Company or
its Subsidiaries determined as of the Effective Time (the "Indemnified
Parties"), against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages,
settlements or liabilities (collectively, "Costs") incurred in
connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, arising after
the Effective Time and out of or pertaining to matters existing or
occurring at or prior to the Effective Time, including without
limitation, the authorization of this Agreement and the transactions
contemplated hereby, whether asserted or claimed prior to, at or after
the Effective Time, to the fullest extent that the Company would have
been permitted under Delaware law and its certificate of incorporation
or by-laws in effect on the date hereof to indemnify such person (and
also advance expenses as incurred to the fullest extent permitted under
applicable law provided the person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately
determined that such person is not entitled to indemnification);
provided that any determination required by law to be made with respect
to whether an officer's or director's conduct complies with the
standards set forth under Delaware law and the Company's certificate of
incorporation and by-laws as of the date hereof shall be made by
independent counsel selected jointly by Parent and the Indemnified
Party.
2. In the event of any claim, action, suit, proceeding or investigation
in which indemnification pursuant to Section 6.10(a) is sought (whether
arising before or after the Effective Time), (i) Parent shall have the
right to assume the defense thereof and Parent shall not be liable to
any Indemnified Parties for any legal expenses of other counsel or any
other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if Parent elects not
to assume such defense or counsel for the Indemnified Parties advises
that there are issues which raise conflicts of interest between Parent
and the Indemnified Parties, the Indemnified Parties may retain counsel
satisfactory to them and reasonably satisfactory to Parent, and Parent
shall pay the reasonable fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are received;
provided, however, that Parent shall be obligated pursuant to this
paragraph (b) to pay for only one firm of counsel for all Indemnified
Parties in any jurisdiction unless the use of one counsel for such
Indemnified Parties would present such counsel with a conflict of
interest, (ii) the Indemnified Parties will cooperate in the defense of
any such matter unless counsel for the Indemnified Parties advises that
there are issues which raise conflicts of interest making such
cooperation inadvisable and (iii) Parent shall not be liable for any
settlement effected without its prior written consent (which shall not
be unreasonably withheld); and provided further that Parent shall not
have any obligation hereunder to any Indemnified Party when
Exhibit 68
49
and if a court of competent jurisdiction shall ultimately determine,
and such determination shall have become final and nonappealable, that
the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law. If a court of
competent jurisdiction determines that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by
applicable law, then Parent shall provide indemnification to the
maximum extent and in such manner as is permissible under applicable
law. If such indemnity is completely unavailable with respect to any
Indemnified Party, Parent and the Indemnified Party shall contribute to
the amount payable in such proportion as is appropriate to reflect
relative faults and benefits.
3. For a period of six (6) years following the Effective Time, Parent
will provide to the persons who served as directors or officers of
Company or any of the Company's Subsidiaries on or before the Effective
Time, insurance against liabilities and claims (and related expenses)
made against them resulting from their service as such prior to the
Effective Time. Such coverage may be provided by means of an extended
reporting period endorsement to the policy presently issued to the
Company by the present carrier for the Company, or by such other means
which shall provide substantially equivalent coverage to the persons.
K. FIDUCIARY OBLIGATIONS. Notwithstanding anything in this Agreement to the
contrary, the Company shall not be required to take, or cause to be taken, or
fail to take any actions or to do, or cause to be done or fail to do any things
which may be contrary to the fiduciary obligations of persons who are directors
of the Company, or are acting pursuant to the exercise of the directors'
fiduciary obligations, as determined in good faith by a majority of the
directors of the Company, based as to legal matters on the advice of its legal
counsel.
L. FINANCING.
1. Parent shall use all reasonable good faith efforts to consummate the
Financing and Parent will keep the Purchaser apprised of the status of
matters relating to completion of the Financing. Parent shall raise the
amount in cash equity required by the terms of the Commitment
Letter(s).
