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EXHIBIT 2.5
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is dated
the 26th day of June, 2000, by and among Venture Catalyst Incorporated, a Utah
corporation ("VCAT"), ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇.▇▇▇, Inc., a California corporation and
wholly-owned subsidiary of VCAT ("Acquisition Corp."), a ▇▇▇▇▇▇▇.▇▇▇, Inc., a
California corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ (together with ▇▇. ▇▇▇▇▇▇, the "Founders"), ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (with the Founders, each a "Shareholder" and,
collectively, the "Shareholders").
A. The parties intend that, subject to the terms and conditions
hereinafter set forth, Acquisition Corp. will merge with and into the Company in
a reverse triangular merger (the "Merger"), with the Company to be the surviving
corporation of the Merger, all pursuant to the terms and conditions of this
Agreement, the Agreement of Merger substantially in the form of Exhibit A (the
"Agreement of Merger") and the applicable provisions of the laws of the State of
California. Upon the effectiveness of the Merger, all the outstanding common
stock of the Company ("Company Common") will be converted into common stock, par
value $.001 per share, of VCAT ("VCAT Common") on the basis determined herein
and as provided in the Agreement of Merger.
B. The parties intend that the Merger shall constitute a reorganization
within the meaning of Section 368(a)(I)(A) of the Internal Revenue Code of
1986, as amended (the "Code"), by virtue of the provisions of Section
368(a)(2)(E) of the Code.
NOW, THEREFORE, in consideration of the premises, the provisions and
the respective agreements hereinafter set forth, the parties hereto hereby
agree as follows:
ARTICLE I.
PLAN OF REORGANIZATION
A. The Merger. The Agreement of Merger will be filed with the Secretary
of State of the State of California, on the Closing Date (as defined in Section
VI(A) below). The effective date of the Merger as specified in the Agreement of
Merger (the "Effective Date") will occur on or before June 30, 2000, or on such
other date as the parties hereto may mutually agree upon. Subject to the terms
and conditions of this Agreement and, the Agreement of Merger, Acquisition
Corp. will be merged with and into the Company in a statutory merger pursuant
to the Agreement of Merger and in accordance with applicable provisions of
California law.
B. Conversion of Shares. At the Effective Date, by virtue of the Merger
and without any action on the part of VCAT, Acquisition Corp., the Company or
any holder of Company Common:
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1. each share of Company Common outstanding immediately prior to
the Effective Date, shall automatically be converted into and become a right to
receive the number of shares of VCAT Common set forth opposite each
Shareholders name on Annex A hereto; and
2. all shares of Company Common held by the Company at the
Effective Date as treasury shares or by a subsidiary of the Company shall be
canceled and no payment shall be made with respect thereto.
Conversion of Acquisition Corp. Shares. Each share of Acquisition Corp.
common stock, $.001 par value ("Acquisition Corp. Common"), that is issued and
outstanding immediately prior to the Effective Date will, by virtue of the
Merger and without further action on the part of the sole shareholder of
Acquisition Corp., be converted into and become one (1) share of Company Common
that is issued and outstanding immediately after the Effective Date, and the
shares of Company Common into which the shares of Acquisition Corp. Common are
so converted shall be the only shares of Company Common that are issued and
outstanding immediately after the Effective Date.
D. Effects of the Merger. At the Effective Date: (i) the separate
existence of Acquisition Corp. will cease and Acquisition Corp. will be merged
with and into the Company and the Company will be the surviving corporation
pursuant to the terms of the Agreement of Merger; (ii) the Articles of
Incorporation of the Company will be the Articles of Incorporation of the
surviving corporation; (iii) each share of Company Common outstanding
immediately prior to the Effective Date will be converted as provided in this
Article I; (iv) each share of Acquisition Corp. Common outstanding immediately
prior to the Effective Date will be converted as provided in this Article I;
and (v) the Merger will, at and after the Effective Date, have all of the
effects provided by applicable law.
E. Bylaws of the Company. At the Effective Date, the Bylaws of the
Company will be amended and restated in their entirety to read as set forth on
Exhibit B as the Bylaws of the surviving corporation.
F. Directors and Officers. At the Effective Date: (i) the directors of
the Company as the surviving corporation shall be: L. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; and (ii) the officers of the Company as the
surviving corporation shall be: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chairman and Chief Executive
Officer, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Financial Officer, and ▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary.
G. Securities Law Issues. Based in part on the representations of the
Shareholders made in Article III below, the VCAT Common to be issued in the
Merger will be issued pursuant to an exemption from registration under Section
4(2) of the Securities Act of 1933, as amended (the "Securities Act"), and/or
Regulation D promulgated under the Securities Act and applicable state
securities laws.
