AGREEMENT AND PLAN OF MERGER
September 8 , 2000
By and Among
EDG CAPITAL, INC., MRM MERGER SUB, INC.
AND MOLECULAR RADIATION MANAGEMENT, INC.
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into this
8th day of September, 2000, by and among EDG Capital, Inc. ("Acquiror), a New
York corporation having its principal place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, MRM Merger Sub, Inc. ("Merger Sub"), a New York corporation
and a wholly-owned subsidiary of Acquiror having its principal place of business
at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, and Molecular Radiation
Management Group, Inc. (the "Company"), a New York corporation having its
principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
WHEREAS, the Boards of Directors of Acquiror, Merger Sub, and the Company
each has determined that it is advisable and in the best interests of their
respective stockholders that Merger Sub be merged with and into the Company
pursuant to and subject to the terms and conditions of this Agreement and the
New York Business Corporation Law ("New York Law").
WHEREAS, for United States federal income tax purposes, it is intended that
the Merger will qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, in connection with, in preparation for and subject to the
effectiveness Merger, Acquiror and the Company deem it advisable that Acquiror,
which presently has outstanding 242,500 shares of common stock, par value $0.01,
of Acquiror ("Acquiror Common Stock"), undergo a 2.57315 for one stock split
(with all fractional shares being rounded up) in the form of a stock dividend
(the "Stock Split") to stockholders of record on August 23, 2000, resulting in
such stockholders owning upon the effectiveness of the Merger approximately
623,989 shares of Acquiror Common Stock.
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NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I.
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with New York Law, at the Effective
Time (as defined in Section 1.2) Merger Sub shall be merged with and into the
Company (the "Merger"). As a result of the Merger, the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
surviving corporation of the Merger (sometimes referred to herein as the
"Surviving Corporation") and a wholly-owned subsidiary of Acquiror.
SECTION 1.2 Effective Time. As promptly as practicable on the Closing Date
(as defined in Section 1.6), the parties hereto shall cause the Merger to be
consummated by filing a certificate of merger (the "Certificate of Merger") with
the Secretary of State of the State of New York, as required by, and executed in
accordance with the relevant provisions of, New York Law and in such form as
approved by Acquiror and the Company prior to such filing (the time of the
filing of the Certificate of Merger or the time specified therein being the
"Effective Time").
SECTION 1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of New York Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the rights, privileges,
powers and franchises of Merger Sub and the Company shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Merger Sub and the Company
shall become the debts, liabilities and duties of the Surviving Corporation.
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SECTION 1.4 Certificate of Incorporation; Bylaws. At the Effective Time,
(a) the certificate of incorporation of the Company, as in effect immediately
prior to the Effective Time and as amended by the Certificate of Merger, shall
be the certificate of incorporation of the Surviving Corporation, and (b) the
bylaws of the Company, as in effect immediately prior to the Effective Time,
shall be the bylaws of the Surviving Corporation.
SECTION 1.5 Directors and Officers. The directors of the Company
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation; and the officers of the
Company immediately prior to the Effective Time shall be the officers of the
Surviving Corporation, in each case until their respective successors are duly
elected or appointed and qualified in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation.
SECTION 1.6 Closing. Subject to the terms and conditions of this Agreement,
the closing of the Merger (the "Closing") will take place simultaneously with
the latest to occur or, if permissible, waiver of the conditions set forth in
Article VIII hereof (the "Closing Date"), at the offices of Hofheimer Gartlir &
Gross, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, unless
another date or place is agreed to in writing by the parties hereto. It is the
intention of the parties that the Closing shall occur simultaneously with the
completion of the Acquiror's private placement described in Section 7.2 below of
a minimum of $1 million from the sale of 1,239,926 shares of its Common Stock at
a price of $.8065 per share, with G-V Capital Corp., a member in good standing
of the National Association of Securities Dealers, Inc. ("NASD"), acting as
placement agent.
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SECTION 1.7 Subsequent Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to continue in, vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties, privileges, franchises or assets of either of its
constituent corporations acquired or to be acquired by the Surviving Corporation
as a result of, or in connection with, the Merger or otherwise to carry out this
Agreement, the officers and directors of the Surviving Corporation shall be and
hereby are directed and authorized to execute and deliver, in the name and on
behalf of either of such constituent corporations, all such deeds, bills of
sale, assignments and assurances and to take and do, in the name and on behalf
of each of such corporations or otherwise, all such other actions and things as
may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties, privileges,
franchises or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
SECTION 1.8. Tax Treatment of the Merger. It is intended by the parties
hereto that the Merger shall constitute a reorganization of Merger Sub and the
Company within the meaning of Section 368(a) of the Code. The parties hereby
adopt this Agreement as a "plan of reorganization" of Merger Sub and the Company
within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States
Treasury Regulations.
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ARTICLE II.
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.1 Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Acquiror, Merger Sub, the
Company or the holders of any of the securities referred to in this Section 2.1:
(a) Common Stock. Each share of the common stock of the Company, par value
$0.01 (the "Company Common Stock"), excluding any shares described in Section
2.1(b), issued and outstanding immediately prior to the Effective Time shall
cease to be outstanding and shall be converted into and exchanged for the right
to receive 7,831.5789 shares of Acquiror Common Stock, resulting in all such
shares of Company Common Stock being exchanged for the right to receive an
aggregate of approximately 7,440,000 shares of Acquiror Common Stock. The shares
of Acquiror Common Stock issuable to the holders of Company Common Stock
pursuant hereto, is sometimes referred to herein, collectively, as the "Merger
Consideration". All such shares of Company Common Stock shall cease to be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each certificate previously evidencing any such shares shall
thereafter represent only the right to receive the Merger Consideration. Except
as otherwise provided herein or by applicable law, the holders of certificates
previously evidencing such shares of Company Common Stock outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares of Company Common Stock. Each such certificate previously
evidencing such shares of Company Common Stock shall be exchanged for a like
number of shares of Acquiror Common Stock.
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(b) Treasury Stock. All shares of capital stock of the Company held in the
treasury of the Company immediately prior to the Effective Time shall be
canceled and extinguished without any conversion thereof and no amount shall be
delivered or deliverable in exchange therefor.
(c) Merger Sub Stock. Each share of common stock of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and
exchanged for one (1) duly and validly issued, fully paid and nonassessable
share of common stock of the Surviving Corporation.
SECTION 2.2 Exchange of Certificates.
(a) Exchange Agent. As soon as reasonably practicable after the Effective
Time, Acquiror shall deposit with the transfer agent for its Common Stock (the
"Exchange Agent"), for the benefit of the former holders of shares of Company
Common Stock (excluding any shares described in Section 2.1(b)), for issuance
and payment in accordance with this Article II the shares of Acquiror Common
Stock issuable pursuant to Section 2.1(a) (such shares of Acquiror Common Stock
being hereinafter referred to as the "Exchange Fund"). Acquiror shall cause the
Exchange Agent, pursuant to irrevocable instructions, to deliver Acquiror Common
Stock contemplated to be paid pursuant to Section 2.1(a) out of the Exchange
Fund. The Exchange Fund shall not be used for any purpose other than as set
forth in this Section 2.2(a).
(b) Payment Procedures. As soon as reasonably practicable after the
Effective Time, Acquiror shall cause the Exchange Agent to mail to each record
holder, as of the Effective Time, of an outstanding certificate or certificates
(each a "Certificate" and collectively, the "Certificates") that immediately
prior to the Effective Time evidenced outstanding shares of Company Common Stock
(excluding any shares described in Sections 2.1(b)): (1) a form letter of
transmittal and (2) instructions for use in effecting the surrender of the
Certificates for payment therefor. Upon surrender to the Exchange Agent of a
Certificate, together with such letter of transmittal duly executed and any
other required documents, the holder of such Certificate shall be
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entitled to receive in exchange therefor the applicable amount of Merger
Consideration pursuant to Section 2.1(a) and any dividends or other
distributions to which such holder is entitled pursuant to Section 2.2(h), and
such Certificate shall forthwith be canceled. In the event of a surrender of a
Certificate representing shares of Company Common Stock which are not registered
in the transfer records of the Company under the name of the Person surrendering
such Certificate, a certificate representing the proper number of shares of
Acquiror Common Stock may be issued to a Person other than the Person in whose
name the Certificate so surrendered is registered if (x) such Certificate shall
be properly endorsed or otherwise be in proper form for transfer to the Person
surrendering such Certificate and requesting such issuance, (y) such Person
surrendering such Certificate and requesting such issuance shall pay any
transfer or other Taxes required by reason of the issuance of shares of Acquiror
Common Stock to a Person other than the registered holder of such Certificate or
shall establish to the satisfaction of Acquiror that such Taxes have been paid
or are not applicable, and (z) such Person surrendering such Certificate shall,
if required by Acquiror, have such Person's signature guaranteed by a bank,
brokerage firm or other financial intermediary that is a member of a medallion
guarantee program. Until surrendered in accordance with the provisions of this
Section 2.2, each Certificate shall represent for all purposes only the right to
receive the applicable consideration set forth in Section 2.1.
(c) Restrictive Legend. Notwithstanding anything herein to the contrary,
each Certificate issued to a holder of Company Common Stock pursuant to the
Merger shall bear a restrictive legend for securities not registered in the form
approved by counsel for Acquiror.
(d) No Further Rights in Stock. All shares of Acquiror Common Stock issued
upon the surrender for exchange of Certificates in accordance with the terms of
Sections 2.1 and 2.2
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hereof shall be deemed to have been issued in full satisfaction of all rights
pertaining to the shares of Company Common Stock theretofore represented by such
Certificates, and there shall be no further registration of transfer on the
stock transfer books of the Surviving Corporation of the shares of Company
Common Stock represented by such Certificates which were outstanding immediately
prior to the Effective Time. If, after the Effective Time, any such Certificates
are presented to Acquiror, the Surviving Corporation or the Exchange Agent for
any reason, they shall be canceled and exchanged as provided in this Article II,
except as otherwise provided by law.
(e) No Liability. Neither Acquiror nor the Surviving Corporation shall be
liable to any holder of shares of Company Common Stock for any Acquiror Common
Stock delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(f) Withholding of Tax. Acquiror or the Exchange Agent shall be entitled to
deduct and withhold from the applicable amount of the Merger Consideration
otherwise issuable to any former holder of Company Common Stock such amounts as
Acquiror (or any Affiliate thereof) or the Exchange Agent are required to deduct
and withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign Tax law. To the extent that amounts are so
withheld by Acquiror (or any Affiliate thereof) or the Exchange Agent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the former holder of Company Common Stock in respect of whom such
deduction and withholding was made by Acquiror (or any Affiliate thereof) or the
Exchange Agent.
(g) Lost, Stolen or Destroyed Certificates. In the event any Certificate
evidencing shares of Company Common Stock shall have been lost, stolen or
destroyed, upon the making of an affidavit setting forth that fact by the Person
claiming such lost, stolen or destroyed Certificate and,
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if required by Acquiror the posting by such Person of a bond in such reasonable
amount as Acquiror may direct as indemnity against any claim that may be made
against Acquiror, the Surviving Corporation or the Exchange Agent with respect
to such Certificate, Acquiror shall cause the Exchange Agent to pay to such
Person the applicable amount of the Merger Consideration with respect to such
lost, stolen or destroyed Certificate.
