Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger dated as of March 20, 2003 ("this
Agreement"), between Algiers Resources, Inc., a Delaware corporation
("Algiers"), Algiers Merger Co., a Delaware corporation and a wholly-owned
subsidiary of Algiers ("Algiers Merger Co.") and Command International
Acquisition Corporation, a Delaware corporation (the "Company").
Preliminary Statement
Algiers' common stock, $0.001 par value per share ("Algiers Common
Stock"), is registered with the Securities and Exchange Commission (the "SEC")
under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Algiers files reports and other documents required to be filed
with the SEC under the rules and regulations of the SEC. Algiers has no business
operations. Algiers is what is commonly referred to as a "public shell" company
formed for the specific purpose of acquiring, through a merger or other business
combination, an operating company seeking the perceived advantages of becoming a
"public company".
The Company and Algiers will enter into a business combination
transaction as a result of which the Company will merge with and into Algiers
Merger Co. (the "Merger"), with Algiers Merger Co. continuing as the surviving
corporation, on the terms and subject to the conditions set forth in this
Agreement.
The board of directors of each of the Company, Algiers and Algiers
Merger Co. has determined that the Merger would be fair to and in the best
interests of their respective stockholders and have approved this Agreement and
the transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein set forth, and for
the purpose of prescribing the terms and conditions of the Merger, the parties
agree as follows:
ARTICLE 1 - THE MERGER
1.1. The Merger.
Upon the terms and subject to the conditions set forth in this
Agreement and compliance with the applicable provisions of the Delaware General
Corporation Law ("Delaware Law"), at the Effective Time (as such term is defined
in Section 1.3), the Company shall be merged with and into Algiers Merger Co.,
the separate corporate existence of the Company shall cease and Algiers Merger
Co. shall continue as the surviving corporation and shall succeed to and assume
all of the rights, properties, franchises, liabilities and obligations of the
Company in accordance with Delaware Law and this Agreement. Algiers Merger Co.,
as the surviving Delaware corporation with the operating business of the Company
after the Merger, is sometimes hereinafter referred to as the "Surviving
Corporation."
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1.2. Closing.
Unless this Agreement shall have been terminated and the transactions
herein contemplated shall have been abandoned under Section 9.1, the closing of
the Merger (the "Closing") shall take place at the offices of Snow ▇▇▇▇▇▇ ▇▇▇▇▇▇
P.C., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other place as
Algiers and the Company may agree, as promptly as practicable, but no later than
five business days following the satisfaction or waiver of the conditions set
forth in Article 8. The Closing shall be deemed to have occurred and shall be
effective as of the Effective Time (as defined in Section 1.3 below). The date
upon which the Closing actually occurs is referred to as the "Closing Date."
1.3 Effective Time.
Subject to the provisions of this Agreement, the parties hereto shall
cause a certificate of merger, in the form annexed hereto as Exhibit A (the
"Certificate of Merger") to be filed with the Secretary of State of the State of
Delaware, in accordance with Delaware Law, as soon as practicable on or after
the Closing Date. The Merger shall be effective at the time of acceptance of the
Certificate of Merger by the Secretary of State of the State of Delaware, or at
such time thereafter as is provided in the Certificate of Merger (the "Effective
Time").
1.4. Effect of the Merger.
At the Effective Time, the effect of the Merger shall be as provided by
the applicable provisions of Delaware Law. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of the Company and Algiers Merger Co.
shall vest in the Surviving Corporation, and all debts, liabilities and
obligations of the Company and Algiers Merger Co. shall become the debts,
liabilities and obligations of the Surviving Corporation.
1.5. Certificate of Incorporation; Bylaws.
(a) Certificate of Incorporation. The Certificate of Incorporation of
Algiers Merger Co., as in effect immediately prior to the Effective Time, shall
be the Certificate of Incorporation of the Surviving Corporation, until
thereafter amended as provided by Delaware Law and such Certificate of
Incorporation, except that the Certificate of Incorporation shall be amended as
of the Effective Time to change the corporate name of the Surviving Corporation
to "Command International Corporation."
(b) Bylaws. The Bylaws of Algiers Merger Co., as in effect immediately
prior to the Effective Time, shall be the Bylaws of the Surviving Corporation,
until thereafter amended as in accordance with Delaware Law, the Certificate of
Incorporation and such Bylaws.