H. Tax-Free Reorganization. The parties hereto intend that the Merger
shall
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constitute a reorganization within the meaning of Section 368(a)(1)(A) of the
Code, by virtue of the provisions of Section 368(a)(2)(E) of the Code.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF
THE FOUNDERS AND THE COMPANY
The Founders and the Company, jointly and severally, represent and warrant to
VCAT and Acquisition Corp. as follows:
A. Existence; Good Standing; Corporate Authority; Compliance With Law.
The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of California. The Company is not required
to be licensed or qualified to do business as a foreign corporation in any
other jurisdiction, except where the failure to be so licensed or qualified
would not have a material adverse effect on the Company. The Company has all
requisite corporate power and authority to own its properties and carry on its
business as now conducted. The Company is not in default with respect to any
order of any court, governmental authority or arbitration board or tribunal to
which the Company is a party or is subject, and the Company is not in violation
of any material laws, ordinances, governmental rules or regulations to which
it is subject. The Company has obtained all material licenses, permits and
other authorizations and has taken all actions required by applicable laws or
governmental regulations in connection with its business as now conducted.
B. Validity and Effect of Agreements. This Agreement constitutes, and all
agreements and documents contemplated hereby when executed and delivered
pursuant hereto for value received will constitute, the valid and legally
binding obligations of the Company enforceable in accordance with their terms.
The execution and delivery of this Agreement does not and the consummation of
the transactions contemplated hereby will not (i) require the consent of any
third party, (ii) result in the breach of any term of provision of, or
constitute a default under, or result in the acceleration of or entitle any
party to accelerate (whether after the giving of notice or the lapse of time
or both) any obligation under, or result in the creation or imposition of any
lien, charge, pledge, security interest or other encumbrance upon any part of
the property of the Company pursuant to any provision of, any material order,
judgment, arbitration award, injunction, decree, indenture, mortgage, lease,
license, lien, or other agreement or instrument to which the Company is a party
or by which it is bound, or (iii) violate or conflict with any material
provision of the by-laws or articles of incorporation of the Company as
amended to the date of this Agreement. This Agreement and the transactions,
agreements and documents contemplated hereby, have been duly and validly
approved by the Company's Board of Directors and its shareholders, as required
by applicable law.
C. Capitalization. The Company has authorized capital stock consisting
solely of 1,000,000 shares of Company Common, of which 310,000 shares are
issued and outstanding. Except for rights granted pursuant to this Agreement,
there are no outstanding rights, warrants, options, subscriptions, agreements
or commitments giving anyone any right to require the Company to sell or issue,
any capital stock or other securities. The Shareholders own of record and
beneficially all of the issued and outstanding shares of the Company's capital
stock.
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D. Records. The corporate minute books of the Company to be delivered
to VCAT at the Closing shall contain true and complete copies of the articles
of incorporation, as amended to the Closing Date, bylaws, as amended to the
Closing Date, and the minutes of all meetings of directors and shareholders and
certificates reflecting all actions taken by the directors or shareholders
without a meeting, from the date of incorporation of the Company to the Closing
Date ("Records"). The Company possesses complete and accurate records of all
rights it holds to use Personally-Identifiable Data, including but not limited
to records of all privacy policies, terms and conditions, or other agreements
and understandings pursuant to which such Personally-Identifiable Data was
collected or provided. The Company has used all reasonable efforts to obtain
authorization, through privacy policies, notices, consents or otherwise, to use
Personally-Identifiable Data in the business of the Company as conducted and
proposed to be conducted. "Personally-Identifiable Data" means data containing
personally-identifiable information relating to any person or any e-mail
address.
E. Officers and Directors; Bank Accounts; Powers of Attorney;
Insurance. The officers and directors of the Company are as set forth in the
Records. Schedule 1 sets forth (i) the name of each bank, savings institution
or other person with which the Company has an account or safe deposit box and
the names and identification of all persons authorized to drawn thereon or to
have access thereto, (ii) the names of all persons, if any, holding powers of
attorney from the Company and a summary statement of the terms thereof, and
(iii) a list of all insurance policies owned by the Company, together with a
brief statement of the coverage thereof.
F. Taxes. The Company (i) has duly and timely filed or caused to be
filed all federal, state, local and foreign tax returns (including, without
limitation, consolidated and/or combined tax returns) required to be filed by
it prior to the date of this Agreement which relate to the Company or with
respect to which the Company or the assets or properties of the Company are
liable or otherwise in any way subject, (ii) has paid or fully accrued for all
taxes shown to be due and payable on such returns (which taxes are all the
taxes due and payable under the laws and regulations pursuant to which such
returns were filed), and (iii) has properly accrued for all such taxes accrued
in respect of the Company or the assets and properties of the Company for
periods subsequent to the periods covered by such returns. No deficiency in
payment of taxes for any period has been asserted by any taxing body and
remains unsettled at the date of this Agreement. Copies of all federal, state,
local and foreign tax returns of the Company has been made available for
inspection by VCAT.
G. Title to Company Shares. The outstanding shares of Company Common
are duly authorized, validly issued, fully paid and nonassessable and are owned
by the Shareholders free and clear of all liens, encumbrances, charges,
assessments and adverse claims. The outstanding shares of Company Common are
not subject to any rights of rescission and have been offered, issued and sold
by the Company in compliance with all registration or qualification
requirements of applicable federal and state securities laws. Upon transfer of
the Company Common by the Shareholders, VCAT will, as a result, receive good
and marketable title to all of the Company Common, free and clear of all
security interests, liens, encumbrances, charges, assessments, restrictions and
adverse claims.
