1
Exhibit 10.8
AGREEMENT AND PLAN OF MERGER
among
THE RTK GROUP, INC.
(a New Jersey corporation),
CRI ACQUISITION CORP.
(a Delaware corporation)
COMMUNICATION RESOURCES INCORPORATED
(a Delaware corporation)
and
CREST/CRI LLC
(a Delaware limited liability company)
July 23, 1999
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TABLE OF CONTENTS
Page
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Article I THE MERGER................................................................................1
Section 1.1. The Merger............................................................................1
Section 1.2. The Closing...........................................................................2
Section 1.3. Certificate of Merger.................................................................2
Section 1.4. Certificate of Incorporation..........................................................2
Section 1.5. Bylaws................................................................................2
Section 1.6. Directors and Officers................................................................2
Section 1.7. CRI Common Stock......................................................................2
Section 1.8. Exchange of Certificates Representing CRI Common Stock................................3
Section 1.9. Treatment of Options..................................................................4
Section 1.10. Merger Sub Capital Stock..............................................................5
Article II REPRESENTATIONS AND WARRANTIES OF CRI....................................................5
Section 2.1. Organization, Standing and Qualification of CRI; Corporate Authority..................5
Section 2.2. Actions Pending.......................................................................5
Section 2.3. No Defaults...........................................................................5
Section 2.4. Title, Liens..........................................................................6
Section 2.5. Leases................................................................................6
Section 2.6. Burdensome and Conflicting Agreements and Charter Provisions..........................6
Section 2.7. Intellectual Property.................................................................6
Section 2.8. Financial Statements..................................................................7
Section 2.9. Disclosure............................................................................7
Section 2.10. Environmental.........................................................................7
Section 2.11. Employees.............................................................................8
Section 2.12. Insurance.............................................................................8
Section 2.13. Business Relations....................................................................9
Section 2.14. ERISA.................................................................................9
Section 2.15. Capitalization........................................................................9
Article III REPRESENTATIONS AND WARRANTIES OF RTK AND MERGER SUB....................................9
Section 3.1. Organization of RTK and its Subsidiaries..............................................9
Section 3.2. Due Authorization....................................................................10
Section 3.3. RTK Common Stock.....................................................................10
Section 3.4. Ownership of Merger Sub; No Prior Activities.........................................10
Section 3.5. No Conflict..........................................................................10
Section 3.6. Title to and Condition of Assets.....................................................11
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Section 3.7. Environmental Matters................................................................11
Section 3.8. Financial Information................................................................12
Section 3.9. Litigation...........................................................................12
Section 3.10. Intellectual Property................................................................13
Section 3.11. Insurance............................................................................13
Section 3.12. Plans and Agreements Relating to Employees...........................................13
Article IV NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES, INDEMNIFICATION, ETC.............14
Section 4.1. Survival of Representations and Warranties...........................................14
Section 4.2. Indemnification......................................................................14
Section 4.3. Assignment of Rights to Indemnification..............................................16
Article V GENERAL PROVISIONS.......................................................................16
Section 5.1. Notices..............................................................................16
Section 5.2. Assignment; Binding Effect...........................................................17
Section 5.3. Entire Agreement.....................................................................17
Section 5.4. Amendment............................................................................17
Section 5.5. Governing Law........................................................................17
Section 5.6. Counterparts.........................................................................17
Section 5.7. Headings.............................................................................17
Section 5.8. Interpretation.......................................................................18
Section 5.9. Waivers..............................................................................18
Section 5.10. Incorporation of Schedules and Exhibits..............................................18
Section 5.11. Severability.........................................................................18
Section 5.12. Definitions..........................................................................18
Exhibit A Certificate of Merger
Schedule 2.1 Qualification to do Business
Schedule 2.4 Title, Liens
Schedule 2.7 Intellectual Property
Schedule 2.8 Financial Statements
Schedule 2.10 Environmental
Schedule 2.11 Employees
Schedule 2.12 Insurance
Schedule 2.13 Business Relations
Pursuant to Regulation S-K, Item 601(b)(2), a copy of any omitted schedule will
be furnished to the Commission upon request.
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 23,
1999, by and among The RTK Group, Inc., a New Jersey corporation ("RTK"), CRI
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of
RTK ("Merger Sub"), Communication Resources Incorporated, a Delaware corporation
("CRI") and Crest/CRI LLC, a Delaware limited liability company ("Crest").
RECITALS
A. The Boards of Directors of RTK and CRI each have determined that a
business combination between RTK and CRI is in the best interests of their
respective companies and stockholders and presents an opportunity for their
respective companies to achieve long-term strategic and financial benefits, and
accordingly have agreed to effect the merger provided for herein.
B. The stockholders of CRI have unanimously approved and adopted this
Agreement in accordance with the Delaware General Corporation Law (the "DGCL")
and the Certificate of Designation of CRI.
C. For federal income tax purposes, it is intended that the merger
provided for herein shall qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
and for financial accounting purposes shall be accounted for as a purchase.
D. Merger Sub is a wholly-owned subsidiary of RTK and has been formed
solely to facilitate the Merger (as defined herein) and has conducted and will
conduct no business or activity other than in connection with the Merger.
E. Crest is a stockholder in CRI and is a party to this Agreement only
for purposes of assigning certain of its rights to RTK as set forth in Section
4.3 hereof.
F. RTK, Merger Sub and CRI desire to make certain representations,
warranties and agreements in connection with the merger.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties and agreements contained herein, the parties hereto
hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1. THE MERGER. At the Effective Time (as defined in Section
1.3), Merger Sub shall be merged with and into CRI in accordance with this
Agreement, and the
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separate corporate existence of Merger Sub shall thereupon cease (the "Merger").
CRI shall be the surviving corporation in the Merger (sometimes hereinafter
referred to as the "Surviving Corporation"). The Merger shall have the effects
specified in the DGCL.
Section 1.2. THE CLOSING. The closing of the Merger (the "Closing")
shall take place on the same date and time as the execution of this Agreement or
at such other time and date as RTK and CRI may agree. The date on which the
Closing occurs is hereinafter referred to as the "Closing Date."
Section 1.3. CERTIFICATE OF MERGER. The parties hereto shall cause a
Certificate of Merger meeting the requirements of Section 251 of the DGCL to be
properly executed and filed in accordance with such Section on the Closing Date.
The Merger shall become effective at the time of filing of the Certificate of
Merger with the Secretary of State of the State of Delaware in accordance with
the DGCL or at such later time which the parties hereto shall have agreed upon
and designated in such filing as the effective time of the Merger (the
"Effective Time"). The Certificate of Merger is attached hereto as EXHIBIT A.