1.6. Directors and Officers.
(a) The Surviving Corporation.
(i) Directors. The initial directors of the Surviving
Corporation will be designated by the Company, as set forth on Schedule
1.6 attached hereto each to hold office, subject to the applicable
provisions of the Certificate of Incorporation and Bylaws of the
Surviving Corporation, until his successor has been duly elected and
qualified, or until his earlier death, resignation or removal in
accordance with the Certificate of Incorporation and Bylaws of the
Surviving Corporation.
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(ii) Officers. The officers of the Company immediately prior
to the Effective Time as set forth on Schedule 1.6 attached hereto,
shall be the officers of the Surviving Corporation, each to hold office
until their successors has been duly appointed and qualified, or his
earlier death, resignation or removal in accordance with the
Certificate of Incorporation and By-laws of the Surviving Corporation.
(b) Algiers.
(i) Directors. On the Closing Date, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, the
sole director of Algiers shall resign and the new directors of Algiers
shall be the same directors of Surviving Corporation as set forth on
Schedule 1.6.
(ii) Officers On the Closing Date, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, the
sole officer of Algiers shall resign and the new officers of Algiers
shall be the same officers of the Surviving Corporation as set forth on
Schedule 1.6.
ARTICLE 2
EFFECT OF MERGER ON OUTSTANDING
SECURITIES OF THE COMPANY
2.1 Conversion of Outstanding Company Common Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of Algiers, Algiers
Merger Co., the Company or any holder of any common stock, par value $0.0001 per
share (the "Company Common Stock"), of the Company, subject to the other
provisions of this Article 2:
(i) each share of Company Common Stock held in treasury of the
Company shall be cancelled and no payment shall be made nor other
consideration paid with respect to such cancellation.
(ii) each outstanding share of Company Common Stock shall be
converted into the right to receive one share of common stock, par
value $.001 per share ("Algiers Common Stock"), of Algiers (the "Merger
Consideration") upon the surrender of the certificate representing such
share of Company Common Stock in accordance with Section 2.4 of this
Agreement.
(iii) all then outstanding shares of common stock, par value
$.001 per share ("Algiers Merger Co. Common Stock"), of Algiers Merger
Co. shall be converted into 100 shares of common stock, par value
$.001per share ("Surviving Corporation Common Stock"), of the Surviving
Corporation.
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2.2 No Fractional Shares.
No fractional shares of Algiers Common Stock shall be issued in
connection with the payment of the Merger Consideration.
2.3 Company Options.
At the Effective Time, Algiers shall assume the Company's obligations
with respect to then outstanding options, as set forth on Schedule 2.3 attached
hereto, to purchase shares of Company Common Stock, in which and by which
assumption each optionee, upon exercise of an option in accordance with its
terms, shall acquire that number of shares of Algiers Common Stock that optionee
would have acquired had such optionee exercised the subject option immediately
prior to the Effective Time, giving effect to the Merger Consideration.
2.4. Surrender of Certificates.
(a) Exchange Procedures. Promptly after the Effective Time,
certificates representing the Company Common Stock (each, a "Company Stock
Certificate") shall be surrendered to Algiers. Upon surrender of a Company Stock
Certificate to Algiers, or to such other agent or agents as may be appointed by
Algiers, the holder of such Company Stock Certificate shall be entitled to a
certificate representing the number of shares of Algiers Common Stock that the
shares of Company Common Stock evidenced by such surrendered Company Stock
Certificate have been converted into the right to receive, giving effect to the
Merger Consideration, and the Company Stock Certificate so surrendered shall be
delivered to the Algiers for cancellation. Until so surrendered, each
outstanding Company Stock Certificate that, prior to the Effective Time,
evidenced ownership of shares of Company Common Stock will be deemed from and
after the Effective Time, for all corporate purposes, to represent solely the
right to receive Algiers Common Stock and the holder of such Company Common
Stock shall not be entitled to vote or receive any dividend or other
distribution payable to holders of shares of Algiers Common Stock; provided,
however, that, upon the surrender of such Company Stock Certificate in exchange
for certificate(s) representing shares of Algiers Common Stock, there shall be
paid to the record holder of the certificate(s) representing Algiers Common
Stock issued upon such exchange, the amount of dividends or other distributions
which theretofore became payable and were not paid with respect to the number of
shares of Algiers Common Stock represented by the certificate(s) issued upon
such surrender. In no event shall the persons entitled to receive such dividends
or distributions be entitled to receive interest thereon.
