FOURTH AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
dated as of
June 21, 2001
among
AMCON DISTRIBUTING COMPANY
AMCON MERGER SUB, INC.
and
HAWAIIAN NATURAL WATER COMPANY, INC.
FOURTH AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
FOURTH AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of
June 21, 2001 (the "Agreement"), by and among AMCON Distributing Company, a
Delaware corporation ("AMCON"), AMCON Merger Sub, Inc., a Delaware corporation
and a wholly-owned subsidiary of AMCON ("Merger Sub"), and Hawaiian Natural
Water Company, Inc., a Hawaii corporation ("HNWC").
RECITALS:
WHEREAS, the Boards of Directors of AMCON and HNWC deem it advisable and
in the best interests of each corporation and its respective stockholders that
AMCON and HNWC engage in a business combination which shall be effected by the
terms of this Agreement through the merger as outlined below;
WHEREAS, the respective Boards of Directors of HNWC, Merger Sub and AMCON
have each (i) determined that the merger of HNWC with and into Merger Sub (the
"Merger") is fair to, and in the best interests of, their respective companies
and stockholders, (ii) have approved and declared the advisability of this
Agreement and (ii) have approved the Merger, and (iii) in the case of HNWC,
has recommended the approval and adoption of this Agreement, this Merger and
the transactions contemplated hereby by its stockholders;
WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (a "368 Reorganization"), and the
regulations promulgated thereunder;
WHEREAS, simultaneously with the execution and delivery of this
Agreement, AMCON has entered into an agreement (the "Stockholders Agreement"
in the form attached as Exhibit A hereto) with certain stockholders of HNWC
pursuant to which such HNWC stockholders have agreed to vote the shares of
HNWC Common Stock owned by them in favor of the Merger under certain
circumstances, which agreement is accompanied by irrevocable proxies to vote
such shares in accordance therewith.
NOW, THEREFORE, in consideration of the premises, which are incorporated
into and made part of this Agreement, and of the mutual representations,
warranties, covenants, agreements and conditions set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the capitalized terms used in this
Agreement shall have the meanings specified or referred to in Appendix I
hereto which is incorporated herein by reference.
ARTICLE II
THE MERGER
Section 2.1 Effects of the Merger.
(a) The Surviving Corporation. Upon the terms and subject to the
conditions of this Agreement and in accordance with the Hawaii Business
Corporation Act (the "Hawaii Law"), and the Delaware General Corporation Law
of the State of Delaware (the "Delaware Law"), at the Effective Time (as
defined below), HNWC shall be merged with and into Merger Sub. As a result
of the Merger, the separate corporate existence of HNWC shall cease and Merger
Sub shall continue as the surviving corporation in the Merger (the "Surviving
Corporation").
(b) Effective Time. As soon as practicable after the Closing of the
Merger, the Articles of Merger for the Merger in substantially the form
attached hereto as Exhibit B, prepared and executed in accordance with the
relevant provisions of the Hawaii Law, shall be filed with the Secretary of
State of Hawaii, and the Certificate of Merger for the Merger, in
substantially the form attached hereto as Exhibit C, prepared and executed in
accordance with the relevant provisions of the Delaware Law, shall be filed
with the Secretary of State of Delaware. The parties hereto agree to take all
such further actions as may be required by law to make the Merger effective.
The Merger shall become effective in accordance with the terms of this
Agreement, the Articles of Merger and the Certificate of Merger at the time
and date contemplated therein (such time and date being referred to herein as
the "Effective Time").
(c) The Closing. The Closing of the Merger and transactions
contemplated by this Agreement will take place at 10:00 a.m., west coast time,
on a date mutually agreed upon by the parties hereto, which shall be no later
than the third Business Day following the date on which all of the conditions
to the obligations of the parties hereunder set forth in Article VIII hereof
have been satisfied or waived. The place of Closing shall be at such place as
may be mutually agreed upon by the parties hereto.
(d) Effects of the Merger. At and after the Effective Time, the Merger
will have the effects set forth in the Delaware Law and Hawaii Law. Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
Merger Sub and HNWC shall be vested in the Surviving Corporation, and all
debts, liabilities and duties of Merger Sub and HNWC shall become the debts,
liabilities and duties of the Surviving Corporation. In addition, the Merger
shall have the following effects:
(i) Articles of Incorporation. The Certificate of Incorporation
of Merger Sub as in effect immediately prior to the Effective Time (as set
forth in Exhibit D hereto) shall be the Certificate of Incorporation of the
Surviving Corporation.
(ii) Bylaws. The Bylaws of Merger Sub as in effect immediately
prior to the Effective Time (as set forth in Exhibit E hereto) shall be the
Bylaws of the Surviving Corporation.
(iii) Board of Directors. At the Effective Time, the Board of
Directors of the Surviving Corporation shall be as listed on Exhibit F hereto.
(iv) Management. At the Effective Time, the principal officers of
the Surviving Corporation at the Effective Time shall be as listed on
Exhibit G.
Section 2.2 Effect of the Merger on HNWC Capital Stock. Subject to the
provisions of this Article II, at the Effective Time, by virtue of the Merger
and without any action on the part of the parties hereto or their respective
stockholders:
(a) Common Merger Consideration. Each share of HNWC Common Stock
outstanding immediately prior to the Effective Time shall be converted into
and become a right to receive a fractional share of AMCON Common Stock equal
to the product of the Common Exchange Ratio times one share of HNWC Common
Stock, which stock, together with any cash in lieu of fractional shares of
AMCON Common Stock to be paid pursuant to Section 2.4 of this Agreement, are
referred to herein as (the "Common Merger Consideration"), (i) except for
shares of HNWC Common Stock held by persons who object to the Merger and
comply with all provisions of the Hawaii Law concerning the right of such
holders to dissent from the Merger and demand appraisal for their shares
("Common Dissenters' Shares") which shall be cancelled and shall cease to
exist and as to which consideration shall be paid solely in accordance with
Section 2.6 of this Agreement, (ii) except for shares of HNWC Common Stock
held by HNWC as treasury stock which shall be cancelled without payment of any
consideration therefor and shall cease to exist, and (iii) except for shares
of HNWC Common Stock owned by AMCON or Merger Sub immediately prior to the
Effective Time, other than the 2,000,000 shares of HNWC Common Stock acquired
from HNWC by AMCON and issued on or after February 1, 2001 (the "Non-Excluded
Shares", which 2,000,000 Non-Excluded Shares include 1,250,000 shares of HNWC
Common Stock which will be received by AMCON upon the conversion of the 10%
Secured Convertible Note dated June 21, 2001 in the principal amount of
$500,000 issued by HNWC to AMCON (the "$500,000 Convertible Note")), all of
which shares, other than the Non-Excluded Shares, shall be cancelled without
payment of any consideration therefor and shall cease to exist and the Non-
Excluded Shares shall be converted into the Common Merger Consideration. The
shares of HNWC Common Stock referred to in clauses in (i), (ii) and (iii) of
this Section 2.2(a) as being excluded from the conversion into Common Merger
Consideration (which does not encompass the Non-Excluded Shares) are sometimes
referred to collectively in this Agreement as the "Excluded Shares".
Fractions of a share determined pursuant to this Section 2.2(a) shall be
rounded to three decimal places.
(b) Common Exchange Ratio. The Common Exchange Ratio shall be equal to
the quotient of (i) the quotient of (x) $2,865,348, divided by (y) the Average
AMCON Stock Price, divided by (ii) the number of shares of HNWC Common Stock
outstanding immediately prior to the Effective Time (excluding the Excluded
Shares). Notwithstanding the foregoing, (i) if the Average AMCON Stock Price
is greater than $8.00, then the Average AMCON Stock Price shall be deemed to
be $8.00 and thus the Common Exchange Ratio shall be the quotient of
(A) 358,168, divided by (B) the number of shares of HNWC Common Stock
outstanding immediately prior to the Effective Time (excluding the Excluded
Shares), or (ii) if the Average AMCON Stock Price is less than $6.00, then the
Average AMCON Stock Price shall be deemed to be $6.00 and thus the Common
Exchange Ratio shall be the quotient of (C) 477,558, divided by (D) the number
of shares of HNWC Common Stock outstanding immediately prior to the Effective
Time (excluding the Excluded Shares). The Common Exchange Ratio determined
pursuant to this Section 2.2(b) shall be rounded to three decimal places.
(c) Certificates. At the Effective Time, each certificate theretofore
representing shares of HNWC Common Stock ("Common Certificates"), except for
the Excluded Shares, shall, without any action on the part of AMCON, HNWC,
Merger Sub or the holder thereof, represent, and shall be deemed to represent
from and after the Effective Time, the number of shares of AMCON Common Stock
as determined in accordance with Sections 2.2(a) and (b) above and shall cease
to represent any rights in any shares of capital stock of HNWC. At the
Effective Time, each holder of a Common Certificate which, prior to the
Effective Time, represented shares of HNWC Common Stock (except for Common
Dissenters' Shares), shall cease to have any rights with respect to any shares
of HNWC capital stock. In accordance herewith, former holders of HNWC Common
Stock (except for the Excluded Shares) shall, from and after the Effective
Time, be deemed from and after the Effective Time to be holders of the shares
of AMCON Common Stock into which such shares of HNWC Common Stock have been
converted in accordance with Section 2.2(a) and (b) hereof.
Section 2.3 Merger Sub Common Stock. Each share of common stock of Merger
Sub outstanding and each share held in treasury immediately prior to the
Effective Time shall be converted into and become one share of AMCON Common
Stock.
Section 2.4 Fractional Shares. No fraction of a share of AMCON Common Stock
shall be issued in connection with the conversion of HNWC Common Stock in the
Merger and the distribution of AMCON Common Stock in respect thereof, but in
lieu of such fraction, the Exchange Agent shall make a cash payment (without
interest and subject to the payment of any applicable withholding Taxes) equal
to the same fraction of the market value of a full share of AMCON Common
Stock, computed on the basis of the mean of the high and low sales prices of
AMCON Common Stock as reported on the American Stock Exchange ("AMEX") on the
first full day on which AMCON Common Stock is traded on the AMEX after the
Effective Time (all such fractions of share of AMCON Common Stock are referred
to herein as "Fractional Shares").
Section 2.5 Stock Options, Warrants and Other Stock Related Rights.
(a) On or prior to the Effective Time, HNWC will take all action
necessary such that each stock option, warrant or other stock related right
prior to the Effective Time and which remains outstanding immediately prior to
the Effective Time shall cease to represent a right with respect to shares of
HNWC Common Stock and shall be converted, at the Effective Time, into a right,
on the same terms and conditions as were applicable under such stock option,
warrant or other stock related right (but taking into account any changes
thereto), with respect to that number of shares of AMCON Common Stock
determined by multiplying the number of shares of HNWC Common Stock subject to
such stock option, warrant or other stock related right, as applicable, by the
Common Exchange Ratio, rounded, if necessary, to the nearest whole share of
AMCON Common Stock, at a price per share (rounded to the nearest one-hundredth
of a cent) equal to the per-share exercise price specified in such stock
option, warrant or stock related right, as applicable, divided by the Common
Exchange Ratio; provided, however, that in the case of any stock option to
which Section 421 of the Code applies by reason of its qualification under
Section 422 of the Code, the option price, the number of shares subject to
such option and the terms and conditions of exercise of such option shall be
determined in a manner consistent with the requirements of Section 424(a) of
the Code.
(b) As soon as practicable after the Effective Time, AMCON shall deliver
to the holders of stock options, warrants or other stock related rights
appropriate notices setting forth such holders' rights pursuant to the
applicable documents and instruments (except that there shall be no
acceleration in the vesting or exercisability of such option, warrants or
stock related rights by reason of this Agreement, the Merger or the other
matters contemplated by this Agreement) and the agreements evidencing the
grants of such stock options, warrants or other stock related rights shall
continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 2.5 after giving effect to the Merger).
To the extent permitted by law, AMCON shall comply with the terms of the HNWC
Employee Plans and shall take such reasonable steps as are necessary or
required by, and subject to the provisions of, such HNWC Employee Plans, to
have the stock options which qualified as incentive stock options prior to the
Effective Time continue to qualify as incentive stock options of AMCON after
the Effective Time.
(c) AMCON shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of AMCON Common Stock for delivery upon
exercise of stock options, warrants or other stock related rights in
accordance with this Section 2.5.
Section 2.6 Appraisal Rights. Notwithstanding Section 2.2, shares of HNWC
Common Stock outstanding immediately prior to the Effective Time and held by a
holder other than AMCON or Merger Sub who has not voted in favor of the Merger
or consented thereto in writing and who has demanded appraisal for such shares
of HNWC Common Stock in accordance with the Hawaii Law shall not be converted
into the Merger Consideration unless such holder fails to perfect or withdraws
or otherwise loses his right to appraisal. If after the Effective Time such
holder fails to perfect or withdraws or loses his right to appraisal, such
shares of HNWC Common Stock shall be treated as if they had been converted as
of the Effective Time into the Merger Consideration. HNWC shall give the
Surviving Corporation and AMCON prompt notice of any demands received by HNWC
for appraisal of shares of HNWC Common Stock, and the Surviving Corporation
and AMCON shall have the right to participate in all negotiations and
proceedings with respect to such demands. HNWC shall not, except with the
prior written consent of the Surviving Corporation and AMCON, make any payment
with respect to, or settle or offer to settle, any such demands.
Section 2.7 Affiliates. Notwithstanding anything to the contrary herein, to
the fullest extent permitted by law, no certificates representing shares of
AMCON Common Stock or cash shall be delivered to a Person who may be deemed an
"affiliate" of HNWC in accordance with Section 7.8 hereof for purposes of Rule
145 under the Securities Act, until such Person has executed and delivered a
HNWC Affiliate Agreement (as defined in Section 7.8) pursuant to Section 7.8.
Section 2.8 Exchange Fund. Prior to the Effective Time, AMCON shall appoint
a commercial bank or trust company reasonably acceptable to HNWC having net
capital of not less than $50,000,000, or a subsidiary thereof, to act as
exchange agent hereunder for the purpose of exchanging Common Certificates
representing the Merger Consideration (the "Exchange Agent"). At or prior to
the Effective Time, AMCON shall deposit with the Exchange Agent, in trust for
the benefit of holders of Common Certificates which immediately prior to the
Effective Time represented outstanding shares of HNWC Common Stock whose
shares will be converted into shares of AMCON Common Stock at the Effective
Time, certificates representing the AMCON Common Stock issued pursuant to
Section 2.2 upon conversion of outstanding shares of HNWC Common Stock. AMCON
agrees to make available to the Exchange Agent from time to time as needed,
cash sufficient to pay cash in lieu of fractional shares pursuant to Section
2.4 and any dividends and other distributions pursuant to Section 2.10. Any
cash and certificates representing AMCON Common Stock deposited with the
Exchange Agent shall hereinafter be referred to as the "Exchange Fund."
Section 2.9 Exchange Procedures. As soon as reasonably practicable after the
Effective Time, AMCON shall cause the Exchange Agent to mail to each holder of
a Common Certificate (i) a letter of transmittal which shall specify that
delivery shall be effected, and risk of loss and title to the Common
Certificates shall pass, only upon delivery of the Common Certificates to the
Exchange Agent, and which letter shall be in customary form and have such
other provisions as AMCON may reasonably specify and (ii) instructions for
effecting the surrender of such Common Certificates in exchange for the
certificates representing the applicable Merger Consideration. Upon surrender
of a Common Certificate to the Exchange Agent together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, and such other documents as may reasonably be required by the
Exchange Agent, the holder of such Common Certificate shall be entitled to
receive in exchange therefor (A) certificates representing one or more shares
of AMCON Common Stock representing, in the aggregate, the whole number of
shares into which such holder's shares of HNWC Common Stock have been
converted pursuant to Section 2.2 (after taking into account all shares of
HNWC Common Stock then held by such holder), and (B) a check in the amount
equal to the cash that such holder has the right to receive in lieu of any
fractional shares of AMCON Common Stock pursuant to Section 2.4 and dividends
and other distributions pursuant to Section 2.10. No interest will be paid or
will accrue on any cash payable pursuant to Section 2.4 or Section 2.10. In
the event of a transfer of ownership of HNWC Common Stock which is not
registered in the transfer records of HNWC, certificates representing one or
more shares of AMCON Common Stock representing, in the aggregate, the proper
number of shares of AMCON Common Stock, a check in the proper amount of cash
in lieu of any fractional shares of AMCON Common Stock pursuant to Section 2.4
and any dividends or other distributions to which such holder is entitled
pursuant to Section 2.10, may be issued with respect to such HNWC Common Stock
to such a transferee if the Common Certificate which formerly represented such
shares is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid.