(h) Distributions With Respect to Unexchanged Company Common Stock. No
dividends or other distributions declared or made with respect to Acquiror
Common Stock with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the shares of Acquiror
Common Stock such holder is entitled to receive pursuant to Section 2.1 until
such holder shall surrender such Certificate. Subject to applicable law and the
provisions of this Article II, following the surrender of any such Certificate
there shall be paid to the record holder of the shares of Acquiror Common Stock
issued in exchange for such Certificate, without interest, at the time of such
surrender, the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such shares of
Acquiror Common Stock.
SECTION 2.3 Transfer Books. At the Effective Time, the transfer books of
the Company with respect to all shares of capital stock and other securities of
the Company shall be closed and no further registration of transfers of such
shares of capital stock shall thereafter be made on the records of the Company.
On or after the Effective Time, if any Certificates for shares of Company Common
Stock (excluding any shares described in Section 2.1(b)) are presented to the
Exchange Agent, the Surviving Corporation or Acquiror for any reason, such
Certificates shall be canceled and exchanged as provided in this Article II,
except as otherwise provided by law.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Acquiror and Merger Sub,
subject to the exceptions set forth in the Company's disclosure schedule (which
exceptions shall specifically identify a section, subsection or clause of a
single section or subsection hereof, as applicable, to which such exception
relates, it being understood and agreed that each such exception shall be deemed
to be disclosed both under such section, subsection or clause hereof and any
other section, subsection or clause hereof to which such disclosure reasonably
relates) that:
SECTION 3.1 Organization and Qualification; Subsidiaries.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization is duly
qualified to conduct its business, and is in good standing, in each jurisdiction
where the character of its properties owned, operated or leased or the nature of
its activities makes such qualification necessary, except for such failures
which have not had and would not be reasonably likely to have a Material Adverse
Effect on the Company. The Company has the requisite corporate power and
authority and any necessary governmental authority, franchise, license or permit
to own, operate, lease and otherwise to hold and operate its assets and
properties and to carry on its businesses as now being conducted, except for
such failures which have not had and would not be reasonably likely to have a
Material Adverse Effect on the Company. The Company has no Subsidiaries (as
defined below) or any direct or indirect beneficial ownership of any securities,
equity or other ownership interest in any Person.
(b) For purposes of this Agreement, a "Subsidiary" of any Person means any
corporation, partnership, joint venture or other legal entity of which such
Person (either alone or
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through or together with any other Subsidiary of such Person) (i) owns, directly
or indirectly, fifty percent (50%) or more of the capital stock, partnership
interests or other equity interests the holders of which are generally entitled
to vote for the election of the board of directors or other governing body of
such corporation, partnership, joint venture or other legal entity; or (ii)
possesses, directly or indirectly, control over the direction of management or
policies of such corporation, partnership, joint venture or other legal entity
(whether through ownership of voting securities, by agreement or otherwise).
SECTION 3.2 Certificate of Incorporation and Bylaws. The Company has
heretofore delivered to Acquiror a complete and correct copy of the certificate
or articles of incorporation and the bylaws of the Company, each as amended to
the date of this Agreement. Each such certificate or articles of incorporation
and bylaws is in full force and effect. The Company is not in violation of any
of the provisions of its certificate or articles of incorporation or bylaws.
SECTION 3.3 Capitalization.
(a) The authorized capital stock of the Company consists of 200,000 shares,
par value $0.01, of Common Stock. There are 950 shares of Company Common Stock
issued and outstanding and 50 shares of Company Common Stock held by the Company
in its treasury.
(b) All outstanding shares of capital stock of the Company are, and all
shares which may be issued will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights and
were issued in full compliance with applicable federal and state securities
laws. Except as set forth on Schedule 3.3(b), there are not issued, reserved for
issuance or outstanding (1) any shares of capital stock or other voting
securities of the Company, (2) any securities of the Company convertible into or
exchangeable or exercisable
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for shares of capital stock or voting securities or ownership interests of the
Company, or (3) any warrants, calls, options, conversion rights, rights of
exchange, plans or other rights of any kind to acquire from the Company, or any
obligation of the Company to issue, any capital stock, voting securities or
other ownership interests in, or securities convertible into or exchangeable or
exercisable for, capital stock or voting securities of, or other ownership
interests in, the Company. There are no outstanding obligations of the Company
to repurchase, redeem or otherwise acquire any such securities or to issue,
deliver or sell, or cause to be issued, delivered or sold, any such securities,
including, without limitation, any offer, issuance or sale in such a manner.
(c) Except as set forth in Schedule 3.3(c) , the Company is not a party to
any agreement restricting the purchase or transfer of, relating to the voting of
or granting any preemptive or antidilutive rights with respect to, any
securities of the Company or any of the Company Subsidiaries that are
outstanding or that may be subsequently issued upon the conversion or exercise
of any instrument or otherwise.
(d) At the Effective Time the aggregate number of outstanding shares of
Company Common Stock on a fully diluted basis shall not exceed 950 shares.
SECTION 3.4 Authority. The Company has the necessary corporate power and
authority to enter into this Agreement. The Board of Directors and all of the
stockholders of the Company, by joint written consent in lieu of meeting dated
September 1, 2000, have authorized and approved this Agreement and the merger as
required by New York Law and the consummation of the transactions contemplated
hereby. The unanimous written consent of the holders of all outstanding shares
of Company Common Stock to authorize and approve this Agreement and the Merger
and the consummation of the transactions contemplated hereby is the only vote of
the holders of any
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class or series of the Company's capital stock necessary to approve and adopt
this Agreement and the transactions contemplated hereby, including the Merger.
The execution and delivery of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by the Company and, assuming the due authorization,
execution and delivery hereof by Acquiror and Merger Sub, constitutes a legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights generally and by the application of
general principles of equity.
SECTION 3.5 No Conflict; Required Filings and Consents.
(a) Except as set forth in Schedule 3.5(a), the execution and delivery of
this Agreement by the Company do not, and the performance by the Company of its
obligations under this Agreement will not, (1) conflict with or violate the
certificate or articles of incorporation or bylaws of the Company, (2) subject
to obtaining the approvals and compliance with the requirements set forth in
Section 3.5(b), to the Company's knowledge conflict with or violate any law,
statute, ordinance, rule, regulation, order, judgment or decree applicable to
the Company or by which any of its properties or assets is bound or affected, or
(3) result in any breach of or constitute a default (or an event which with or
without notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or result in
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the creation of an Encumbrance on any of the properties or assets of the Company
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company is a party or by which the Company or any of its properties or assets is
bound or affected, except, in the case of clauses (2) and (3) above, for any
such conflicts, violations, breaches, defaults or other alterations or
occurrences that (A) would not prevent or delay consummation of the Merger in
any material respect or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and (B) have not had
and would not be reasonably likely to have a Material Adverse Effect on the
Company.
(b) To the Company's knowledge, the execution and delivery of this
Agreement by the Company do not, and the performance of this Agreement by the
Company will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority,
domestic or foreign (each a "Governmental Entity"), by or with respect to the
Company or any Company Subsidiary, except (1) for filing and recordation of
appropriate merger documents as required by New York Law, and (2) where failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, (A) would not prevent or delay consummation of the
Merger in any material respect or otherwise prevent the Company from performing
its obligations under this Agreement in any material respect, or (B) have not
had and would not be reasonably likely to have a Material Adverse Effect on the
Company.
(c) The execution and delivery of this Agreement by the Company do not, the
performance of this Agreement by the Company will not, and the consummation of
the transactions contemplated by this Agreement will not, (1) entitle any
current or former employee or officer of the Company or any ERISA Affiliate to
severance pay, unemployment compensation or any other
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payment, (2) accelerate the time of payment or vesting, or increase the amount
of compensation, due any such employee or officer, or (3) accelerate the vesting
of any stock option or of any shares of restricted stock or other securities of
the Company.
SECTION 3.6 Financial Statements: Absence of Undisclosed Liabilities or
Material Adverse Change:
(a) The Company has previously furnished to Acquiror copies of its audited
balance sheet as at December 31, 1999 and the related statements of operations,
stockholders' equity and cash flows for the years then ended, including the
footnotes thereto (the "Audited Financial Statements"), certified by Kurcias,
▇▇▇▇▇ & Company LLP, independent certified public accountants, and its most
recent unaudited balance sheet as at June 30, 2000 and the related statements of
operations, stockholders' equity and cash flows for the six months then ended
(the "Interim Financial Statements"). The Audited Financial Statements and the
Interim Financial Statements comply in all material respects with the published
rules and regulations of the SEC, have been prepared in accordance with
generally accepted accounting principles ("GAAP") applied consistently
throughout the periods involved and present fairly the consolidated financial
position, results of operations and cash flows of the Company on and as of the
dates and for the periods indicated, subject, in the case of the Interim
Financial Statements, to normal year-end adjustments. The statements of
operations do not contain any special or nonrecurring items (as compared to the
prior year) of income or loss, except as expressly specified therein.
(b) There has not been any material adverse change in the financial
condition of the Company from that set forth in the Interim Financial
Statements.
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SECTION 3.7 No Undisclosed Liabilities. The Company does not have any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, except (a) liabilities or obligations reflected in the Interim
Financial Statements through June 30, 2000, (b) liabilities or obligations
incurred in the ordinary course of business consistent with past practice since
June 30, 2000 which have not had, and will not have, a Material Adverse Effect
on the Company, (c) liabilities or obligations which have not had and are not
reasonably likely to have a Material Adverse Effect on the Company and (d)
liabilities under contracts of the type required to be disclosed by the Company
on any Schedule and so disclosed or which because of the dollar amount or other
qualifications are not required to be listed on such Schedule.
SECTION 3.8 Absence of Certain Changes or Events. Except as set forth on
Schedule 3.8, since December 31, 1999, the Company has conducted its business in
the ordinary course consistent with past practice and there has not been any
condition, event or occurrence that, individually or in the aggregate, has
resulted, or could reasonably be expected to result, in a Material Adverse
Effect with respect to the Company.
SECTION 3.9 Absence of Litigation. There are (a) no claims, actions, suits,
audits, investigations, or proceedings pending or, to the knowledge of the
Company, threatened against the Company before any court, administrative,
governmental, arbitral, mediation or regulatory authority or body, domestic or
foreign, that would be reasonably likely to have a Material Adverse Effect on
the Company or that challenge or seek to prevent, enjoin, alter or materially
delay the transactions contemplated hereby, and (b) no judgments, decrees,
injunctions or orders of any Governmental Entity or arbitrator outstanding
against the Company.
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SECTION 3.10 Licenses and Permits; Compliance with Laws. Set forth on
Schedule 3.10 is a true and complete list of all permits, licenses, franchises,
authorizations and approvals (none of which has been modified or rescinded and
all of which are in full force and effect) from all Governmental Entities held
by the Company (the "Company Permits"). The Company Permits constitute all
permits, licenses and approvals of all Governmental Entities which are necessary
for the operation of the businesses of the Company as presently conducted and
for the Company to own, lease and operate their respective properties, except
where the failure to have any such permits, licenses or approvals would not have
a Material Adverse Effect on the Company. The Company is in compliance with the
terms of the Company Permits and all applicable statutes, laws, ordinances,
rules and regulations, except where the failure so to comply would not have a
Material Adverse Effect on the Company.