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H. Title to Properties and Assets. The Company has good and marketable
title to all of the material properties and assets used by it in the conduct of
its business (including, without limitation, all source code for all of the
computer software to operate the Company's products) and the properties and
assets reflected on the balance sheet as of May 31, 2000 (the "Balance Sheet")
and none of such properties or assets is, except as disclosed in the Balance
Sheet or the Schedules hereto, subject to a contract of sale, or subject to
security interests, mortgages, encumbrances, liens or charges of any kind or
character. Except as disclosed on the Balance Sheet or the Schedules hereto,
there are no material liabilities, claims, obligations or responsibilities of
the Company of any nature.
I. Condition of Personal Property; Financial Statements. All material
tangible personal property, equipment, fixtures and inventories included within
the assets of the Company or required to be used in the ordinary course of
business are in good, merchantable or in reasonably repairable condition and
are suitable for the purposes for which they are used. No value in excess of
applicable reserves has been given to any inventory with respect to obsolete or
discontinued products. All of the material inventories and equipment, including
equipment leased to others, are well maintained and in good operating
condition. Schedule 2 contains true and correct copies of the financial
statements of the Company for each of the periods ended December 31, 1999 and
May 31, 2000, which have been prepared in accordance with generally accepted
accounting principles.
J. Real Estate. Schedule 3 contains a list of all real property owned by
the Company or in which the Company has a leasehold or other interest and of
any lien, charge or encumbrance thereupon. Such Schedule also contains a
substantially accurate description identifying all such real property and the
significant rental terms (including rents, termination dates and renewal
conditions). The improvements upon such properties and use thereof by the
Company conforms to all applicable lease restrictions, zoning and other local
ordinances.
K. List of Contracts and Other Data. Schedule 4 sets forth the following:
1. All computer software, patents and registrations for trademarks,
trade names, service marks and copyrights which are unexpired as of the date of
this Agreement and which are used in connection with the operation of the
Company's business, as well as all applications pending on said date for
patents or for trademark, trade name, service ▇▇▇▇ or copyright registrations,
and all other proprietary rights, owned or held by the Company and which are
reasonably necessary to, or used in connection with, the business of the
Company, and (ii) all licenses granted by or to the Company and all other
agreements to which the Company is a party and which relate, in whole or
in part, to any items of the categories mentioned in (i) above or to other
proprietary rights of the Company which are reasonably necessary to, or used in
connection with, the business of the Company;
2. All collective bargaining agreements, employment and consulting
agreements, executive compensation plans, bonus plans, profit-sharing plans,
deferred compensation agreements, employee pension or retirement plans,
employee stock purchase and stock option plans, group life insurance,
hospitalization insurance or other plans or arrangements
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providing for benefits to employees of the Company;
3. all contracts, understandings and commitments (including,
without limitation, mortgages, indentures and loan agreements) to which the
Company is a party, or to which it or any of its assets or properties are
subject;
4. the names and current annual compensation rates of all employees
of the Company; and
5. all customer backlog which is represented by firm purchase
orders, identifying the customers, product and purchase prices.
True and complete copies of all documents and complete descriptions of all
oral understandings, if any, have been provided or made available to VCAT and
its counsel.
L. No Breach or Default. The Company is not in default under any
material contract to which it is a party or by which it is bound, nor has any
event occurred which, after the giving of notice or the passage of time or
both, would constitute a default under any such contract. The Company and the
Founders have no reason to believe that the parties to such contracts will not
fulfill their obligations under such contracts in all material respects or are
threatened with insolvency.
M. Labor Controversies. There are no controversies between the Company
and any of its employees which might reasonably be expected to materially
adversely affect the conduct of its business, or any unresolved labor union
grievances or unfair labor practice or labor arbitration proceedings pending or
threatened relating to its business, and there are no organizational efforts
presently being made or threatened involving any of the Company's employees.
The Company has not received notice of any claim that the Company has not
complied with any laws relating to the employment of labor, including any
provisions thereof relating to wages, hours, collective bargaining, the payment
of social security and similar taxes, equal employment opportunity, employment
discrimination and employment safety, or that the Company is liable for any
arrears of wages or any taxes or penalties for failure to comply with any of
the foregoing.
N. Litigation. Except as set forth in Schedule 5, there are no actions,
suits or proceedings with respect to the Company involving claims by or against
the Company which are pending or threatened against the Company, at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality. No basis for
any action, suit or proceeding exists, and there are no orders, judgments,
injunctions or decrees of any court or governmental agency with respect to
which the Shareholders or the Company has been made or to which the
Shareholders or the Company is a party, which apply, in whole or in part, to
the business of the Company, or to any of the assets or properties of the
Company, or the Company Shares or which would result in any material adverse
change in the business or prospects of the Company.
O. No Misrepresentation or Omission. No representation or warranty the
Founders
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or the Company in this Article II or in any other Article or Section of this
Agreement, or in any certificate or other document furnished or to be furnished
by the Founders or the Company pursuant hereto, contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained therein not misleading or will
omit to state a material fact necessary in order to provide VCAT and
Acquisition Corp. with accurate information as to the Company.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDERS AND THE COMPANY
Each of the Shareholders represents and warrants to VCAT and Acquisition Corp.
as follows:
A. No Brokers. Such Shareholder and, to such Shareholder's knowledge,
the Company has not entered into any contract, arrangement or understanding
with any person or firm which may result in the obligation of VCAT, Acquisition
Corp. or the Company to pay any finder's fees, brokers or agent's commissions
or other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby, and such
Shareholder and, to such Shareholder's knowledge, the Company is not aware of
any claim or basis for any claim for payment of any finder's fees, brokerage or
agent's commissions or other like payments in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby.