2. In the event that the Financing is not consummated and a claim,
action, suit or proceeding is sought by Parent against the financing
source or sources for failure to consummate the Financing (i) Parent
shall offer the Company the right to join in such claim, action, suit
or proceeding, (ii) Parent and the Company shall cooperate in any such
claim, action, suit or proceeding, and (iii) Parent and the Company
shall share equally in all costs and in all recoveries in any such
claim, action, suit or proceeding. Nothing contained herein shall
obligate (A) Parent to pursue any such claim, action, suit or
proceeding or (B) the Company to participate in any such claim, action,
suit or proceeding.
Exhibit 69
50
VII. ARTICLE
CONDITIONS PRECEDENT
A. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The respective
obligation of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Closing of the following conditions:
1. STOCKHOLDER APPROVAL. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the
affirmative vote of the stockholders of the Company, to the extent
required by Delaware law and the Company's Certificate of
Incorporation. The issuance of the shares of Parent Common Stock in the
Merger shall have been approved and adopted by the affirmative vote of
the stockholders of Parent, to the extent required by Delaware law and
Parent's Certificate of Incorporation.
2. REGULATORY APPROVALS. All necessary approvals, authorizations and
consents of all Governmental Entities required to consummate the
transactions contemplated hereby shall have been obtained and shall
remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired or been terminated (all such
approvals and the expiration of all such waiting periods being referred
to herein as the "Requisite Regulatory Approvals").
3. NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No order, injunction or
decree issued by any court or agency of competent jurisdiction or other
legal restraint or prohibition (an "Injunction") preventing the
consummation of the Merger or any of the other transactions
contemplated by this Agreement shall be in effect and no proceeding
initiated by any Governmental Entity seeking an injunction shall be
pending. No statute, rule, regulation, order, injunction or decree
shall have been enacted, entered, promulgated or enforced by any
Governmental Entity which prohibits, restricts or makes illegal
consummation of the Merger, or any of the other transactions
contemplated by this Agreement.
4. FINANCING. The Financing shall have been consummated in accordance
with the proposal set forth in the Commitment Letter(s).
B. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB. The obligation of Parent and Sub
to effect the Merger is also subject to the satisfaction or waiver by Parent and
Sub, at or prior to the Effective Time, of the following conditions:
1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company set forth in this Agreement shall be true and correct as
of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date. Parent shall
have received a certificate
Exhibit 70
51
signed on behalf of the Company by its Chief Executive Officer and
Chief Financial Officer to the foregoing effect.
2. PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date,
and Parent shall have received a certificate signed on behalf of the
Company by its Chief Executive Officer and Chief Financial Officer to
such effect.
3. CONSENTS UNDER AGREEMENTS. The consent, approval, waiver or
amendment (with financial covenants) of each person (other than the
Governmental Entities referred to in Section 7.01(b)) whose consent or
approval shall be required in order to permit the succession by the
Surviving Corporation pursuant to the Merger to any obligation, right
or interest of the Company under any material loan or credit agreement,
note, mortgage, indenture, lease, license or other agreement or
instrument shall have been obtained and shall be reasonably
satisfactory to Parent.
4. LEGAL OPINION. Parent shall have received the legal opinion of
Bourne, ▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Company, dated the Closing Date,
covering such matters as Parent and Sub shall reasonably request.
5. FIRPTA. The Company shall have delivered to the Parent and Sub an
affidavit, dated as of the Effective Date, pursuant to Sections 897 and
1445 of the Code in substantially the form set forth in Exhibit E
hereto, and shall have complied with the notice requirements set forth
in Treasury Regulation Section 1.897-2(h)(2).
6. BOGEN AGREEMENT AND ▇▇▇▇▇ AGREEMENT. The Bogen Agreement and the
▇▇▇▇▇ Agreement shall be in full force and effect as of the Effective
Time, and the employment agreements of ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇
with the Company shall have been terminated in all respects, except as
expressly contemplated by the Bogen Agreement and the ▇▇▇▇▇ Agreement,
respectively.