SECTION 3.11 Unlawful Payments. None of the Company or, to the knowledge of
the Company, any officer, director, employee, agent or representative of the
Company has made, directly or indirectly, any bribe or kickback, illegal
political contribution, payment from corporate funds which was incorrectly
recorded on the books and records of the Company, unlawful payment from
corporate funds to governmental or municipal officials in their individual
capacities for the purpose of affecting their action or the actions of the
jurisdiction which they represent to obtain favorable treatment in securing
business or licenses or to obtain special concessions of any kind whatsoever, or
illegal payment from corporate funds to obtain or retain any business.
SECTION 3.12 Taxes. The Company has prepared and filed on a timely basis
with all appropriate Governmental Entities all material returns, reports,
information statements and other documentation in respect of Taxes that it is
required to file, including extensions, and all such
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returns, reports, information statements and other documentation are correct and
complete in all material respects. The Company has paid in full all Taxes due
(other than Taxes, the failure of which to pay would not have a Material Adverse
Effect on the Company) and, in the case of material Taxes accruing but not due,
the Company has made adequate provisions in its books and records and financial
statements for such payments. The Company has withheld from payments made to its
present or former employees, contractors, officers and directors, creditor or
other third party, all amounts required by law to be withheld except where the
liability for which would not have a Material Adverse Effect on the Company, and
has, where required, remitted such amounts within the applicable periods to the
appropriate Governmental Entities. In addition, (a) there are no assessments of,
or claims against, the Company with respect to Taxes, the liability for which
would have a Material Adverse Effect on the Company, that are outstanding; (b)
no Governmental Entity is conducting an examination or audit of the Company in
respect of Taxes and the Company has not received notice of any such examination
or audit from any Governmental Entity; and (c) the Company has not executed or
filed any agreement extending the period of assessment or collection of any
Taxes which remain in effect.
SECTION 3.13 Intellectual Property.
(a) Schedule 3.13 sets forth a list and brief description of all material
Intellectual Property owned, utilized or licensed by the Company (all of the
foregoing items collectively referred to as the "Company Intellectual
Property"). Schedule 3.13 identifies the Company Intellectual Property based on
the following categories: (1) inventions, patents and patent applications, (2)
trademarks and trade names, (3) copyrights, and (4) licenses. The Company has
furnished Acquiror with copies of all license agreements to which the Company is
a party, either as licensor
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or licensee, with respect to the Company Intellectual Property. The Company has
good title to, or the right to use, all the Company Intellectual Property and
all inventions, processes, designs, formulae, trade secrets and know-how
necessary for the conduct of the businesses of the Company as presently
conducted or currently proposed to be conducted, without the payment of any
royalty or similar payment except to the extent disclosed on Schedule 3.13. To
the knowledge of the Company, the Company is not infringing on any Intellectual
Property right of others, or has knowledge of any infringement by others of such
rights of the Company.
(b) All licenses set forth on Schedule 3.13 are valid and binding
obligations of the Company and, to the knowledge of the Company, of the other
parties thereto, and are enforceable against the Company and, to the knowledge
of the Company, against the other parties thereto in accordance with their
respective terms. Except as set forth on Schedule 3.13, the Company owns and
possesses all right, title and interest in and to, or have the right to use
pursuant to a valid license, all the Company Intellectual Property necessary for
the operation of the business of the Company as presently conducted or currently
proposed to be conducted.
(c) The Company also has delivered to Acquiror correct and complete samples
or copies of all trademark, service ▇▇▇▇, and copyright registrations and
patents and, as relate to the foregoing, applications for registrations,
licenses, agreements and permissions (as amended to date) held by the Company,
and the Company has made available to Acquiror correct and complete copies of
all other written documentation evidencing ownership and prosecution (if
applicable) of each such item. With respect to each item of Company Intellectual
Property necessary for the conduct of the business of the Company as heretofore
and as currently conducted, each as set forth on Schedule 3.13, to the knowledge
of the Company: (1) with respect to each item of Company
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Intellectual Property not owned by the Company, the identified owner of such
item possesses all right, title, and interest in and to the item; (2) the item
is not subject to any outstanding judgments, decrees, injunctions or orders of
any Governmental Entity or arbitrator; (3) no charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand is pending or is threatened
which challenges the legality, validity, enforceability, use, or ownership of
the item; and (4) except as set forth on Schedule 3.13, the Company has not
agreed to indemnify any Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
(d) Except as set forth on Schedule 3.13, all of the computer software,
computer firmware, computer hardware (whether general or special purpose), and
other similar or related items of automated, computerized, and/or software
system(s) that are used or relied on by the Company in the administration and
conduct of its business, to the knowledge of the Company (i) are able to process
date data (including, but not limited to, calculating, comparing, and
sequencing) in a consistent manner from, into and between the twentieth century
(through 1999), the year 2000 and the twenty-first century, including leap year
calculations, and (ii) have not malfunctioned, ceased to function, generated
incorrect data, or produced incorrect results when processing, providing, and/or
receiving (A) date-related data into and between the twentieth and twenty-first
centuries, or (B) date-related data in connection with any valid date in the
twentieth and twenty-first centuries.
SECTION 3.14 Material Contracts.
(a) Schedule 3.14 sets forth a complete and correct list, as of the date of
this Agreement, of all agreements of the following type to which the Company is
a party or may be bound (collectively, the "Company Material Contracts"): (1)
agreements currently in full force and effect that would be required to be filed
as an exhibit to a Company Registration Statement under
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the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on Form
10-SB; (2) employment, severance, termination, consulting and retirement
agreements; (3) loan agreements, indentures, letters of credit, mortgages, notes
and other debt instruments and guarantees of any of the foregoing; (4)
agreements that require aggregate annual payments of more than Fifty Thousand
Dollars ($50,000)(unless such agreements are terminable without penalty upon
ninety (90) days (or less) notice); (5) agreements containing any provisions
with respect to a "change in control"; (6) agreements with any employee,
director, officer or beneficial owner (as determined pursuant to Rule 13d-3
promulgated under the Exchange Act) of five percent (5%) or more of Company
Common Stock; (7) agreements or arrangements concerning a partnership or joint
venture; (8) agreements and arrangements requiring noncompetition by the
Company; (9) agreements relating to the manufacturing, packaging, marketing,
sale or distribution by the Company of any products owned or licensed by the
Company; (10) all leases (or subleases) with respect to real property leased by
the Company as lessee or sublessee ("Real Property Leases"); and (11) agreements
for a remaining term of five (5) years or more with any customer of the Company.
(b) Except as set forth in Schedule 3.14, all the Company Material
Contracts are valid and in full force and effect on the date hereof except to
the extent they have previously expired in accordance with their terms, and the
Company has not (or has no knowledge that any party thereto has) violated any
provision of, or committed or failed to perform any act which with or without
notice, lapse of time or both would constitute a default under the provisions
of, any Company Material Contract, except for defaults which would not
reasonably be expected to have a Material Adverse Effect on the Company. True
and complete copies of all Company Material Contracts have been delivered to
Acquiror.
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SECTION 3.15 Employee Benefit Plans. The Company has no pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation or bonus plans or agreements or other
incentive plans or agreements, other employee programs, arrangements or
agreements or benefit plans or fringe benefit plans, including, without
limitation, all "employee benefit plans" as that term is defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
(collectively, "Benefit Plans"), except for group health insurance.
SECTION 3.16 Properties; Assets. The Company does not own (of record or
beneficially) any real property or have any interest in any real property other
than the leasehold interests granted pursuant to the Real Property Leases. The
Company is the lessee of all leasehold estates granted pursuant to the Real
Estate Leases and is in possession of the properties purported to be leased
thereunder, and each such Real Property Lease is valid without default
thereunder by the lessee. The assets and properties of the Company, taken as a
whole, are in good operating condition and repair (ordinary wear and tear
excepted), and constitute all of the assets and properties which are required
for the businesses and operations of the Company as presently conducted.
SECTION 3.17 Labor Relations. The Company is not a party to any collective
bargaining agreement or other contract or agreement with any labor organization
or other representative of any of the employees of the Company. To the knowledge
of the Company, the Company is in compliance in all material respects with all
laws relating to the employment or the workplace, including, without limitation,
provisions relating to wages, hours, collective bargaining, safety and health,
work authorization, equal employment opportunity, affirmative action plans,
immigration
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and the withholding of income taxes, unemployment compensation, worker's
compensation, employee privacy and right to know and social security
contributions.
SECTION 3.18 Environmental Matters.
(a) Except for matters which would not have a Material Adverse Effect on
the Company, (i) the Company is in compliance with all applicable Environmental
Laws (as defined below), (ii) the Company has received no written communication
that alleges that the Company is not in compliance with applicable Environmental
Laws, (iii) to the Company's knowledge no permits or other governmental
authorizations pursuant to the Environmental Laws ("Company Environmental
Permits") are required by the Company for the conduct of its businesses, and
(iv) the Company does not handle, store, transport, treat, or dispose of any
Hazardous Materials (as defined below).
(b) There is no Company Environmental Claim (as defined below) pending or,
to the knowledge of the Company, threatened against or involving the Company or
against any Person whose liability for any Environmental Claim the Company has
or may have retained or assumed either contractually or by operation of law.
(c) Except for matters which would not have a Material Adverse Effect on
the Company, to the knowledge of the Company there are no past or present
actions or activities by the Company or any other Person involving the storage,
treatment, release, emission, discharge, disposal or arrangement for disposal of
any Hazardous Materials that could reasonably form the basis of any Company
Environmental Claim against the Company or against any Person whose liability
for any Company Environmental Claim the Company may have retained or assumed
either contractually or by operation of law.
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(d) As used herein, these terms shall have the following meanings:
(1) "Company Environmental Claim" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, investigations, proceedings or notices of noncompliance or
violation (written or oral) by any Person or Governmental Entity alleging
potential liability arising out of, based on or resulting from the
presence, or release or threatened release into the environment of, or any
exposure to, any Hazardous Materials at any property or location owned or
leased by the Company or other circumstances forming the basis of any
violation or alleged violation of any Environmental Law.
(2) "Environmental Laws" means all applicable foreign, federal, state
and local laws (including the common law), rules, requirements and
regulations relating to pollution, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or protection of human health as it relates to the
environment including, without limitation, laws and regulations relating to
releases of Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials or relating to management of asbestos in
buildings.
(3) "Hazardous Materials" means wastes, substances, or materials
(whether solids, liquids or gases) that are deemed hazardous, toxic,
pollutants, or contaminants under any Environmental Laws, including,
without limitation, substances defined as "hazardous substances", "toxic
substances", "radioactive materials, including sources of ionizing and
nonionizing radiation", "petroleum products or wastes" or other similar
designations in, or otherwise subject to regulation under, any
Environmental Law.