B. Investment Representation. Each Shareholder represents that he
understands that (i) the VCAT Common being acquired by such Shareholder
pursuant to this Agreement has not been registered under the Securities Act of
1933, as amended (the "1933 Act"), and is being issued in reliance upon the
exemption afforded by Section 4(2) thereof for transactions by an issuer not
involving any public offering, (ii) such VCAT Common must be held indefinitely
unless a subsequent disposition thereof is registered under the 1933 Act or is
exempt from such registration, (iii) such VCAT Common will bear a legend to
such effect, and (iv) VCAT will make a notation on its transfer books to such
effect. Each Shareholder further represents that (i) such VCAT Common is being
acquired by such Shareholder for investment and without any present view toward
distribution thereof to any other person, (ii) such Shareholder will not sell
or otherwise dispose of such VCAT Common except in compliance with the
registration requirements or exemption provisions under the 1933 Act, the rules
and regulations thereunder, and as otherwise set forth by the Securities and
Exchange Commission ("SEC") (iii) such Shareholder has knowledge and experience
in financial and business matters and that he is capable of evaluating the
risks and merits of an investment in VCAT Common, (iv) such Shareholder has
consulted with counsel, to the extent deemed necessary, as to all matters
covered by this Agreement and has not relied upon VCAT and Acquisition Corp. for
any explanation of the application of the various federal or state securities
laws with regard to the acquisition of such VCAT Common, (v) such Shareholder
has investigated and is familiar with the affairs, financial condition and
prospects of VCAT, and has been given sufficient access to and has acquired
sufficient information about VCAT and Acquisition Corp. to reach an informed
and knowledgeable decision to acquire such VCAT Common, and (vi) such
Shareholder is able to bear the economic risks of such an investment.
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C. Validity and Effect of Agreements. This Agreement constitutes, and all
agreements and documents contemplated hereby, when executed and delivered by
such Shareholder pursuant hereto for value received will constitute, the valid
and legally binding obligations of such Shareholder enforceable in accordance
with their terms. The execution and delivery of this Agreement by such
Shareholder does not and the consummation of the transactions contemplated
hereby by such Shareholder will not (i) require the consent of any third party,
or (ii) result in the breach of any term or provision of, or constitute a
default under, or result in the acceleration of or entitle any party to
accelerate (whether after the giving of notice or the lapse of time or both) any
obligation under, any order, judgment, arbitration award, injunction, decree,
indenture, mortgage, lease, license, lien, or other agreement or instrument to
which such Shareholder is a party or by which such Shareholder is bound. This
Agreement and the transactions, agreements and documents contemplated hereby
have been duly and validly approved by such Shareholder.
D. Ownership. Except for rights granted pursuant to this Agreement,
there are no outstanding rights, warrants, options, subscriptions, agreements
or commitments giving anyone any right to require such Shareholder to sell any
capital stock or other securities of the Company. Such Shareholder owns of
record and beneficially all of the issued and outstanding shares of the
Company's capital stock reflected as being owned by such Shareholder on Annex A
hereto.
E. Title to Company Shares. The outstanding shares of Company Common
reflected as being owned by such Shareholder on Annex A hereto are owned by such
Shareholder free and clear of all liens, encumbrances, charges, assessments and
adverse claims. The outstanding shares of Company Common reflected as being
owned by such Shareholder on Annex A hereto are not subject to any rights of
rescission. Upon transfer of such Company Common by such Shareholder, VCAT
will, as a result, receive good and marketable title to all of such Company
Common, free and clear of all security interests, liens, encumbrances, charges,
assessments, restrictions and adverse claims, except for any created by VCAT or
Acquisition Corp.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF VCAT
AND ACQUISITION CORPORATION
VCAT and Acquisition Corp., jointly and severally, represent and warrant to the
Shareholders and the Company as follows:
A. Existence; Good Standing; Corporate Authority; Compliance with Law.
Each of VCAT and Acquisition Corp. is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each of VCAT and Acquisition Corp. is duly licensed or qualified
to do business as a foreign corporation and is in good standing under the laws
of all other jurisdictions in which the character of the properties owned or
leased by it therein or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified would not
have a material adverse effect on the Company. VCAT and Acquisition Corp. has
all requisite corporate power and authority to own its properties and carry on
its business as now conducted. Neither VCAT nor Acquisition Corp. is
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in default with respect to any order of any court, governmental authority or
arbitration board or tribunal to which either of them is a party or is subject,
and neither is in violation of any material laws, ordinances, governmental
rules or regulations to which it is subject. Each of VCAT and Acquisition Corp.
has obtained all material licenses, permits to other authorizations and has
taken all actions required by applicable laws or government regulations in
connection with its business as now conducted.