Section 2.10 Distributions with Respect to Unexchanged Common Certificates.
No dividends or other distributions declared or made with respect to shares of
AMCON Common Stock with a record date after the Effective Time shall be paid
to the holder of any unsurrendered Common Certificate with respect to the
certificate representing shares of AMCON Common Stock that such holder would
be entitled to receive upon surrender of such Common Certificate and no cash
payment in lieu of fractional shares of AMCON Common Stock shall be paid to
any such holder pursuant to Section 2.4 until such holder shall surrender such
Common Certificate in accordance with Section 2.9. Subject to the effect of
applicable laws, following surrender of any such Common Certificate, there
shall be paid to such holder of shares of AMCON Common Stock issuable in
exchange therefor, without interest, (a) promptly after the time of such
surrender, the amount of any cash payable in lieu of fractional shares of
AMCON Common Stock to which such holder is entitled pursuant to Section 2.4
and the amount of dividends or other distributions with a record date after
the Effective Time theretofore paid with respect to such whole shares of AMCON
Common Stock and (b) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior
to such surrender and a payment date subsequent to such surrender payable with
respect to such shares of AMCON Common Stock.
Section 2.11 No Further Ownership Rights in HNWC Common Stock. All shares of
AMCON Common Stock and cash paid upon conversion of shares of HNWC Common
Stock in accordance with the terms of Article II (including any cash paid
pursuant to Section 2.4 or Section 2.10) shall be deemed to have been issued
or paid in full satisfaction of all rights pertaining to the shares of HNWC
Common Stock.
Section 2.12 Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of Common Certificates for six
months after the Effective Time shall be delivered to AMCON or otherwise on
the instruction of AMCON, and any holders of the Common Certificates who have
not theretofore complied with this Article II shall thereafter look only to
AMCON for the certificates representing the Merger Consideration with respect
to the shares of HNWC Common Stock formerly represented thereby to which such
holders are entitled pursuant to Section 2.2, any cash in lieu of fractional
shares of AMCON Common Stock to which such holders are entitled pursuant to
Section 2.4 and any dividends or distributions with respect to shares of AMCON
Common Stock to which such holders are entitled pursuant to Section 2.10. Any
such portion of the Exchange Fund remaining unclaimed by holders of Common
Certificates which, prior to the Effective Time, represented shares of HNWC
Common Stock five years after the Effective Time (or such earlier date
immediately prior to such time as such amounts would otherwise escheat to or
become property of any Governmental Entity) shall, to the extent permitted by
law, become the property of AMCON free and clear of any claims or interest of
any Person previously entitled thereto.
Section 2.13 No Liability. None of AMCON, the Surviving Corporation or the
Exchange Agent shall be liable to any Person in respect of any Merger
Consideration from the Exchange Fund delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
Section 2.14 Investment of the Exchange Fund. The Exchange Agent shall invest
any cash included in the Exchange Fund as directed by AMCON on a daily basis.
Any interest and other income resulting from such investments shall promptly
be paid to AMCON.
Section 2.15 Lost Common Certificates. If any Common Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact
by the Person claiming such Common Certificate to be lost, stolen or destroyed
and, if required by AMCON, the posting by such Person of a bond in such
reasonable amount as AMCON may direct as indemnity against any claim that may
be made against it with respect to such Common Certificate, the Exchange Agent
will deliver in exchange for such lost, stolen or destroyed Common Certificate
a certificate representing the applicable Merger Consideration with respect to
the shares of HNWC Common Stock, any cash in lieu of fractional shares of
AMCON Common Stock, and unpaid dividends and distributions on shares of AMCON
Common Stock issued in respect thereof, pursuant to this Agreement.
Section 2.16 Withholding Rights. Each of the Surviving Corporation and AMCON
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Common Certificates which,
prior to the Effective Time, represented shares of HNWC Common Stock, such
amounts as it is required to deduct and withhold with respect to the making of
such payment under the Code and the rules and regulations promulgated
thereunder, or any provision of state, local or foreign tax law. To the
extent that amounts are so withheld by the Surviving Corporation or AMCON, as
the case may be, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the shares of HNWC Common
Stock in respect of which such deduction and withholding was made by the
Surviving Corporation or AMCON, as the case may be.
Section 2.17 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of HNWC or Merger Sub, any
deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of HNWC or Merger Sub, any other actions and things to
vest, perfect or confirm of record or otherwise in the Surviving Corporation
any and all right, title and interest in, to and under any of the rights,
properties or assets acquired or to be acquired by the Surviving Corporation
as a result of, or in connection with, the Merger.
Section 2.18 Stock Transfer Books. The stock transfer books of HNWC shall be
closed immediately upon the Effective Time and there shall be no further
registration of transfers of shares of HNWC Common Stock thereafter on the
records of HNWC. On or after the Effective Time, any Common Certificates
presented to the Exchange Agent or AMCON for any reason shall be exchanged for
certificates representing the Merger Consideration with respect to the shares
of HNWC Common Stock formerly represented thereby, any cash in lieu of
fractional shares of AMCON Common Stock to which the holders thereof are
entitled pursuant to Section 2.4 and any dividends or other distributions to
which the holders thereof are entitled pursuant to Section 2.10.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMCON
Except as disclosed in (i) the AMCON Disclosure Schedule dated the date
hereof (each section or subsection of which Disclosure Schedule qualifies the
correspondingly numbered representation, warranty or covenant to the extent
specified therein) or (ii) the AMCON SEC Documents filed prior to the date
hereof, AMCON represents and warrants to HNWC that, as of the date hereof
(except for representations and warranties that address matters only as of a
specific date, in which case such representations are true and correct on and
as of such specific date):
Section 3.1 Corporate Existence and Power. AMCON is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware, and has all corporate powers required to carry on its
business as now conducted. AMCON is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except where the failure to be
so qualified, individually or in the aggregate, would not be reasonably likely
to have an AMCON Material Adverse Effect. AMCON has heretofore made available
to HNWC true and complete copies of AMCON's certificate of incorporation and
bylaws as currently in effect.
Section 3.2 Corporate Authorization. The execution, delivery and performance
by AMCON of this Agreement and the consummation by AMCON of the transactions
contemplated hereby are within AMCON's corporate powers and, as of the date
hereof, have been duly authorized by all necessary corporate action. Assuming
that this Agreement constitutes the valid and binding obligation of HNWC, this
Agreement constitutes, as of the date hereof, a valid and binding agreement of
AMCON, enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and
similar laws, now or hereafter in effect, relating to or affecting creditors'
rights and remedies generally and to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
Section 3.3 Governmental Authorization. The execution, delivery and
performance by AMCON of this Agreement and the consummation by AMCON of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any Governmental Entity other than (a) the filing of (i) Articles
of Merger in accordance with the Hawaii Law, (ii) a Certificate of Merger in
accordance with the Delaware Law, and (iii) appropriate documents with the
relevant authorities of other states or jurisdictions in which AMCON or any
AMCON Subsidiary is qualified to do business; (b) compliance with any
applicable requirements of the Securities Act and the Exchange Act; (c) such
as may be required under any applicable state securities or blue sky laws; and
(d) such other consents, approvals, actions, orders, authorizations,
registrations, declarations and filings that, if not obtained or made, would
not, individually or in the aggregate, (x) be reasonably likely to have an
AMCON Material Adverse Effect or (assuming for this purpose that the Effective
Time had occurred) a Surviving Corporation Material Adverse Effect, or (y)
prevent or materially impair the ability of AMCON to consummate the
transactions contemplated by this Agreement.
Section 3.4 Non-Contravention. The execution, delivery and performance by
AMCON of this Agreement and the consummation by AMCON of the transactions
contemplated hereby do not and will not (a) contravene or conflict with
AMCON's certificate of incorporation or bylaws, (b) assuming compliance with
the matters referred to in Section 3.3, contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to AMCON or any AMCON
Subsidiary, (c) constitute a default under or give rise to a right of
termination, cancellation or acceleration of any right or obligation of AMCON
or any AMCON Subsidiary or to a loss of any benefit or status to which AMCON
or any AMCON Subsidiary is entitled under any provision of any agreement,
contract or other instrument binding upon AMCON or any AMCON Subsidiary or any
license, franchise, permit or other similar authorization held by AMCON or any
AMCON Subsidiary, or (d) result in the creation or imposition of any Lien on
any asset of AMCON or any AMCON Subsidiary other than, in the case of each of
(b), (c) and (d), any such items that would not, individually or in the
aggregate (x) be reasonably likely to have an AMCON Material Adverse Effect or
(y) prevent or materially impair the ability of AMCON to consummate the
transactions contemplated by this Agreement.
Section 3.5 Capitalization.
(a) The authorized capital stock of AMCON consists of 15,000,000 shares
of AMCON Common Stock, $0.01 per value per share, and 1,000,000 shares of
preferred stock, $0.01 par value per share, of AMCON ("AMCON Preferred
Stock"). At the close of business on September 30, 2000, (i) 2,737,551 shares
of AMCON Common Stock were issued and outstanding, (ii) stock options ("AMCON
Stock Options") to purchase an aggregate of 389,620 shares of AMCON Common
Stock were issued and outstanding (of which options to purchase an aggregate
of 188,166 shares of AMCON Common Stock were exercisable), (iii) no shares of
AMCON Common Stock were held in its treasury and (iii) no shares of AMCON
Preferred Stock were issued and outstanding. All outstanding shares of
capital stock of AMCON have been duly authorized and validly issued and are
fully paid and nonassessable.
(b) As of the date hereof, except (i) as set forth in this Section 3.5,
and (ii) for changes since March 31, 2001, resulting from the exercise of
stock options outstanding on such date, there are no outstanding (x) shares of
capital stock or other voting securities of AMCON, (y) securities of AMCON
convertible into or exchangeable for shares of capital stock or voting
securities of AMCON, or (z) options or other rights to acquire from AMCON, and
no obligation of AMCON to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of AMCON (the items in clauses (x), (y) and (z) being referred to
collectively as the "AMCON Securities"). There are no outstanding obligations
of AMCON or any AMCON Subsidiary to repurchase, redeem or otherwise acquire
any AMCON Securities. There are no outstanding contractual obligations of
AMCON to provide funds to, or make any investment (in the form of a loan,
capital contribution or otherwise) in, any other Person other than in the
ordinary course of business consistent with past practice. There are no
stockholder agreements, voting trusts or other agreements or understandings to
which AMCON is a party, or of which AMCON is aware, relating to voting,
registration or disposition of any shares of capital stock of AMCON or
granting to any person or group of persons the right to elect, or to designate
or nominate for election, a director to the board of directors of AMCON.
Section 3.6 Subsidiaries.
(a) Each Significant Subsidiary of AMCON is a corporation duly
incorporated or an entity duly organized, and is validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
has all powers and authority and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted and is duly qualified to do business as a foreign entity and is
in good standing in each jurisdiction where the character of the property
owned or leased by it or the nature of its activities makes such qualification
necessary, in each case with such exceptions as, individually or in the
aggregate, would not be reasonably likely to have, an AMCON Material Adverse
Effect.
(b) All of the outstanding shares of capital stock of, or other
ownership interest in, each AMCON Subsidiary has been validly issued and is
fully paid and nonassessable. All of the outstanding capital stock of, or
other ownership interest in, each of AMCON's Subsidiaries, is owned, directly
or indirectly, by AMCON, is owned free and clear of any Lien and free of any
other limitation or restriction (including any limitation or restriction on
the right to vote, sell or otherwise dispose of such capital stock or other
ownership interests) with such exceptions as, individually or in the
aggregate, would not be reasonably likely to have, an AMCON Material Adverse
Effect. There are no outstanding (i) securities of AMCON or any of the AMCON
Subsidiaries convertible into or exchangeable or exercisable for shares of
capital stock or other voting securities or ownership interests in any of the
AMCON Subsidiaries, (ii) options, warrants or other rights to acquire from
AMCON or any of the AMCON Subsidiaries, and no other obligation of AMCON or
any of the AMCON Subsidiaries to issue, any capital stock, voting securities
or other ownership interests in, or any securities convertible into or
exchangeable or exercisable for any capital stock, voting securities or
ownership interests in, any of the AMCON Subsidiaries or (iii) obligations of
AMCON or any of the AMCON Subsidiaries to repurchase, redeem or otherwise
acquire any outstanding securities of any of the AMCON Subsidiaries or any
capital stock of, or other ownership interests in, any of the AMCON
Subsidiaries.
Section 3.7 AMCON SEC Documents.
(a) AMCON has made available to HNWC the AMCON SEC Documents. AMCON has
filed all reports, filings, registration statements and other documents
required to be filed by it with the SEC since September 30, 1997. No AMCON
Subsidiary is required to file any form, report, registration statement or
prospectus or other document with the SEC.
(b) As of its filing date, each AMCON SEC Document complied as to form
in all material respects with the applicable requirements of the Securities
Act and/or the Exchange Act, as the case may be.
(c) No AMCON SEC Document filed pursuant to the Exchange Act contained,
as of its filing date, any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No AMCON SEC Document, as amended or supplemented, if applicable,
filed pursuant to the Securities Act contained, as of the date such document
or amendment became effective, any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
Section 3.8 Financial Statements; No Material Undisclosed Liabilities.
(a) The audited consolidated financial statements of AMCON included in
the AMCON 10-K fairly present in all material respects, in conformity with
GAAP consistently applied (except as may be indicated in the notes thereto),
the consolidated financial position of AMCON and its consolidated Subsidiaries
as of the dates thereof and their consolidated results of operations,
consolidated cash flows and changes in stockholders' equity for the periods
then ended (subject to normal year-end adjustments in the case of any
unaudited interim financial statements).
(b) There are no liabilities of AMCON or any AMCON Subsidiary of any
kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, in each case, that are required by GAAP to be set
forth on a consolidated balance sheet of AMCON, other than:
(i) liabilities or obligations disclosed or provided for in the
AMCON Balance Sheet or disclosed in the notes thereto;
(ii) liabilities or obligations under this Agreement or incurred
in connection with the transactions contemplated hereby;
(iii) current liabilities incurred in the ordinary course of
business since September 30, 2000; and
(iv) other liabilities or obligations that individually or in the
aggregate, would not be reasonably likely to have an AMCON Material Adverse
Effect.
(c) AMCON and the AMCON Subsidiaries keep proper accounting records in
which all material assets and liabilities, and all material transactions, of
AMCON and the AMCON Subsidiaries are recorded in conformity with GAAP. No
part of AMCON's or any AMCON Subsidiary's accounting system or records, or
access thereto, is under the control of a Person who is not an employee of
AMCON or such Subsidiary.
Section 3.9 Information to be Supplied.
(a) The information to be supplied by AMCON expressly for inclusion or
incorporation by reference in the Proxy Statement/Prospectus will (i) in the
case of the Registration Statement, at the time it becomes effective, not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading and (ii) in the case of the remainder of the
Proxy Statement/Prospectus, at the time of the mailing thereof, and at the
time of the Special Meeting, not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy
Statement/Prospectus will comply (with respect to information relating to
AMCON) as to form in all material respects with the provisions of the
Securities Act and the Exchange Act.