Section 1.4. CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of Merger Sub shall be the Certificate of Incorporation of the
Surviving Corporation, until duly amended in accordance with applicable law,
provided that the name of the Surviving Corporation shall be "Communication
Resources Incorporated." Such Certificate is attached to the Certificate of
Merger as Exhibit 1.
Section 1.5. BYLAWS. The Bylaws of Merger Sub in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation,
until duly amended in accordance with applicable law.
Section 1.6. DIRECTORS AND OFFICERS. The directors of Merger Sub
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation as of the Effective Time and until their successors are duly
appointed or elected in accordance with applicable law. The officers of CRI
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation as of the Effective Time and until their successors are duly
appointed or elected in accordance with applicable law.
Section 1.7. CRI COMMON STOCK. (a) At the Effective Time, each share of
common stock of CRI, par value $.01 per share (the "CRI Common Stock"), issued
and outstanding immediately prior to the Effective Time (other than shares of
CRI Common Stock to be cancelled pursuant to Section 1.7(c)) shall, by virtue of
the Merger and without any action on the part of the holder thereof, be
converted into the right to receive the Merger Consideration. The Merger
Consideration is equal to one (1) share of common stock of RTK, without par
value (the "RTK Common Stock").
(b) As a result of the Merger and without any action on the
part of the holder thereof, at the Effective Time all shares of the CRI Common
Stock shall cease to be outstanding and shall be cancelled and retired and shall
cease to exist, and each holder of shares of CRI Common Stock (other than shares
of CRI Common Stock to be cancelled pursuant to Section
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1.7(c)) shall thereafter cease to have any rights with respect to such shares of
CRI Common Stock, except the right to receive, without interest, the RTK Common
Stock upon the surrender of a certificate or form of unexercised option grant
(each, a "Certificate") representing such shares of CRI Common Stock.
(c) Each share of CRI Common Stock issued and held in CRI's
treasury at the Effective Time shall, by virtue of the Merger, cease to be
outstanding and shall be cancelled and retired without payment of any
consideration therefor.
(d) All shares of Series A Convertible Preferred Stock of CRI
have been converted to shares of Common Stock prior to the Merger.
Section 1.8. EXCHANGE OF CERTIFICATES REPRESENTING CRI COMMON STOCK.
(a) As of the Effective Time, RTK shall, for the benefit of the holders of
shares of CRI Common Stock (other than shares of CRI Common Stock to be
cancelled pursuant to Section 1.7(c)), for exchange in accordance with this
Article I, cause certificates representing the shares of RTK Common Stock to be
issued pursuant to Section 1.7 and paid pursuant to this Section 1.8 in exchange
for outstanding shares of CRI Common Stock.
(b) Prior to the Effective Time, RTK shall provide to each
holder of record of shares of CRI Common Stock (other than shares of CRI Common
Stock to be cancelled pursuant to Section 1.7(c)) (i) a letter of transmittal
which shall specify that delivery shall be effected, and risk of loss and title
to such shares of CRI Common Stock shall pass, only upon delivery of the
Certificates representing such shares to RTK and which shall be in such form and
have such other provisions as RTK may reasonably specify and (ii) instructions
for use in effecting the surrender of such Certificates in exchange for
certificates representing shares of RTK Common Stock. Upon surrender of a
Certificate for cancellation to RTK together with such letter of transmittal,
duly executed and completed in accordance with the instructions thereto, the
holder of the shares represented by such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of RTK Common Stock which such holder has the right to receive in respect
of the Certificate surrendered pursuant to the provisions of this Article I,
after giving effect to any required withholding tax, and the shares represented
by the Certificate so surrendered shall forthwith be cancelled. In the event of
a transfer of ownership of CRI Common Stock which is not registered in the
transfer records of the Company, a certificate representing the proper number of
shares of RTK Common Stock may be issued to such a transferee if the Certificate
representing such CRI Common Stock is presented to RTK, accompanied by all
documents required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid.
(c) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared after the Effective Time on RTK Common
Stock shall be paid with respect to any shares of CRI Common Stock represented
by a Certificate until such Certificate is surrendered for exchange as provided
herein. Subject to the effect of applicable laws, following surrender of any
such Certificate, there shall be paid to the holder of the certificates
representing whole shares of RTK Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of dividends or
other distributions with a record date after the
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Effective Time theretofore payable with respect to such whole shares of RTK
Common Stock and not paid, less the amount of any withholding taxes which may be
required thereon, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of RTK Common Stock, less the amount of any
withholding taxes which may be required thereon.
(d) At or after the Effective Time, there shall be no
transfers on the stock transfer books of CRI of the shares of CRI Common Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be cancelled and exchanged for certificates for shares of RTK Common Stock
deliverable in respect thereof pursuant to this Agreement in accordance with the
procedures set forth in this Article I.
(e) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the execution by such person of an agreement to
indemnify the Surviving Corporation against any claim that may be made against
it with respect to such Certificate or such other bond, security or indemnity as
RTK may reasonably request, RTK will issue in exchange for such lost, stolen or
destroyed Certificate the shares of RTK Common Stock, and unpaid dividends and
distributions on shares of RTK Common Stock as provided in Section 1.8(c),
deliverable in respect thereof pursuant to this Agreement.
Section 1.9. TREATMENT OF OPTIONS. At the Effective Time, RTK shall
assume CRI's rights and obligations under each of the outstanding stock options
previously granted by CRI to certain of its employees, directors and consultants
that are outstanding immediately prior to the Effective Time (each such stock
option existing immediately prior to the Effective Time is referred to herein as
an "Existing Option" and each such assumed stock option existing immediately
after the Effective Time is referred to herein as an "Assumed Option"). Under
each Assumed Option, the optionee shall have the right to receive from RTK, in
accordance with the terms and subject to the conditions of the Existing Option,
the Merger Consideration that such optionee would have been entitled to receive
had the optionee exercised his or her Existing Option immediately prior to the
Effective Time, but only in accordance with the terms and conditions of the
Existing Option (including payment of the aggregate exercise price thereof).
Except as provided in this Section 1.9, the Assumed Option shall not give the
optionee any additional benefits that the holder thereof did not have under the
Existing Option; provided, however, that the terms of such Existing Options
shall govern the vesting thereof, including, if applicable, any vesting of
Existing Options as a result of the Merger. Each Assumed Option shall constitute
a continuation of the Existing Option, substituting RTK for CRI and, in the case
of employees, employment by RTK or a subsidiary of RTK for employment by an CRI
or a subsidiary of CRI. Notwithstanding the foregoing, the terms of any Assumed
Option shall be such that the substitution of the Assumed Option for the
Existing Option would not constitute a modification of the Existing Option
within the meaning of Section 424(h)(3) of the Code and the Regulations
promulgated thereunder.