B. Authorization; Validity and Effect of Agreements. The execution and
delivery of this Agreement and all agreements and documents contemplated hereby
by VCAT and Acquisition Corp., and the consummation by them of the transactions
contemplated hereby, have been duly authorized by all requisite corporate
action. This Agreement constitutes, and all agreements and documents
contemplated hereby when executed and delivered pursuant hereto for value
received will constitute, the valid and legally binding obligations of VCAT and
Acquisition Corp. enforceable in accordance with their terms. The execution
and delivery of this Agreement does not and the consummation of the
transactions contemplated hereby will not (i) require the consent of any third
party, (ii) result in the breach of any term or provision of, or constitute a
default under, or result in the acceleration of or entitle any party to
accelerate (whether after the giving of notice or the lapse of time or both)
any obligation under, or result in the creation or imposition of any lien,
charge, pledge, security interest or other encumbrance upon any part of the
property of the Company pursuant to any provision of, any material order,
judgment, arbitration award, injunction, decree, indenture, mortgage, lease,
license, lien, or other agreement or instrument to which VCAT or Acquisition
Corp. is a party or by which either of them is bound, and (iii) violate or
conflict with any material provision of the by-laws or articles of
incorporation of VCAT or Acquisition Corp., each as amended to the date of
this Agreement.
C. No Brokers. Neither VCAT nor Acquisition Corp. has entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of the Shareholders or the Company to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby, and neither VCAT nor Acquisition Corp. is aware of any
claim or basis for any claim for payment of any finder's fees, brokerage or
agent's commissions or other like payments in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby.
D. Public Filings. Since June 30, 1999, information required to be
filed with the SEC by VCAT or provided to the SEC in accordance with the rules
and regulations of the SEC have been filed and did not contain at the time of
such filing any untrue statement of material fact required to be stated therein
or omit to state a material fact necessary to make the statements therein not
misleading.
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ARTICLE V.
OTHER COVENANTS AND AGREEMENTS
A. Indemnification by the Shareholders. Upon the terms and subject to
the conditions set forth in this Article V, each of the Shareholders agrees to
indemnify and hold VCAT, Acquisition Corp., the Company and each person who
controls or is controlled by or under common control with, including any
director or officer (collectively, the "Affiliates"), harmless against, and will
reimburse VCAT (or Acquisition Corp., the Company or the Affiliates if VCAT so
requests) on demand for, any payment, loss, cost or expense (including
reasonable attorney's fees and reasonable costs of investigation incurred in
defending against such payment, loss, cost or expense or claim therefor) made or
incurred by or asserted against VCAT, Acquisition Corp., the Company or the
Affiliates for a period of one year after the Closing Date in respect of any
omission, misrepresentation, breach of warranty, or nonfulfillment of any term,
provision, covenant or agreement on the part of such Shareholder (including as
Founders) contained in this Agreement, or from any misrepresentation in, or
omission from, any certificate or other instrument furnished or to be furnished
to VCAT by such Shareholder pursuant to this Agreement. Such Shareholder shall
have no liability hereunder until the total of all claims for indemnification
from all Shareholders exceed $15,000, in which case it shall include all such
liability of such Shareholder. Except in the case of fraud, intentional
misrepresentation or intentional breach of any provision of this Agreement by
such Shareholder, such Shareholder shall have no liability for indemnification
in excess of the return of the VCAT Common to be received by such Shareholder.
B. Indemnification by VCAT. Upon the terms and subject to the conditions
set forth in this Article V, VCAT agrees to indemnify and hold the Shareholders
harmless against, and will reimburse the Shareholders on demand for, any
payment, loss, cost or expense (including reasonable attorney's fees and
reasonable costs of investigation incurred in defending against such payment,
loss, cost of expense or claim therefor) made or incurred by or asserted against
the Shareholders for a period of one year after the Closing Date in respect of
any omission, misrepresentation, breach of warranty, or nonfulfillment of any
term, provision, covenant or agreement on the part of VCAT contained in this
Agreement, or from any misrepresentation in, or omission from, any certificate
or other instrument furnished or to be furnished to the Shareholders pursuant to
this Agreement. VCAT shall have no liability hereunder until the total of all
claims for indemnification exceed $15,000, in which case it shall include all
such liabilities of VCAT. Except in the case of fraud, intentional
misrepresentation or intentional breach of this Agreement, VCAT shall have no
liability for indemnification in excess of the VCAT Common to be issued under
this Agreement.
C. Costs and Expenses. Except as otherwise provided in Section V(D),
VCAT will not be responsible for or pay any costs or expenses of any kind
incurred by the Shareholders and the Company in connection with the negotiation,
execution and performance of this Agreement and the transactions contemplated
hereby, including legal and accounting fees. In no event shall any of such costs
or expenses be paid by or incurred on behalf of the Company.
The Shareholders will not be responsible for or pay any costs or expenses
of any kind incurred by VCAT and Acquisition Corp. in connection with the
negotiation, execution and
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performance of this Agreement and the transactions contemplated hereby,
including legal and accounting fees.