(b) Notwithstanding the foregoing, AMCON makes no representation or
warranty with respect to any statements made or incorporated by reference in
the Proxy Statement/Prospectus based on information supplied by HNWC.
Section 3.10 Absence of Certain Changes. Since September 30, 2000, except as
otherwise expressly contemplated by this Agreement, AMCON and the AMCON
Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been (a) any damage, destruction or other
casualty loss (whether or not covered by insurance) affecting the business or
assets of AMCON or any AMCON Subsidiary that, individually or in the
aggregate, has had or would be reasonably likely to have an AMCON Material
Adverse Effect, (b) any action, event, occurrence, development or state of
circumstances or facts that, individually or in the aggregate, has had or
would be reasonably likely to have an AMCON Material Adverse Effect or (c) any
incurrence, assumption or guarantee by AMCON of any material indebtedness for
borrowed money other than in the ordinary course and in amounts and on terms
consistent with past practices.
Section 3.11 Litigation. Section 3.11 of the AMCON Disclosure Schedule
contains a list and description of each action, suit, investigation,
arbitration or proceeding pending against, or to the Knowledge of AMCON
threatened against, AMCON or any AMCON Subsidiary or any of their respective
assets or properties before any arbitrator or Governmental Entity. None of
such actions, suits, investigations, arbitrations or proceedings, individually
or in the aggregate, would be reasonably likely to have, an AMCON Material
Adverse Effect. There are no outstanding judgments, decrees, injunctions,
awards or orders against AMCON that would be reasonably likely to have,
individually or in the aggregate, an AMCON Material Adverse Effect.
Section 3.12 Taxes.
(a) All Tax returns, statements, reports and forms (collectively, the
"AMCON Returns") required to be filed with any taxing authority by, or with
respect to, AMCON and the AMCON Subsidiaries have been filed in substantial
compliance with all applicable laws.
(b) AMCON and the AMCON Subsidiaries have timely paid all Taxes shown as
due and payable on the AMCON Returns that have been so filed, and all other
Taxes not subject to reporting obligations, and, as of the time of filing, the
AMCON Returns correctly reflected the facts regarding the income, business,
assets, operations, activities and the status of AMCON and the AMCON
Subsidiaries (other than Taxes that are being contested in good faith and for
which adequate reserves are reflected on the AMCON Balance Sheet).
(c) AMCON and the AMCON Subsidiaries have made provision for all Taxes
payable by them for which no AMCON Return has yet been filed.
(d) The charges, accruals and reserves for Taxes with respect to AMCON
and the AMCON Subsidiaries reflected on the AMCON Balance Sheet are adequate
under GAAP to cover the tax liabilities accruing through the date thereof.
(e) There is no action, suit, proceeding, audit or claim now proposed or
pending against or with respect to AMCON or any of the AMCON Subsidiaries in
respect of any Tax that would be reasonably likely to have an AMCON Material
Adverse Effect.
(f) Neither AMCON nor any of the AMCON Subsidiaries has been a member of
an affiliated, consolidated, combined or unitary group other than one of which
AMCON was the common parent.
(g) Neither AMCON nor any of the AMCON Subsidiaries holds any asset
subject to a consent under Section 341(f) of the Code.
Section 3.13 Employee Benefits.
(a) Section 3.13(a) of the AMCON Disclosure Schedule contains a correct
and complete list identifying each material "employee benefit plan", as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA"), each employment, severance or similar contract, plan, arrangement
or policy and each other plan or arrangement (written or oral) providing for
compensation, bonuses, profit-sharing, stock option or other stock related
rights or other forms of incentive or deferred compensation, vacation
benefits, insurance coverage (including any self-insured arrangements), health
or medical benefits, disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance
benefits) that is maintained, administered or contributed to by AMCON or any
ERISA Affiliate (as defined below) of AMCON and covers any employee or former
employee of AMCON or any AMCON Subsidiary. Copies of such plans (and, if
applicable, related trust agreements) and all amendments thereto and written
interpretations thereof have been furnished, or will be made available upon
request, to HNWC together with the most recent annual report (Form 5500
including, if applicable, Schedule B thereto) and summary plan description
prepared in connection with any such plan. Such plans are referred to
collectively herein as the "AMCON Employee Plans". For purposes of this
Section 3.13, "ERISA Affiliate" of any Person means any other Person which,
together with such Person, would be treated as a single employer under Section
414 of the Code.
(b) No AMCON Employee Plan is now or at any time has been subject to
Part 3, Subtitle B of Title I or ERISA or Title IV of ERISA. At no time has
AMCON or any of its ERISA Affiliates contributed to, or been required to
contribute to, any "multiemployer plan," as defined in Section 3(37) or ERISA
(a "Multiemployer Plan"), and neither AMCON nor any of its ERISA Affiliates
has, or ever has had, any liability (contingent or otherwise) relating to the
withdrawal or partial withdrawal from a multiemployer Plan. To the Knowledge
of AMCON, nothing has been done or omitted to be done and no transaction or
holding of any asset under or in connection with any AMCON Employee Plan has
occurred that will make AMCON or any AMCON Subsidiary, or any officer or
director of AMCON or any AMCON Subsidiary, subject to any liability under
Title I of ERISA or liable for any tax pursuant to Section 4975 of the Code
(assuming the taxable period of any such transaction expired as of the date
hereof) that would be reasonably likely to have an AMCON Material Adverse
Effect.
(c) Each AMCON Employee Plan that is intended to be qualified under
Section 401(a) of the Code now meets, and at all time since its inception have
met, the requirements for such qualification, and each trust forming a part
thereof is now, and at all times since its inception has been, exempt from tax
pursuant to Section 501(a) of the Code. Each such plan has received a
determination letter from the Internal Revenue Service to the effect that such
plan is qualified and its related trust is exempt from federal income taxes.
AMCON has furnished, or will make available upon request, to HNWC copies of
the most recent Internal Revenue Service determination letters with respect to
each such AMCON Employee Plan. Each AMCON Employee Plan has been maintained
and administered in substantial compliance with its terms (except that in any
case in which any AMCON Employee Plan is currently required to comply with a
provision of ERISA or of the Code, but is not yet required to be amended to
reflect such provision, such plan has been maintained and administered in
accordance with the provision) and with the requirements prescribed by any and
all statutes, orders, rules and regulations, including but not limited to
ERISA and the Code, which are applicable to such AMCON Employee Plan. All
material reports, returns and similar documents with respect to each AMCON
Employee Plan required to be filed with any government agency or distributed
to any AMCON Employee Plan participant have been duly timely filed and
distributed.
(d) There is no contract, agreement, plan or arrangement that, as a
result of the Merger, would be reasonably likely to obligate AMCON to make any
payment of any amount that would not be deductible pursuant to the terms of
Section 162(m) or Section 280G of the Code.
(e) Except as disclosed in writing to HNWC prior to the date hereof,
there has been no amendment to, written interpretation or announcement
(whether or not written) relating to, or change in employee participation or
coverage under, any AMCON Employee Plan that would increase materially the
expense of maintaining such AMCON Employee Plan above the level of the expense
incurred in respect thereof for the fiscal year ended September 30, 2000.
(f) No AMCON Employee Plan promises or provides post-retirement medical,
life insurance or other benefits due now or in the future to current, former
or retired employees of AMCON or any Subsidiary.
Section 3.14 Compliance with Laws; Licenses, Permits and Registrations.
(a) Neither AMCON nor any AMCON Subsidiary is in violation of, or has
violated, any applicable provisions of any laws, statutes, ordinances,
regulations, judgments, injunctions, orders or consent decrees, except for any
such violations that, individually or in the aggregate, would not be
reasonably likely to have an AMCON Material Adverse Effect.
(b) Each of AMCON and the AMCON Subsidiaries has all permits, licenses,
approvals, authorizations of and registrations with and under all federal,
state, local and foreign laws, and from all Governmental Entities required by
AMCON and the AMCON Subsidiaries to carry on their respective businesses as
currently conducted, except where the failure to have any such permits,
licenses, approvals, authorizations or registrations, individually or in the
aggregate, would not be reasonably likely to have an AMCON Material Adverse
Effect.
Section 3.15 Title to Properties.
(a) AMCON and each AMCON Subsidiary have good and marketable title to,
or valid leasehold interests in, all their properties and assets except for
such as are no longer used or useful in the conduct of their businesses or as
have been disposed of in the ordinary course of business and except for
defects in title, easements, restrictive covenants and similar Liens,
encumbrances or impediments that do not materially interfere with the ability
of AMCON and its Subsidiaries to use their respective assets and conduct their
businesses, as currently used or conducted. All such assets and properties,
other than assets and properties in which AMCON or any AMCON Subsidiary has
leasehold interests, are free and clear of all Liens, except for Liens that,
in the aggregate, do not and will not materially interfere with the ability of
AMCON and the AMCON Subsidiaries to use their respective assets and conduct
their businesses, as currently conducted.
(b) AMCON and each AMCON Subsidiary (i) are in substantial compliance
with the terms of all leases to which they are a party and under which they
are in occupancy, and all such leases are in full force and effect and (ii)
enjoy peaceful and undisturbed possession under all such leases.
Section 3.16 Intellectual Property.
(a) AMCON and the AMCON Subsidiaries own or have a valid license to use
(i) all fictional business names, trading names, registered and unregistered
trademarks, service marks, domain names and applications (collectively,
"Marks"); (ii) all patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "Patents"); (iii) all
copyrights in both published works and unpublished works (collectively,
"Copyrights"); (iv) all rights in mask works (collectively, "Rights in Mask
Works"); and (v) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process technology,
plans, drawings, and blue prints (collectively, "Trade Secrets"); necessary to
(x) carry on the business of AMCON as currently conducted or as proposed to be
conducted by the Surviving Corporation, to (y) make, have made, use,
distribute and sell all products currently sold by AMCON and all products in
development.
(b) There are no outstanding and, to AMCON's Knowledge, no Threatened
disputes or disagreements with respect to any agreement to which AMCON or an
AMCON subsidiary is a party, relating to any of AMCON's Marks, Patents,
Copyrights, Rights in Mask Works, or Trade Secrets (collectively, "AMCON
Intellectual Property").
(c) AMCON is the owner of all right, title, and interest in and to the
AMCON Intellectual Property, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims.
(d) All former and current employees of AMCON have executed written
contracts with AMCON that assign to AMCON all rights to any inventions,
improvements, discoveries, or information relating to the business of AMCON.
To AMCON's knowledge, no employee of AMCON has entered into any contract that
restricts or limits in any way the scope or type of work in which the employee
may be engaged or requires the employee to transfer, assign, or disclose
information concerning his work to anyone other than AMCON.
(e) All of the Patents are currently in compliance in all material
respects with formal legal requirements (including payment of filing,
examination, and maintenance fees and proofs of working or use), are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions.
(f) No Patent has been or is now involved in any interference, reissue,
reexamination, or opposition proceeding. To AMCON's Knowledge, there is no
potentially interfering patent or patent application of any third party.
(g) No Patent is infringed or, to AMCON's Knowledge, has been challenged
or threatened in any way. To AMCON's Knowledge, none of the products
manufactured and sold or proposed to be sold, nor any process or know-how
used, by AMCON infringes or is alleged to infringe any Patent or other
proprietary right of any other Person.
(h) AMCON is not required to make any payments to any third parties in
connection with its use of AMCON Intellectual Property.
(i) All products made, used, or sold under the Patents have been marked
with the proper patent notice.
Section 3.17 Environmental Matters.
(a) With such exceptions as, individually or in the aggregate, would not
be reasonably likely to have an AMCON Material Adverse Effect, (i) no written
notice, notification, demand, request for information, citation, summons,
complaint or order has been received by, and no investigation, action, claim,
suit, proceeding or review is pending or threatened by any Person against
AMCON or any AMCON Subsidiary with respect to any applicable Environmental Law
and (ii) AMCON and the AMCON Subsidiaries are and have been in compliance with
all applicable Environmental Laws.
(b) For purposes of this Section 3.17 and Section 4.16, the term
"Environmental Laws" means any federal, state, local and foreign statutes,
laws (including, without limitation, common law), judicial decisions,
regulations, ordinances, rules, judgments, orders, codes, injunctions, permits
or governmental agreements relating to human health and safety, the
environment or to pollutants, contaminants, wastes, or chemicals, hazardous
substances, hazardous materials or hazardous wastes as any of those terms is
regulated or defined by Environmental Laws.
Section 3.18 Finders' Fees; Opinions of Financial Advisor. There is no
investment banker, broker, finder or other intermediary that has been retained
by, or is authorized to act on behalf of, AMCON or any AMCON Subsidiary who
might be entitled to any fee or commission from HNWC or any of its Affiliates
upon consummation of the transactions contemplated by this Agreement.
Section 3.19 Board Approval; Required Vote.
(a) As of the date hereof, this Agreement and the transactions
contemplated hereby have been approved by AMCON's Board of Directors.
(b) No votes of the holders of any class or series of capital stock of
AMCON is required by law, rule, regulation or rule of the American Stock
Exchange to approve and adopt this Agreement and/or any of the other
transactions contemplated hereby, including the Merger.
Section 3.20 Tax Treatment. Neither AMCON nor any of its Affiliates has taken
or agreed to take, or will take, any action or is aware of any fact or
circumstance that would prevent or impede the Merger from qualifying as a 368
Reorganization.
Section 3.21 Certain Agreements. None of AMCON, any AMCON Subsidiary or any
of their respective Affiliates (i) are parties to or otherwise bound by any
agreement or arrangement that limits or otherwise restricts AMCON, any AMCON
Subsidiary, the Surviving Corporation or any of their respective Affiliates
from engaging or competing in any line of business or in any locations, which
agreement or arrangement is material to the business of AMCON and the AMCON
Subsidiaries or would be material to the business of the Surviving Corporation
(assuming the Merger has taken place), in either case taken as a whole and
(ii) except in the ordinary course of business, have amended, modified or
terminated any material contract, agreement or arrangement of AMCON or any
AMCON Subsidiary or otherwise waived, released or assigned any material
rights, claims or benefits of AMCON or any AMCON Subsidiary thereunder.
Section 3.22 Employment Agreements. There exists (i) no union, guild or
collective bargaining agreement to which AMCON or any AMCON Subsidiary is a
party, (ii) no employment, consulting or severance agreement between AMCON or
any Subsidiary of AMCON and any Person (except for consulting agreements that
individually, and in the aggregate, are not material to AMCON), and (iii) no
employment, consulting, severance or indemnification agreement or other
agreement or plan to which AMCON or any AMCON Subsidiary is a party that would
be altered or result in any bonus, golden parachute, severance or other
payment or obligation to any Person, or result in any acceleration of the time
of payment or in the provision or vesting of any benefits, as a result of the
execution or performance of this Agreement or as a result of the Merger or the
other transactions contemplated hereby.
Section 3.23 Transactions With Directors, Officers and Affiliates. Except for
any of the following matters which would not be required to be disclosed
pursuant to Item 402 or Item 404 of Regulation S-K of the U.S. Securities and
Exchange Commission (the "Commission"), since September 30, 2000, there have
been no transactions between AMCON or any of its Subsidiaries and any
director, officer, employee, stockholder or Affiliate of AMCON or any of its
Subsidiaries, including, without limitation, loans, guarantees or pledges to,
by or for AMCON or any of AMCON's Subsidiaries from, to, by or for any of such
Persons. Since September 30, 2000, none of the officers or directors of AMCON
or any of its Subsidiaries, and no spouse or relative of any of such Persons,
has been a director or officer of, or has had any material direct or indirect
interest in, any Person which during such period has been a supplier, customer
or sales agent of AMCON or any of its Subsidiaries or has competed with or
been engaged in any business of the kind being conducted by AMCON or any of
its Subsidiaries.