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Section 1.10. MERGER SUB CAPITAL STOCK. Each share of capital stock of
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted, by virtue of the Merger, into one share of common stock of the
Surviving Corporation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CRI
CRI hereby represents and warrants to RTK and Merger Sub as follows:
Section 2.1. ORGANIZATION, STANDING AND QUALIFICATION OF CRI; CORPORATE
AUTHORITY. CRI is a corporation duly organized and existing in good standing
under the laws of Delaware, and has the corporate power to own its property and
to carry on its business as now being conducted, is duly qualified and in good
standing as a foreign corporation to do business in every jurisdiction where the
character of the properties owned or leased by it or the nature of any business
transacted by it makes such qualification necessary except where such
nonqualification or lack of good standing would not have a Material Adverse
Change on the business of CRI or as described on SCHEDULE 2.1. On the date
hereof CRI has only those subsidiaries listed on Schedule 2.1 (the
"Subsidiaries"). CRI has delivered to the Company true, complete and correct
copies of the Certificate of Incorporation and its Bylaws, as amended and in
full force and effect on the date hereof.
Section 2.2. ACTIONS PENDING. There is no action, suit, investigation
or proceeding pending or, to the knowledge of CRI, threatened against CRI or any
of its Subsidiaries before any court, arbitrator or administrative or
governmental body that (i) seeks to enjoin or otherwise prevent the transfer of
the shares of CRI Common Stock contemplated hereby or (ii) materially and
adversely affects, or as to which there is a reasonable possibility of an
adverse decision that would materially and adversely affect, either individually
or collectively, the business or condition of CRI and its Subsidiaries taken as
a whole. Neither CRI nor any Subsidiary is in violation of any judgment, order,
writ, injunction, decree, rule or regulation of any court or governmental
department, commission, board, bureau, agency or instrumentality, the violation
of which reasonably could be expected to, either individually or collectively,
have a Material Adverse Change on the business, property, assets or financial
position of CRI and its Subsidiaries taken as a whole.
Section 2.3. NO DEFAULTS. Neither CRI nor any of its Subsidiaries is in
violation of, or in default under, nor has there been any waiver (other than the
waiver of Nationsbank N.A. dated May 5, 1998) given with respect to, any term or
provision of any charter, bylaw, partnership agreement, mortgage, indenture,
agreement, instrument, statute, rule, regulation, judgment, decree, order, writ,
or injunction applicable to it, such that such violations and defaults in the
aggregate could reasonably be expected to result in any Material Adverse Change
in the business, assets, condition (financial or otherwise) or results of
operations of CRI and its
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Subsidiaries taken as a whole, or materially adversely affect the ability of CRI
to perform in any material respect its obligations under this Agreement.
Section 2.4. TITLE, LIENS. Except as set forth on SCHEDULE 2.4 hereto,
CRI has, and each of its Subsidiaries has, good and marketable title, free and
clear of all Liens, to its respective properties and assets. For purposes of
this Section 2.4, "Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, a person or business entity other than the
owner of the property, whether such interest is based on the common law, statute
or contract, and including, but not limited to, the security interest lien
arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt
or a lease, consignment or bailment for security purposes. The term "Lien" shall
include reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting real property, except any such usual or normal
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases or other title exceptions or encumbrances
affecting real property, including encumbrances for taxes not yet due and
payable, that are not materially disruptive to the use of such property in the
ordinary course of business. For the purposes of this Agreement, CRI or a
Subsidiary shall be deemed to be the owner of any property which it has acquired
or holds subject to a conditional sale agreement, financing lease or other
arrangement pursuant to which title to the property has been retained by or
vested in some other person or business entity for security purposes.
Section 2.5. LEASES. CRI and each of its subsidiaries enjoys peaceful
and undisturbed possession of all leases material to CRI or any of its
subsidiaries and necessary for the operation of its respective properties and
assets, none of which contains any non-market, unusually burdensome provisions
which materially or adversely affects or impairs the operation of such
properties or assets. All such leases are valid and subsisting and are in full
force and effect.
Section 2.6. BURDENSOME AND CONFLICTING AGREEMENTS AND CHARTER
PROVISIONS. Neither the execution nor delivery of this Agreement by CRI, nor
fulfillment of nor compliance with the terms and provisions of this Agreement,
will conflict with, or result in a breach of the terms, conditions or provisions
of, or constitute a default under, or result in any violation of, or result in
the creation of any Lien upon any of the properties or assets of CRI or any of
its subsidiaries pursuant to, or require any consent, approval or other action
by any court or administrative or governmental body or any other person or
business entity pursuant to the Certificate of Incorporation of CRI or any of
its subsidiaries, any award of any arbitrator or any material agreement,
instrument, order, judgment, decree, statute, law, rule or regulation to which
CRI or any of its subsidiaries is subject except as have been or will be
obtained.
Section 2.7. INTELLECTUAL PROPERTY. (a) CRI exclusively owns or
possesses the requisite licenses or rights (on reasonable commercial terms) to
use all trades secrets, trademarks, service marks, service names, trade names,
copyrights and other intellectual property rights necessary to enable it to
conduct its business as now operated and, except as set forth in SCHEDULE 2.7
hereof, to the best of CRI's knowledge, as presently contemplated to be operated
in the future (collectively, the "Company IP"), and Schedule 2.7 sets forth a
full and complete list of all such rights; there is no claim or action by any
person pertaining to, or proceeding pending, or to CRI's
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knowledge threatened, which challenges the right of CRI or of any of its
subsidiaries with respect to any Company IP; to CRI's knowledge, CRI or its
subsidiaries' current and intended products and services do not infringe on any
licenses, trademarks, service marks, service names, trade names, copyrights or
other rights held by any person or business entity; and CRI is unaware of any
facts or circumstances which might give rise to any of the foregoing.
(b) Except as set forth in SCHEDULE 2.7, no proceedings or
claims in which CRI alleges that any person or business entity is infringing
upon, or otherwise violating, any Company IP are pending, and none have been
served by, instituted or asserted by CRI, nor are any proceedings threatened
alleging any such violation or infringement.