D. Registration Rights.
1. Registration Procedures. VCAT shall:
(a) not later than nine months after the Closing, prepare and
file with the SEC a registration statement on appropriate form (the
"Registration Statement") pursuant to the 1933 Act relating to the resale
of the VCAT Common to be issued hereunder by the Shareholders;
(b) use its best efforts, subject to receipt of necessary
information from the Shareholders, to cause the Registration Statement to
become effective no later than 60 days after the Registration Statement is
filed by VCAT;
(c) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration Statement
effective until the earlier of (i) 12 months after the effective date of
the Registration Statement or (ii) the date on which all of the VCAT Common
have been sold by such Stockholder pursuant to the Registration Statement
or Rule 144 under the 1933 Act or any other rule of similar effect;
(d) furnish to the Shareholders with respect to the VCAT Common
registered under the Registration Statement such reasonable number of
copies of prospectuses in order to facilitate the public sale or other
disposition of all or any of the VCAT Common to be issued hereunder by the
Shareholders; provided, however, that the obligation of VCAT to deliver
copies of prospectuses to the Shareholders shall be subject to the receipt
by VCAT of reasonable assurances from the Shareholders that the
Shareholders will comply with the applicable provisions of the 1933 Act and
of such other securities or blue sky laws as may be applicable in
connection with any use of such prospectuses;
(e) file documents required of VCAT for normal blue sky
clearance in states reasonably requested in writing by Shareholders;
provided, however, that VCAT shall not be required to qualify to do
business or consent to service of process in any jurisdiction in which it
is not now so qualified or has not so consented; and
(f) if at any time or from time to time, VCAT shall determine to
register any shares of VCAT Common, either for its own account or the
account of a shareholder other than the Shareholders, other than (i) a
registration relating to employee benefit plans or (ii) a registration
relating to a SEC Rule 145 transaction, VCAT will include in such
registration (and any related qualification under blue sky laws or other
compliance), and in any understanding involved therein, the VCAT Common to
be issued hereunder specified in a written request or requests made within
ten (10) business days after receipt of written notice from VCAT by any
Shareholder, but only to the extent that
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such inclusion will not diminish the number of securities to be included by
VCAT or by holders of VCAT Common for whose account such registration is
being made, and subject to timely receipt of all information reasonably
requested by VCAT or the underwriters, if any.
(g) notify the Shareholders at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act of the
happening of any event as a result of which the prospectus included the
Registration Statement, as then in effect includes an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
(h) bear all expenses in connection with the procedures in
paragraphs (a) through (e) of this Section V(D) and the registration of
the VCAT Common to be issued hereunder pursuant to the Registration
Statement, other than fees and expenses, if any, of counsel or other
advisers to the Shareholders or underwriting discounts, brokerage fees and
commissions incurred by the Shareholders, if any.
2. Transfer of Shares After Registration. Each Shareholder, while
any VCAT Common issued under this Agreement is covered by a Registration
Statement, agrees that it will not effect any disposition of the VCAT Common or
its right to purchase VCAT Common Stock that would constitute a sale within the
meaning of the Securities Act, except as contemplated in the Registration
Statement referred to in Section V(D), and that it will promptly notify VCAT of
any changes in the information set forth in the Registration Statement regarding
such Shareholder or its Plan of Distribution.
3. Indemnification.
(a) In addition to any other provision of this Agreement, VCAT
agrees to indemnify and hold harmless each of the Shareholders and each person,
if any, who controls such Shareholder within the meaning of the 1933 Act,
against any losses, claims, damages, liabilities or expenses, joint or several,
to which such Shareholder or such controlling person may become subject, under
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
or any other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of VCAT), insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required to be
stated therein or necessary to make the statements in any of them, in light of
the circumstances under which they were made, not misleading, and will reimburse
such Shareholder and each such controlling person for any legal and other
expenses as such expenses are reasonably incurred by such Shareholder or such
controlling person in connection with investigating, or defending, compromising
or paying any such loss, claim, damage, liability, expense or action; provided,
however, that VCAT will not be liable in any such case to the extent that any
such loss, claim, damage, liability or expense arises
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out of or is based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the Prospectus
or any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to VCAT by or on behalf of the Shareholders
expressly for use therein, or (ii) the failure of the Shareholders to comply
with the covenants and agreements contained in Section V(D)(2) hereof
respecting sale of the VCAT Common, or (iii) any statement or omission in any
prospectus that is corrected in any subsequent prospectus that was delivered to
the Shareholders prior to the pertinent sale or sales by such Shareholder.
(b) In addition to any other provision of this Agreement, each
Shareholder will severally indemnify and hold harmless VCAT, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls VCAT within the meaning of the 1933 Act, against
any losses, claims, damages, liabilities or expenses to which VCAT, each of its
directors, each of its officers who signed the Registration Statement or
controlling person may become subject, under the 1933 Act, the 1934 Act, or any
other federal or state statutory law or regulation (including in settlement of
any litigation, if such settlement is effected with the written consent of such
Shareholder) insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of or are based
upon (i) any failure of such Shareholder to comply with the covenants and
agreements contained in Section V(D) hereof respecting the sale of the VCAT
Common or (ii) any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, the prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, the prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to VCAT by or on
behalf of such Shareholder expressly for use therein, and will reimburse VCAT,
each of its directors, each of its officers who signed the Registration
Statement or controlling person for any legal and other expense reasonably
incurred by VCAT, each of its directors, each of its officers who signed the
Registration Statement or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action.
ARTICLE VI.