Section 3.24 Material Contracts. Schedule 3.24 delivered to HNWC by AMCON
prior to the execution of this Agreement lists all material contracts and
agreements to which, as of the date hereof, AMCON or any AMCON Subsidiary is a
party or by which AMCON or any AMCON Subsidiary is bound or under which AMCON
or any AMCON Subsidiary has or may acquire any rights, which were not filed
prior to the date hereof as exhibits to AMCON SEC Documents, which involve or
relate to (i) obligations of AMCON or any AMCON Subsidiary for borrowed money
or other indebtedness where the amount of such obligations exceeds $6,000,000
individually, (ii) the lease by AMCON or any AMCON Subsidiary, as lessee or
lessor, of real property for rent of more than $6,000,000 per annum, (iii) the
purchase or sale of goods (other than raw material to be purchased by AMCON on
terms that are customary and consistent with the past practice of AMCON and in
amounts and at prices substantially consistent with past practices of AMCON)
or services with an aggregate minimum purchase price of more than $6,000,000
per annum, (iv) rights to manufacture and/or distribute any product which
accounted for more than $45,000,000 of the consolidated revenues of AMCON and
its Subsidiaries during the fiscal year ended September 30, 2000 or under
which AMCON or any AMCON Subsidiary received or paid license or other fees in
excess of $1,000,000 during any year, (v) the purchase or sale of assets or
properties not in the ordinary course of business having a purchase price in
excess of $6,000,000, (vi) the right (whether or not currently exercisable) to
use, license (including any "in-license" or "outlicense"), sublicense or
otherwise exploit any intellectual property right or other proprietary asset
of AMCON or of any of Subsidiary of AMCON or any other Person which, is
material to AMCON; (vii) any material collaboration or joint venture or
similar arrangement; (viii) the restriction on the right or ability of AMCON
or any Subsidiary of AMCON (A) to compete with any other Person, (B) to
acquire any product or other asset or any services from any other Person,
(C) to solicit, hire or retain any Person as an employee, consultant or
independent contractor, (D) to develop, sell, supply, distribute, offer,
support or service any product or any technology or other asset to or for any
other Person, (E) to perform services for any other Person, or (F) to transact
business or deal in any other manner with any other Person; (ix) any currency
hedging; or (x) individual capital expenditures or commitments in excess of
$6,000,000. All such contracts and agreements are duly and validly executed
by AMCON or such AMCON Subsidiary, and are in full force and effect in all
material respects. Neither AMCON nor any of its Subsidiaries has violated or
breached, or committed any default under, any contract or agreement, and, to
the knowledge of AMCON, no other Person has violated or breached, or committed
any default under, any contract or agreement, which violation, breach or
default (alone or in combination with other violations, breaches or defaults
under such contract or agreement or under other contracts or agreements) has
had or may reasonably be expected to have an AMCON Material Adverse Effect. No
event has occurred which, after notice or the passage of time or both, would
constitute a default by AMCON or any Subsidiary of AMCON under any contract or
agreement or give any Person the right to (A) declare a default or exercise
any remedy under any contract or agreement, (B) receive or require a rebate,
chargeback, penalty or change in delivery schedule under any contract or
agreement, (C) accelerate the maturity or performance of any contract or
agreement, or (D) cancel, terminate or modify any contract or agreement, in
each case which, together with all other events of the types referred to in
clauses (A), (B), (C) and (D) of this sentence has had or may reasonably be
expected to have an AMCON Material Adverse Effect. All such contracts and
agreements will continue, after the Effective Time, to be binding in all
material respects in accordance with their respective terms until their
respective expiration dates.
Section 3.25 Insurance. AMCON has made available to HNWC a summary of all
material insurance policies and all material self insurance programs and
arrangements relating to the business, assets and operations of AMCON and its
Subsidiaries. Each of such insurance policies is in full force and effect.
Since September 30, 2000, neither AMCON nor any of its Subsidiaries has
received any notice or other communication regarding any actual or possible
(i) cancellation or invalidation of any material insurance policy, (ii)
refusal of any coverage or rejection of any material claim under any insurance
policy, or (iii) material adjustment in the amount of the premiums payable
with respect to any insurance policy. There is no pending workers'
compensation or other claim under or based upon any insurance policy of AMCON
or any of its Subsidiaries other than claims incurred in the ordinary course
of business.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HNWC
Except as disclosed in the (i) HNWC Disclosure Schedule delivered to
AMCON dated the date hereof (each section or subsection of which Disclosure
Schedule qualifies the correspondingly numbered representation, warranty or
covenant to the extent specified therein), or (ii) the HNWC SEC Documents
filed prior to the date hereof, HNWC represents and warrants to AMCON that, as
of the date hereof (except for representations and warranties that address
matters only as of a specific date, in which case such representations are
true and correct on and as of such specific date):
Section 4.1 Corporate Existence and Power. HNWC is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Hawaii, and has all corporate powers required to carry on its
business as now conducted. HNWC is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character
of the property owned or leased by it or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified,
individually or in the aggregate, would not be reasonably likely to have a
HNWC Material Adverse Effect. HNWC has heretofore made available to AMCON
true and complete copies of HNWC's articles of incorporation and bylaws as
currently in effect.
Section 4.2 Corporate Authorization. The execution, delivery and performance
by HNWC of this Agreement and the consummation by HNWC of the transactions
contemplated hereby are within HNWC's corporate powers and, except for the
HNWC Stockholder Approval (as defined herein), have been duly authorized by
all necessary corporate action. Assuming that this Agreement constitutes the
valid and binding obligation of AMCON, this Agreement constitutes a valid and
binding agreement of HNWC, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect, relating to or
affecting creditors' rights and remedies generally and to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
Section 4.3 Governmental Authorization. The execution, delivery and
performance by HNWC of this Agreement and the consummation by HNWC of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any Governmental Entity other than (a) the filing of (i) the
Articles of Merger in accordance with the Hawaii Law, (ii) the Certificate of
Merger in accordance with the Delaware Law, and (iii) appropriate documents
with the relevant authorities of other states or jurisdictions in which HNWC
or any HNWC Subsidiary is qualified to do business; (b) compliance with any
applicable requirements of the Securities Act and the Exchange Act; (c) such
as may be required under any applicable state securities or blue sky laws; and
(d) such other consents, approvals, actions, orders, authorizations,
registrations, declarations and filings that, if not obtained or made, would
not, individually or in the aggregate, (x) be reasonably likely to have a HNWC
Material Adverse Effect or (assuming for this purpose that the Effective Time
had occurred) a Surviving Corporation Material Adverse Effect, or (y) prevent
or materially impair the ability of HNWC to consummate the transactions
contemplated by this Agreement.
Section 4.4 Non-Contravention. The execution, delivery and performance by
HNWC of this Agreement and the consummation by HNWC of the transactions
contemplated hereby do not and will not (a) contravene or conflict with HNWC's
articles of incorporation or bylaws, (b) assuming compliance with the matters
referred to in Section 4.3, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to HNWC, (c) constitute a default under
or give rise to a right of termination, cancellation or acceleration of any
right or obligation of HNWC or any HNWC Subsidiary or to a loss of any benefit
or status to which HNWC is entitled under any provision of any agreement,
contract or other instrument binding upon HNWC or any HNWC Subsidiary or any
license, franchise, permit or other similar authorization held by HNWC, or (d)
result in the creation or imposition of any Lien on any asset of HNWC other
than, in the case of each of (b), (c) and (d), any such items that would not,
individually or in the aggregate (x) be reasonably likely to have a HNWC
Material Adverse Effect or (y) prevent or materially impair the ability of
HNWC to consummate the transactions contemplated by this Agreement.
Section 4.5 Capitalization.
(a) The authorized capital stock of HNWC consists of 20,000,000 shares
of HNWC Common Stock and 5,000,000 shares of HNWC Preferred Stock (of which
1,250 shares of HNWC Series A Convertible Preferred Stock were authorized and
250 shares of HNWC Series B Convertible Preferred Stock were authorized and
750,000 shares of HNWC Series C Preferred Stock were authorized). At the
close of business on the date hereof, (i) 7,935,982 shares of HNWC Common
Stock were issued and outstanding, (ii) stock options ("HNWC Stock Options")
to purchase an aggregate of 683,926 shares of HNWC Common Stock were issued
and outstanding (of which options to purchase an aggregate of 624,226 shares
of HNWC Common Stock were exercisable), (iii) warrants ("HNWC Warrants") to
purchase an aggregate of 4,862,899 shares of HNWC Common Stock were issued and
outstanding (of which warrants to purchase an aggregate of 4,862,899 shares of
HNWC Common Stock were exercisable), (iv) no shares of HNWC Preferred Stock
were issued and outstanding, and (v) there were no stock options and warrants
to purchase shares of HNWC Preferred Stock issued and outstanding. All
outstanding shares of capital stock of HNWC have been duly authorized and
validly issued and are fully paid and nonassessable.
(b) As of the date hereof, except (i) as set forth in this Section 4.5,
(ii) for changes since March 31, 2001, resulting from the exercise of stock
options outstanding on such date and (iii) the issuance of the $500,000
Convertible Note to AMCON, there are no outstanding (x) shares of capital
stock or other voting securities of HNWC, (y) securities of HNWC convertible
into or exchangeable for shares of capital stock or voting securities of HNWC,
or (z) options or other rights to acquire from HNWC, and no obligation of HNWC
to issue, any capital stock, voting securities or securities convertible into
or exchangeable for capital stock or voting securities of HNWC (the items in
clauses (x), (y) and (z) being referred to collectively as the "HNWC
Securities"). There are no outstanding obligations of HNWC or any HNWC
Subsidiary to repurchase, redeem or otherwise acquire any HNWC Securities
other than 100 shares of its Series B Convertible Preferred Stock. There are
no outstanding contractual obligations of HNWC to provide funds to, or make
any investment (in the form of a loan, capital contribution or otherwise) in,
any other Person. There are no stockholder agreements, voting trusts or other
agreements or understandings to which HNWC is a party, or of which HNWC is
aware, relating to voting, registration or disposition of any shares of
capital stock of HNWC or granting to any person or group of persons the right
to elect, or to designate or nominate for election, a director to the board of
directors of HNWC, except for the Stockholders Agreement attached hereto as
Exhibit A.
Section 4.6 Subsidiaries. HNWC does not have any subsidiaries and does not
own or control, directly or indirectly, any stock or equity interest in any
corporation or other Person.
Section 4.7 HNWC SEC Documents.
(a) HNWC has made available to AMCON the HNWC SEC Documents. HNWC has
filed all reports, filings, registration statements and other documents
required to be filed by it with the SEC since December 31, 1997.
(b) As of its filing date, each HNWC SEC Document complied as to form in
all material respects with the applicable requirements of the Securities Act
and/or the Exchange Act, as the case may be.
(c) No HNWC SEC Document filed pursuant to the Exchange Act contained,
as of its filing date, any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No HNWC SEC Document, as amended or supplemented, if applicable,
filed pursuant to the Securities Act contained, as of the date such document
or amendment became effective, any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
Section 4.8 Financial Statements; No Material Undisclosed Liabilities.
(a) The audited HNWC financial statements and unaudited consolidated
interim financial statements of HNWC included in the HNWC 10-KSB and the HNWC
10-QSB fairly present in all material respects, in conformity with GAAP
consistently applied (except as may be indicated in the notes thereto and
except that financial statements on Form 10QSB do not contain all GAAP notes
to such financial statements), the financial position of HNWC as of the dates
thereof and its results of operations, stockholders' equity and consolidated
cash flows for the periods then ended (subject to normal year-end adjustments
in the case of any unaudited interim financial statements).
(b) There are no liabilities of HNWC of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, in each
case, that are required by GAAP to be set forth on a balance sheet of HNWC,
other than:
(i) liabilities or obligations disclosed or provided for in the
HNWC Balance Sheet or disclosed in the notes there;
(ii) liabilities or obligations under this Agreement or incurred
in connection with the transactions contemplated hereby;
(iii) current liabilities incurred in the ordinary course of
business since December 31, 2000; and
(iv) other liabilities or obligations that individually or in the
aggregate, would not be reasonably likely to have a HNWC Material Adverse
Effect.
(c) HNWC keeps proper accounting records in which all material assets
and liabilities, and all material transactions, of HNWC are recorded in
conformity with GAAP. No part of HNWC's accounting system or records, or
access thereto, is under the control of a Person who is not an employee of
HNWC.
Section 4.9 Information to be Supplied.
(a) The information to be supplied by HNWC expressly for inclusion or
incorporation by reference in the Proxy Statement/Prospectus will (i) in the
case of the Registration Statement, at the time it becomes effective, not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading and (ii) in the case of the remainder of the
Proxy Statement/Prospectus, at the time of the mailing thereof, and at the
time of the Special Meeting, not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy
Statement/Prospectus will comply (with respect to information relating to
HNWC) as to form in all material respects with the provisions of the
Securities Act and the Exchange Act.
(b) Notwithstanding the foregoing, HNWC makes no representation or
warranty with respect to any statements made or incorporated by reference in
the Proxy Statement/Prospectus based on information supplied by AMCON.
Section 4.10 Absence of Certain Changes. Since December 31, 1999, except as
otherwise expressly contemplated by this Agreement, HNWC has conducted its
business in the ordinary course consistent with past practice and there has
not been (a) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of HNWC that,
individually or in the aggregate, has had or would be reasonably likely to
have a HNWC Material Adverse Effect, (b) any action, event, occurrence,
development or state of circumstances or facts that, individually or in the
aggregate, has had or would be reasonably likely to have a HNWC Material
Adverse Effect or (c) any incurrence, assumption or guarantee by HNWC of any
material indebtedness for borrowed money other than in the ordinary course and
in amounts and on terms consistent with past practices.
Section 4.11 Litigation. Section 4.11 of the HNWC Disclosure Schedule
contains a list of each action, suit, investigation, arbitration or proceeding
pending against, or to the Knowledge of HNWC threatened against, HNWC or any
of its respective assets or properties before any arbitrator or Governmental
Entity. None of such actions, suits, investigations, arbitrations or
proceedings, individually or in the aggregate, would be reasonably likely to
have a HNWC Material Adverse Effect. There are no outstanding judgments,
decrees, injunctions, awards or orders against HNWC that would be reasonably
likely to have, individually or in the aggregate, a HNWC Material Adverse
Effect.
Section 4.12 Taxes.
(a) All Tax returns, statements, reports and forms (collectively, the
"HNWC Returns") required to be filed with any taxing authority by, or with
respect to, HNWC and the HNWC Subsidiaries have been filed in substantial
compliance with all applicable laws.
(b) HNWC has timely paid all Taxes shown as due and payable on the HNWC
Returns that have been so filed, and all other Taxes not subject to reporting
obligations, and as of the time of filing, the HNWC Returns correctly
reflected the facts regarding the income, business, assets, operations,
activities and the status of HNWC and the HNWC Subsidiaries (other than Taxes
that are being contested in good faith and for which adequate reserves are
reflected on the HNWC Balance Sheet).
(c) HNWC has made provision for all Taxes payable by them for which no
HNWC Return has yet been filed.
(d) The charges, accruals and reserves for Taxes with respect to HNWC
reflected on the HNWC Balance Sheet are adequate under GAAP to cover the Tax
liabilities accruing through the date thereof.
(e) There is no action, suit, proceeding, audit or claim now proposed or
pending against or with respect to HNWC in respect of any Tax that would be
reasonably likely to have a HNWC Material Adverse Effect.
(f) HNWC has not been a member of an affiliated, consolidated, combined
or unitary group other than one of which HNWC was the common parent.
(g) HNWC does not hold any asset subject to a consent under Section
341(f) of the Code.
Section 4.13 Employee Benefits.