(b) No Liability. Notwithstanding anything to the contrary in this
Section 2.4, none of the Surviving Corporation, Algiers or the Company shall be
liable to a holder of Company Common Stock which or whom has not been located by
any reasonable means of communication for at least five years for any amount
properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
2.5. No Further Ownership Rights in Company Common Stock.
All shares of Algiers Common Stock issued in exchange for shares of
Company Common Stock as Merger Consideration in accordance with the terms of
this Agreement shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of Company Common Stock.
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2.6. Lost, Stolen or Destroyed Certificates.
In the event any Company Stock Certificate shall have been lost, stolen
or destroyed, the Company shall issue in exchange for such lost, stolen or
destroyed Company Stock Certificate, upon receiving notice from the holder
thereof before the Effective Time and upon the making of an affidavit in such
form as is acceptable to the Company and Algiers of that fact by such holder, a
new Company Stock Certificate evidencing such shares of Company Common Stock
subject to such notice and affidavit; provided, however, that the Company, as a
condition precedent to the issuance thereof, may require the owner of such lost,
stolen or destroyed Company Stock Certificate to deliver a bond in such sum as
Algiers may reasonably direct as indemnity against any claim that may be made
with respect to the certificates alleged to have been lost, stolen or destroyed.
2.7. Tax and Accounting Consequences.
It is intended by the parties to this Agreement that the Merger shall
constitute a tax-free reorganization within the meaning of Section 368(a)(1)(B)
the Code.
2.8. Taking of Necessary Action; Further Action.
If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Agreement and to vest
the Surviving Corporation with full right, title and possession to all assets,
property, rights, privileges, powers and franchises of the Company, the officers
and directors of the Company are fully authorized in the name of the Company or
otherwise to take, and will take, all such lawful and necessary action.
ARTICLE 3
RIGHTS OF DISSENTING STOCKHOLDERS
3.1 Dissenters' Rights.
Notwithstanding any provision of this Agreement to the contrary, any
shares of Company Common Stock ("Dissenting Shares") held by a holder who has
demanded and perfected appraisal or dissenters' rights for such Dissenting
Shares in accordance with Delaware Law and who, as of the Effective Time, has
not effectively withdrawn or lost such appraisal or dissenters' rights, shall
not be converted into the right to receive the Merger Consideration, but shall
only be entitled to such dissenters' rights as are granted by Delaware Law.
3.2 Effect of Withdrawal or Loss of Dissenters' Rights.
Notwithstanding the provisions of Section 3.1, if any holder of shares
of Company Common Stock who demands appraisal of such shares under Delaware Law
shall effectively withdraw or lose (through failure to perfect or otherwise) the
right to appraisal, then, as of the later of the (i) Effective Time and (ii)
occurrence of such withdrawal or loss, such holder's shares shall automatically
be, pursuant to the Merger, converted into the right to receive Algiers Common
Stock in accordance with Sections 2.1 and 2.2.
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3.3 Company's Obligations.
The Company shall give Algiers (i) prompt notice of any written demands
for appraisal of any shares of Company Common Stock, withdrawals of such
demands, and any other instruments served pursuant to Delaware Law and received
by the Company in connection therewith and (ii) the opportunity to participate
in all negotiations and proceedings with respect to demands for appraisal under
Delaware Law.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company hereby represents and warrants to Algiers and Algiers
Merger Co. as follows:
4.1. Organization, Standing and Power.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Company has the
corporate power to own its properties and to carry on its business as now being
conducted. The Company has made available to Algiers a true and correct copy of
its Certificate of Incorporation and Bylaws, each as amended to date.
4.2. Authority.
The Company has the requisite corporate or other power and authority to
enable it to own, lease and operate its assets and properties to carry on its
business as now being conducted, except, for those jurisdictions where the
failure to be so organized, existing or in good standing individually or in the
aggregate would not have a material adverse effect (as defined in Section
8.2(a)) on the Company. The Company is duly qualified or licensed to do business
and is in good standing (with respect to jurisdictions which recognize such
concept) in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary, except for those jurisdictions where the failure to be so
qualified or licensed or to be in good standing would not have a material
adverse effect on the Company.