Section 2.8. FINANCIAL STATEMENTS. The audited consolidated balance
sheets of CRI and its subsidiaries dated as of December 31, 1998 and December
31, 1997, the related audited consolidated statements of operations dated
December 31, 1998 and December 31, 1997 and the audited consolidated statement
of cash flows dated December 31, 1998 and December 31, 1997 (the "Financials"),
fairly present the combined financial position, results of operations and cash
flows of CRI and its subsidiaries in accordance with generally accepted
accounting principles applied on a consistent basis as of the dates and for the
periods set forth therein.
There has been no Material Adverse Change in the condition, financial
or other, of CRI and its subsidiaries, on a consolidated basis, since December
31, 1998 except as disclosed on SCHEDULE 2.8.
Section 2.9. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement prepared by or on behalf of CRI by its authorized
representatives or agents and furnished to or made available to RTK in writing
by or on behalf of the CRI by its authorized representatives or agents in
connection herewith, together with publicly available information, considered
together, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein, in the light of the circumstances under which made, not misleading.
Section 2.10. ENVIRONMENTAL. (a) Except as set forth on SCHEDULE 2.10,
CRI and its subsidiaries comply, and CRI, its subsidiaries and their respective
predecessors at all times during their existence have complied, with all
applicable Environmental Laws (as defined below).
(b) There is not now pending or, to the knowledge of CRI,
threatened, any action, claim, proceeding or investigation, nor has CRI, any
subsidiary, or any of their respective predecessors received any notice, claim,
demand letter or request for information at any time, alleging that CRI, any
subsidiary, or any of their respective predecessors may be in violation of, or
liable under, any Environmental Law, nor does there exist any basis for any such
action, claim, proceeding or investigation.
(c) There are no Hazardous Substances (as defined below)
located on any of the properties currently or formerly owned or operated by CRI,
its subsidiaries or any of their respective predecessors (including soil,
groundwater and surface features and buildings and
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structures thereon) (the "Properties"), and none of the Properties contain, or
has contained, any underground improvements, including, but not limited to,
treatment or storage tanks, sumps, water, gas or oil ▇▇▇▇▇, or associated
piping.
(d) CRI and each of its subsidiaries does not have any
contingent liability in connection with a Release (as defined below) or
threatened Release of any Hazardous Substance at any location.
(e) To the knowledge of CRI, there are no present or past
Environmental Conditions (as defined below) in any way related to CRI, its
subsidiaries, or any of their respective predecessors which have, or may have,
individually or in the aggregate, a Material Adverse Change with respect to any
Property or the business or condition of CRI or the its subsidiaries, taken as a
whole.
(f) As used herein, "Environmental Law" means any federal,
state, local or foreign law, regulation, order, decree, judgment, opinion,
common law or binding equitable principle or agency requirement relating to
pollution, contamination, wastes, hazardous material or the protection of the
environment, human health or safety.
(g) As used herein, "Hazardous Substance" means any substance
that is listed, classified under or regulated by any governmental authority
pursuant to any Environmental Law, including, without limitation, any petroleum
product or by-product, asbestos-containing material, lead-containing paint or
plumbing, polychlorinated biphenyls, radioactive material or radon.
(h) As used herein, "Release" means any release, spill,
emission, leaking, pumping, injection, deposit, discharge, dispersal, leaching
or migrating into the indoor or outdoor environment of any Hazardous Substance.
(i) As used herein, "Environmental Condition" means the
Release or threatened Release of any Hazardous Substance upon, under, in or
about any of the Properties, or any other circumstance involving any Property or
CRI, any of its subsidiaries, or any of their respective predecessors that could
be expected to result in any claim, liability, costs or losses, or any
restriction on the ownership, use or transfer of any Property pursuant to any
Environmental Law.
Section 2.11. EMPLOYEES. No employee of CRI is subject to the terms and
conditions of a collective bargaining agreement. There are no union contracts
relating to any employees of CRI to be offered employment by CRI. There are no
material controversies pending, or to the knowledge of CRI, threatened with
respect to any employees of CRI. Except as set forth in SCHEDULE 2.11, there are
no employment contracts between CRI and any employee engaged in the Business.
Section 2.12. INSURANCE. SCHEDULE 2.12 sets forth a list (specifying
the insurer and the policy number or covering note number with respect to
binders, describing each pending claim thereunder of more than $10,000) of all
the insurance policies presently in effect for CRI with the effective date and
the coverage amounts indicated thereon. Such policies and binders are valid and
enforceable in accordance with their terms and are in full force and effect, and
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insure against risks and liabilities to an extent and in a manner customary in
the industries in which CRI operates.
Section 2.13. BUSINESS RELATIONS. Except as set forth on SCHEDULE 2.13,
to the knowledge of CRI, there exists no actual termination or cancellation of,
or threatened termination or cancellation that is reasonably likely to result in
an actual termination or cancellation of, or any adverse modification or change
in, the business relationship of CRI with any customer or any group of customers
whose purchases are individually or in the aggregate material to the business of
CRI.
Section 2.14. ERISA. Neither CRI nor any of its subsidiaries nor any
ERISA Affiliate maintains, contributes or has any liability (contingent or
otherwise) with respect to a plan (including a Multiemployer Plan) subject to
Title IV of ERISA or Section 412 of the Internal Revenue Code of 1986, as
amended. All employee benefit plans and arrangements (regardless of whether such
plans or arrangements are covered by ERISA) maintained by or contributed to by
CRI, any of its subsidiaries or any ERISA Affiliate are in compliance with all
applicable law, including any reporting requirements. Neither CRI nor any of its
subsidiaries has any liability (contingent or otherwise) with respect to retiree
medical or death benefits. Neither CRI nor any of its subsidiaries nor any other
person, including any fiduciary, has engaged in any transaction prohibited by
Section 4975 of the Internal Revenue Code of 1986, as amended, or Section 406 of
ERISA which could subject CRI, any of its subsidiaries or any entity that CRI or
any of its subsidiaries has an obligation to indemnify to any tax or penalty
imposed under Section 4975 of the Internal Revenue Code of 1986, as amended, or
Section 502 of ERISA. The transactions contemplated by this Agreement will not
involve any transaction prohibited by Section 406 of ERISA or in Section 4975 of
the Internal Revenue Code of 1986, as amended. The assets of CRI do not
constitute "plan assets" for purposes of ERISA.