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SECTION 3.19. Insurance. Schedule 3.19 contains a list of all insurance
policies of director and officer liability, title, property, fire, casualty,
liability, life, workmen's compensation, libel and slander, and other forms of
insurance in force with respect to the Company. All such insurance policies (a)
insure against such risks, and are in such amounts, as are appropriate and
reasonable, in the judgment of the Company's Board of Directors, considering the
Company's properties, businesses and operations, (b) are in full force and
effect, and (c) are valid, outstanding, and enforceable. The Company has
received or given no notice of cancellation with respect to any such insurance
policies.
SECTION 3.20 Regulatory Compliance.
(a) As to each product subject to the jurisdiction of the FDA under the
Federal Food, Drug and Cosmetic Act and the regulations thereunder ("FDCA") and
the Public Health Services Act ("PHSA") and the regulations thereunder, and each
product subject to the jurisdiction of the Drug Enforcement Administration
("DEA") under the Controlled Substances Act ("CSA") and the regulations
thereunder (each such product, a "Pharmaceutical Product") that is manufactured,
packaged, labeled, tested, distributed, sold, and/or marketed by the Company, or
any Pharmaceutical Product licensed by the Company to any licensee of the
Company (a "Product Licensee"), such Pharmaceutical Product is being
manufactured, packaged, labeled, tested, distributed, sold and/or marketed by
the Company, and, to the knowledge of the Company, each Product Licensee in
compliance with all applicable requirements under FDCA, PHSA, CSA, and similar
laws, rules and regulations relating to investigational use, premarket
clearance, licensure, or application approval, good manufacturing practices,
good laboratory practices, good clinical practices, labeling, advertising,
record keeping, filing of reports including but not limited to adverse event
reports as
-26-
required by 21 C.F.R. sec. 314.80, and security, except where the failure to be
in compliance would not have a Material Adverse Effect on the Company. None of
the Company or, to the knowledge of the Company, any Product Licensee has
received any notice or other communication from the FDA, DEA, or any other
Governmental Entity (i) contesting the premarket clearance, licensure,
registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, sale of, controlled substance
scheduling of, or the labeling and promotion of any Pharmaceutical Product
described in this Section 3.20 or (ii) otherwise alleging any violation of any
laws, rules or regulations by the Company or any Product Licensee which would
have a Material Adverse Effect on the Company.
(b) No Pharmaceutical Products of the Company or Pharmaceutical Products
which are licensed by the Company to any Product Licensee have been recalled,
withdrawn, replaced, suspended or discontinued nor have any DEA registrations
been terminated by the Company, any Company Subsidiary or any Product Licensee
in the United States or outside the United States (whether voluntarily or
otherwise) since January 1, 1999. There are no completed or pending efforts to
impose a clinical hold on any clinical investigation, proceedings seeking the
recall, withdrawal, replacement, suspension or seizure of any such
Pharmaceutical Product, or proceedings seeking the suspension or revocation of
any DEA registration including an order to show cause against the Company or, to
the knowledge of the Company, any Product Licensee, nor have any such efforts or
proceedings been pending at any time since January 1, 1999 which would have a
Material Adverse Effect on the Company.
(c) As to each biological drug or other drug of the Company or the Company
Subsidiaries for which a biological license application establishment license
application, product
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license application, new drug application, investigational new drug application,
abbreviated new drug application, registration issued by the DEA, or similar
state or foreign regulatory application has been approved, the Company and, to
the knowledge of the Company, the Product Licensees are in compliance with 21
U.S.C. sec. 355, 42 U.S.C. sec. 351, and 21 U.S.C. sec. 822, and 21 C.F.R. Parts
312, 314, 601, and 1301 et seq., respectively, and similar laws and all terms
and conditions of such applications, except where the failure to be in
compliance would not have a Material Adverse Effect on the Company. As to each
such biological drug or other drug, the Company and, to the knowledge of the
Company, each Product Licensee and the officers, employees or agents of the
Company and, to the knowledge of the Company, the officers, employees or agents
of each Product Licensee have included in the application for such biological
drug or other drug, where required, the certification described in 21 U.S.C.
sec. 335a(k)(1) or any similar law and the list described in 21 U.S.C. sec.
335a(k)(2) or any similar law, and such certification and such list was in each
case true and accurate when made and remained true and accurate thereafter,
except in the case where the failure of such application to be true and accurate
would not have a Material Adverse Effect on the Company. In addition, the
Company and, to the knowledge of the Company, each Product Licensee is in
material compliance with all applicable registration and listing requirements
set forth in 21 U.S.C. sec. 360 and 21 C.F.R. Part 207 and all similar laws.
(d) Each article of any biological drug or other drug manufactured and/or
distributed by the Company and, to the knowledge of the Company, any Product
Licensee is not adulterated within the meaning of 21 U.S.C. sec. 351 (or similar
laws) or misbranded within the meaning of 21 U.S.C. sec. 352 (or similar laws),
and is not a product that is in violation of 21 U.S.C.
-28-
sec. 355, 42 U.S.C. sec. 351 (or similar laws), except where such failure in
compliance with the foregoing would not have a Material Adverse Effect on the
Company.
(e) None of the Company or, to the knowledge of the Company, any Product
Licensee, or any officer, employee or agent of either the Company or, to the
knowledge of the Company, any Product Licensee has made any untrue statement of
a material fact or fraudulent statement to the FDA or other Governmental Entity,
failed to disclose a fact required to be disclosed to the FDA or any other
Governmental Entity, or committed an act, made a statement, or failed to make a
statement that, at the time such disclosure was made, could reasonably be
expected to provide a basis for the FDA to invoke its policy respecting "Fraud,
Untrue Statements of Material Facts, Bribery, and Illegal Gratuities", set forth
in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy, or for or any
other Governmental Entity to take any action which could have a Material Adverse
Effect on the Company. None of the Company or, to the knowledge of the Company,
any Product Licensee, or any officer, employee or agent of the Company or, to
the knowledge of the Company, any Product Licensee, has been convicted of any
crime or engaged in any conduct for which debarment is mandated by 21 U.S.C.
sec. 335a(a) or any similar law or authorized by 21 U.S.C. sec. 335a(b) or any
similar law.
(f) None of the Company or, to the knowledge of the Company, any Product
Licensee has received any written notice that the FDA or any other Governmental
Entity has commenced, or threatened to initiate, any action to withdraw its
approval of, request the recall of, or change the controlled substances
schedules of any product of the Company or any Product Licensee, or commenced,
or threatened to initiate, any action to impose a clinical hold on any clinical
investigation by the Company or any Product Licensee, or any action to enjoin
production
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at, or suspend or revoke the DEA registration or any facility of, or enter into
a Consent Decree of Permanent Injunction with the Company or any Product
Licensee which would have a Material Adverse Effect on the Company.
(g) The Company and, to the knowledge of the Company, the Product Licensees
are not in violation of, in any material respect, and are in material compliance
with, all applicable laws, rules and regulations regarding the conduct of
pre-clinical and clinical investigations, including, but not limited to, good
laboratory practices, good clinical practices, investigational new drug
requirements and requirements regarding informed consent and Institutional
Review Boards designed to ensure the protection of the rights and welfare of
human subjects, including, but not limited to, the requirements provided in 21
C.F.R. Parts 50, 56, 58 and 312.
(h) To the extent that any biological drugs or other drug is intended for
export from the United States, each of the Company and, to the knowledge of the
Company, each Product Licensee is in full compliance with all of the
requirements in 21 U.S.C. sec. 381(e) or sec. 382, and the Controlled Substances
Import and Export Act (21 U.S.C. sec. 951, et. seq.
(i) The Company and, to the knowledge of the Company, each Product Licensee
is not in violation of and is in material compliance with all applicable laws,
rules and regulations regarding the manufacture, analysis, distribution and
investigation of controlled substances including, but not limited to, the
requirements provided by 21 U.S.C. sec. 801, et. seq., and 21 C.F.R. sec. 1300
et. seq.
(j) The Company has provided or made available to Acquiror all documents in
its possession or, to the knowledge of the Company, the possession of Product
Licensees concerning
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communication to or from FDA or DEA, or prepared by FDA or DEA which bear in any
material respect on compliance with FDA or DEA regulatory requirements.
SECTION 3.21 No Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
SECTION 3.22 Disclosure. No representation or warranty of the Company in
this Agreement and no statement in the Company's disclosure schedules contains
any statement which is false or misleading with respect to any material fact or
omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not false or
misleading.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Acquiror and Merger Sub jointly and severally represent and warrant to the
Company as follows:
SECTION 4.1 Organization and Qualification. Merger Sub is a corporation
duly organized, validly existing and in good standing under New York Law. Merger
Sub was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement. As of the date of this Agreement, except for
obligations or liabilities incurred in connection with its incorporation and
organization and otherwise in connection with the transactions contemplated by
this Agreement, Merger Sub has not incurred, directly or indirectly, any
obligations or liabilities or engaged in any business activities of any type or
kind whatsoever or entered into any agreements or arrangements with any Person.
The capital stock of Merger Sub is directly owned 100% by Acquiror, there are
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no outstanding or authorized options, warrants, calls, rights, commitments or
any other contracts requiring Merger Sub to issue, transfer, sell, purchase,
redeem or acquire any shares of capital stock and Merger Sub has not incurred
any obligations or liabilities or engaged in any business or activities of any
type or kind whatsoever or entered into any Contract with any Person other than
pursuant to this Agreement.
SECTION 4.2 Certificate of Incorporation and Bylaws. Merger Sub has
heretofore made available to the Company a complete and correct copy of the
certificate of incorporation and the bylaws of Merger Sub, each as amended to
date. Such certificate of incorporation and bylaws are in full force and effect.
Merger Sub is not in violation of any of the provisions of its certificate of
incorporation or bylaws.
SECTION 4.3 Authority. Merger Sub has the necessary corporate power and
authority to enter into this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Merger Sub and the consummation by Merger Sub of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of
Merger Sub are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Merger Sub and, assuming the due authorization, execution and
delivery of this Agreement by the Company and Acquiror, constitutes a legal,
valid and binding obligation of Merger Sub, enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights generally and by the application of
general principles of equity.
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SECTION 4.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Merger Sub do not, and
the performance by Merger Sub of its obligations under this Agreement will not,
(1) conflict with or violate the certificate of incorporation or bylaws of
Merger Sub, (2) subject to compliance with the requirements set forth in Section
4.4(b) below, conflict with or violate any law, statute, ordinance, rule,
regulation, order, judgment or decree applicable to Merger Sub or by which any
of its properties or assets is bound or affected.
(b) The execution and delivery of this Agreement by Merger Sub do not, and
the performance of this Agreement by Merger Sub will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity, except (1) for (A) applicable requirements, if any, of the
Exchange Act, Securities Act, state takeover laws, and the National Association
of Securities Dealers, Inc. (the "NASD"), and (B) filing and recordation of
appropriate merger documents as required by New York Law, and (2) where failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay consummation of the Merger
in any material respect.