The Company has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject only to the approval of the
Merger by the Company's stockholders. The Company's Board of Directors has
approved this Agreement and the transactions contemplated hereby. This Agreement
has been duly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable in accordance with its terms,
except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally and (b) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
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4.3. Company Capital Stock.
The authorized capital stock of the Company consists of 100,000,000
shares of Company Common Stock. As of the Closing Date, there shall be issued
and outstanding an aggregate of 5,239,238 shares of Company Common Stock. An
additional 5,239,238 shares of Company Common Stock are reserved for issuance to
the stockholders of Command International Group Inc. ("CIG") under an Agreement
and Plan of Reorganization dated as of July 1, 2002, as amended on February 24,
2003, with CIG (the "CIG Agreement") and its stockholders under which the
Company has the right to acquire all of the shares of CIG in exchange for
5,239,238 shares of Company Common Stock, a copy of which has been delivered by
the Company to Algiers and Algiers Merger Co. There are no options, except as
set forth on Schedule 2.3 attached hereto, or warrants, or other rights to
subscribe for shares of Company Common Stock, or securities convertible into
shares of Common Stock. All outstanding shares of Company Common Stock are duly
authorized, validly issued, fully paid and non-assessable and are not subject to
preemptive rights created by statute, the Certificate of Incorporation or
By-laws of the Company or any agreement to which the Company is a party or by
which it is bound.
4.4. Subsidiaries.
The Company does not have any subsidiaries or affiliated companies and
does not otherwise own any shares of capital stock or any interest in, or
control, directly or indirectly, any other corporation, partnership,
association, joint venture or other business entity.
4.5 Company Financial Statements.
The Company's unaudited balance sheet as of September 30, 2002, and the
related audited statements of operations, stockholders' equity and cash flows
for the period from inception through September 30, 2002 (collectively, the
"Company Financials"), are correct in all material respects and have been
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a basis consistent throughout the periods indicated and consistent
with each other. The Company Financials present fairly the financial condition
and results of operations of the Company as of the dates and during the periods
indicated therein.
4.6. Taxes.
All federal, state and other returns and reports required to be filed
by the Company have been duly filed by the Company and, except as set forth on
Schedule 4.6 attached hereto, all material taxes and other assessments and
levies (including all interest and penalties) including, without limitation,
income, franchise, real estate, sales, gross receipts, use and services taxes,
and employment and employee withholding taxes, owed by the Company have been
paid in full by the Company unless being contested in good faith. Except as set
forth on Schedule 4.6, all such taxes and other assessments and levies which the
Company is required by law to have withheld, collected or deposited have been
duly withheld and collected and deposited with the proper governmental
authorities or segregated and set aside for such payment, and if so segregated
and set aside, shall be so paid by the Company as required by law.
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4.7. Litigation.
There is no material action, suit or proceeding of any nature pending
or to the best of the Company's knowledge threatened against the Company, or its
properties or assets, and there are no facts or circumstances which form the
basis for any such action, suit or proceeding.
4.8. No Conflict; Required Filings and Consents.
(a) No Conflict. Except as set forth on Schedule 4.8 attached hereto,
the execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby will not, (i) conflict with or violate
the Certificate of Incorporation or By-laws of the Company, (ii) conflict with
or violate any federal, foreign, state or provincial law, rule, regulation,
order, judgment or decree (collectively, "Laws") applicable to the Company or
any of its subsidiaries or by which its or any of their respective properties or
assets are bound or affected, or (iii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or impair the Company's or any of its subsidiaries' rights or
alter the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien on any of the properties or assets of the Company or any
of its subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its or any of their respective properties
or assets are bound or affected, except in the case of clauses (ii) and (iii)
for any such conflicts, violations, breaches, defaults or other occurrences that
do not have a Material Adverse Effect, as defined in Section 8.2(a) below.