(a) Section 4.13(a) of the HNWC Disclosure Schedule contains a correct
and complete list identifying each material "employee benefit plan", as
defined in Section 3(3) of ERISA, each employment, severance or similar
contract, plan, arrangement or policy and each other plan or arrangement
(written or oral) providing for compensation, bonuses, profit-sharing, stock
option or other stock related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage (including any self-
insured arrangements), health or medical benefits, disability benefits,
workers' compensation, supplemental unemployment benefits, severance benefits
and post-employment or retirement benefits (including compensation, pension,
health, medical or life insurance benefits) that is maintained, administered
or contributed to by HNWC or any of its ERISA Affiliates and covers any
employee or former employee of HNWC or any HNWC Subsidiary. Copies of such
plans (and, if applicable, related trust agreements) and all amendments
thereto and written interpretations thereof have been furnished, or will be
made available upon request, to AMCON together with the most recent annual
report (Form 5500 including, if applicable, Schedule B thereto) and summary
plan description prepared in connection with any such plan. Such plans are
referred to collectively herein as the "HNWC Employee Plans". For purposes of
this Section 4.13, "ERISA Affiliate" of any Person means any other Person
which, together with such Person, would be treated as a single employer under
Section 414 of the Code.
(b) No HNWC Employee Plan is now or at any time has been subject to
Part 3, Subtitle B of Title I or ERISA or Title IV of ERISA. At no time has
HNWC or any of its ERISA Affiliates contributed to, or been required to
contribute to, any "multiemployer plan," as defined in Section 3(37) of ERISA
(a "Multiemployer Plan"), and neither HNWC nor any of its ERISA Affiliates
has, or ever has had, any liability (contingent or otherwise) relating to the
withdrawal or partial withdrawal from a Multiemployer Plan. To the Knowledge
of HNWC, no condition exists and no event has occurred that would be
reasonably likely to constitute grounds for termination of any HNWC Employee
Plan that is a Retirement Plan or, with respect to any HNWC Employee Plan that
is a Multiemployer Plan, presents a material risk of a complete or partial
withdrawal under Title IV of ERISA and neither HNWC nor any of its ERISA
Affiliates has incurred any liability under Title IV of ERISA arising in
connection with the termination of, or complete or partial withdrawal from,
any plan covered or previously covered by Title IV of ERISA that would be
reasonably likely to have a HNWC Material Adverse Effect. To the Knowledge of
HNWC, nothing has been done or omitted to be done and no transaction or
holding of any asset under or in connection with any HNWC Employee Plan has
occurred that will make HNWC or any HNWC Subsidiary, or any officer or
director of HNWC or any HNWC Subsidiary, subject to any liability under Title
I of ERISA or liable for any tax pursuant to Section 4975 of the Code
(assuming the taxable period of any such transaction expired as of the date
hereof) that would be reasonably likely to have a HNWC Material Adverse
Effect.
(c) Each HNWC Employee Plan that is intended to be qualified under
Section 401(a) of the Code now meets, and at all times since its inception
have met, the requirements for such qualification, and each trust forming a
part thereof is now, and at all times since its inception has been, exempt
from tax pursuant to Section 501(a) of the Code. Each such plan has received a
determination letter from the Internal Revenue Service to the effect that such
plan is qualified and its related trust is exempt from federal income taxes.
HNWC has furnished, or will make available upon request, to AMCON copies of
the most recent Internal Revenue Service determination letters with respect to
each such HNWC Employee Plan. Each HNWC Employee Plan has been maintained and
administered in substantial compliance with its terms (except that in any case
in which any HNWC Employee Plan is currently required to comply with a
provision of ERISA or of the Code, but is not yet to be amended to reflect
such provision, such plan has been maintained and administered in accordance
with the provision) and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including but not limited to ERISA
and the Code, which are applicable to such HNWC Employee Plan. All material
reports, returns and similar documents with respect to each HNWC Employee Plan
required to be filed with any governmental agency or distributed to any HNWC
Employee Plan participant have been duly timely filed and distributed.
(d) There is no contract, agreement, plan or arrangement that, as a
result of the Merger, would be reasonably likely to obligate HNWC to make any
payment of any amount that would not be deductible pursuant to the terms of
Section 162(m) or Section 280G of the Code.
(e) Except as disclosed in writing to AMCON prior to the date hereof,
there has been no amendment to, written interpretation or announcement
(whether or not written) relating to, or change in employee participation or
coverage under, any HNWC Employee Plan that would increase materially the
expense of maintaining such HNWC Employee Plan above the level of the expense
incurred in respect thereof for the fiscal year ended December 31, 1999.
(f) No HNWC Employee Plan promises or provides post-retirement medical,
life insurance or other benefits due now or in the future to current, former
or retired employees of HNWC or any Subsidiary.
Section 3.14 Compliance with Laws; Licenses, Permits and Registrations.
(a) HNWC is not in violation of, nor has HNWC violated, any applicable
provisions of any laws, statutes, ordinances, regulations, judgments,
injunctions, orders or consent decrees, except for any such violations that,
individually or in the aggregate, would not be reasonably likely to have a
HNWC Material Adverse Effect.
(b) HNWC has all permits, licenses, approvals, authorizations of and
registrations with and under all federal, state, local and foreign laws, and
from all Governmental Entities required by HNWC to carry on its business as
currently conducted, except where the failure to have any such permits,
licenses, approvals, authorizations or registrations, individually or in the
aggregate, would not be reasonably likely to have a HNWC Material Adverse
Effect.
Section 4.15 Title to Properties.
(a) HNWC has good and marketable title to, or valid leasehold interests
in, and all necessary use permits with respect to, all its properties and
assets, except for such as are no longer used or useful in the conduct of its
business or as have been disposed of in the ordinary course of business and
except for defects in title, easements, restrictive covenants and similar
Liens, encumbrances or impediments that do not materially interfere with the
ability of HNWC to conduct its business as currently conducted. All such
assets and properties, other than assets and properties in which HNWC has
leasehold interests, are free and clear of all Liens, except for Liens that do
not and will not materially interfere with the ability of HNWC to conduct its
business as currently conducted.
(b) HNWC (i) is in substantial compliance with the terms of all leases
and use permits to which it is a party or a beneficiary and under which it is
in occupancy, and all such leases and use permits are in full force and effect
and (ii) enjoys peaceful and undisturbed possession under all such leases and
use permits.
Section 4.16 Intellectual Property.
(a) HNWC owns or has a valid license to use (i) all Marks; (ii) all
Patents; (iii) all Copyrights; (iv) all Rights in Mask Works' and (v) all
Trade Secrets; necessary to (x) carry on the business of HNWC as currently
conducted or as proposed to be conducted by the Surviving Corporation, to (y)
make, have made, use, distribute and sell all products currently sold by HNWC
and all products in development.
(b) There are no outstanding and, to HNWC's Knowledge, no threatened
disputes or disagreements with respect to any agreement to which HNWC is a
party, relating to any of HNWC's Marks, Patents, Copyrights, Rights in Mask
Works, or Trade Secrets (collectively, "HNWC Intellectual Property").
(c) HNWC is the owner of all right, title, and interest in and to the
HNWC Intellectual Property, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims.
(d) All former and current employees of HNWC have executed written
contracts with HNWC that assign to HNWC all rights to any inventions,
improvements, discoveries, or information relating to the business of HNWC. To
HNWC's knowledge, no employee of HNWC has entered into any contract that
restricts or limits in any way the scope or type of work in which the employee
may be engaged or requires the employee to transfer, assign, or disclose
information concerning his work to anyone other than HNWC.
(e) All of the Patents are currently in compliance with formal legal
requirements (including payment of filing, examination, and maintenance fees
and proofs of working or use), are valid and enforceable, and are not subject
to any maintenance fees or taxes or actions.
(f) No Patent has been or is now involved in any interference, reissue,
reexamination, or opposition proceeding. To HNWC's Knowledge, there is no
potentially interfering patent or patent application of any third party.
(g) No Patent is infringed or, to HNWC's Knowledge, has been challenged
or threatened in any way. To HNWC's knowledge, none of the products
manufactured and sold or proposed to be sold, nor any process or know-how
used, by HNWC infringes or is alleged to infringe any Patent or other
proprietary right of any other Person.
(h) HNWC is not required to make any payments to any third parties in
connection with its use of the HNWC Intellectual Property.
(i) All products made, used, or sold under the Patents have been marked
with the proper patent notice.
Section 4.17 Environmental Matters. With such exceptions as, individually or
in the aggregate, would not be reasonably likely to have a HNWC Material
Adverse Effect, (i) no written notice, notification, demand, request for
information, citation, summons, complaint or order has been received by, and
no investigation, action, claim, suit, proceeding or review is pending or
threatened by any Person against, HNWC with respect to any applicable
Environmental Law and (ii) HNWC is and has been in compliance with all
applicable Environmental Laws.
Section 4.18 Finders' Fees. There is no investment banker, broker, finder or
other intermediary that has been retained by, or is authorized to act on
behalf of, HNWC or who might be entitled to any fee or commission from AMCON
or any of its Affiliates upon consummation of the transactions contemplated by
this Agreement.
Section 4.19 Required Vote and Waiver; Board Approval.
(a) The only vote or waiver of rights of the holders of any class or
series of capital stock of HNWC required by law, rule or regulation to approve
and adopt this Agreement and/or any of the other transactions contemplated
hereby, including the Merger (collectively, the "HNWC Stockholder Approval")
is the affirmative vote of the holders of more than fifty percent of the
outstanding shares of HNWC Common Stock in favor of the approval and adoption
of this Agreement and approval of the Merger.
(b) HNWC's Board of Directors has unanimously (i) determined and
declared that this Agreement and the transactions contemplated hereby,
including the Merger, are advisable and in the best interests of HNWC and its
stockholders, (ii) approved and adopted this Agreement, the Merger and the
other transactions contemplated hereby and (iii) resolved to recommend to such
stockholders that they vote in favor of adopting and approving this Agreement
and the Merger in accordance with the terms hereof at a special meeting of the
stockholders of HNWC duly held for such purpose (the "HNWC Stockholders
Meeting").
Section 4.20 State Takeover Statutes. HNWC has taken all actions required to
be taken by it in order to exempt this Agreement and the transactions
contemplated hereby from the provisions of all "control share acquisition,"
"business combination," "fair price" or other anti-takeover laws or
regulations enacted under state or federal laws in the United States that
might apply to this Agreement or any of the transactions contemplated hereby.
Section 4.21 Tax Treatment. Neither HNWC nor any of its Affiliates has taken
or agreed to take, or will take, any action or is aware of any fact or
circumstance that would prevent or impede the Merger from qualifying as a 368
Reorganization.
Section 4.22 Certain Agreements. Neither HNWC nor any of its Affiliates (i)
are parties to or otherwise bound by any agreement or arrangement that limits
or otherwise restricts HNWC, the Surviving Corporation or any of their
respective Affiliates from engaging or competing in any line of business or in
any locations, which agreement or arrangement is material to the business of
HNWC or would be material to the business of the Surviving Corporation
(assuming the Merger has taken place), in either case taken as a whole and
(ii) except in the ordinary course of business, have amended, modified or
terminated any material contract, agreement or arrangement of HNWC or any HNWC
Subsidiary or otherwise waived, released or assigned any material rights,
claims or benefits of HNWC or any HNWC Subsidiary thereunder.
Section 4.23 Employment Agreements. There exists (i) no union, guild or
collective bargaining agreement to which HNWC is a party, (ii) no employment,
consulting or severance agreement between HNWC and any Person (except for
consulting agreements that individually, and in the aggregate, are not
material to HNWC), and (iii) no employment, consulting, severance or
indemnification agreement or other agreement or plan to which HNWC is a party
that would be altered or result in any bonus, golden parachute, severance or
other payment or obligation to any Person, or result in any acceleration of
the time of payment or in the provision or vesting of any benefits, as a
result of the execution or performance of this Agreement or as a result of the
Merger or the other transactions contemplated hereby.
Section 4.24 Transactions With Directors, Officers and Affiliates. Except for
any of the following matters which would not be required to be disclosed
pursuant to Item 402 or Item 404 of Regulation S-K of the Commission (assuming
HNWC was subject to such Items), since December 31, 1999, there have been no
transactions between HNWC or any of its Subsidiaries and any director,
officer, employee, stockholder or "Affiliate" (as identified pursuant to
Section 7.8 hereof) of HNWC, including, without limitation, loans, guarantees
or pledges to, by or for HNWC, from, to, by or for any of such Persons.
Except for any of the following matters which would not be required to be
disclosed pursuant to Item 402 or Item 404 of Regulation S-K of the Commission
(assuming that HNWC was subject to such Items), since December 31, 1999, none
of the officers or directors of HNWC, and no spouse or relative of any of such
Persons, has been a director or officer of, or has had any material direct or
indirect interest in, any Person which during such period has been a supplier,
customer or sales agent of HNWC or has competed with or been engaged in any
business of the kind being conducted by HNWC.
Section 4.25 Material Contracts. Schedule 4.25 delivered to AMCON by HNWC
prior to the execution of this Agreement lists all material contracts and
agreements and use permits to which, as of the date hereof, HNWC is a party or
by which is bound or under which HNWC has or may acquire any rights, which
involve or relate to (i) obligations of HNWC for borrowed money or other
indebtedness where the amount of such obligations exceeds $50,000
individually, (ii) the lease by HNWC, as lessee or lessor, of real property
for rent of more than $25,000 per annum, (iii) the purchase or sale of goods
(other than raw material to be purchased by HNWC on terms that are customary
and consistent with the past practice of HNWC and in amounts and at prices
substantially consistent with past practices of HNWC) or services with an
aggregate minimum purchase price of more than $25,000 per annum, (iv) rights
to manufacture and/or distribute any product which accounted for more than
$25,000 of the consolidated revenues of HNWC during the fiscal year ended
December 31, 1999 or under which HNWC received or paid license or other fees
in excess of $25,000 during any year, (v) the purchase or sale of assets or
properties not in the ordinary course of business having a purchase price in
excess of $25,000, (vi) the right (whether or not currently exercisable) to
use, license (including any "in-license" or "outlicense"), sublicense or
otherwise exploit any intellectual property right or other proprietary asset
of HNWC or any other Person which, when considered together with all such
other rights, is material to HNWC; (vii) any material collaboration or joint
venture or similar arrangement; (viii) the restriction on the right or ability
of HNWC (A) to compete with any other Person, (B) to acquire any product or
other asset or any services from any other Person, (C) to solicit, hire or
retain any Person as an employee, consultant or independent contractor, (D) to
develop, sell, supply, distribute, offer, support or service any product or
any technology or other asset to or for any other Person, (E) to perform
services for any other Person, or (F) to transact business or deal in any
other manner with any other Person; (ix) any currency hedging; (x) individual
capital expenditures or commitments in excess of $25,000; or (xi) any license,
lease, permit or other right to use any water used by HNWC in its bottling
operations. All such contracts and agreements and permits are duly and
validly executed by HNWC, the other party thereto and all Governmental
Entities, as the case may be, and are in full force and effect in all material
respects. HNWC has not violated or breached, or committed any default under,
any contract or agreement or permit, and, to the knowledge of HNWC, neither
HNWC or other Person has violated or breached, or committed any default under,
any contract or agreement or permit, which violation, breach or default (alone
or in combination with other violations, breaches or defaults under such
contract or agreement or permit or under other contracts or agreements or
permits) has had or may reasonably be expected to have a HNWC Material Adverse
Effect. No event has occurred which, after notice or the passage of time or
both, would constitute a default by HNWC under any contract or agreement or
permit or give any Person the right to (A) declare a default or exercise any
remedy under any contract or agreement or permit, (B) receive or require a
rebate, chargeback, penalty or change in delivery schedule under any contract
or agreement or permit, (C) accelerate the maturity or performance of any
contract or agreement or permit, or (D) cancel, terminate or modify any
contract or agreement or permit, in each case which, together with all other
events of the types referred to in clauses (A), (B), (C) and (D) of this
sentence has had or may reasonably be expected to have a HNWC Material Adverse
Effect. All such contracts and agreements and permits will continue, after
the Effective Time, to be binding in all material respects in accordance with
their respective terms until their respective expiration dates.