Section 4.5 No Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Merger Sub.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror represents and warrants to the Company subject to the exceptions
set forth herein and in Acquiror's disclosure schedules (which exceptions shall
specifically identify a Section,
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Subsection or clause of a single Section or Subsection hereof, as applicable, to
which such exception relates, it being understood and agreed that each such
exception shall be deemed to be disclosed both under such Section, Subsection or
clause hereof and any other Section, Subsection or clause hereof to which such
disclosure reasonably relates) that:
SECTION 5.1 Organization and Qualification; Subsidiaries. Acquiror is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization. Acquiror is duly qualified to conduct
its business, and is in good standing, in each jurisdiction where the character
of its properties owned, operated or leased or the nature of its activities
makes such qualification necessary, except for such failures which would not
have a Material Adverse Effect on Acquiror. Acquiror has the requisite power and
authority and any necessary governmental authority, franchise, license or permit
to own, operate, lease and otherwise to hold and operate its assets and
properties and to carry on its business as now being conducted, except for such
failures which would not have a Material Adverse Effect on Acquiror. The
Acquiror has no Subsidiaries other than Merger Sub.
SECTION 5.2 Certificate of Incorporation and Bylaws. Acquiror has
heretofore delivered to the Company a complete and correct copy of the articles
of incorporation and the bylaws of Acquiror, each as amended to date. Such
articles of incorporation and bylaws are in full force and effect. Acquiror is
not in violation of any of the provisions of its articles of incorporation or
bylaws.
SECTION 5.3 Capitalization.
(a) The authorized capital stock of Acquiror consists of ten million
(10,000,000) shares of Common Stock, and there are(1) two hundred forty two
thousand five hundred (242,500) shares of Acquiror Common Stock issued and
outstanding, (2) no shares of Acquiror Common Stock
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reserved for issuance except in connection with the Stock Split and the Private
Placement, and (3) no shares of Acquiror Common Stock held in Acquiror's
treasury.
(b) All outstanding shares of capital stock of Acquiror are, and all shares
which may be issued will be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. Except for the
Stock Split and Private Placement expressly contemplated by this Agreement, (1)
there are not issued, reserved for issuance or outstanding (A) any shares of
capital stock or other voting securities of Acquiror, (B) any securities of
Acquiror or Merger Sub convertible into or exchangeable or exercisable for
shares of capital stock or voting securities of or ownership interests in
Acquiror or Merger Sub, (C) any warrants, calls, options, conversion rights,
rights of exchange, plans or other rights of any kind to acquire from Acquiror
or Merger Sub, and any obligation of Acquiror or Merger Sub to issue, any
capital stock, voting securities or other ownership interests in, or securities
convertible into or exchangeable or exercisable for capital stock or voting
securities of or other ownership interests in, Acquiror or Merger Sub, and (2)
there are no outstanding obligations of Acquiror or Merger Sub to repurchase,
redeem or otherwise acquire any such securities or to issue, deliver or sell, or
cause to be issued, delivered or sold, any such securities.
(c) Acquiror is not a party to any agreement granting any preemptive or
antidilutive rights with respect to any securities of Acquiror that are
outstanding as of the date hereof, or with respect to any securities of Acquiror
that may be subsequently issued upon the conversion or exercise of any
instrument outstanding as of the date hereof.
SECTION 5.4 Authority. Acquiror has the necessary corporate power and
authority to enter into this Agreement and to perform its obligations hereunder
and to consummate the transactions
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contemplated hereby. The execution and delivery of this Agreement by Acquiror
and the consummation by Acquiror of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action and no other
proceedings on the part of Acquiror are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Acquiror and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Acquiror, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights generally and by the application of general
principles of equity. Acquiror, as the sole stockholder of Merger Sub, has
approved the Merger and this Agreement.
SECTION 5.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Acquiror do not, and
the performance by Acquiror of its obligations under this Agreement will not,
(1) conflict with or violate the articles of incorporation or bylaws of
Acquiror, (2) conflict with or violate any law, statute, ordinance, rule,
regulation, order, judgment or decree applicable to Acquiror its properties or
assets are bound or affected, or (3) result in any breach of or constitute a
default (or an event which with or without notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of an Encumbrance on
any of the properties or assets of Acquiror pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Acquiror or Merger Sub is a party or by
which Acquiror or any of their respective properties
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or assets are bound or affected, except, in the case of clauses (2) and (3)
above, for any such conflicts, violations, breaches, defaults or other
alterations or occurrences that would not (A) prevent or delay consummation of
the Merger in any material respect or otherwise prevent Acquiror from performing
its obligations under this Agreement in any material respect, and (B) have a
Material Adverse Effect on Acquiror.
(b) The execution and delivery of this Agreement by Acquiror does not, and
the performance of this Agreement by Acquiror will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity by or with respect to Acquiror, except (1) for (A)
applicable requirements, if any, of the Securities Act, Blue Sky Laws, Exchange
Act, state takeover laws, and the NASD and (B) filing and recordation of
appropriate merger documents as required by New York Law and (2) where failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not (A) prevent or delay consummation of the
Merger in any material respect, or otherwise prevent Acquiror from performing
its obligations under this Agreement in any material respect, and (B) have a
Material Adverse Effect on Acquiror.
SECTION 5.6 SEC Filings; Financial Statements.
(a) Acquiror is a reporting company under the Securities and Exchange Act
of 1934, as amended (the "Exchange Act"), has filed all forms, reports,
statements and other documents required to be filed with the SEC since December
31, 1997, and has heretofore delivered to the Company, in the form filed with
the SEC since such date, together with any amendments thereto, all of its(i)
Annual Reports on Form 10-K, (ii) Quarterly Reports on Form 10-Q, (iii) reports
on Form 8-K and (iv) other reports or registration statements filed by Acquiror
(collectively, the
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"Acquiror SEC Reports"). As of their respective filing dates, the Acquiror SEC
Reports (i) complied as to form in all material respects with the requirements
of the Exchange Act and the Securities Act, as applicable, and (ii) did not at
the time they were filed contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Since the date of its incorporation, Acquiror has engaged
in no business except as set forth in the Acquiror SEC Reports.
(b) The unaudited March 31, 2000 financial statements, including the
footnotes thereto, of Acquiror included in the Acquiror SEC Reports, and
Acquiror's June 30, 2000 financial statements, including the footnotes thereto
(the "June 30, 2000 Financial Statements"), certified by ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
independent certified public accountants, comply in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved and present fairly the
financial position, the results of operations and cash flows of Acquiror on and
as of the dates and for the periods indicated, subject, in the case of interim
financial statements, to normal year-end adjustments.
SECTION 5.7 No Undisclosed Liabilities. Acquiror has no liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise,
except (a) liabilities or obligations reflected in the June 30, 2000 Financial
Statements, (b) liabilities or obligations incurred in the ordinary course of
business consistent with past practice since June 30, 2000 and (c) liabilities
or obligations which arose in connection with the Merger and transactions
contemplated thereby.
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SECTION 5.8 Absence of Certain Changes or Events. Except as disclosed in
the June 30, 2000 Financial Statements, since March 31, 2000 the Acquiror has
conducted its business in the ordinary course consistent with past practice and
there has not been any condition, event or occurrence that, individually or in
the aggregate, has resulted, or could reasonably be expected to result in a
Material Adverse Effect with respect to the Acquiror.
SECTION 5.9 Absence of Litigation. As of the date hereof there are (a) no
claims, actions, suits, investigations, or proceedings pending or, to Acquiror's
knowledge, threatened against Acquiror or Merger Sub before any court,
administrative, governmental, arbitral, mediation or regulatory authority or
body, domestic or foreign, that would be reasonably likely to have a Material
Adverse Effect on Acquiror or that challenge or seek to prevent, enjoin, alter
or materially delay the transactions contemplated hereby, and (b) no judgments,
decrees, injunctions or orders of any Governmental Entity or arbitrator
outstanding against Acquiror or Merger Sub that would be reasonably likely to
have a Material Adverse Effect on Acquiror.
SECTION 5.10 Taxes. Acquiror has prepared and filed on a timely basis with
all appropriate Governmental Entities all material returns, reports, information
statements and other documentation (including extensions) required to be filed
by Acquiror in respect of Taxes (the "Tax Returns") and all such Tax Returns are
correct and complete in all material respects. Acquiror has paid in full all
Taxes due (other than Taxes, the failure of which to pay have not had and are
not reasonably likely to have a Material Adverse Effect on Acquiror) and, in the
case of material Taxes accruing but not due, Acquiror has made adequate
provision in its books and records and financial statements for such payment.
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SECTION 5.11 Compliance with Laws. To the knowledge of Acquiror, Acquiror
is not in violation of, nor has Acquiror violated, any applicable provisions of
any laws, statues, ordinances or regulations, other than as would not be
reasonably likely to have a Material Adverse Effect.
SECTION 5.12 Previous Issuances of Securities. All previous issuances of
Acquiror's securities have been made in accordance with applicable State and
Federal Securities laws or exemption therefrom.
SECTION 5.13 Brokers. Except for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
each of whom is entitled to that number of shares of Acquiror Common Stock as
shall equal .5% of Acquiror's outstanding Common Stock after giving effect to
the Stock Split, the Private Placement and the Acquisition, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Acquiror.
SECTION 5.14 Disclosure. No representation or warranty of Acquiror in this
Agreement and no statement in Acquiror's disclosure schedules contains any
statement which is false or misleading with respect to any material fact or
omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading.
ARTICLE VI.
COVENANTS
SECTION 6.1 Affirmative Covenants. The Company on the one hand, and
Acquiror and Merger Sub on the other, each hereby covenants and agrees that,
prior to the Effective Time, unless otherwise expressly contemplated by this
Agreement or consented to in writing by the other, it shall: (a) operate its
business in the usual and ordinary course consistent with past practices; (b)
use its commercially reasonable efforts to preserve substantially intact its
business organization, maintain
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its rights and franchises, retain the services of its respective officers and
employees and maintain its relationship with its respective customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them with the intention that its goodwill and ongoing business
shall be unimpaired at the Effective Time; (c) use its commercially reasonable
efforts to maintain and keep its properties and assets in as good repair and
condition as at present, ordinary wear and tear excepted; (d) use its
commercially reasonable efforts to keep in full force and effect insurance
comparable in amount and scope of coverage to that currently maintained; (e)
prepare and file all Tax Returns required to be filed in a timely manner, and in
a manner consistent with past practices and applicable laws and regulations; and
(f)operate its business in accordance with the terms of its licenses and in all
material respects with all applicable laws, rules and regulations.
SECTION 6.2 Negative Covenants. Neither the Company on the one hand, nor
Acquiror and Merger Sub on the other, except as expressly contemplated by this
Agreement or otherwise consented to in writing by the other, from the date
hereof until the Closing Date shall do any of the following:
(a) declare or pay any dividend on, or make any other distribution in
respect of, outstanding shares of its capital stock;
(b) (1) redeem, repurchase or otherwise reacquire any shares of its capital
stock or other securities or any securities or obligations convertible into or
exchangeable for any share of its capital stock or other securities, or any
options, warrants or conversion or other rights to acquire any shares of its
capital stock or other securities or any such securities or obligations; (2)
effect any merger, consolidation, restructuring, reorganization or
recapitalization, or adopt a plan of complete or partial liquidation or
dissolution; or (3) adjust, split, combine or reclassify any of its capital
stock
-41-
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 or other
securities;
(c) (1) issue, pledge, deliver, award, grant or sell, or register under the
Securities Act or the Exchange Act or otherwise file any registration statement
under any statute covering, or authorize or propose the issuance, pledge,
delivery, award, grant or sale of (including the grant of any Encumbrances on)
or registration of or filing of any registration statement covering any shares
of any class of its capital stock or other securities (including shares held in
treasury), any securities convertible into or exercisable or exchangeable for
any such shares or other securities, or any rights, warrants or options to
acquire any such shares or other securities; or (2) amend or otherwise modify
the terms of any such rights, warrants or options;
(d) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any other
manner, (1) any business or any corporation, partnership, association or other
business organization or division thereof or (2) make or commit to make any
loans, advances or capital contributions to, or investments in, any other
Person.