(b) Required Filings and Consents. The execution and delivery of this
Agreement by the Company does not, and the performance of this Agreement by the
Company will not, require any consent, approval, authorization or permit of, or
filing with notification to, any domestic or foreign governmental or regulatory
authority, except (i) for the applicable requirements, if any, of any foreign
jurisdiction requiring notification in connection with the Merger and the
transactions contemplated hereby and the filing and recordation of appropriate
merger or other documents as required by Delaware Law and (ii) where the failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, either (A) would not prevent or materially delay
consummation of the Merger or otherwise prevent or materially delay the Company
from performing its obligations under this Agreement or (B) do not have a
Material Adverse Effect.
4.9. Status of Material Contracts.
The Company is not in default of, or in anticipatory breach of, any of
its material contracts with third parties, nor does the Company have any reason
to believe that it will be so in the future.
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4.10. Ownership of Property.
The Company owns, and at the Closing will have, good, valid and
marketable title or valid license to any property, including intellectual
property, that it uses in the operation of its business, free and clear of all
mortgages, liens, pledges, charges or encumbrances, except (i) the lien of
current taxes no yet due and payable and (ii) such imperfections of title, liens
and easements as do not and would not reasonably be expected to have a Material
Adverse Effect on the Company. With regard to any licenses to use property,
including intellectual property, the Company has valid and enforceable license
agreements with the third party owners of the property, and to the Company's
knowledge, none of such intellectual property infringes upon the proprietary
rights of any third party.
4.11. ERISA Plans.
The Company does not have any employee benefit plans that would be
covered by the federal ERISA laws.
4.12. Restrictions on Business Activities.
To the Company's knowledge, there is no agreement, judgment,
injunction, order or decree binding upon the Company which has or could
reasonably be expected to have the effect of prohibiting or materially impairing
any current or future business practice of the Company to compete with any other
person or the conduct of business by the Company as currently conducted or as
proposed to be conducted.
4.13. Governmental Authorization; Compliance with Laws.
The Company has obtained each federal, state, county, local or foreign
governmental consent, license, permit, grant, or other authorization of any
applicable governmental entity or other regulatory agency, (i) pursuant to which
the Company currently operates or holds any interest in any of its properties or
(ii) that is required for the operation of its business or the holding of any
such interest ((i) and (ii) herein collectively referred to as the "Company
Authorizations"), and all of such Company Authorizations are in full force and
effect, except where the failure to obtain or have any such Company
Authorizations could not reasonably be expected to have a Material Adverse
Effect on the Company. The Company is in material compliance with all applicable
laws, statutes, orders, rules and regulations of any applicable governmental
entity or other regulatory agency relating to it except where the failure to do
so would not have a Material Adverse Effect and the Company has not received
notice of any violations of any of the above.
4.14. Brokers or Finders.
The Company will not directly or indirectly, incur any liability or
finder's fee, or agent's commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby.
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4.15 Intangible Assets.
Schedule 4.15 attached hereto contains a true and complete list of all
patents and patent applications (pending or in the process of preparation),
domestic or foreign, patent rights, trademarks, trade names and licenses under
the patents of others, trade secrets, secret processes and other proprietary
rights of every kind and nature used or necessary for use by the Company in its
business as presently conducted. To the Company's knowledge, all such patents,
patent applications, patent rights and licenses are valid and effective in
accordance with their terms, and all such trade names, trade secrets, secret
processes and other proprietary rights are valid and effective. The Company has
not received any notice of any claim of infringement. Except as disclosed in
Schedule 4.15 attached hereto, there are no agreements, contracts or obligations
under which the Company is obligated with respect to, or is using, any patents,
patent applications, patent rights, trademarks, trade names, licenses under the
patents of others, trade secrets, secret processes or other proprietary rights.
The trade secrets and "know-how" of the Company are in such form and of such
quality that, following the Closing, the Company will be able to continue to
sell the products heretofore provided by the Company.
4.16 Disclosure.
No statement of fact made by the Company contained herein and no
written statement of fact furnished by the Company to Algiers or Algiers Merger
Co. in connection herewith and/or in connection with any filing by Algiers with
the Securities and Exchange Commission, taken as a whole (inclusive of the
Schedules to this Agreement), contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
herein or therein not misleading in light of the circumstances in which they
were made.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
OF ALGIERS AND ALGIERS MERGER CO.