7. DISSENTING SHARES. Dissenting Shares shall constitute not more than
five percent (5%) of the issued and outstanding shares of Company
Common Stock as of the record date for the Company Stockholder Meeting.
8. FIVE LOG REDUCTION. The Company shall be in compliance with the
requirements of the Food Labeling: Warning and Notice Statement;
Labeling of Juice Products; Final Rule promulgated by the United States
Food and Drug Administration through in-plant validation of five (5)
log reduction without use of pasteurization, which compliance will
eliminate any requirement for a warning label.
Exhibit 71
52
C. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the Company to
effect the Merger is also subject to the satisfaction, or waiver by the Company,
at or prior to the Closing of the following conditions:
1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Parent and Sub set forth in this Agreement shall be true and correct
of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date. The Company
shall have received a certificate signed on behalf of Parent and Sub by
their respective Chief Executive Officers and Chief Financial Officers
to the foregoing effect.
2. PERFORMANCE OF OBLIGATIONS OF PARENT AND SUB. Parent and Sub shall
have each performed in all material respects all obligations required
to be performed by them; under this Agreement at or prior to the
Closing Date, and the Company shall have received a certificate signed
on behalf of Parent and Sub by their respective Chief Executive
Officers and Chief Financial Officers to such effect.
3. CONSENTS UNDER AGREEMENTS. The consent, approval, waiver or
amendment (with financial covenants) of each person (other than the
Governmental Entities referred to in Section 7.01(b)) whose consent or
approval shall be required in order to permit the succession by the
Surviving Corporation pursuant to the Merger to any obligation, right
or interest of Parent or Sub under any material loan or credit
agreement, note, mortgage, indenture, lease, license or other agreement
or instrument, shall have been obtained and shall be reasonably
satisfactory to the Company.
4. SEC REGISTRATION; LISTING OF SHARES. The Registration Statement
shall have been declared effective by the SEC and shall not be subject
to a stop order or any threatened stop order, and the issuance of the
Parent Common Stock shall have been qualified in every state where such
qualification is required under the applicable state securities laws.
The Parent Common Stock to be issued in connection with the Merger
shall have been included for quotation on the Nasdaq SmallCap Market or
any other national securities exchange, or quotation system, if any,
upon which the Parent Common Stock is trading or being quoted at the
Effective Time.
5. FAIRNESS OPINION. The Company shall have received the written
opinion of Ladenburg ▇▇▇▇▇▇▇▇ & Company to the effect that, as of the
date of such opinion, the Per Share Price is fair to the Company's
stockholders from a financial point of view, and such opinion shall not
have been amended or rescinded as of the Effective Time.
6. LEGAL OPINION. The Company shall have received the legal opinion of
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP, counsel to Parent and Sub,
Exhibit 72
53
dated the Closing Date, covering such matters as the Company shall
reasonably request.
7. INSURANCE. The Company shall have received evidence, reasonably
satisfactory to it, that Parent shall have obtained the insurance
referred to in Section 6.10(c) hereof or, after giving ten (10) days'
prior written notice to Parent, shall have obtained the insurance
referred to in Section 6.10(c) hereof.
8. PROVISION OF THE EXCHANGE FUND. Parent shall have made available to
the Exchange Agent the Exchange Fund described in Section 2.0 thereof.