(e) sell, lease, exchange, mortgage, pledge, transfer or otherwise encumber
or dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or
otherwise encumber or dispose of, any of its assets, except for sales of
inventory in the ordinary course of business and consistent with past practices;
(f) except as otherwise contemplated by this Agreement or as required to
comply with applicable law, (1) adopt, enter into, terminate or amend in any
material respect (A) any Benefit Plan or (B) any other agreement, plan or policy
involving it and one or more of its current or former
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directors, officers or employees, (2) increase in any manner the compensation,
bonus or fringe or other benefits of, or pay any bonus to, any current or former
officer, director or employee (except for normal increases of cash compensation
or cash bonuses in the ordinary course of business consistent with past practice
that, in the aggregate, do not materially increase its benefits or compensation
expenses), (3) pay any benefit or amount not required under any Benefit Plan or
any other benefit plan or arrangement as in effect on the date of this
Agreement, other than in the ordinary course of business, (4) increase in any
manner the severance or termination pay of any current or former director,
officer or employee, (5) enter into or amend any employment, deferred
compensation, consulting, severance, termination or indemnification agreement,
arrangement or understanding with any current or former employee, officer or
director, (6) grant any awards under any bonus, incentive, performance or other
compensation plan or arrangement or Benefit Plan (including the grant of stock
options, "phantom" stock, stock appreciation rights, "phantom" stock rights
stock based or stock related awards, performance units or restricted stock or
the removal of existing restrictions in any Benefit Plans or agreements or
awards made thereunder), (7) take any action to fund or in any other way secure
the payment of compensation or benefits under any employee plan, agreement,
contract or arrangement or Benefit Plan, (8) take any action to accelerate the
vesting of payment of any compensation or benefit under any Benefit Plan or (9)
materially change any actuarial or other assumption used to calculate funding
obligations with respect to any pension plan or change the manner in which
contributions to any pension plan are made or the basis on which such
contributions are determined;
(g) propose or adopt any amendments to its certificate or articles of
incorporation or its bylaws;
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(h) incur any Indebtedness, other than in the ordinary course of business;
(i) engage in any transaction with, or enter into any agreement,
arrangement, or understanding with, directly or indirectly, any of such entity's
Affiliates which involves the transfer of consideration or has a financial
impact on such entity, other than pursuant to such agreements, arrangements, or
understandings existing on the date of this Agreement;
(j) except for transactions in the ordinary course of business, terminate,
or amend or waive any provision of, any Material Contract;
(k) transfer or license to any Person or otherwise extend, amend or modify
any rights to Intellectual Property;
(l) (1) make any change in any of its methods of accounting or (2) change
any of its methods of reporting income or deductions for federal income tax
purposes from those employed in the preparation of the federal income tax
returns for the taxable year ended December 31, 1999, except, in the case of
clause (1) or clause (2), as may be required by law or GAAP;
(m) take any action that is intended or would reasonably be expected to
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect at any time prior to the
Effective Time, or in any of the conditions to the Merger set forth in Article
VIII not being satisfied or in a violation of any provision of this Agreement;
or
(n) agree in writing or otherwise to do any of the foregoing.
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ARTICLE VII.
ADDITIONAL AGREEMENTS
SECTION 7.1 Access and Information. During the period from the date hereof
to the Effective Time (the "Interim Period"), the Company and Acquiror shall,
and Acquiror shall cause Merger Sub to, afford to each other and their
respective officers, employees, accountants, consultants, legal counsel and
other representatives reasonable access during normal business hours (and at
such other times as the parties may mutually agree) to the properties, executive
personnel and all information concerning the business, properties, contracts,
records and personnel of the Company, Merger Sub or Acquiror, as the case may
be, as such other party may reasonably request.
SECTION 7.2 Confidentiality. Acquiror and the Company each acknowledge and
agree that: (a) all information received by it (the "Receiving Party") from or
on behalf of the other party in connection with the transactions contemplated
under this Agreement shall be deemed received pursuant to the confidentiality
agreement previously executed between the Company and Acquiror (the
"Confidentiality Agreement"), (b) such Receiving Party shall, and shall cause
its officers, directors, employees, Affiliates, financial advisors and agents to
comply with the provisions of the Confidentiality Agreement with respect to such
information, and (c) the provisions of the Confidentiality Agreements are hereby
incorporated herein by reference with the same effect as if fully set forth
herein.
SECTION 7.3 Private Placement. Acquiror shall undertake a private placement
(the "Private Placement") to accredited investors which is intended to yield
gross proceeds of no less than $1,000,000 and a maximum of $1,800,000 (without
regard to a $300,000 over-allotment option) through the sale of shares of
Acquiror's Common Stock not registered under the Securities Act by
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reason of the exemption available under Section 4(6) thereof. The closing of at
least $1,000,000 in subscriptions under the Private Placement shall occur
concurrently with the Closing under this Agreement. The proceeds of the Private
Placement shall be utilized for working capital purposes of the Surviving
Corporation. The Private Placement shall be effectuated through G-V Capital
Corp. (the "Placement Agent"), which is a broker-dealer registered with the SEC
and in good standing with the NASD, which shall be paid by Acquiror a 5% sales
commission, a non-accountable expense allowance equal to the lesser of $30,000
or 2% of the Private Placement's gross proceeds including the over-allotment
option, and shall receive from Acquiror for nominal consideration five year
warrants (the "Placement Agent Warrants") to purchase at a price of $0.8065 each
that number of shares of Acquiror Common Stock as shall equal 5% of the total
number of shares sold in the Private Placement including the over-allotment
shares.
SECTION 7.4 Registration of Resale of Certain Shares of Common Stock.
Acquiror shall use its best efforts to prepare and file within 180 days
following the Effective Time a registration statement on Form SB-2 or S-1 with
the SEC under the Securities Act in order to register the reoffer and
redistribution of all the shares of Acquiror Common Stock sold in the Private
Placement, the shares of Acquiror Common Stock underlying the Placement Agent
Warrants, and the shares of Acquiror Common stock owned by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ among other securities. For the purposes
hereof, the number of shares of Acquiror Common Stock to be included in the
registration statement shall be adjusted by the Stock Split.
SECTION 7.5 Public Announcements. Acquiror and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated hereunder and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law.
-46-
SECTION 7.6 Indemnification.
(a) From and after the Effective Time, the Company shall cause the Acquiror
to indemnify, defend and hold harmless the present and former officers,
directors and employees of Acquiror (collectively, the "Indemnified Parties")
against all losses, expenses, claims, damages, liabilities or amounts that are
paid in settlement of, with the approval of Acquiror or otherwise in connection
with, any claim, action, suit, proceeding or investigation (a "Claim"), based in
whole or in part on the fact that such person is or was such a director, officer
or employee and arising out of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement), in each case to the fullest extent permitted under New York Law
(and shall pay expenses in advance of the final disposition of any such action
or proceeding to each Indemnified Party to the fullest extent permitted under
New York Law, upon receipt from the Indemnified Party to whom expenses are
advanced of the undertaking to repay such advances contemplated by Section
723(c) of New York Law.
(b) Any Indemnified Party wishing to claim indemnification under this
Section 7.5, promptly upon learning of any such Claim, shall notify Acquiror
(although the failure so to notify Acquiror shall not relieve Acquiror from any
liability which Acquiror may have under this Section 7.5, except to the extent
such failure prejudices Acquiror), and shall deliver to Acquiror the undertaking
contemplated.
SECTION 7.6 Further Action; Commercially Reasonable Efforts.
(a) Each of the parties hereto shall use all commercially reasonable
efforts to take, or cause to be taken, all appropriate action, and do, or cause
to be done, all things necessary, proper or advisable under applicable laws or
otherwise to consummate and make effective the transactions contemplated by this
Agreement as promptly as practicable, including, without limitation, using all
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its commercially reasonable efforts to obtain all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Entities
and parties to contracts with the Company, Acquiror or Merger Sub as are
necessary for the transactions contemplated herein. In case at any time after
the Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each party to
this Agreement shall use all commercially reasonable efforts to take all such
action.
(b) During the Interim Period, each of the parties hereto shall promptly
notify the other in writing of any pending or, to the knowledge of such party,
threatened action, proceeding or investigation by any Governmental Entity or any
other Person (i) challenging or seeking damages in connection with the Merger or
the conversion of Company Common Stock into the Merger Consideration pursuant to
the Merger, or (ii) seeking to restrain or prohibit the consummation of the
Merger or any of the transactions contemplated by this Agreement or otherwise
limit the right of Acquiror to own or operate all or any portion of the business
or assets of the Company.
(c) Each party hereto shall use its commercially reasonable efforts to
refrain from taking any action, or entering into any transaction, which would
cause any of its representations or warranties contained in this Agreement to be
untrue or which would result in a breach of any covenant made by it in this
Agreement.
SECTION 7.7 No Solicitation.
(a) From the date of this Agreement until the Effective Time or the
termination of this Agreement pursuant to the terms of this Agreement, the
Company shall not and shall not permit any of its Affiliates, directors,
officers, employees, agents or representatives, including, without limitation,
any investment banker, attorney or accountant of the Company (collectively,
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"Representatives") directly or indirectly, to (i) initiate, solicit, encourage
or otherwise facilitate (including by way of furnishing information), any
inquiries or the making of any proposal or offer that constitutes, or may
reasonably be expected to lead to, an Acquisition Proposal (as defined below),
(ii) enter into or maintain or continue discussions or negotiate with any Person
in furtherance of such inquiries or to obtain an Acquisition Proposal, or (iii)
agree to, approve, recommend, or endorse any Acquisition Proposal, or authorize
or permit any of its Representatives to take any such action and, the Company
shall promptly notify Acquiror of any such inquiries and proposals received by
the Company or any of its Representatives, relating to any of such matters.