Section 4.26 Certain Business Practices. Neither HNWC nor to the knowledge of
HNWC any director, officer, agent or employee of HNWC has (i) used any funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity, (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, (assuming for purposes of this Section 4.26
that HNWC is subject to Section 30A of the Exchange Act) or (iii) made any
other unlawful payment.
Section 4.27 Insurance. HNWC has made available to AMCON a summary of all
material insurance policies and all material self insurance programs and
arrangements relating to the business, assets and operations of HNWC . Each of
such insurance policies is in full force and effect. Since December 31, 1999,
HNWC has not received any notice or other communication regarding any actual
or possible (i) cancellation or invalidation of any material insurance policy,
(ii) refusal of any coverage or rejection of any material claim under any
insurance policy, or (iii) material adjustment in the amount of the premiums
payable with respect to any insurance policy. There is no pending workers'
compensation or other claim under or based upon any insurance policy of HNWC
other than claims incurred in the ordinary course of business.
Section 4.28 No Actions Inconsistent with Article VI. HNWC has not taken any
of the actions contemplated by Article VI of this Agreement during the period
from and including September 29, 2000 through and including the date of this
Agreement, except for the issuance of the Convertible Notes and the Non-
Excluded Shares.
Section 4.29 Use of Proceeds of Convertible Notes. None of the proceeds of
the $500,000 Convertible Note or the other secured convertible promissory
notes to AMCON in the aggregate principal amount of $750,000 (the "Other
Convertible Notes") have been or will be used for any purposes other than
(a) providing working capital and other general corporate purposes of HNWC,
and (b) to redeem the HNWC Series A Convertible Preferred Stock or Series B
Convertible Preferred Stock or both, in each case, outstanding as of September
29, 2000.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Merger Sub represents and warrants to HNWC as follows:
Section 5.1 Organization. Merger Sub is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware. Merger Sub
is a direct wholly-owned subsidiary of AMCON.
Section 5.2 Corporate Authorization. Merger Sub has all requisite corporate
power and authority to enter into this agreement and to consummate the
transaction contemplated by this Agreement. The execution, delivery and
performance by each of Merger Sub of this Agreement and the consummation of
the transactions contemplated by this Agreement have been duly authorized by
all necessary corporate action on the part of Merger Sub. This Agreement has
been duly executed and delivered by Merger Sub and constitutes a valid and
binding agreement of Merger Sub, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally or by general equity principles.
Section 5.3 Non-Contravention. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated by this Agreement do not and will not contravene or
conflict with its certificate of incorporation or bylaws.
Section 5.4 No Business Activities. Merger Sub has not conducted any
activities other than in connection with the organization of Merger Sub, the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated by this Agreement. Merger Sub has no subsidiaries.
Section 5.5 Taxes. Merger Sub has not taken or agreed to take, will not
take, and is not aware of any fact or circumstance that would prevent or
impede the Merger from qualifying as 368 Reorganizations.
ARTICLE VI
COVENANTS OF HNWC
HNWC agrees as follows:
Section 6.1 HNWC Interim Operations. Except as set forth in the HNWC
Disclosure Schedule or as otherwise expressly contemplated or permitted
hereby, or as required by any Governmental Entity of competent jurisdiction,
without the prior consent of AMCON (which consent shall not be unreasonably
withheld or delayed), from the date hereof until the Effective Time, HNWC
shall conduct its business in all material respects in the ordinary course
consistent with past practice and shall use commercially reasonable efforts to
(i) preserve intact its present business organization, (ii) maintain in effect
all material foreign, federal, state and local licenses, approvals and
authorizations, including, without limitation, all material licenses and
permits that are required for HNWC to carry on its business and (iii) preserve
existing relationships with its material customers, lenders, suppliers and
others having material business relationships with it. Without limiting the
generality of the foregoing, except as otherwise expressly contemplated or
permitted by this Agreement, or as required by a Governmental Entity of
competent jurisdiction, from the date hereof until the Effective Time, without
the prior consent of AMCON (which consent shall not be unreasonably withheld
or delayed), HNWC shall not:
(a) amend its certificate of incorporation or by-laws;
(b) split, combine or reclassify any shares of capital stock of HNWC or
declare, set aside or pay any dividend in respect of its capital stock or
redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or
otherwise acquire any of its securities except for the 100 shares of its
Series B Convertible Preferred Stock;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or
sale of, any shares of its capital stock of any class or any securities
convertible into or exercisable for, or any rights, warrants or options to
acquire, any such capital stock or any such convertible securities, other than
(A) a number of shares of capital stock equal to that number of shares
underlying options forfeited prior to the Closing by former HNWC employees,
pursuant to the HNWC Employee Plans, (B) HNWC Common Stock upon the exercise
of stock options or warrants in accordance with their present terms or upon
exercise of options issued pursuant to clause (A) of this Section 6.1(c)(i),
(C) HNWC Common Stock upon the conversion of the $500,000 Convertible Note or
the Other Convertible Notes, or (D) other existing contractual arrangements,
or (ii) amend in any respect any term of any outstanding security of HNWC;
(d) other than in connection with transactions not prohibited by Section
6.1(e), incur any capital expenditures or any obligations or liabilities in
respect thereof, except for those (i) contemplated by the capital expenditure
budgets for HNWC previously made available to AMCON, or (ii) incurred in the
ordinary course of business of HNWC and consistent with past practice;
(e) acquire (whether pursuant to cash merger, stock or asset purchase or
otherwise) in one transaction or series of related transactions (i) any assets
(including any equity interests) having a fair market value in excess of
$25,000, or (ii) all or substantially all of the equity interests of any
Person or any business or division of any Person having a fair market value in
excess of $25,000, but in no event shall the expenditures, commitments,
obligations or liabilities made, incurred or assumed, as the case may be, by
HNWC pursuant to Sections 6.1(d) and 6.1(e) exceed $50,000 in the aggregate;
(f) sell, lease, out-license, encumber or otherwise dispose of any
assets, other than (i) sales of finished goods in the ordinary course of
business consistent with past practice, (ii) equipment and property no longer
used in the operation of HNWC's business and (iii) assets related to
discontinued operations of HNWC;
(g) (i) incur any indebtedness for borrowed money or guarantee any such
indebtedness, (ii) issue or sell any debt securities or warrants or rights to
acquire any debt securities of HNWC, (iii) make any loans, advances or capital
contributions to or investments in, any other Person, or (iv) guarantee any
debt securities or indebtedness of others in any case in an amount in excess
of $100,000, except in the ordinary course of business consistent with past
practice (which exception shall include, without limitation, borrowings under
HNWC's existing credit agreements and overnight borrowings);
(h) (i) enter into any agreement or arrangement that limits or otherwise
restricts HNWC or any of its Affiliates or any successor thereto or that
would, after the Effective Time, limit or restrict HNWC or the Surviving
Corporation, or any of their respective Affiliates, from engaging or competing
in any line of business or in any location, or (ii) enter into, amend, modify
or terminate any material contract, agreement or arrangement of HNWC or
otherwise waive, release or assign any material rights, claims or benefits of
HNWC thereunder; provided, however, that this Section 6.1(h) shall not prevent
HNWC from entering into material contracts with customers, suppliers or
distributors, so long as such contracts are entered into in the ordinary
course and consistent with HNWC's prior practice;
(i) (i) except as required by law or a written agreement existing on or
prior to the date hereof, increase the amount of compensation of any director
or executive officer or make any increase in or commitment to increase any
employee benefits, (ii) except as required by law, a written agreement
existing on or prior to the date hereof, or a HNWC severance policy existing
as of the date hereof, grant any severance or termination pay to any director,
officer or employee of HNWC or, (iii) adopt any additional employee benefit
plan or, except in the ordinary course of business consistent with past
practice and containing only normal and customary terms, make any contribution
to any existing such plan or (iv) except as may be required by law or a
written agreement or employee benefit plan existing on or prior to the date
hereof, or as contemplated by this Agreement, enter into, amend in any
respect, or accelerate the vesting under any HNWC Employee Plan, employment
agreement, option, license agreement or retirement agreements, or (v) hire any
employee with an annual base salary in excess of $40,000;
(j) change (x) HNWC's methods of accounting in effect at December 31,
1999 except as required by changes in GAAP, as concurred with by its
independent public accountants, (y) HNWC's fiscal year, or (z) make any
material Tax election, other than in the ordinary course of business
consistent with past practice and containing only normal and customary terms;
(k) (i) settle, propose to settle or commence, any litigation,
investigation, arbitration, proceeding or other claim that is material to the
business of HNWC, other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice of liabilities (x)
recognized or disclosed in the HNWC Financial Statements (or the notes
thereto) or (y) incurred since the date of such Financial Statements in the
ordinary course of business consistent with past practice, or (ii) make any
tax election or enter into any settlement or compromise of any tax liability;
(l) enter into any new material line of business;
(m) except to the extent required to comply with its obligations
hereunder or required by law, HNWC shall not amend or propose to so amend its
Certificate of Incorporation, Bylaws or other governing documents;
(n) use any of the proceeds of the $500,000 Convertible Note or the
Other Convertible Notes for any purposes other than (i) providing working
capital and other general corporate purposes, and (ii) to redeem the HNWC
Series A Convertible Preferred Stock or the Series B Convertible Preferred
Stock or both, in each case, outstanding as of September 29, 2000; or
(o) agree, resolve or commit to do any of the foregoing.
Section 6.2 Acquisition Proposals; Board Recommendation. HNWC agrees that it
shall not, nor shall it authorize or knowingly permit any officer, director,
employee, investment banker, attorney, accountant, agent or other advisor or
representative of HNWC, directly or indirectly, to (i) solicit, initiate or
knowingly facilitate or encourage the submission of any Acquisition Proposal
for HNWC, (ii) participate in any discussions or negotiations regarding, or
furnish to any Person any information with respect to, or take any other
action knowingly to facilitate any inquiries or the making of any proposal
that constitutes an Acquisition Proposal for HNWC, (iii) grant any waiver or
release under any standstill or similar agreement with respect to any class of
HNWC equity securities or (iv) enter into any agreement with respect to any
Acquisition Proposal for HNWC. Notwithstanding anything in this Agreement to
the contrary, HNWC or its Board of Directors shall be permitted to (A) to the
extent applicable, comply with Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal for HNWC.
ARTICLE VII
COVENANTS OF HNWC AND AMCON
The parties hereto agree that:
Section 7.1 Reasonable Best Efforts. Subject to the terms and conditions
hereof, each party will use reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement as promptly as practicable.
Section 7.2 Certain Filings; Cooperation in Receipt of Consents; Listing. As
promptly as reasonably practicable after the date hereof, HNWC and AMCON shall
prepare and AMCON shall file with the SEC the Registration Statement, in which
a Proxy Statement/Prospectus will be included as AMCON's prospectus. Each of
HNWC and AMCON shall use all reasonable efforts to have the Registration
Statement declared effective under the Securities Act as promptly as
reasonably practicable after such filing and to keep the Registration
Statement effective as long as is necessary to consummate the Merger and the
transactions contemplated thereby. HNWC shall mail the Proxy
Statement/Prospectus to its stockholders as promptly as reasonably practicable
after the Registration Statement is declared effective under the Securities
Act and, if necessary, after the Proxy Statement/Prospectus shall have been so
mailed, promptly circulate amended, supplemental or supplemented proxy
material, and, if required in connection therewith, resolicit proxies. AMCON
and HNWC shall take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or to file a general consent
to service of process) required to be taken under any applicable state
securities or blue sky laws in connection with the issuance of shares of
Surviving Corporation Common Stock in the Merger.
(a) No amendment or supplement to the Proxy Statement/Prospectus will be
made by HNWC or AMCON without the approval of the other party, which will not
be unreasonably withheld or delayed. Each party will advise the other party,
promptly after it receives notice thereof, of (i) the time when the
Registration Statement has become effective or any supplement or amendment has
been filed, (ii) the issuance of any stop order, (iii) the suspension of the
qualification of the shares of AMCON Common Stock issuable in connection with
the Merger for offering or sale in any jurisdiction, or (iv) any request by
the SEC for amendment of the Proxy Statement/Prospectus or comments thereon
and responses thereto or requests by the SEC for additional information, in
each case, whether orally or in writing. If at any time prior to the
Effective Time, HNWC or AMCON discovers any information relating to either
party, or any of their respective Affiliates, officers or directors, that
should be set forth in an amendment or supplement to the Proxy
Statement/Prospectus, so that such document would not include any misstatement
of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party that discovers such information shall promptly
notify the other party hereto and an appropriate amendment or supplement
describing such information shall be promptly filed with respect thereto, and
with respect to the Registration Statement, as the case may be, with the SEC
and, to the extent required by law or regulation, disseminated to the
stockholders of HNWC.
(b) HNWC and AMCON shall cooperate with one another in (i) determining
whether any other action by or in respect of, or filing with, any Governmental
Entity is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions contemplated hereby, (ii) seeking
any such other actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection therewith and seeking
promptly to obtain any such actions, consents, approvals or waivers,
(iii) setting a mutually acceptable date for the HNWC Special Meeting, and
(iv) taking all lawful action to call, give notice of, convene and hold a
meeting of HNWC stockholders for the purpose of obtaining the requisite vote
to approve and adopt this Agreement, the Merger and the other matters
contemplated by this Agreement. The Board of Directors of HNWC shall, subject
to its fiduciary duties under applicable law, declare the advisability of and
recommend adoption and approval of this Agreement, the Merger and the other
matters contemplated by this Agreement by the stockholders of HNWC, and shall
not, subject to its fiduciary duties under applicable law, withdraw, modify or
materially qualify in any manner adverse to AMCON to such recommendation or
take any action or make any statement in connection with the HNWC Stockholders
Meeting materially inconsistent with such recommendation (any such withdrawal,
modification, qualification or statement (whether or not required), an
"Adverse Change in the HNWC Recommendation").
(c) Each party shall permit the other party to review any communication
given by it to, and consult with each other in advance of any meeting or
conference with, any Governmental Entity or, in connection with any proceeding
by a private party, with any other Person, and to the extent permitted by the
applicable Governmental Entity or other Person, give the other party the
opportunity to attend and participate in such meetings and conferences, in
each case in connection with the transactions contemplated hereby.
(d) AMCON and HNWC agree to use their respective reasonable best efforts
to cause the shares of AMCON Common Stock to be issued upon conversion of
shares of HNWC Common Stock in accordance with this Agreement, the Articles of
Merger and the Certificate of Merger to be approved for listing upon issuance
on the American Stock Exchange.
Section 7.3 Headquarters. The parties intend that, by the end of one year
after the AMCON Effective Time, the Surviving Corporation shall maintain its
principal corporate offices and headquarters in Omaha, Nebraska.
Section 7.4 Public Announcements. AMCON and HNWC shall use reasonable best
efforts to develop a joint communications plan and each party shall use
reasonable best efforts (i) to ensure that all press releases and other public
statements with respect to the transactions contemplated hereby shall be
consistent with such joint communications plan, and (ii) unless otherwise
required by applicable law or by obligations pursuant to any rules of the
American Stock Exchange, to consult with each other before issuing any press
release or, to the extent practical, otherwise making any public statement
with respect to this Agreement or the transactions contemplated hereby.
Section 7.5 Access to Information; Notification of Certain Matters.