Section 2.15. CAPITALIZATION. The total authorized capital stock of CRI
consists of (a) 25,000,000 shares of CRI Common Stock and (b) 21,910,000 shares
of CRI Preferred Stock. On the date hereof there are 20,908,587 issued and
outstanding shares of CRI Common Stock and no issued and outstanding shares of
CRI Preferred Stock.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
RTK AND MERGER SUB
RTK and Merger Sub hereby jointly and severally represent and warrant
to CRI that except as set forth on the disclosure schedule with respect to RTK
attached hereto (the "Disclosure Schedule"):
Section 3.1. ORGANIZATION OF RTK AND ITS SUBSIDIARIES. Each of RTK and
its subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, with corporate
power and authority and all licenses, permits and authorizations necessary to
conduct its business and to own, lease and operate the properties and assets
used in connection therewith. Each of RTK and its subsidiaries is in good
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standing as a foreign corporation and licensed or qualified to transact business
in each jurisdiction in which the conduct of its business or its ownership,
leasing or operation of properties and assets requires it to be so licensed or
qualified, except where the failure to be so licensed or qualified would not
cause a Material Adverse Change. Neither the Company nor any of its subsidiaries
is in default under or in violation of any provision of its certificate of
incorporation or by-laws.
Section 3.2. DUE AUTHORIZATION. RTK has full right, power and authority
to enter into this Agreement and the other documents required to be delivered by
it hereunder, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the other documents required to be delivered
hereunder and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of RTK.
Each of this Agreement and the other documents required to be delivered
hereunder has been duly executed and delivered by RTK. This Agreement is, upon
execution and delivery thereof by RTK, a legal, valid and binding obligation of
RTK, enforceable against it in accordance with its terms (except as
enforceability may be limited by any applicable bankruptcy, insolvency or other
laws affecting creditors' rights generally or by general principles of equity,
regardless of whether such enforceability is considered in equity or at law).
Section 3.3. RTK COMMON STOCK. The issuance and delivery by RTK of
shares of RTK Common Stock in connection with the Merger and this Agreement have
been duly and validly authorized by all necessary corporate action on the part
of RTK. The shares of RTK Common Stock to be issued in connection with the
Merger and this Agreement, when issued in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable.
Section 3.4. OWNERSHIP OF MERGER SUB; NO PRIOR ACTIVITIES. Merger Sub
is a wholly owned subsidiary of RTK created solely for the purpose of effecting
the Merger. As of the date hereof and the Effective Time, except for obligations
or liabilities incurred in connection with its incorporation or organization and
the transactions contemplated by this Agreement and except for this Agreement
and any other agreements or arrangements contemplated by this Agreement, Merger
Sub has not and will not have incurred, directly or indirectly, through any
subsidiary or affiliate, any material obligations or liabilities or engaged in
any material business activities of any type or kind whatsoever or entered into
any agreements or arrangements with any person.
Section 3.5. NO CONFLICT. Neither the execution and delivery of this
Agreement or any of the other documents contemplated hereby nor the consummation
of the transactions contemplated hereby or thereby by RTK will (a) conflict
with, result in a breach or violation of or constitute (or with notice or lapse
of time or both constitute) a default under, (i) the certificate of
incorporation or by-laws of RTK or any of its subsidiaries, (ii) any law,
statute, regulation, order, judgment or decree or (iii) any instrument, contract
or other agreement to which RTK or any of the its subsidiaries is a party or by
which it or any of its subsidiaries (or any of their
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respective properties or assets) is subject or bound; (b) result in the creation
of, or give any party the right to create, any lien, charge, option, security
interest or other encumbrance upon the assets or properties of RTK or any of its
subsidiaries; (c) terminate or modify, or give any third party the right to
terminate or modify, the provisions or terms of any instrument, contract or
other agreement to which RTK or any of its subsidiaries is a party or by which
RTK or any of its subsidiaries (or any of their respective properties or assets)
is subject or bound or require RTK or any of its subsidiaries to prepay any
amount thereunder; or (d) require RTK or any of its subsidiaries to obtain any
authorization, consent, approval or waiver from, to give any notification to, or
to make any filing with, any governmental body or authority or to obtain the
approval or consent of any other Person except as obtained or will be obtained.
Section 3.6. TITLE TO AND CONDITION OF ASSETS
(a) RTK and each of its subsidiaries has good and marketable
title to, or valid and subsisting leasehold interests in or valid licenses to
use, all of its respective assets, free and clear of any liens, charges,
options, security interests or other encumbrances of any nature, options to
purchase or lease, easements, restrictions, covenants, conditions, or
imperfections of title, except the lien of current personal property taxes not
yet due and payable. All of such assets are adequate for the purposes for which
such assets are currently used or held for use and are in reasonably good repair
and operating condition (subject to normal wear and tear).
(b) RTK has a valid and subsisting leasehold interest in all
leases material to RTK ("Leased Real Property"), free and clear of all liens,
leases, encumbrances, claims under bailment and storage agreements, options,
equities, conditional sales contracts, title retention agreements,
encroachments, conditions, limitations, security interests, charges and
restrictions (collectively, "Liens"), except for Liens, if any, for real
property taxes not yet due and payable, and all restrictive covenants, easements
and rights, including, but not limited to, easements for power lines, water
lines, communication lines, sewer, roadways and other means of ingress and
egress, to which the Leased Real Property may be subject or which are necessary
to conduct the business conducted on such Leased Real Property. RTK and each of
its subsidiaries enjoys peaceful and undisturbed possession under all such
leases and all such leases are valid and enforceable in accordance with their
respective terms.
Section 3.7. ENVIRONMENTAL MATTERS.
(a) (i) All permits required under Environmental Laws (as
defined in Section 2.10(f)) that are necessary for the operations of the
business conducted by RTK and its subsidiaries relating to the installation and
maintenance of cabling systems (including fiber) for the transmission of video,
voice and data (the "Business") and the Leased Real Property ("Environmental
Permits") have been obtained and are in full force and effect, and RTK is
unaware of any basis for revocation or suspension of any such Environmental
Permits; (ii) no Environmental Laws impose any obligation upon RTK or its
Affiliates, as a result of any transaction contemplated hereby, to provide any
prior notification to any governmental entity of the transactions contemplated
hereby; and (iii) the Business has at all times been operated in full compliance
with all such Environmental Permits and within the production levels or emission
levels specified in such Environmental Permits.
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(b) RTK and its subsidiaries have at all times complied with
all applicable Environmental Laws.
(c) There are no existing, pending or, to the actual knowledge
of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇ ("Knowledge"), threatened actions, suits, claims, investigations,
inquiries or proceedings by or before any Governmental Body directed against RTK
or any of its subsidiaries, and none of RTK or any of its subsidiaries is
subject to any orders, judgments, decrees or settlements, and none of RTK or any
of its subsidiaries has received or is otherwise aware of any notices, claims or
other communications alleging any potential liability of RTK or any of its
subsidiaries, which pertain or relate to Environmental Laws.