(b) For purposes of this Agreement, "Acquisition Proposal" means an
inquiry, offer or proposal regarding any of the following (other than the
transactions contemplated by this Agreement) involving the Company: (1) any
merger, reorganization, consolidation, share exchange, recapitalization,
business combination, liquidation, dissolution, or other similar transaction
involving, or, any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of, all or any significant portion of the assets or ten percent
(10%) or more of the equity securities of, the Company, in a single transaction
or series of related transactions which could reasonably be expected to
interfere with the completion of the Merger; (2) any tender offer or exchange
offer for twenty percent (20%) or more of the outstanding shares of capital
stock of the Company or the filing of a registration statement under the
Securities Act in connection therewith; or (3) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
SECTION 7.8 Event Notices. During the Interim Period, each party hereto
will promptly notify the other parties hereto of (a) the occurrence or
nonoccurrence of any event the occurrence
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or nonoccurrence of which would be likely to cause any condition to the
obligations of such party to effect the Merger and the other transactions
contemplated by this Agreement not to be satisfied and (b) the failure of such
party to comply with any covenant or agreement to be complied with by it
pursuant to this Agreement which would be likely to result in any condition to
the obligations of such party to effect the Merger and the other transactions
contemplated by this Agreement not to be satisfied. No delivery of any notice
pursuant to this Section 7.8 will cure any breach of any representation or
warranty, covenant, condition or agreement of such party contained in this
Agreement or otherwise limit or affect the remedies available hereunder to the
party receiving such notice.
SECTION 7.9 Tax Treatment. Each of Acquiror and the Company shall use
reasonable efforts to cause the Merger to qualify as a reorganization under the
provisions of Section 368 of the Code. The parties will characterize the Merger
as such a reorganization for purposes of all Tax Returns and other filings.
SECTION 7.10 Board of Directors of Acquiror. Promptly following the
Effective Time, Acquiror will take all actions reasonably requested by ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, the Company's Chief Executive Officer, such that five designees of
the Company and one designee of G-V Capital Corp., the placement agent in the
Private Placement, shall be appointed as the sole members of Acquiror's Board of
Directors.
ARTICLE VIII.
CLOSING CONDITIONS
SECTION 8.1 Conditions to Obligations of Acquiror, Merger Sub and the
Company to Effect the Merger. The respective obligations of Acquiror, Merger Sub
and the Company to effect
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the Merger and the other transactions contemplated herein shall be subject to
the satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived, in whole or in part, to the extent permitted
by applicable law:
(a) Private Placement. In the Private Placement Acquiror shall have
received gross proceeds of at least $1 million; and in the event Acquiror
receives gross proceeds of less than $1.5 million, Acquiror's pre-Private
Placement shareholders shall have contributed to Acquiror's capital, pro rata,
that number of shares of Acquiror Common Stock so that after giving effect to
the Stock Split, the Private Placement and the Acquisition they shall own in the
aggregate exactly 6% of Acquiror's outstanding shares of Common Stock.
(b) Stock Split. The Stock Split shall have been duly authorized and
effectuated.
(c) No Order. No Governmental Entity or federal or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, statute, rule, ordinance, regulation, executive order, decree, judgment,
stipulation, injunction or other order (whether temporary, preliminary or
permanent) in any case which is in effect and which prevents or prohibits
consummation of the Merger or any other transactions contemplated in this
Agreement; provided, however, that the parties shall use their reasonable
efforts to cause any such decree, judgment, injunction or order to be vacated or
lifted.
(d) Lock-Up Agreements. The investors in the Private Placement, and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, each shall have
entered into an agreement with the Placement Agent or Acquiror, respectively, in
form and substance satisfactory to the Company and Acquiror, to the effect that
without the prior written consent of the Placement Agent or Acquiror,
respectively, each will not sell or otherwise dispose of his shares of Acquiror
Common Stock for one year from the Effective Time or nine months following the
effectiveness of Acquiror's Registration Statement covering the resale of such
shares, whichever shall first occur.
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(e) Employment Agreements. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall
have entered into employment agreements with Acquiror and the Company to serve
as Chief Executive Officer and Chief Operating Officer, respectively, for a
minimum initial term of three years.
(f) Due Diligence. The parties shall have completed to their satisfaction
their respective due diligence investigations.
SECTION 8.2 Additional Conditions to Obligations of Acquiror and Merger
Sub. The obligations of Acquiror and Merger Sub to effect the Merger and the
other transactions contemplated in this Agreement are also subject to the
following conditions, any or all of which may be waived by Acquiror, in whole or
in part, to the extent permitted by applicable law:
(a) Representations and Warranties. The representations and warranties of
the Company made in this Agreement shall be true and correct in all material
respects when made and on and as of the Closing Date; provided, however, that,
notwithstanding the foregoing, the representations and warranties of the Company
set forth in Section 3.3 shall be true and correct in all respects. Acquiror
shall have received a certificate of the Chief Executive Officer of the Company
to that effect.
(b) Agreements and Covenants. The agreements and covenants of the Company
required to be performed on or before the Effective Time shall have been
performed in all material respects. Acquiror shall have received a certificate
of the Chief Executive Officer of the Company to that effect.
(c) No Material Adverse Changes. There shall have been no Material Adverse
Effect on the Company since the date of this Agreement.
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(d) No Litigation. There shall not be pending or threatened any suit,
action, proceeding or investigation (1) challenging or seeking to restrain or
prohibit the consummation of the Merger or any of the other transactions
contemplated by this Agreement, (2) relating to the Merger and seeking to obtain
from Acquiror any damages or (3) which would materially and adversely affect the
right of the Acquiror to own the assets or operate the business of the Company.
(e) Consents Under Company Agreements. The Company shall have obtained the
consent or approval of any Person whose consent or approval shall be required
under any agreement or instrument in order to permit the consummation of the
transactions contemplated hereby, except those which the failure to obtain would
not have a Material Adverse Effect on the Company.
(f) Opinion of Counsel. Acquiror shall have received an opinion from
counsel to the Company, in form satisfactory to Acquiror's counsel, that:
(1) The Company has been duly organized and is a validly existing
corporation in good standing under the laws of the State of New York with
full power and authority to own and operate its properties and to carry on
its current and proposed business;
(2) This Agreement and the transactions contemplated hereby has been
duly authorized by all necessary action of the Board of Directors and
stockholders of the Company, and no stockholder of the Company is entitled
to appraisal rights with respect to the Merger contemplated by this
Agreement;
(3) This Agreement has been duly executed and delivered by the Company
and is a valid and binding obligation of the Company legally enforceable
against the Company in accordance with its terms, except as enforceability
may be
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limited by bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights now or hereafter
in effect, and to general equitable principles;
(4) Neither the execution, delivery or performance of this Agreement
nor the consummation of the transactions herein contemplated, nor
compliance with the terms hereof by the Company do or will conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, the certificate of incorporation or the bylaws of the
Company, any indenture, mortgage, deed of trust or other contract,
agreement or instrument to which such counsel knows, after due inquiry, the
Company is a party or by which, to the knowledge of such counsel after due
inquiry, the Company or any of its assets or properties is bound, or to the
knowledge of such counsel after due inquiry, any law, order, rule or
regulation, judgment, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or its business or any of its properties; and
no further consent, approvals, authorizations or orders of agencies,
officers or other regulatory authorities are necessary for the consummation
of the Merger; and
(5) The authorized capital stock of Company consists solely of 200,000
shares of common stock, par value $0.01, of which as of the Closing Date
950 shares of common stock were issued and outstanding. To the knowledge of
such counsel (i) all of the issued and outstanding shares of Company Common
Stock are duly authorized, validly issued, fully paid and nonassessable and
(ii) there are no outstanding options, warrants, calls or other rights of
any kind to acquire securities or ownership interests in the Company or
other agreements obligating Company to
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issue or sell any shares of capital stock of Company or to grant, extend or
enter into any agreements with respect thereto.
(6) Upon filing of the Certificate of Merger with the Secretary of
State of New York, the Merger shall be effective under New York Business
Corporation Law and Acquiror will become the sole owner of all of the
Company Common Stock, free and clear of all Encumbrances.
(g) The Shareholders Agreement among MRM and the shareholders of MRM, dated
November 24, 1997, shall have been terminated.
SECTION 8.3 Additional Conditions to Obligations of the Company. The
obligations of the Company to effect the Merger and the other transactions
contemplated in this Agreement are also subject to the following conditions any
or all of which may be waived by the Company, in whole or in part, to the extent
permitted by applicable law:
(a) Representations and Warranties. The representations and warranties of
Acquiror and Merger Sub made in this Agreement shall be true and correct in all
material respects when made and on and as of the Closing Date (except for
representations and warranties that speak as of a specific date or time, which
need only be true and correct in all material respects as of such date and time.
The Company shall have received a certificate of the Chief Executive Officer of
Acquiror to such effect.
(b) Agreements and Covenants. The agreements and covenants of Acquiror and
Merger Sub required to be performed on or before the Effective Time shall have
been performed in all material respects. The Company shall have received a
certificates of the Chief Executive Officer of Acquiror and Merger Sub to such
effect.
(c) No Material Adverse Change. There shall have been no Material Adverse
Effect on Acquiror or Merger Sub since the date of this Agreement.
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(d) Opinion of Counsel. The Company shall have received an opinion from
counsel to Acquiror and Merger Sub, in form satisfactory to the Company's
counsel, that:
(1) Acquiror and Merger Sub each has been duly organized and is a
validly existing corporation in good standing under the laws of the State
of New York with full power and authority to own and operate its properties
and to carry on its current and proposed business;
(2) This Agreement and the transactions contemplated hereby has been
duly authorized by all necessary action of the Board of Directors of
Acquiror and the Board of Directors and sole stockholder of Merger Sub, and
no stockholder of Acquiror or Merger Sub is entitled to appraisal rights
with respect to the Merger contemplated by this Agreement;
(3) This Agreement has been duly executed and delivered by Acquiror
and Merger Sub and is a valid and binding obligation of Acquiror and Merger
Sub legally enforceable against Acquiror and Merger Sub in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights now or hereafter in effect, and to
general equitable principles;
(4) Neither the execution, delivery or performance of this Agreement
nor the consummation of the transactions herein contemplated, nor
compliance with the terms hereof by the Acquiror do or will conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, the certificate of organization or the bylaws of the
Acquiror, any indenture, mortgage, deed of trust or other
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contract, agreement or instrument to which such counsel knows, after due
inquiry, the Acquiror is a party or by which, to the knowledge of such
counsel after due inquiry, the Acquiror or any of its assets or properties
is bound, or to the knowledge of such counsel after due inquiry, any law,
order, rule or regulation, judgment, writ, injunction or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Acquiror or its business or any of its
properties; and no further consent, approvals, authorizations or orders of
agencies, officers or other regulatory authorities are necessary for the
consummation of the Merger;
(5) The authorized capital stock of Acquiror consists solely of 50
million shares of common stock, par value $0.001, of which as of the
Closing Date 242,500 shares of common stock of Acquiror were issued and
outstanding excluding those shares to be issued pursuant to the Merger, the
Stock Split, the Private Placement and the Placement Agent Warrants. To the
knowledge of such counsel, (i) all of the issued and outstanding shares of
Acquiror Common Stock are duly authorized, validly issued, fully paid and
nonassessable, and (ii) there are no outstanding options, warrants, calls
or other rights of any kind to acquire securities or ownership interests in
Acquiror or other agreements obligating Acquiror to issue or sell any
shares of capital stock of Acquiror or to grant, extend or enter into any
agreements with respect thereto;
(6) The Acquiror Common Stock, when issued pursuant to the Merger
Agreement, will be duly authorized, validly issued and outstanding, fully
paid and
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non-assessable shares of the common stock, $.001 par value of Acquiror,
free and clear of all claims, liens and Encumbrances; and
(7) Upon filing of the Certificate of Merger with the Secretary of
State of New York, the Merger shall be effective under New York Business
Corporation Law and Acquiror will become the sole owner of all of the
Company Common Stock, free and clear of all Encumbrances.