VIII. ARTICLE
TERMINATION AND AMENDMENT
A. TERMINATION. This Agreement may be terminated and the Merger abandoned at any
time prior to the Effective Time, whether before or after approval of the
matters presented in connection with the Merger by the stockholders of the
Company and Parent:
1. by mutual consent of Parent and the Company in a written instrument,
if the Board of Directors of each so determines by a vote of a majority
of the members of its entire Board;
2. by either Parent or the Company upon written notice to the other
party (i) at least thirty (30) days after the date on which any request
or application for a regulatory approval required to consummate the
Merger shall have been denied or withdrawn at the request or
recommendation of the Governmental Entity which must grant such
requisite regulatory approval, unless within the thirty (30) day period
following such denial or withdrawal a petition for rehearing or an
amended application has been filed with the applicable Governmental
Entity; provided, however, that no party shall have the right
to terminate this Agreement pursuant to this Section 8.01(b)(i) if such
denial or request or recommendation for withdrawal shall be due to the
failure of the party seeking to terminate this Agreement to perform or
observe the covenants and agreements of such party set forth herein, or
(ii) if any Governmental Entity of competent jurisdiction shall have
issued a final nonappealable order enjoining or otherwise prohibiting
the consummation of any of the transactions contemplated by this
Agreement;
3. by either Parent or the Company if the Merger shall not have been
consummated on or before the later of (i) if the Company has mailed the
proxy statement contained in the Registration Statement to its
stockholders on or prior to December 31, 1998, the thirtieth (30th) day
after the Company has mailed the
Exhibit 73
54
proxy statement or, if later, five (5) days after the Company
Stockholder Meeting and (ii) December 31, 1998, unless the failure of
the Closing to occur by such date shall be due to the failure of the
party seeking to terminate this Agreement to perform or observe in any
material respect the covenants and agreements of such party set forth
herein;
4. by the Company (provided that the Company shall not be in material
breach of any of its obligations under Section 6.03) if any approval of
the stockholders of the Company required for the consummation of and
Merger shall not have been obtained by reason of the failure to obtain
the required vote at a duly held meeting of stockholders or at any
adjournment or postponement thereof;
5. by either Parent or the Company (provided that the terminating party
is not then in material breach of any representation, warranty,
covenant or other agreement contained herein) if there shall have been
a material breach of any of the representations or warranties set forth
in this Agreement on the part of the other party, (i) which breach (if
susceptible to cure) is not cured within twenty (20) business days
following written notice to the party committing such breach, or (ii)
which breach, by its nature, cannot be cured;
6. by either Parent or the Company (provided that the terminating party
is not then in material breach of any representation, warranty,
covenant or other agreement contained herein) if there shall have been
a material breach of any of the covenants or agreements set forth in
this Agreement on the part of the other party, (i) which breach (if
susceptible to cure) shall not have been cured within twenty (20)
business days following receipt by the breaching party of written
notice of such breach from the other party hereto, or (ii) which
breach, by its nature, cannot be cured;
7. by Parent, if the Board of Directors of the Company does not
publicly recommend, as required by Section 6.03 hereof, in the
Registration Statement that the Company's stockholders approve and
adopt this Agreement or, if after recommending in the Registration
Statement that stockholders approve and adopt this Agreement, the Board
of Directors of the Company shall have withdrawn, modified or amended
such recommendation in any respect materially adverse to Parent;
8. by the Company, if the Board of Directors of the Company votes to
recommend a Superior Offer rather than pursuing the consummation of the
transactions contemplated hereunder or, if after recommending in the
Registration Statement that stockholders approve and adopt this
Agreement and the Merger, the Board of Directors of the Company shall
have withdrawn, modified or amended such recommendation in order to
recommend a Superior Offer; provided, however, that the Company shall
notify Parent at least two (2) full business days prior to the exercise
of its termination rights under this Section 8.01(h); or
Exhibit 74
55
9. by either Parent or the Company (provided that the terminating party
is not then in material breach of any representation, warranty,
covenant or other agreement contained herein) after a reasonable and
objective determination that any of the conditions in Section 7.01 or
7.02, in the case of a termination by Parent, or that any of the
conditions in Section 7.01 or 7.03, in the case of a termination by the
Company, have not been satisfied or cured within the time frames
required by such sections or are incapable of being satisfied or cured,
as the case may be, by the later of (i) if the Company has mailed the
proxy statement contained in the Registration Statement to its
stockholders on or prior to December 31, 1998, the thirtieth (30th) day
after the Company has mailed the proxy statement or, if later, five (5)
days after the Company Stockholder Meeting and (ii) December 31, 1998.