Algiers and Algiers Merger Co. represent and warrant to the Company as
follows:
5.1. Organization, Standing and Power.
Algiers is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Algiers Merger Co. is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each of Algiers and Algiers Merger Co. has the
corporate power to own its respective properties and to carry on its respective
business as now being conducted. Algiers and Algiers Merger Co. have each made
available to the Company true and correct copies of its respective Certificates
of Incorporation and Bylaws, each as amended to date.
5.2. Authority.
Algiers and Algiers Merger Co. have all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated by this Agreement, subject to approval of the Merger by Algiers, as
the sole stockholder of Algiers Merger Co. The execution and delivery 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 Algiers and Algiers Merger Co. Each of Algiers' and Algiers Merger Co.'s
Board of Directors has unanimously approved this Agreement and the transactions
contemplated hereby and Algiers, as the sole stockholder of Algiers Merger Co.,
has approved this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Algiers and Algiers Merger Co.
and constitutes the valid and binding obligations of Algiers and Algiers Merger
Co., enforceable in accordance with its terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally and (b)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
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5.3. Capital Stock.
(1) Algiers. The authorized capital stock of Algiers consists of
40,000,000 shares of Algiers Common Stock, and 5,000,000 shares of preferred
stock, $.001 par value per share (the "Algiers Preferred Stock"). As of the date
of this Agreement, approximately 2,545,000 shares of Algiers Common Stock are
issued and outstanding. No shares of Algiers Preferred Stock have been issued.
All outstanding shares of Common Stock are duly authorized, validly issued,
fully paid and non-assessable. Except for warrants to purchase 51,000 shares of
Algiers Common Stock (the "Algiers Warrants"), there are no options, warrants or
other rights to subscribe for Algiers Common Stock or securities convertible
into Algiers Common Stock. Pursuant to Section 8.3(h) herein, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
shall surrender for cancellation 1,272,500 of Algiers Common Stock at or prior
to the Effective Time and Algiers shall then have 1,272,500 shares of common
stock issued and outstanding, plus 51,000 shares issuable on a cashless basis of
outstanding warrants, or an aggregate of 1,323,500 shares of Common Stock. No
other changes in Algiers Capital Stock are contemplated prior to the Closing and
as set forth in Section 8.3(h) herein. Algiers Common Stock issuable upon
surrender of Company Stock Certificates, when issued in accordance with the
terms and provisions of this Agreement, will be duly authorized, validly issued,
fully paid and non-assessable.
(2) Algiers Merger Co. The authorized capital stock of Algiers Merger
Co. consists of 100 shares of Algiers Merger Co. Common Stock. As of the date of
this Agreement, all of Algiers Merger Co. Common Stock shares are issued and
outstanding and held by Algiers, and all such issued and outstanding shares are
duly authorized, validly issued, fully paid and nonassessable. As of the date
hereof, no shares of Algiers Merger Co. Common Stock are issuable upon exercise
of warrants or options. Other than as set forth in this Section 5.3, there are
no options, convertible securities, warrants, calls, rights, commitments or
agreements of any character to which Algiers Merger Co. is a party or by which
it is bound, obligating Algiers Merger Co. to issue, deliver, sell, repurchase
or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any
shares of the capital stock of Algiers Merger Co. or obligating Algiers Merger
Co. to grant, extend or enter into any such option, convertible security,
warrant, call, right, commitment or agreement.
5.4. Subsidiaries.
With the exception of Algiers Merger Co., which was formed for purposes
of this Merger, Algiers does not have any subsidiaries or affiliated companies
and does not otherwise own any shares of capital stock or any interest in, or
control, directly or indirectly, any other corporation, partnership,
association, joint venture or other business entity.
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5.5 SEC Documents; Algiers Financial Statements.
(a) SEC Documents; Algiers Financial Statements. Algiers has filed on a
timely basis with the SEC and made available to the Company all registration
statements, reports and documents (including all exhibits, amendments and
supplements thereto) required to be filed by Algiers under the Exchange Act, and
the rules and regulations of the SEC thereunder, all of which when filed
complied in all material respects with all applicable requirements of the
Exchange Act and the rules and regulations thereunder (the "SEC Documents"). As
of their respective filing dates, none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading. The financial statements
of Algiers, including the notes thereto, included in the SEC Documents (the
"Algiers Financial Statements"), comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, were prepared in accordance with GAAP applied
on a basis consistent throughout the periods indicated and consistent with each
other (except as may be indicated in the notes thereto or, in the case of
unaudited statements, as permitted by SEC rules for such form) and present
fairly the financial position of Algiers at the dates thereof and results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal, recurring audit adjustments which will not be
material in amount or significance) and do not include or omit to state any fact
which renders the Algiers Financial Statements misleading. There has been no
change in Algiers accounting policies, except as described in the notes to
Algiers Financial Statements. There are no facts or events concerning Algiers
that are required to be disclosed under the Exchange Act and the rules and
regulations of the SEC thereunder that have not been disclosed in the SEC
Documents.