(d) There has been no Release of any Hazardous Substance (each
as defined in Section 2.10) by RTK or RTK's subsidiaries or, to the Knowledge of
RTK, any other Person, on, to, from or underlying the Leased Real Property.
(e) No asbestos-containing materials or polychlorinated
biphenyls are present in, on or to the Knowledge of RTK, underlying the Leased
Real Property.
(f) Neither RTK nor any of its subsidiaries have owned or
operated, nor to the Knowledge of RTK has any other Person owned or operated,
any underground storage tanks, sumps or septic fields, active or abandoned, at
any of the Leased Real Property.
Section 3.8. FINANCIAL INFORMATION.
The Financial Statements (as defined in the Stock Purchase Agreement
dated as of June 14, 1999 among RTK and the other parties thereto (the "Stock
Purchase Agreement")) are in accordance with the books and records of RTK and
its subsidiaries and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods covered
thereby. The balance sheets included in the Financial Statements present fairly
as of their respective dates the consolidated financial condition of RTK and its
subsidiaries (subject, in the case of the Unaudited Financial Statements (as
defined in the Stock Purchase Agreement), to year end adjustments that may be
required upon audit, which adjustments will not have a material adverse effect
on such financial statements).
Section 3.9. LITIGATION. Neither RTK, any Affiliate or subsidiary of
RTK, nor any of their respective directors, officers, employees or agents (in
their capacity as such) is a party to any pending or, to RTK's Knowledge,
threatened, claim, action, suit, proceeding or investigation, at law or in
equity or otherwise in, before or by any court or governmental board,
commission, agency, department or office, or private arbitration tribunal,
including, without limitation, any claim, action, suit, proceeding or
investigation (a) arising in connection with the conduct of business by RTK and
its subsidiaries or (b) to restrain, prohibit or invalidate, or to obtain
damages or other relief from RTK or any of its Affiliates or subsidiaries, or
any of their respective directors or officers, or equitable or other relief in
respect of this Agreement or the transactions contemplated hereby. Neither RTK
nor any of RTK's subsidiaries is a party or is
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subject to any order, ruling, judgment, decree or stipulation which affects the
Business or which would prevent the transactions contemplated by this Agreement.
Section 3.10. INTELLECTUAL PROPERTY. The Disclosure Schedule contains a
true and complete list of all patents, trademarks and service marks (either
registered, common law or registration applied for), trade names, registered
copyrights and third party licenses, except "shrinkwrap" software licenses,
which are owned, used, registered in the name of or licensed by RTK or any of
its subsidiaries, or in which RTK or any of its subsidiaries otherwise has an
interest, together with a brief statement as to any filing, registration or
issuance thereof, as to any licenses, sublicenses, covenants or agreements
entered into or granted by or to RTK or any of its subsidiaries with respect
thereto and as to any pending or, to the Knowledge of RTK, threatened disputes
or adverse claims with respect thereto. RTK or one of its subsidiaries is the
exclusive owner of all items listed on such Disclosure Schedule. RTK and its
subsidiaries own or are licensed or otherwise have the right to use (without the
payment by RTK or any subsidiary of any royalty, and otherwise on commercially
reasonable terms) all the Intellectual Property necessary to carry on the
Business as currently conducted. All licenses, if any, of RTK and its
subsidiaries to use Intellectual Property necessary to carry on the Business as
currently conducted are in full force and effect and neither RTK or any of its
subsidiaries nor, to the best of RTK's Knowledge, any of the other parties to
such licenses is in breach of any provision of, or in default under any of the
terms of, such licenses. RTK and its subsidiaries have not granted any Person
any license or other right to use any of the Intellectual Property necessary to
carry on the Business as currently conducted, whether requiring the payment of
royalties or not. There is no pending or, to the best of RTK's Knowledge,
threatened claim or litigation against RTK or any of its subsidiaries contesting
its right to use Intellectual Property, asserting the misappropriation or misuse
of any Intellectual Property or asserting that RTK or any of its subsidiaries
has violated or infringed the Intellectual Property of another party.
Section 3.11. INSURANCE. The Disclosure Schedule sets forth all
insurance agreements and policies maintained by RTK and its subsidiaries or
under which RTK or one of its subsidiaries is listed as a beneficiary or
additional insured (including any self-insurance arrangements) and the type and
amounts of coverage thereunder, which coverage reflects all insurance which is
required by law to be maintained by it and its subsidiaries. RTK and its
subsidiaries maintain the type and amount of insurance which is adequate to
protect them and their financial condition against the risks involved in the
conduct of the Business.
Section 3.12. PLANS AND AGREEMENTS RELATING TO EMPLOYEES.
(a) The Disclosure Schedule lists each of the following plans,
contracts, policies and arrangements which is or, within six years prior to the
Closing Date, was sponsored, maintained or contributed to by, or otherwise
binding upon RTK or any of its subsidiaries or, in the case of an "employee
pension plan" (as defined in Section 3(2) of ERISA), an ERISA Affiliate for the
benefit of any current or former employee, director or other personnel
(including any such plan, contract, policy or arrangement approved or adopted
before, but effective on or after, the date of this Agreement): (i) any
"employee benefit plan," as such term is defined in Section 3(3) of ERISA,
whether or not subject to the provisions of ERISA, (ii) any personnel policy,
and (iii) any other employment, consulting, collective bargaining, stock option,
stock
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bonus, stock purchase, phantom stock, incentive, bonus, deferred compensation,
retirement, severance, vacation, dependent care, employee assistance, fringe
benefit, medical, dental, sick leave, death benefit, golden parachute or other
compensatory plan, contract, policy or arrangement which is not an employee
benefit plan as defined in Section 3(3) of ERISA (each such plan, contract,
policy and arrangement described in (i), (ii) or (iii) above being herein
referred to as an "Employee Plan").
(b) The Disclosure Schedule sets forth by number and
employment classification the approximate numbers of employees, independent
contractors and consultants of RTK and its subsidiaries as of the date of this
Agreement, including employees under any collective bargaining or labor
contracts to which RTK or any of its subsidiaries is a party and which is
applicable to persons employed by RTK or any of its subsidiaries, and, except as
set forth therein, none of said individuals are subject to union or collective
bargaining agreements.
ARTICLE IV
NATURE AND SURVIVAL OF REPRESENTATIONS
AND WARRANTIES, INDEMNIFICATION, ETC.
Section 4.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements
of the parties made in this Agreement or provided herein shall survive the
Closing Date to the extent expressly provided herein. All representations and
warranties of the parties made in this Agreement or as provided herein shall be
made as of the date hereof and shall survive the Effective Time for a period
ending one year from the Closing Date (the "Survival Period").