(a) From the date hereof until the Effective Time and subject to
applicable law, HNWC and AMCON shall (i) give to the other party, its counsel,
financial advisors, auditors and other authorized representatives reasonable
access during normal business hours to the offices, properties, books,
records, contracts, commitments, officers and employees and all other
information concerning it and its business, properties, assets, condition
(financial or otherwise) or prospects of such party, (ii) consistent with its
legal obligations, furnish or make available to the other party, its counsel,
financial advisors, auditors and other authorized representatives such
financial and operating data and other information as such Persons may
reasonably request and (iii) instruct its employees, counsel, financial
advisors, auditors and other authorized representatives to cooperate with the
reasonable requests of the other party in its investigation. Any
investigation pursuant to this Section 6.5 shall be conducted in such manner
as not to interfere unreasonably with the conduct of the business of the other
party. Unless otherwise required by law, each of AMCON and HNWC will hold,
and will cause its respective officers, employees, counsel, financial
advisors, auditors and other authorized representatives to hold, any nonpublic
information obtained in any such investigation in confidence in accordance
with Section 7.9. No information or knowledge obtained in any investigation
pursuant to this Section 7.5 shall affect or be deemed to modify any
representation or warranty made by any party hereunder.
(b) Each party hereto shall give prompt notice to each other party
hereto of:
(i) the receipt by such party or any of such party's Subsidiaries
of any notice or other communication from any Person alleging that the consent
of such Person is or may be required in connection with the transactions
contemplated by this Agreement.
(ii) the receipt by such party or any of such party's Subsidiaries
of any notice or other communication from any Governmental Entity in
connection with any of the transactions contemplated by this Agreement; and
(iii) such party's obtaining Knowledge of any actions, suits,
claims, investigations or proceedings commenced, threatened against, relating
to or involving or otherwise affecting any of HNWC or AMCON, as the case may
be, or any AMCON Subsidiary which relate to the consummation of the
transactions contemplated by this Agreement; and
(iv) such party's obtaining Knowledge of the occurrence, or
failure to occur, of any event which occurrence or failure to occur will be
likely to cause (A) any representation or warranty contained in this Agreement
to be untrue or inaccurate in any material respect, or (B) any material
failure of any party to comply with or satisfy any covenant, condition or
agreement o be complied with or satisfied by it under this Agreement;
provided, however, that no such notification shall limit or otherwise affect
the representations, warranties, obligations or remedies of the parties to the
conditions to the obligations of the parties hereunder.
Section 7.6 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of AMCON, HNWC or Merger Sub,
any deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of AMCON, HNWC or Merger Sub, any other actions and things
to vest, perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and under any of the
rights, properties or assets of HNWC, AMCON or Merger Sub acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with
the Merger.
Section 7.7 Tax Treatment.
(a) Prior to the Effective Time, each party shall cooperate with the
other party and shall use its reasonable best efforts to cause the Merger to
qualify as a 368 Reorganization, and will not take any action reasonably
likely to cause the Merger not so to qualify. The Surviving Corporation shall
not take any action after the Effective Time that would cause the Merger not
to qualify as a 368 Reorganization.
(b) Each party shall cooperate with the other party and shall use its
reasonable best efforts to obtain the opinion referred to in Section 8.3(b)
and in connection therewith, HNWC shall deliver to such counsel a customary
representation letter substantially in the forms attached hereto as Exhibit H
(the "HNWC Representation Letter") or otherwise in form and substance
reasonably satisfactory to such counsel.
Section 7.8 Affiliates. Not less than 45 days prior to the Effective Time,
HNWC shall deliver to AMCON a letter identifying all persons who, in the
reasonable judgment of HNWC, may be deemed at the time this Agreement is
submitted for adoption by the stockholders of HNWC, "affiliates" of HNWC for
purposes of Rule 145 under the Securities Act, and such list shall be updated
as necessary to reflect changes from the date hereof. HNWC shall use
reasonable best efforts to cause each Person identified on such list to
deliver to AMCON not less than 30 days prior to the Effective Time, a written
agreement substantially in the form attached as Exhibit I hereto (a "HNWC
Affiliate Agreement").
Section 7.9 Confidentiality.
(a) Prior to the Effective Time and after any termination of this
Agreement each party hereto will hold, and will use its reasonable best
efforts to cause its officers, directors, employees, accountants, counsel,
consultants, advisors, affiliates (as such term is used in Rule 12b-2 under
the Exchange Act) and representatives (collectively, the "Representatives"),
to hold, in confidence all confidential documents and information concerning
the other parties hereto and its Subsidiaries furnished to such party in
connection with the transactions contemplated by this Agreement, including,
without limitation, all analyses, compilations, studies or records prepared by
the party receiving the information or by such party's Representatives, that
contain or otherwise reflect or are generated from such information
(collectively, the "Confidential Material"). The party furnishing any
Confidential Material is herein referred to as the "Delivering Company" and
the party receiving any Confidential Material is herein referred to as the
"Receiving Company."
(b) The Receiving Company agrees that the Confidential Material will not
be used other than for the purpose of the transactions contemplated by this
Agreement, and that such information will be kept confidential by the
Receiving Company and its Representatives; provided, however, that (i) any of
such information may be disclosed to the Representatives who need to know such
information for the purpose described above (it being understood that (a) each
such Representative shall be informed by the Receiving Company of the
confidential nature of such information, shall be directed by the Receiving
Company to treat such information confidentially and not to use it other than
for the purpose described above and shall agree to be bound by the terms of
this Section 7.9, and (b) in any event, the Receiving Company shall be
responsible for any breach of this Agreement by any of its Representatives),
and (ii) any other disclosure of such information may be made if the
Delivering Company has, in advance, consented to such disclosure in writing.
The Receiving Company will make all reasonable, necessary and appropriate
efforts to safeguard the Confidential Material from disclosure to anyone other
than as permitted hereby.
(c) Notwithstanding the foregoing, if the Receiving Company or any of
its Representatives is requested or required (by oral question or request for
information or documents in legal proceedings, interrogatories, subpoena,
civil investigative demand or similar process) to disclose any Confidential
Material, the Receiving Company will promptly notify the Delivering Company of
such request or requirement so that the Delivering Company may seek an
appropriate protective order and/or waive the Receiving Company's compliance
with the provisions of this Agreement. If, in the absence of a protective
order or the receipt of a waiver hereunder, the Receiving Company or any of
its Representatives is nonetheless, in the reasonable written opinion of the
Receiving Company's counsel, compelled to disclose Confidential Material to
any tribunal, the Receiving Company or such Representative, after notice to
the Delivering Company, may disclose such information to such tribunal. The
Receiving Party shall exercise reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded the Confidential Material so
disclosed. The Receiving Company or such Representative shall not be liable
for the disclosure of Confidential Material hereunder to a tribunal compelling
such disclosure unless such disclosure to such tribunal was caused by or
resulted from a previous disclosure by the Receiving Company or any of its
Representatives not permitted by this Agreement.
(d) This Section 7.9 shall be inoperative as to particular portions of
the Confidential Material if such information (i) is or becomes generally
available to the public other than as a result of a disclosure by the
Receiving Company or its Representatives, (ii) was available to the Receiving
Company on a non-confidential basis prior to its disclosure to the Receiving
Company by the Delivering Company or the Delivering Company's Representatives,
or (iii) becomes available to the Receiving Company on a non-confidential
basis from a source other than the Delivering Company or the Delivering
Company's Representatives, provided that such source is not known by the
Receiving Company, after reasonable inquiry, to be bound by a confidentiality
agreement with the Delivering Company or the Delivering Company's
Representatives and is not otherwise prohibited from transmitting the
information to the Receiving Company by a contractual, legal or fiduciary
obligation. The fact that information included in the Confidential Material
is or becomes otherwise available to the Receiving Company or its
Representatives under clauses (i) through (iii) above shall not relieve the
Receiving Company or its Representatives of the prohibitions of the
confidentiality provisions of this Section 7.9 with respect to the balance of
the Confidential Material.
(e) If this Agreement is terminated, each party hereto will, and will
use its reasonable best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to, destroy or deliver
to the party from whom such Confidential Material was obtained, upon request,
all documents and other materials, and all copies thereof, obtained by such
party or on its behalf from any such other parties in connection with this
Agreement that are subject to such confidence.
Section 7.10 Benefit Matters. AMCON and HNWC will work together to design
benefit plans to be adopted by the Surviving Corporation for the benefit of
its employees as soon as practicable following the Merger. Until such
adoption, the Surviving Corporation shall cause all AMCON Employee Plans and
all HNWC Employee Plans to be maintained in full force and effect.
Section 7.11 Exemption From Liability Under Section 16(b).
(a) Provided that HNWC delivers to AMCON the Section 16 Information with
respect to HNWC prior to the Effective Time, the Board of Directors of AMCON,
or a committee of Non-Employee Directors thereof (as such term is defined for
purposes of Rule 16b-3(d) under the Exchange Act), shall adopt a resolution in
advance of the Effective Time providing that the receipt by the HNWC Insiders
of AMCON Common Stock in exchange for shares of HNWC Common Stock, and of
options to purchase AMCON Common Stock upon assumption and conversion by the
Surviving Corporation of options to purchase HNWC Common Stock, in each case
pursuant to the transactions contemplated hereby and to the extent such
securities are listed in the Section 16 Information, are intended to be exempt
from liability pursuant to Rule 16b-3 under the Exchange Act.
(b) "Section 16 Information" shall mean information accurate in all
respects regarding the HNWC Insiders, the number of shares of HNWC Common
Stock, or other HNWC equity securities, deemed to be beneficially owned by
each such HNWC Insider and expected to be exchanged for Surviving Corporation
Common Stock in connection with the Merger.
(c) "HNWC Insiders" shall mean those officers and directors of HNWC who
are subject to the reporting requirements of Section 16(a) of the Exchange Act
who are listed in the Section 16 Information.
Section 7.12 Lease Agreement. AMCON and HNWC agree that the Lease Agreement
between HNWC and Hawaii Brewery Development Co., Inc. ("Hawaii Brewery"),
regarding real property situated in Keaau, Puna, Hawaii, together with all
buildings and other improvements located thereon, the water well located
thereon and the appurtenant pumping equipment (which are described in Exhibits
A and B to that Lease), which Lease has been duly and validly executed and
delivered by HNWC and Hawaii Brewery and is attached hereto as Exhibit K,
shall become effective on the Closing Date and shall thereupon become legally
binding and enforceable in accordance with its terms.
ARTICLE VIII
CONDITIONS TO THE MERGER
Section 8.1 Conditions to the Obligations of Each Party. The respective
obligations of HNWC, AMCON and Merger Sub to consummate the Merger are subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. The HNWC Stockholder Approval shall have been
obtained;
(b) Securities Laws. (i) The Registration Statement shall have become
effective in accordance with the provisions of the Securities Act, no stop
order suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and no proceedings for that purpose shall have been
initiated or threatened by the SEC and not concluded or withdrawn and (ii) all
state securities or blue sky authorizations necessary to carry out the
transactions contemplated hereby shall have been obtained and be in effect;
(c) AMEX Listing. The shares of AMCON Common Stock to be issued in the
Merger shall have been approved for listing upon issuance on the AMEX, subject
to official notice of issuance;
(d) Regulatory Approvals. Other than the filings provided for by
Article II, all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by,
any Governmental Entity the failure of which to obtain would have a HNWC
Material Adverse Effect, an AMCON Material Adverse Effect or a Surviving
Corporation Material Adverse Effect, shall have been filed, occurred or been
obtained; and
(e) No Injunctions or Restraints; Illegality. No Laws shall have been
adopted or promulgated, and no temporary restraining order, preliminary or
permanent injunction or other order issued by a court or other Governmental
Entity of competent jurisdiction shall be in effect, (i) having the effect of
making the Merger illegal or otherwise prohibiting, enjoining or restraining
consummation of the Merger or (ii) which otherwise would reasonably be
expected to have a Surviving Corporation Material Adverse Effect after giving
effect to the Merger; provided, however, that the provisions of this
Section 8.1(e) shall not be available to any party whose failure to fulfill
its obligations pursuant to Sections 7.1 and 7.2 shall have been the cause of,
or shall have resulted in, such order or injunction.
Section 8.2 Conditions to the Obligations of AMCON and Merger Sub. The
obligations of AMCON and Merger Sub to consummate the Merger are subject to
the satisfaction, or waiver by AMCON and Merger Sub, on or prior to the
Closing Date, of the following further conditions:
(a) Representations and Covenants. (i) HNWC shall have performed in all
material respects all of its obligations hereunder required to be performed by
it at or prior to the time of the filing of the Articles of Merger and the
Certificates of Merger; (ii) the representations and warranties of HNWC in
this Agreement that are qualified as to materiality, HNWC Material Adverse
Effect or Surviving Corporation Material Adverse Effect shall be accurate, and
any such representations and warranties that are not so qualified shall be
accurate, in all material respects, as of the date of this Agreement and as of
the Effective Time (except for representations and warranties that address
matters only as of a specific date, in which case such representations and
warranties qualified as to materiality, HNWC Material Adverse Effect or
Surviving Corporation Material Adverse Effect shall be true and correct, and
those not so qualified shall be true and correct in all material respects, on
and as of such earlier date); and (iii) AMCON shall have received a
certificate signed by the Chief Executive Officer or Chief Financial Officer
of HNWC to the foregoing effect;
(b) Affiliate Agreements. AMCON shall have received from each Person
named in the letter referred to in Section 7.8 an executed copy of a HNWC
Affiliate Agreement substantially in the form of Exhibit I to this Agreement;
(c) Employment Agreements. The Chief Executive Officer of HNWC shall
have executed and delivered to the Surviving Corporation an employment
agreement in the form attached hereto as Exhibit J;
(d) No Material Adverse Change. There shall have been no material
adverse change in the financial condition, results of operations or cash flows
or assets, liabilities, business or prospects of HNWC from September 29, 2000
through the Closing Date, except as disclosed in (i) the HNWC Disclosure
Schedule dated the date hereof, or (ii) HNWC SEC Documents filed prior to the
date hereof;
(e) Dissenters. The aggregate number of Dissenters' Shares shall not
exceed 5.0% of the total number of shares of HNWC Common Stock outstanding and
entitled to vote;
(f) Consents. Consents shall have been obtained from all parties to
HNWC Material Contracts (as defined in Section 4.25) that are needed because
of the Merger or the transactions contemplated hereby in order to permit the
Surviving Corporation to enjoy all rights and benefits thereunder (the
"Material Consent Condition"); and
(g) All of the shares of HNWC's Series B Convertible Preferred Stock
shall have been repurchased.
Section 8.3 Conditions to the Obligations of HNWC. The obligations of HNWC
to consummate the Merger are subject to the satisfaction, or waiver by HNWC,
on or prior to the Closing Date, of the following further conditions:
(a) Representations and Covenants. (i) AMCON shall have performed in
all material respects all of its obligations hereunder required to be
performed by it at or prior to the time of the filing of the Articles of
Merger and the Certificates of Merger; (ii) the representations and warranties
of AMCON and Merger Sub in this Agreement that are qualified as to
materiality, AMCON Material Adverse Effect or Surviving Corporation Material
Adverse Effect shall be accurate, and any such representations and warranties
that are not so qualified shall be accurate, in all material respects, as of
the date of this Agreement and as of the Effective Time (except for
representations and warranties which address matters only as of a specific
date, in which case such representations and warranties qualified as to
materiality, AMCON Material Adverse Effect or Surviving Corporation Material
Adverse Effect shall be true and correct, and those not so qualified shall be
true and correct in all material respects, on and as of such earlier date);
and (iii) HNWC shall have received a certificate signed by the Chief Executive
Officer or Chief Financial Officer of AMCON and Merger Sub to the foregoing
effect;
(b) Tax Opinion. HNWC shall have received an opinion of Squire, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ L.L.P. in form and substance reasonably satisfactory to HNWC, on the
basis of certain facts, representations and assumptions set forth in such
opinion, dated as of the date of the filing of the Articles of Merger and the
Certificates of Merger, to the effect that the Merger will qualify for federal
income tax purposes as a 368 Reorganization and that each of AMCON and HNWC
will be a party to the reorganizations within the meaning of Section 368(b) of
the Code. In rendering such opinion, such counsel shall be entitled to rely
upon representations of officers of AMCON and HNWC;
(c) Employment Agreements. The Chief Executive Officer of HNWC shall
have executed and delivered to the Surviving Corporation an employment
agreement in the form attached hereto as Exhibit J; and
(d) No Material Adverse Change. There shall have been no material
adverse change in the financial condition, results of operations or cash flows
or assets, liabilities, business or prospects of AMCON from September 30, 2000
through the Closing Date, except as disclosed in (i) the AMCON Disclosure
Schedule dated the date hereof, or (ii) AMCON SEC Documents filed prior to the
date hereof.