(b) Liabilities and Obligations. Except as and to the extent shown or
provided for in Algiers Financial Statements or notes and schedules thereto or
as disclosed in any of the schedules to this Agreement or such current
liabilities as may have been incurred since September 30, 2002 in the ordinary
course of business, to the extent quantified and reflected as a liability on
Algiers's books and records, Algiers and its subsidiaries as at the date hereof
has no liabilities or obligations (whether known or unknown, accrued, absolute,
contingent or otherwise) which might be or become a charge against the assets or
liabilities of Algiers, except as specifically provided pursuant to the terms of
the agreement or understanding to which such liability or obligation relates; as
of September 30, 2002, there was no asset used by Algiers in its operations that
has not been reflected in the Algiers Financial Statements, and except as set
forth in the Algiers Financial Statements, no assets have been acquired by
Algiers since such date, except in the ordinary course of business.
(c) No Changes. Since September 30, 2002, Algiers has not suffered any
Material Adverse Effect (as defined in Section 8.2(a) below) with respect to its
business (financial or otherwise), and Algiers has conducted its business only
in the ordinary course and there has not been any declaration, setting aside or
payment of any dividend or other distribution with respect to Algiers Common
Stock or any repurchase, redemption or other acquisition by Algiers of any other
securities of Algiers. Except as disclosed in the Algiers Financial Statements,
there has been no decrease in stockholders' equity as compared with the amount
shown for such stockholders' equity as at September 30, 2002, except as may
relate to results of operations for the period between September 30, 2002 and
the date of this Agreement, and no material adverse changes in the financial
position of Algiers, since September 30, 2002.
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5.6. Taxes.
All federal, state and other returns and reports required to be filed
by Algiers have been duly filed by Algiers and except as set forth on Schedule
5.6 attached hereto, all material taxes and other assessments and levies
(including all interest and penalties) including, without limitation, income,
franchise, real estate, sales, gross receipts, use and services taxes, and
employment and employee withholding taxes, owed by Algiers have been paid in
full by Algiers unless being contested in good faith. Except as set forth on
Schedule 5.6 attached hereto all such taxes and other assessments and levies
which Algiers is required by law to have withheld, collected or deposited have
been duly withheld and collected and deposited with the proper governmental
authorities or segregated and set aside for such payment, and if so segregated
and set aside, shall be so paid by Algiers as required by law.
5.7. Litigation.
There is no action, suit or proceeding of any nature pending or to the
best of Algiers' knowledge threatened against Algiers or any of its
subsidiaries, their respective properties, and there are no facts or
circumstances, which form the basis for any such action, suit or proceeding.
5.8. No Conflict; Required Filings and Consents.
(a) No Conflict. Except as set forth on Schedule 5.8 attached hereto,
the execution and delivery of this Agreement by Algiers and Algiers Merger Co.
does not, and the performance of this Agreement by Algiers and Algiers Merger
Co. and the consummation by Algiers and Algiers Merger Co. of the transactions
contemplated hereby will not, (i) conflict with or violate the Certificate of
Incorporation or By-laws of Algiers or Algiers Merger Co., (ii) conflict with or
violate any Laws applicable to Algiers or any of its subsidiaries or by which
they or any of their respective properties are bound or affected or (iii) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or impair Algiers' or any its
subsidiaries' rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien on any of the properties or
assets of Algiers or any of its subsidiaries pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Algiers, Algiers Merger Co. or any of
its subsidiaries is a party or by which Algiers or any of its subsidiaries or
any of their respective properties are bound or affected, except in the case of
clauses (ii) and (iii) for any such conflicts, violations, breaches, defaults or
other occurrences that do not have a Material Adverse Effect.