Section 4.2. INDEMNIFICATION. (a) CRI hereby agrees to defend,
indemnify and hold RTK and its subsidiaries and their officers, directors and
employees (collectively, the "RTK Indemnitees") harmless from and against any
and all claims, liabilities, losses, damages, deficiencies, penalties, fines,
costs or expenses (including, without limitation, the fees and expenses of
investigation and counsel) (collectively, "Losses"), arising out of or resulting
from (i) any breach of the representations and warranties contained in Article
II; (ii) any breach in any material respect by CRI of any agreement of CRI
contained in or arising out of this Agreement or (iii) any and all actions,
suits, proceedings, claims, demands, assessments and judgments incidental to the
foregoing to the enforcement of such indemnification.
(b) Notwithstanding the foregoing or any other provision of
this Agreement, CRI will only be liable to the RTK Indemnitees for Losses to the
extent that CRI receives payment pursuant to a breach of the Contribution
Agreement dated as of May 7, 1998 between CRI and the parties whose names appear
on Schedule 1 attached thereto (the "Contribution Agreement"), or Amendment No.
1 to the Agreement of Limited Partnership of Communications Resources Inc. L.P.
dated as of May 6, 1998 ("Amendment No. 1").
(c) RTK hereby agrees to defend, indemnify and hold the
shareholders of CRI and their subsidiaries and their officers, directors and
employees (collectively, the "CRI Indemnitees") harmless from and against any
and all claims, liabilities, losses, damages, deficiencies, penalties, fines,
costs or expenses (including, without limitation, the fees and
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expenses of investigation and counsel) (collectively, "Losses"), arising out of
or resulting from (i) any breach of the representations and warranties contained
in Article III; (ii) any breach in any material respect by RTK of any agreement
of RTK contained in or arising out of this Agreement or (iii) any and all
actions, suits, proceedings, claims, demands, assessments and judgments
incidental to the foregoing to the enforcement of such indemnification.
(d) Promptly after the receipt by the RTK Indemnitees or CRI
Indemnities, as the case may be, of a notice of any claim, action, suit or
proceeding of any third party which is subject to indemnification hereunder,
such party or parties (the "Indemnified Party") shall give written notice of
such claim (a "Notice of Claim") to the party or parties obligated to provide
indemnification hereunder (collectively, the "Indemnifying Party"), stating the
nature and basis of such claim and the amount thereof, to the extent known. The
failure of the Indemnified Party to so notify the Indemnifying Party shall not
impair the Indemnified Party's ability to seek indemnification from the
Indemnifying Party, except to the extent that the Indemnifying Party is
materially prejudiced. The Indemnifying Party shall be entitled to participate
in the defense or settlement of such matter and the parties agree to cooperate
in any such defense or settlement and to give each other full access to all
information relevant thereto. The Indemnifying Party shall not be obligated to
indemnify an Indemnified Party hereunder for any settlement entered into without
the Indemnifying Party's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. If any Notice of Claim relates to
a claim by a person or persons other than any federal, state, local or foreign
Tax authority, and the amount of such claim is acknowledged by the Indemnifying
Party to be fully covered by the foregoing indemnity, as limited herein, the
Indemnifying Party may elect to defend against such claim at its own expense, in
lieu of the Indemnified Party assuming such defense; PROVIDED, that the
Indemnified Party shall be entitled to participate in or monitor such defense at
its own expense and the Indemnifying Party will fully cooperate with the
Indemnified Party and its counsel with respect thereto. If the Indemnifying
Party elects to assume such defense, the Indemnifying Party shall retain counsel
reasonably satisfactory to the Indemnified Party. No compromise or settlement of
such claim may be effected by the Indemnifying Party without the consent of the
Indemnified Party (which shall not be unreasonably withheld) unless (i) there is
no finding or admission of any violation of law and no effect on any other
claims that may be made against such Indemnified Party and (ii) the sole relief
provided is monetary damages that are paid in full by the Indemnifying Party.
(e) Notwithstanding any provision in this Article IV to the
contrary, any claim for indemnification in respect of which notice is given in
accordance with the provisions of Section 4.2(d) hereof prior to the expiration
of the Survival Period shall survive with respect to such claim until final
resolution thereof.
(f) The rights of the parties to indemnification relating to
this Agreement or the transactions contemplated hereby shall be strictly limited
to those contained in this Article IV, and such indemnification rights shall be
the exclusive remedies of the parties subsequent to the Closing Date with
respect to any matter in any way relating to this Agreement or arising in
connection herewith. To the maximum extent permitted by law, the RTK
Indemnitees, the CRI Indemnities and CRI hereby waive any and all other rights
and remedies against CRI, the CRI
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Indemnities or the RTK Indemnitees, respectively, with respect to any matters
related to this Agreement or the transactions contemplated hereby, whether under
any laws, at common law or otherwise. Except as provided in, and in accordance
with, this Article IV, no claim, action or remedy shall be brought, maintained
or pursued by the RTK Indemnitees, the CRI Indemnitees or CRI, or their
successors or permitted assigns, against CRI, the CRI Indemnities or the RTK
Indemnitees, respectively, and no recourse shall be sought or granted against
any of them, by virtue of or based upon any alleged misstatement or omission
regarding any inaccuracy in or breach of any of the representations or
warranties of CRI, RTK or Merger Sub set forth or contained in this Agreement.
Section 4.3. ASSIGNMENT OF RIGHTS TO INDEMNIFICATION. In furtherance of
the rights granted to the RTK Indemnitees under Section 4.2(b), CRI and Crest
hereby assign to the RTK Indemnitees any all rights and privileges possessed by
CRI and Crest with respect to a breach of such Contribution Agreement and
Amendment No. 1, as if the RTK Indemnitees were parties to said Contribution
Agreement and Amendment No. 1 with all rights and privileges in connection with
a breach thereunder.
ARTICLE V
GENERAL PROVISIONS
Section 5.1. NOTICES. Any notice required to be given hereunder shall
be sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to RTK or Merger Sub: If to CRI:
------------------------ ----------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇'▇▇▇▇▇
c/o Communication Resources Incorporated Communication Resources Incorporated
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 1001 West Cypress Creek Road, Suite 207
Ft. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Ft. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: With copies to:
V. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇, Esq. ▇▇▇▇▇▇ & Poliakoff PA
Crest Communications Partners LP ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
Section 5.2. ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Article IV nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
Section 5.3. ENTIRE AGREEMENT. This Agreement, the Exhibits, the
Schedules and any documents delivered by the parties in connection herewith
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
Section 5.4. AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 5.5. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
its rules of conflict of laws.