B. EFFECT OF TERMINATION. In the event of termination of this Agreement by
either Parent or the Company as provided in Section 8.01, this Agreement shall
forthwith become void and have no effect except Sections 6.04(b), 6.12(b) and
8.03 shall survive any termination of this Agreement, and there shall be no
further obligation on the part of Parent, Sub, the Company, or their respective
officers or directors except for the obligations under such provisions.
Notwithstanding anything to the contrary contained in this Agreement, no party
shall be relieved or released from any liabilities or damages arising out of its
intentional breach of any provision of this Agreement; provided, however, that
no claim for intentional breach shall survive the Closing.
C. EXPENSES; TERMINATION FEE.
1. If the Merger is not consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such expense, provided that
nothing contained herein shall limit Parent's rights under Section
8.03(b) hereof. If the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by Parent; provided, however, that
Parent shall not be required to pay more than an aggregate of $495,000
for the out-of-pocket expenses of the Company and its advisors,
including without limitation legal counsel, investment advisors and
accountants (but excluding the out-of pocket expenses of the financial
printer with respect to the Registration Statement and the proposed
proxy filing already incurred by the Company).
2. In order to induce Parent to enter into this Agreement and to
reimburse Parent for incurring the costs and expenses related to
entering into this Agreement and consummating the transactions
contemplated by this Agreement, in the event that (i) the transactions
contemplated by this Agreement are not consummated as a result of any
failure to satisfy the conditions set forth in Sections 7.01(a) (as to
the Company's stockholders), 7.02(b) or 7.02(f) of this Agreement or
(ii) the Company terminates this Agreement and, at the time of
termination, the Board of Directors of the Company has received a
Superior Offer and such Superior Offer is accepted by the Company
within twelve (12) months after the termination of this Agreement), the
Company shall pay Parent
Exhibit 75
56
an amount equal to $1,500,000 (inclusive of out-of-pocket expenses) in
connection with the transactions contemplated by this Agreement.
3. In order to induce the Company to enter into this Agreement and to
reimburse the Company for incurring the costs and expenses related to
entering into this Agreement and consummating the transactions
contemplated by this Agreement, in the event that (i) the transactions
contemplated by this Agreement are not consummated as a result of any
failure to satisfy the conditions set forth in Sections 7.01(a) (as to
the Parent's stockholders) or 7.03(b) of this Agreement or (ii) Parent
terminates this Agreement and, at the time of termination, the Board of
Directors of Parent has received an offer to be acquired by a third
party and Parent accepts such offer within twelve (12) months after the
termination of this Agreement), Parent shall pay the Company an amount
equal to $750,000 (inclusive of out-of-pocket expenses) in connection
with the transactions contemplated by this Agreement.
4. In order to induce the Company to enter into this Agreement, in the
event that the transactions contemplated by this Agreement are not
consummated for reasons other than as a result of any failure to
satisfy the conditions set forth in Sections 7.01(a) (as to the
Company's stockholders), 7.02(a), 7.02(b), 7.02(c), 7.02(e), 7.02(f),
7.02(g) or 7.02(h) of this Agreement, Parent hereby covenants and
agrees that it will not directly or indirectly acquire an entity which
manufactures fresh juices within twelve (12) months after the
termination or failure to consummate of this Agreement.