CLOSING
A. The Closing. The closing of the transactions provided for herein (the
"Closing") will take place at the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ offices of VCAT at 10:00 a.m., Pacific Time on or
before July 31, 2000, or, if all conditions to Closing have not been satisfied
or waived by such date, such other place, time and date as the Company and VCAT
may mutually select (the "Closing Date"). Concurrently with the Closing, the
Agreement of Merger and such officers' certificates or other documents as may
be required to effectuate the Merger will be filed in the offices of the
California Secretary of State. Accordingly, the Effective Date of the Merger
will be the Closing Date.
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B. Exchange of Certificates. As of the Effective Date, all shares of the
Company Common that are outstanding immediately prior thereto will, by virtue
of the Merger and without further action, cease to exist, and all such shares
will be converted into the right to receive from VCAT the number of shares of
VCAT Common determined as set forth in Article I hereof.
At and after the Effective Date, each certificate representing outstanding
shares of the Company Common will represent the number of shares of VCAT Common
into which such shares of the Company Common have been converted, and such
shares of VCAT Common will be deemed registered with the transfer agent of VCAT
in the name of the holder of such certificate. As soon as practicable after the
Effective Date, Shareholders will surrender (a) the certificates for such
shares (the "Company Certificates") to VCAT for cancellation or (b) an
affidavit of lost certificate in a form reasonably satisfactory to VCAT.
Promptly following the Effective Date and receipt of the Company Certificates,
VCAT will cause its transfer agent to issue to such surrendering holder
certificate(s) for the number of shares of VCAT Common to which such
Shareholder is entitled pursuant to Article I.
All shares of VCAT Common delivered upon the surrender of the Company
Certificates in accordance with the terms hereof will be delivered to the
registered holder. After the Effective Date, there will be no further
registration of transfers of the shares of the Company Common on the stock
transfer books of the Company.
Until the Company Certificates representing the Company Common outstanding
prior to the Merger are surrendered pursuant to this Article VI, such
certificates will be deemed, for all purposes, to evidence ownership of the
number of shares of VCAT Common into which the shares of the Company Common
will have been converted.
ARTICLE VII.
CONDITIONS OF CLOSING
A. VCAT's Conditions of Closing. The obligation of VCAT hereunder shall
be subject to and conditioned upon the satisfaction at the Closing of each of
the following conditions:
1. All representations and warranties of the Company and the
Shareholders contained in this Agreement and the Schedules hereto shall be true
and correct at and as of the Closing Date, the Company and the Shareholders
shall have performed all agreements and covenants and satisfied all conditions
on their part to be performed or satisfied by the Closing Date pursuant to the
terms of this Agreement, and VCAT shall have received a certificate of the
Company and Shareholders dated the Closing Date to such effect.
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2. The Founders shall have delivered to VCAT a Certificate of the
Secretary of State (or other authorized officer) of the Company's respective
jurisdiction of incorporation certifying as of a date reasonably close to the
Closing Date that the Company has filed all required reports, paid all required
fees and taxes, and is, as of such date, in good standing and authorized to
transact business as a domestic corporation.
No suit, action, investigation, inquiry or other proceeding by any
governmental body or other person or legal or administrative proceeding shall
have been instituted or threatened which questions the validity or legality of
the transactions contemplated hereby.
As of the Closing, there shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction directing that the transactions provided for herein or
any of them not be consummated as so provided or imposing any conditions on the
consummation of the transactions contemplated hereby, which is unduly
burdensome on VCAT.
3. All necessary authorizations, consents and approvals as may be
required to consummate the Merger by any applicable regulator authority have
been obtained.
B. Shareholders' Conditions of Closing. The obligation of the
Shareholders to hereunder shall be subject to and conditioned upon the
satisfaction at the Closing of each of the following conditions:
1. All representations and warranties of VCAT contained in this
Agreement shall be true and correct at and as of the Closing Date and VCAT
shall have performed all agreements and covenants and satisfied all conditions
on its part to be performed or satisfied by the Closing Date pursuant to the
terms of this Agreement, and the Shareholders shall have received a certificate
of VCAT dated the Closing Date to such effect.
2. VCAT shall have delivered to the Shareholders a Certificate of
its corporate Secretary certifying the Resolutions of its Board of Directors
authorizing execution of this Agreement and the execution, performance and
delivery of all agreements, documents and transactions contemplated hereby.
4. No suit, action, investigation, inquiry or other proceeding by
any governmental body or other person or legal or administrative proceeding
shall have been instituted or threatened which questions the validity or
legality of the transactions contemplated hereby.
3. As of the Closing, there shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction directing that the transactions provided for herein or
any of them not be consummated as so provided or imposing any conditions on the
consummation of the transactions contemplated hereby, which is unduly
burdensome on the Shareholders.
4. All necessary authorizations, consents and approvals as may be
required to
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consummate the Merge by any applicable regulatory authority have been obtained.
ARTICLE VIII.
MISCELLANEOUS
A. Notice. Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given if personally delivered or mailed by
certified or registered mail, return receipt requested, addressed as follows:
If to VCAT:
Venture Catalyst Incorporated
16868 ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
If to the Shareholders:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. Scapellatti
▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Provided, however, that notice of change of address shall be deemed given upon
actual receipt.