Section 5.6. COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto.
Section 5.7. HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
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Section 5.8. INTERPRETATION. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders
and words denoting natural persons shall include corporations and partnerships
and vice versa.
Section 5.9. WAIVERS. Except as provided in this Agreement, no action
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties or agreements contained in this Agreement. The waiver by any party
hereto of a breach of any provision hereunder shall not operate or be construed
as a waiver of any prior or subsequent breach of the same or any other provision
hereunder.
Section 5.10. INCORPORATION OF SCHEDULES AND EXHIBITS. The Schedules
and Exhibits attached hereto and referred to herein are hereby incorporated
herein and made a part hereof for all purposes as if fully set forth herein.
Section 5.11. SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
Section 5.12. DEFINITIONS. "Affiliate" or "affiliate" means, with
respect to any Person, any other Person that, directly or indirectly, controls
or is controlled by or is under common control with such Person. As used in this
definition of "Affiliate," the term "control" and any derivatives thereof mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract, or otherwise.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
it now exists and may hereafter be amended.
"ERISA Affiliate" means any person, firm or entity (whether or not
incorporated) which, by reason of its relationship with RTK, is required to be
aggregated with RTK under Sections 414(b), 414(c) or 414(m) of the Code, or
which, together with RTK, is a member of a controlled group within the meaning
of Section 4001 (a) of ERISA.
"Governmental Body" means any court or any federal, state, local,
municipal, or other government or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign.
"Intellectual Property" means all intellectual property rights,
including, without limitation, (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures,
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together with all reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (b) all trademarks, service marks, trade
dress, logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all mask
works and all applications, registrations, and renewals in connection therewith,
(e) all trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes, technologies and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans, strategies and proposals), (f)
all computer software (including data and related documentation and all source
codes and object codes), (g) all other proprietary rights, and (h) all copies
and tangible embodiments thereof (in whatever form or medium).
"Material Adverse Change" means an occurrence or event which has had or
is reasonably likely to have a material adverse effect on the business,
operations, assets, liabilities, properties, prospects or condition (financial
or otherwise) of RTK and its subsidiaries taken as a whole or CRI and its
subsidiaries taken as a whole, as indicated by the context in which used.
"Person" means an individual, partnership, corporation, joint venture,
unincorporated organization, limited liability company, cooperative or other
business organization or a governmental entity or agency thereof.
19
23
IN WITNESS WHEREOF, this Agreement has been executed by the Parties
hereto as of the day and year first written above.
THE RTK GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
CRI ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
COMMUNICATION RESOURCES
INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Title:
Crest/CRI LLC
By: Crest Partners II LLC, its
sole member
By: WAT Capital LLC
-----------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Member
20
24
Exhibit A
CERTIFICATE OF MERGER
OF
CRI ACQUISITION CORP.
WITH AND INTO
COMMUNICATION RESOURCES INCORPORATED
--------------------------------------------------------------------------------
Pursuant to Section 251(c) of the
General Corporation Law of the State of Delaware
--------------------------------------------------------------------------------
The undersigned corporation, organized and existing under and by virtue
of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: The name and state of incorporation of each of the constituent
corporations (together, the "Constituent Corporations") to the merger are as
follows:
Name: State of Incorporation
----- ----------------------
CRI Acquisition Corp. Delaware
Communication Resources Incorporated Delaware
SECOND: An Agreement and Plan of Merger (the "Merger Agreement") dated
as of July , 1999 by and among The RTK Group, Inc., a New Jersey corporation
("RTK"), CRI Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of RTK ("Merger Sub"), Communication Resources Incorporated, a
Delaware corporation (the "Company"), and Crest/CRI LLC, a Delaware limited
liability company, has been approved, adopted, certified, executed and
acknowledged by each of the Constituent Corporations in accordance with the
requirements of Section 251 of the General Corporation Law of the State of
Delaware and, by unanimous written consent of their stockholders in accordance
with Section 228 of the General Corporation Law of the State of Delaware.
THIRD: The name of the surviving corporation of the merger is
Communications Resources Incorporated.
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FOURTH: The Certificate of Incorporation of the surviving corporation
shall be in a form attached hereto as Exhibit 1.
FIFTH: The executed Merger Agreement is on file at the principal place
of business of the surviving corporation. The address of the principal place of
business of the surviving corporation is c/o Communication Resources
Incorporated, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
SIXTH: A copy of the Merger Agreement will be furnished by the
surviving corporation, on request and without cost, to any stockholder of either
of the Constituent Corporations.
2
26
IN WITNESS WHEREOF, this Certificate of Merger has been executed on
this day of July, 1999.
COMMUNICATION RESOURCES
INCORPORATED
By:
---------------------------------------
Name:
Title:
27
Exhibit 1
CERTIFICATE OF INCORPORATION
OF
COMMUNICATION RESOURCES INCORPORATED
1. The name of the Corporation is Communication Resources Incorporated
(hereinafter referred to as the "Corporation").
2. The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ (County of New Castle). The name of its registered agent at such address
is The Corporation Trust Company.
3. The nature of the business and the purposes to be conducted and
promoted by the Corporation are to conduct any lawful business, to promote any
lawful purpose and to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware ("DGCL").
4. The total number of shares of stock which the Corporation shall have
authority to issue is 100 shares of common stock, $.01 par value per share.
Shares of the Common Stock may be issued from time to time as the Board
of Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors. The amount of the
authorized Common Stock of the Corporation may be increased or decreased by the
affirmative vote of the holders of a majority of the outstanding stock of the
Corporation entitled to vote.
5. Elections of directors need not be by written ballot unless required
by the Bylaws of the Corporation.
6. In furtherance and not in limitation of the powers conferred upon
the Board of Directors by law, the Board of Directors shall have the power to
make, adopt, alter, amend and repeal from time to time the Bylaws of the
Corporation subject to the right of the stockholders entitled to vote with
respect thereto to alter, amend and repeal Bylaws made by the Board of
Directors.
7. The personal liability of the directors of the Corporation is hereby
eliminated to
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the fullest extent permitted by paragraph (7) of subsection (b) of DGCL Section
102, as the same may be amended and supplemented from time to time.
Any repeal or modification of this Section 7 by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
9. The Corporation shall, to the fullest extent permitted by the
provisions of DGCL Section 145, as the same may be amended and supplemented from
time to time, indemnify any and all persons whom it shall have the power to
indemnify under said section from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any Bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
2