D. AMENDMENT. Subject to compliance with applicable law, this Agreement may be
amended by the parties hereto, by action taken or authorized by their respective
Boards of Directors, at any time before or after approval of the matters
presented in connection with the Merger by the stockholders of the Company;
provided, however, that, after approval by the stockholders of the Company, no
amendment shall be made which reduces or changes the amount or form of the
consideration to be delivered to the stockholders of the Company without the
approval of a majority of the stockholders of the Company. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
E. EXTENSION; WAIVER. At any time prior to the Effective Time, the parties
hereto, by action taken or authorized by their respective Board of Directors,
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party, but such extension or waiver
shall nor operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
Exhibit 76
57
IX. ARTICLE
GENERAL PROVISIONS
A. CLOSING. Subject to the terms and conditions of this Agreement, the closing
of the Merger (the "Closing") will take place at such date, time and place as is
mutually agreed upon by the Company and Parent, which shall be not more than
three (3) business days after the satisfaction of the conditions set forth in
Article VII hereof. The date on which such Closing takes place is referred to
herein as the "Closing Date."
B. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Notwithstanding
any term or provision of this Agreement to the contrary and regardless of any
investigation made by any party, none of the representations, warranties,
covenants and agreements in this Agreement or otherwise made or delivered
pursuant to, or in connection with, this Agreement, the Merger or any related
transactions shall survive the Closing Date, except for those covenants and
agreements contained or referenced in the Bogen Agreement or the ▇▇▇▇▇ Agreement
and in the Confidentiality Agreement.
C. NOTICES. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered personally or telecopied (with
confirmation from recipient), three (3) days after mailed by registered or
certified mail (return receipt requested) or on the day delivered by an express
courier (with confirmation from recipient) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
if to Parent or Sub, to:
Saratoga Beverage Group, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to:
The Fresh Juice Company, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit 77
58
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bourne, ▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 690
Summit, New Jersey 07902-0690
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
D. INTERPRETATION. When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of or Exhibit or
Schedule to this Agreement unless otherwise indicated. 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. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." The phrases
"the date of this Agreement," "the date hereof" and terms of similar import,
unless the context otherwise requires, shall be deemed to be October 13, 1998.
E. COUNTERPARTS. This Agreement may be executed in counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.
F. ENTIRE AGREEMENT. This Agreement (including the documents and the instruments
referred to herein), the Voting Agreement, the Bogen Agreement, the ▇▇▇▇▇
Agreement, the Confidentiality Agreement and the Option Agreement by and between
Parent and ▇▇▇▇▇▇ ▇▇▇▇▇ constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
G. GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of the State of Delaware, without regard to any applicable to
conflicts of law.
H. ENFORCEMENT OF AGREEMENT. The parties hereto agree that irreparable damage
would occur in the event that the provisions contained in Sections 5.03,
6.04(b), or 8.03 of this Agreement were not performed in accordance with its
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
Sections 5.03, 6.04(b) or 8.03 of this Agreement and to enforce specifically the
terms and provisions thereof in any court of the United States or any court
located in the State of New York (if such injunction or enforcement action is
instituted by the Company) or the State of New Jersey (if such injunction or
enforcement action is instituted by Parent), this being in addition to any other
remedy to which they are entitled at law
Exhibit 78
59
or in equity. In the event Parent institutes an action to enforce the provisions
of 8.03(b) of this Agreement, the prevailing party in such action shall be
entitled to all documented, out of pocket costs and expenses, without
limitation.
I. SEVERABILITY. Any term or provision of this Agreement which 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
deemed to be so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
J. PUBLICITY. Except as otherwise required by law or the rules of the National
Association of Securities Dealers, so long as this Agreement is in effect, none
of Parent, Sub or the Company shall, or shall permit any of their Subsidiaries
to, issue or cause the publication of any press release or other public
announcement with respect to, or otherwise make any public statement concerning,
the transactions contemplated by this Agreement without the consent of the other
party, which consent shall nor be unreasonably withheld.
K. ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns. Except as otherwise expressly provided herein, this
Agreement (including the documents and instruments referred to herein) is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
Exhibit 79
60
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.
SARATOGA BEVERAGE GROUP, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Title: President and
Chief Executive Officer
ROWALE CORP.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------
Title: President
THE FRESH JUICE COMPANY, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Chief Executive Officer
Exhibit 80