ARTICLE IX
TERMINATION
Section 9.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time by written notice by the terminating party to the other
party (except if such termination is pursuant to Section 9.1(a)),
notwithstanding approval thereof by the stockholders of HNWC:
(a) by mutual written agreement of AMCON and HNWC;
(b) by either HNWC or AMCON, if
(i) the Merger shall not have been consummated by September 30,
2001 (the "Expiration Date"); provided, however, that the right to terminate
this Agreement under this Section 9.1(b)(i) shall not be available to any
party whose breach of any provision of this Agreement has resulted in the
failure of the Merger to occur on or before the Expiration Date; or
(ii) there shall be any Law that makes consummation of the Merger
illegal or otherwise prohibited or any judgment, injunction, order or decree
of any Governmental Entity having competent jurisdiction enjoining AMCON, HNWC
or the Merger Sub from consummating the Merger is entered and such judgment,
injunction, judgment or order shall have become final and nonappealable and,
prior to such termination, the parties shall have used reasonable best efforts
to resist, resolve or lift, as applicable, such law, regulation, judgment,
injunction, order or decree.
(c) by AMCON, (i) if there shall have occurred a willful and material
breach of Section 6.2 by HNWC or any of its officers, directors, employees,
advisors or agents; (ii) if a breach of any representation, warranty, covenant
or agreement on the part of HNWC set forth in this Agreement shall have
occurred that would cause the condition set forth in Section 8.2(a) not to be
satisfied, and such condition shall be incapable of being satisfied by the
Expiration Date; (iii) HNWC shall have failed to include in the Proxy
Statement/Prospectus the recommendation of the Board of Directors of HNWC in
favor of the adoption and approval of this Agreement and the approval of the
Merger; (v) the Board of Directors of HNWC shall have approved, endorsed or
recommended any Acquisition Proposal; (vi) a tender or exchange offer relating
to securities of HNWC shall have been commenced and HNWC shall not have sent
to its security holders, within ten business days after the commencement of
such tender or exchange offer, a statement disclosing that HNWC recommends
rejection of such tender or exchange offer; or (vii) HNWC or HNWC's Board of
Directors or any committee thereof shall have resolved to do or permit any of
the foregoing;
(d) by HNWC, if a breach of any representation, warranty, covenant or
agreement on the part of AMCON set forth in this Agreement shall have occurred
that would cause the condition set forth in Section 8.3(a) not to be
satisfied, and such condition is incapable of being satisfied by the
Expiration Date; or
(e) automatically if the transactions contemplated herein are enjoined
by a court of competent jurisdiction for a period extending beyond 90 days.
Section 9.2 Effect of Termination. If this Agreement is terminated pursuant
to Section 9.1, this Agreement shall forthwith become void and there shall be
no liability or obligation on the part of AMCON or HNWC or their respective
officers or directors (i) except with respect to the provisions of Sections
7.9, 9.2, 10.1, 10.4, 10.5, 10.10 and 10.11 of this Agreement which provisions
shall remain in full force and effect and survive any termination of this
Agreement, and (ii) except that, notwithstanding anything to the contrary
contained in this Agreement, neither AMCON nor HNWC shall be relieved or
released from any liabilities or damages arising out of its willful material
breach of this Agreement.
Section 9.3 Fees and Expenses. All fees and expenses incurred in connection
herewith and the transactions contemplated hereby shall be paid by the party
incurring such expenses, whether or not the Merger is consummated. As used in
this Agreement, "Expenses" includes all out-of-pocket expenses (including,
without limitation, all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates)
incurred by a party or on its behalf in connection with or related to the
authorization, preparation, negotiation, execution and performance of this
Agreement and the transactions contemplated hereby, including the preparation,
printing, filing and mailing of the Proxy Statement/Prospectus and the
solicitation of stockholder approvals and all other matters related to the
transactions contemplated hereby.
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy or telefacsimile, upon confirmation of
receipt, in each case, if on a Business Day, and otherwise on the next
Business Day, (b) on the first service, or (c) on the fifth Business Day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
if to the Surviving Corporation, to the address set forth below for
AMCON and HNWC, including copies;
if to AMCON, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Board
AMCON Distributing Company
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to HNWC to:
▇▇▇▇▇▇ ▇▇▇▇▇▇
President
Hawaiian Natural Water Company, Inc.
▇▇-▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 10.2 Survival of Representations, Warranties and Covenants After the
Effective Time. The representations, warranties, covenants and other
agreements contained herein and in any certificate or other instrument
delivered pursuant hereto, including any rights arising out of any breach of
such representations, warranties, covenants and other agreements, shall not
survive the Effective Time.
Section 10.3 Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived prior to
the Effective Time if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by AMCON and HNWC or in the case of a
waiver, by the party against whom the waiver is to be effective; provided that
after the HNWC Stockholder Approval, no such amendment or waiver shall,
without the further approval of such stockholders, be made that would require
such approval under any applicable law, rule or regulation.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 10.4 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other party, and any attempt to make
any such assignment without such consent shall be null and void. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors
and assigns.
Section 10.5 Governing Law. This Agreement shall be construed in accordance
with and governed by the internal laws of the State of Delaware without regard
to any principles of Hawaii conflicts or choice of law.
Section 10.6 Counterparts; Effectiveness. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other party (including by
facsimile transmission), it being understood that both parties need not sign
the same counterpart. This Agreement shall become effective when each party
hereto shall have received counterparts hereof signed by all of the other
parties hereto.
Section 10.7 No Third Party Beneficiaries. 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 10.8 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table
of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation."
Section 10.9 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed
that the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled
at law or in equity.
Section 10.10 Entire Agreement. This Agreement (together with the exhibits
and schedules hereto) constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements
and understandings, both oral and written, between the parties with respect to
the subject matter hereof.
Section 10.11 Severability. If any term, provision, covenant or restriction
set forth in this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth in this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not deemed by a party (acting reasonably and in good
faith) to be materially adverse to that party. Upon such a determination, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in order that the
transactions contemplated hereby may be consummated as originally contemplated
to the fullest extent possible.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
AMCON DISTRIBUTING COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
HAWAIIAN NATURAL WATER COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
AMCON MERGER SUB, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
APPENDIX I
DEFINITIONS
"Acquisition Proposal for HNWC" means any offer or proposal for a merger,
consolidation, share exchange, business combination, reorganization,
recapitalization, issuance of securities, liquidation, dissolution, tender
offer or exchange offer or other similar transaction or series of transactions
involving, or any purchase of 10% or more of the assets, or directly or
indirectly acquires beneficial ownership of securities representing, or
exchangeable for or convertible into, more than 10% of the outstanding
securities of any class of voting securities of HNWC or in which HNWC issues
securities representing 10% of the outstanding securities of any class of
voting securities of HNWC, other than the transactions contemplated by this
Agreement.
"Action" means any action, suit, proceeding or investigation by or before
any Governmental Entity or arbitrator.
"Affiliate" means, with respect to any Person, any other Person, directly
or indirectly, controlling, controlled by, or under common control with, such
Person. For purposes of this definition, the term "control" (including the
correlative terms "controlling", "controlled by" and "under common control
with") means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, or partnership or other ownership
interests, by contract, or otherwise.
"AMCON Disclosure Schedule" means the schedule delivered to HNWC by AMCON
pursuant to Article I hereof containing exceptions to the representations and
warranties of AMCON set forth in such Article III.
"AMCON SEC Documents" means (i) AMCON's annual report on Form 10-K for
its fiscal year ended September 30, ▇▇▇▇ (▇▇▇ "▇▇▇▇▇ ▇▇-▇"), (▇▇) AMCON's
quarterly reports on Form 10-Q for its fiscal quarters ended December 31, 2000
and March 31, 2001, and (iii) all other reports, filings, registration
statements and other documents filed by it with the SEC since September 30,
2000.
"Articles of Merger" means the Articles of Merger of HNWC with and into
Merger Sub, in substantially the form attached hereto as Exhibit B.
"Average AMCON Stock Price" means the average of the closing sales price
per share of AMCON Common Stock as reported by AMEX on each of the 20
consecutive trading days immediately preceding the third trading day prior to
the Determination Date.
"Business Day" means any day other than a Saturday, Sunday or one on
which banks are authorized by law to close in the City of New York.
"Certificate of Merger" means the Certificate of Merger of HNWC with and
into Merger Sub, in substantially the form attached hereto as Exhibit C.
"Closing" means the closing of the Merger contemplated in this Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Determination Date" means the date on which the last of the following
occurs: (i) the effective date (including the expiration of any applicable
waiting period by law) of the last required consent or order of any
Governmental Entity having authority over and approving or exempting the
Merger, and (ii) the date on which the stockholders of HNWC have approved the
Merger.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Exchange Agent" means the agent to be agreed upon by AMCON and HNWC and
engaged by the Surviving Corporation to effect the exchange of the Common
Certificates pursuant to Section 2.9 of this Agreement.
"Governmental Entity" means any federal, state or local governmental
authority, any transgovernmental authority or any court, tribunal,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign.
"HNWC Common Stock" means the common stock of HNWC, no par value per
share.
"HNWC Disclosure Schedule" means the schedule delivered to AMCON by HNWC
pursuant to Article IV hereof containing exceptions to the representations and
warranties of HNWC set forth in such Article V.
"HNWC SEC Documents" means (i) HNWC annual report on Form 10-KSB for its
fiscal year ended December 31, 2000 (the "HNWC 10-KSB"), (ii) HNWC quarterly
report on Form 10-QSB for its fiscal quarter ended March 31, 2001 (the "HNWC
10-QSB"), (iii) HNWC proxy or information statements relating to meetings of,
or actions taken without a meeting by, HNWC stockholders held since December
31, 1999, and (iv) all other reports, filings, registration statements and
other documents filed by it with the SEC since December 31, 2000.
"HNWC Series A Convertible Preferred Stock" means the 1,250 shares of
Series A Convertible Preferred Stock of HNWC, par value $1.00 per share,
authorized by unanimous written consent of the HNWC board of directors dated
March 1, 1999.
"HNWC Series B Convertible Preferred Stock" means the 250 shares of
Series B Convertible Preferred Stock of HWNC, par value $1.00 per share,
authorized by unanimous consent of the HNWC board of directors dated March 3,
2000.
"HNWC Series C Convertible Preferred Stock" means the 750,000 shares of
Series C Convertible Preferred Stock of HWNC, par value of $1.00 per share,
authorized by unanimous consent of the HWNC board of directors dated as of
October , 2000.
"Knowledge" means, with respect to the matter in question, if any of
(i) in the case of AMCON or Merger Sub, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chairman of the Board,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, President, and ▇▇▇▇ ▇▇▇▇▇, Chief Financial Officer, and
(ii) in the case of HNWC, [insert names and titles of relevant officers]
officers of AMCON or HNWC, as the case may be, has actual knowledge of such
matter.
"Law" means any federal, state, local, municipal, foreign, international,
multinational, or other judicial or administrative order, judgment, decree,
constitution, statute, rule, regulation, treaty, ordinance or principle of
common law.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Material Adverse Effect" means a material adverse effect on the
financial condition, business, results of operations or prospects of a Person
and its Subsidiaries, taken as a whole, but shall exclude any material adverse
effect arising out of any change or development relating to (i) U.S. or global
economic or industry conditions, (ii) changes in U.S. or global financial
markets or conditions, and/or (iii) any generally applicable change in Law or
GAAP or interpretation of any thereof. "AMCON Material Adverse Effect" means
a Material Adverse Effect in respect of AMCON, "HNWC Material Adverse Effect"
means a Material Adverse Effect in respect of HNWC and "Surviving Corporation
Material Adverse Effect" means a Material Adverse Effect in respect of the
Surviving Corporation.
"Merger" has the meaning specified in the Recitals to this Agreement.
"Person" means an individual, a corporation, a limited liability company,
a partnership, an association, a trust or any other entity or organization,
including any Governmental Entity.
"Proxy Statement/Prospectus" means the proxy statement of HNWC and the
prospectus of AMCON included in the Registration Statement of AMCON relating
to the HNWC Special Meeting, together with any amendments or supplements
thereto.
"Registration Statement" means the Registration Statement on Form S-4
registering under the Securities Act the AMCON Common Stock issuable in
connection with the Merger.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons
performing similar functions are directly or indirectly owned by such Person.
"AMCON Subsidiary" means a Subsidiary of AMCON.
"Surviving Corporation Common Stock" means the common stock of Merger
Sub.
"Tax" or "Taxes" means any federal, state, county, local or foreign
taxes, charges, levies, imposts, duties, other assessments or similar charges
of any kind whatsoever, including any interest, penalties and addition imposed
thereon or with respect thereto.
In addition to the definitions set forth above, each of the following
terms is defined in the Section set forth opposite such term:
TERMS Section
----- --------
368 Reorganization Recitals
Adverse Change in the HNWC Recommendation 7.2(b)
AMCON Preamble
AMCON Employee Plans 3.13(a)
AMCON Intellectual Property 3.16(b)
AMCON Preferred Stock 3.5
AMCON Representation Letter 8.7(b)
AMCON Returns 3.12(a)
AMCON Securities 4.5(b)
AMCON Stock Options 3.5(a)
AMCON Warrants 3.5(a)
Common Certificates 2.9
Confidential Material 7.9(a)
Confidentiality Agreement 5.2(a)
Delaware Law 3.1(a)
Delivering Company 8.9(a)
Effective Time 2.1(b)
Environmental Laws 3.17(b)
ERISA 3.13(a)
ERISA Affiliate 3.13(a)
Expenses 10.3
Expiration Date 10.1(b)(i)
Hawaii Law 2.1(a)
HNWC Preamble
HNWC Affiliate Agreement 7.8
HNWC Employee Plans 4.13(a)
HNWC Financial Statements 4.8(a)
HNWC Insider 8.11(c)
HNWC Intellectual Property 4.16(b)
HNWC Representation Letter 7.7(b)
HNWC Returns 4.12(a)
HNWC Securities 4.5(b)
HNWC Stock Options 4.5(a)
HNWC Stockholder Approval 4.19(a)
HNWC Stockholders Meeting 4.19(b)
HNWC Warrants 4.5(a)
Merger Recitals
Merger Consideration 2.2(a)
Multiemployer Plan 3.13(b)
Receiving Company 7.9(a)
Representatives 7.9(a)
Retirement Plan 3.13(b)
Section 16 Information 7.11(b)
Stockholder Agreements Recitals
Surviving Corporation 2.1(a)
APPENDICES
Appendix I - Definitions
EXHIBITS
Exhibit A- Stockholders' Agreement
Exhibit B- Articles of Merger
Exhibit C- Certificate of Merger
Exhibit D- Certificate of Incorporation of Merger Sub
Exhibit E- Bylaws of Merger Sub
Exhibit F- List of Surviving Corporations' Directors
Exhibit G- Principal Officers of Surviving Corporation
Exhibit H- HNWC Representation Letter
Exhibit I- Form of HNWC Affiliate Agreement
Exhibit J- Form of Employment Agreement
Exhibit K- Form of Lease Agreement