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B. Further Assurances. The parties hereto will at any time, and from time
to time after the Closing Date, upon request of the other party, execute,
acknowledge and deliver all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may be reasonably required to
carry out the intent of this Agreement, and to transfer and vest title to any
Company Common being transferred hereunder, and to protect the right, title and
interest in and enjoyment of all of the Company Common sold, granted, assigned,
transferred, delivered and conveyed pursuant to this Agreement; provided,
however, that this Agreement shall be effective regardless of whether any such
additional documents are executed.
C. Binding Effect: Benefits. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
D. Entire Agreement. This Agreement, together with the Exhibits,
Schedules and other documents contemplated hereby, constitutes the final written
expression of all of the agreements between the parties, and is a complete and
exclusive statement of those terms. It supersedes all understandings and
negotiations concerning the matters specified herein. Any representations,
promises, warranties or statements made by either party that differ in any way
from the terms of this written Agreement and the Exhibits, Schedules and other
documents contemplated hereby, shall be given no force or effect. The parties
specifically represent, each to the other, that there are no additional or
supplemental agreements between them related in any way to the matters herein
contained unless specifically included or referred to herein. No addition to or
modification of any provision of this Agreement shall be binding upon any party
unless made in writing and signed by all parties.
E. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California exclusive of the conflict of
law provisions thereof, and jurisdiction with respect to any litigation arising
under this Agreement shall be limited solely to the applicable state or federal
court located in the southern or central district of California.
F. Survival. All of the terms, conditions, warranties and representations
contained in this Agreement shall survive, in accordance with their terms,
delivery by VCAT of the consideration to be given by him hereunder and delivery
by Shareholders of the consideration to be given by them hereunder, and shall
survive the execution hereof and the Closing hereunder, but in no event beyond
any applicable statute of limitations.
G. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instruments.
H. Headings. Headings of the Articles and Sections of this Agreement are
for the
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convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
I. Waivers. Either VCAT or the Shareholders may, by written notice to
the other, (i) extend the time for the performance of any of the obligations or
other actions of the other under this Agreement; (ii) waive any inaccuracies in
the representations or warranties of the other contained in this Agreement or
in any document delivered pursuant to this Agreement; (iii) waive compliance
with any of the conditions or covenants of the other contained in this
Agreement; or (iv) waive performance of any of the obligations of the other
under this Agreement. Except as provided in the preceding sentence, no action
taken pursuant to this Agreement, including without limitation any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any
other provision hereunder.
J. Incorporation of Exhibits and Schedules. All Exhibits and Schedules
attached hereto are by this reference incorporated herein and made a part
hereof for all purposes as if fully set forth herein.
K. Severability. If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid as applied to any particular case or in all cases,
such circumstances shall not have the effect of rendering such provision
invalid in any other case or of rendering any of the other provisions of this
Agreement inoperative, unenforceable or invalid.
L. Assignability. Neither this Agreement nor any of the parties' rights
hereunder shall be assignable by any party hereto without the prior written
consent of the other parties hereto, which shall not be unreasonably withheld.
M. Arbitration. In the event of a disagreement or dispute between VCAT
and one or more of the parties related to this Agreement, the matter will be
finally settled in Los Angeles, California, by expedited arbitration by a
single arbitrator in a proceeding conducted under the expedited rules of the
American Arbitration Association or any similar successor body, the arbitrator
also apportioning the costs of the arbitration, including the fees of the
arbitrator. The arbitrator shall be selected by VCAT and the other parties as a
group each providing the other with a list of five proposed arbitrators within
five business days of notice of arbitration and if one or more arbitrators
appears on each of such lists, VCAT and the other parties as a group shall
designate one of such duplicated arbitrators. If no arbitrator is named on both
such lists, VCAT and the other parties as a group shall provide each other with
a list of an additional five arbitrators within two business days. If no
arbitrator is named on both of such lists (including the previously provided
list), VCAT and the other parties as a group shall each appoint an arbitrator,
who shall jointly appoint a third arbitrator. Such arbitrators shall act as an
arbitration panel; as used herein, the term arbitrator shall include the
arbitration panel if applicable. The decision of the arbitrator in writing
shall be final and binding upon the parties and will not be subject to appeal.
If any party fails to abide by such decision, the other party may seek the
order of a court
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which shall enter judgment on the decision of the arbitrator, and the party so
failing to abide shall be responsible for the payment of the expenses of the
court proceeding and all resulting enforcement expenses, including actual
attorneys' fees. VCAT and the other parties as a group shall instruct the
arbitrator that a written decision is to be rendered within six months of the
appointment of the arbitrator and any party causing unreasonable delay shall be
subject to sanctions by the arbitrator.
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IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the
date first above written.
VCAT
VENTURE CATALYST INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name:
Title:
SHAREHOLDERS
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------- --------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
ACQUISITION CORP. COMPANY
VENTURE ▇▇▇▇▇▇▇▇.▇▇▇, INC. ▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ----------------------------
Name: Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- -------------------------
Title: Title: President
-------------------------- -------------------------
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ANNEX A
Name VCAT Shares
---- -----------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 112,903
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 28,226
▇▇▇▇ ▇▇▇▇▇ 25,403
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 5,645
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 2,823
21