ARTICLE IX.
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval of this Agreement and
the Merger by the stockholders of the Company:
(a) by mutual consent of Acquiror and the Company;
(b) by Acquiror, upon a breach of any covenant or agreement on the part of
the Company set forth in this Agreement, or if any representation or warranty of
the Company shall have become untrue, in either case such that the conditions
set forth in Section 8.2(a) or Section 8.2(b) would not be satisfied (a
"Terminating Company Breach"); provided, that, if such Terminating Company
Breach is curable by the Company through the exercise of reasonable efforts and
for so long as the Company continues to exercise such reasonable efforts,
Acquiror may not terminate this Agreement under this Section 9.1(b);
(c) by the Company, upon breach of any covenant or agreement on the part of
Acquiror set forth in this Agreement, or if any representation or warranty of
Acquiror shall have become untrue, in either case such that the conditions set
forth in Section 8.3(a) or Section 8.3(b)
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would not be satisfied (a "Terminating Acquiror Breach"); provided, that, if
such Terminating Acquiror Breach is curable by Acquiror through the exercise of
their reasonable efforts and for so long as Acquiror continues to exercise such
reasonable efforts, the Company may not terminate this Agreement under this
Section 9.1(c);
(d) by either Acquiror or the Company, if there shall be any decree,
permanent injunction, judgment, order or other action by any court of competent
jurisdiction or any Governmental Entity which is final and nonappealable
preventing the consummation of the Merger; provided, that the party seeking to
terminate this Agreement pursuant to this Section 9.1(d) shall have used
reasonable efforts to cause any such decree, permanent injunction, judgment or
other order to be vacated or lifted;
(e) by either Acquiror or the Company, if the Merger shall not have been
consummated on or before December 31, 2000; provided, however, the right to
terminate this Agreement under this Section 9.1(e) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of the failure of the Merger to occur on or before such date;
(f) by Acquiror, if there shall have occurred one or more events which
shall have caused a Material Adverse Effect on the Company which Material
Adverse Effect shall have remained uncured (to the extent curable) for a period
of thirty (30) days after written notice from Acquiror of Acquiror's intention
to terminate pursuant to this Section 9.1(f);
(g) by the Company, if there shall have occurred one or more events which
shall have caused a Material Adverse Effect on Acquiror which Material Adverse
Effect shall have
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remained uncured (to the extent curable) for a period of thirty (30) days after
written notice from the Company of the Company's intention to terminate pursuant
to this Section 9.1(g);
The right of any party hereto to terminate this Agreement pursuant to this
Section 9.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any Affiliate of
such party or any of their respective officers, directors, representatives or
agents, whether prior to or after the execution of this Agreement.
SECTION 9.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 9.1, this Agreement shall forthwith become void,
there shall be no liability on the part of Acquiror or the Company or any of
their respective officers, directors, stockholders or Affiliates to the other,
and all rights and obligations of any party hereto shall cease, except that
nothing herein shall relieve any party from liability for any willful breach by
a party of any of its representations, warranties, covenants or agreements in
this Agreement; and provided that the provisions of Section 7.2 of this
Agreement will remain in full force and effect and survive any termination of
this Agreement.
SECTION 9.3 Amendment. This Agreement may be amended by the parties hereto
by action taken or authorized by their respective Boards of Directors at any
time prior to the Effective Time. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
SECTION 9.4 Extension; Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (b) waive any inaccuracies
in the representations and warranties of any other party contained herein or in
any document delivered pursuant hereto and (c) waive compliance by any other
party
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with any of the agreements or conditions contained herein. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bond thereby.
SECTION 9.5 Fees, Expenses and Other Payments. All costs and expenses
incurred by the parties hereto shall be borne solely and entirely by the party
which has incurred such costs and expenses, whether or not the Merger is
consummated and even if this Agreement is terminated, regardless of the reason
for such termination.
ARTICLE X.
GENERAL PROVISIONS
SECTION 10.1 Effectiveness of Representations, Warranties and Agreements.
(a) Except as set forth in Section 10.1(b) of this Agreement, the
representations, warranties, covenants and agreements of each party hereto shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any other party hereto, any Affiliate of such party or
any of their officers, directors, representatives or agents whether prior to or
after the execution of this Agreement.
(b) The representations and warranties in this Agreement will expire at the
Effective Time; provided, however, that this Section 10.1(b) shall in no way
limit or terminate any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time or after the termination of
this Agreement pursuant to Article IX.
SECTION 10.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the
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following addresses (or at such other address for a party as shall be specified
by like changes of address) or sent by electronic transmission to the telecopier
number specified below:
(a) If to Acquiror:
EDG Capital, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: _______________
Attention: ▇▇▇▇▇ ▇▇▇▇▇, President
With a copy (which shall not constitute notice) to:
Hofheimer Gartlir & Gross, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(b) If to the Company:
Molecular Radiation Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, CEO
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
Sichenzia, Ross & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 10.3. Certain Definitions
For purposes of this Agreement, the term:
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(a) "Affiliate" of any Person means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned Person;
(b) "beneficial owner" (including the terms "beneficial ownership" and
"beneficially own") means with respect to any shares of capital stock, a Person
who shall be deemed to be the beneficial owner or have beneficial ownership of
such shares (i) which such Person or any of its Affiliates or associates
beneficially owns, directly or indirectly, (ii) which such Person or any of its
Affiliates or associates (as such term is defined in Rule 12b-2 of the Exchange
Act) has, directly or indirectly, (A) the right to acquire (whether such right
is exercisable immediately or subject only to the passage of time), pursuant to
any agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding, (iii) which are
beneficially owned, directly or indirectly, by any other Persons with whom such
Person or any of its Affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding voting or disposing of any
such shares or (iv) pursuant to Section 13(d) of the Exchange Act and any rules
or regulations promulgated thereunder;
(c) "Business Day" shall mean any day other than a day on which banks in
the State of New York are authorized or obligated to be closed;
(d) control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of stock or as trustee or executor, by
contract or credit arrangement or otherwise;
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(e) "Encumbrance" shall mean any lien, pledge, charge, security interest or
other encumbrance of any nature;
(f) "Indebtedness" of a Person shall mean (1) indebtedness of such Person
for borrowed money whether short-term or long-term and whether secured or
unsecured, (2) indebtedness of such Person for the deferred purchase price of
services or property, which purchase price (A) is due twelve months or more from
the date of incurrence of the obligation in respect thereof or (B) customarily
or actually is evidenced by a note or other written instrument (including,
without limitation, any such indebtedness which is non-recourse to the credit of
such Person but is secured by assets of such Person), (3) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(4) all obligations of such Person upon which interest charges are customarily
paid, (5) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person (even though
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), (6)
obligations of such Person to purchase, redeem, retire, defease or otherwise
acquire for value any capital stock of such Person or any warrants, rights or
options to acquire such capital stock (with redeemable preferred stock being
valued at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends), (7) all executory obligations of such Person
in respect of financial hedge contracts (including, without limitation, equity
hedge contracts), (8) all indebtedness of the types referred to in clauses (1)
through (7) above for which such Person is obligated under a contingent
obligation, and (9) renewals, extensions, refundings, deferrals, restructurings,
amendments and modifications of any such indebtedness, obligation or guarantee;
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(g) "Intellectual Property" means all (1) patents and patent applications,
(2) trademarks, service marks, trade dress, logos, trade names, and corporate
names and registrations and applications for registration thereof, (3)
copyrights and registrations and applications for registration thereof, (4)
computer software, data, and documentation, (5) trade secrets and confidential
business information (including formulas, compositions, inventions (whether
patentable or unpatentable and whether or not reduced to practice), know-how,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, proposals, technical
data, copyrightable works, financial, marketing, and business data, pricing and
cost information, business and marketing plans, and customer and supplier lists
and information, (6) Internet domain names and applications for domain names,
(7) other proprietary rights, and (8) copies and tangible embodiments thereof
(in whatever form or medium);
(h) "Material Adverse Effect" shall mean, with respect to a specified
Person any change, event or effect that individually or in the aggregate (taking
into account all other such changes, events or effects) has had, or would be
reasonably likely to have, a material adverse effect on the business,
operations, earnings, condition (financial or otherwise) or prospects of such
Person and its Subsidiaries, if any, taken as a whole, except to the extent in
the case of Acquiror that any such change, event or effect is caused by a
decline in the price of a share of Acquiror Common Stock or a change in the
trading volume of Acquiror Common Stock;
(i) "Person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in Section
13(d) of the Exchange Act);
(j) "reasonable efforts" shall mean, as to a party hereto, an undertaking
by such party to perform or satisfy an obligation or duty or otherwise act in a
manner reasonably calculated to
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obtain the intended result by action or expenditure not disproportionate or
unduly burdensome in the circumstances, which means, among other things, that
such party shall not be required to (1) expend funds other than for payment of
the reasonable and customary costs and expenses of employees, counsel,
consultants, representatives or agents of such party in connection with the
performance or satisfaction of such obligation or duty or other action or (2)
institute litigation or arbitration as a part of its reasonable efforts; and
(k) "Tax" (including, with correlative meaning, the terms "Taxes" and
"Taxable") shall include, except where the context otherwise requires, all
federal, state, local and foreign income, profits, franchise, gross receipts,
payroll, sales, employment, use, property, withholding, excise, occupancy and
other taxes, duties or assessments or claims of any nature whatsoever, together
with all interest, penalties and additions imposed with respect to such amounts.
SECTION 10.4 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.5 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy or other judgment, decree, injunction or order, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
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SECTION 10.6 Entire Agreement. This Agreement (together with the Exhibits,
the Disclosure Schedules and the other documents delivered pursuant hereto)
constitute the entire agreement of the parties and supersede all prior
agreements and undertakings, both written and oral, between the parties, or any
of them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein, are not intended to confer upon any other Person any
rights or remedies hereunder.
SECTION 10.7 Specific Performance. The transactions contemplated by this
Agreement are unique. Accordingly, the Company acknowledges and agrees that, in
addition to all other remedies to which Acquiror or Merger Sub may be entitled,
each of Acquiror and Merger Sub shall be entitled to a decree of specific
performance.
SECTION 10.8 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 party. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns
SECTION 10.9 Third Party Beneficiaries. Subject to Section 10.8, this
Agreement shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
SECTION 10.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
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SECTION 10.11 Counterparts. This Agreement may be executed and delivered by
facsimile transmission, in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed and
delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
SECTION 10.12 Joint Drafting. This Agreement shall be deemed to have been
drafted jointly by the parties hereto, and no inference or interpretation
against any party shall be made solely by virtue of such party allegedly having
been the draftsperson of this Agreement.
Balance of Page Intentionally Left Blank
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan
of Merger to be executed and delivered as of the date first written above.
MOLECULAR RADIATION MANAGEMENT, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, President
EDG CAPITAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇, President
EDG MERGER SUB, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇, President
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