(b) Required Filings and Consents. The execution and delivery of this
Agreement and the consummation of the Merger contemplated hereby by Algiers and
Algiers Merger Co. do not, and the performance of this Agreement by Algiers and
Algiers Merger Co. will not, require any consent, approval, authorization or
permit of, or filing with notification to, any domestic or foreign governmental
or regulatory authority except (i) for the applicable requirements, if any, of
the Securities Act, the Exchange Act, Blue Sky Laws, the legal requirements of
any foreign jurisdiction requiring notification in connection with the Merger
and the transactions contemplated hereby and the filing and recordation of
appropriate merger or other documents as required by the laws of the state of
Delaware, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, either (A)
would not prevent or materially delay consummation of the Merger or otherwise
prevent or materially delay Algiers or Algiers Merger Co. from performing its
obligations under this Agreement or (B) do not have a Material Adverse Effect.
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5.9. Status of Material Contracts.
As of the date hereof, neither Algiers nor Algiers Merger Co. is in
default of, nor is in anticipatory breach of any of its material contracts with
third parties.
5.10. Ownership of Property.
Algiers owns, and at the Closing shall have, good, valid and marketable
title, or valid license, to any property, that it uses in the operation of its
business which consists solely of corporate books and records, free any clear of
all mortgages, liens, pledges, charges or encumbrances, except (i) the lien of
current taxes not yet due and payable and (ii) such imperfections of title,
liens and easements as do not and would not reasonably be expected to have a
Material Adverse Effect on Algiers.
5.11. ERISA Plans.
Neither Algiers nor Algiers Merger Co. has any plans that would be
covered by the federal ERISA laws.
5.12. Restrictions on Business Activities.
There is no agreement, judgment, injunction, order or decree binding
upon Algiers or Algiers Merger Co. which has or could reasonably be expected to
have the effect of prohibiting or materially impairing any current or future
business practice of Algiers or Algiers Merger Co. to compete with any other
person or the conduct of business by Algiers or Algiers Merger Co. as currently
conducted or as proposed to be conducted by Algiers or Algiers Merger Co.
5.13. Brokers or Finders.
Algiers and Algiers Merger Co. will not directly or indirectly, incur
any liability or finder's fee, or agent's commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
5.14. Governmental Authorization; Compliance with Laws.
Algiers and Algiers Merger Co. have obtained each federal,
state, county, local or foreign governmental consent, license, permit, grant, or
other authorization of any applicable governmental entity or other regulatory
agency, (i) pursuant to which Algiers and Algiers Merger Co. currently operate
or hold any interest in any of its properties which consist solely of books and
records or (ii) that is required for the operation of Algiers' business or the
holding of any such interest ((i) and (ii) herein collectively referred to as
the "Algiers Authorizations"), and all of Algiers Authorizations are in full
force and effect, except where the failure to obtain or have any Algiers
Authorizations could not reasonably be expected to have a Material Adverse
Effect on Algiers. Algiers and Algiers Merger Co. are in material compliance
with all applicable laws, statutes, orders, rules and regulations of any
applicable governmental entity or other regulatory agency relating to Algiers
and Algiers Merger Co. except where the failure to do so would not have a
Material Adverse Effect and Algiers and Algiers Merger Co. have not received
notice of any violations of any of the above.
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5.15 Disclosure.
No statement of fact made by Algiers or Algiers Merger Co. contained
herein and no written statement of fact furnished by Algiers or Algiers Merger
Co. to the Company. in connection herewith or in connection with any filing by
Algiers with the Securities and Exchange Commission prior to the Effective Time
by, taken as a whole (inclusive of the Schedules to this Agreement), contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements herein or therein not misleading in
light of the circumstances in which they were made.
ARTICLE 6 - CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME
6.1. Conduct of Business by the Company and Algiers Pending the Effective Time.
Except as otherwise contemplated by this Agreement, after the date
hereof and prior to the Effective Time or earlier termination of this Agreement,
unless the parties shall otherwise agree in writing, the Company, Algiers and
Algiers Merger Co. shall each:
(a) conduct its respective business in the ordinary and usual course of
business and consistent with past practice;
(b) not (i) amend or propose to amend its respective Certificate of
Incorporation or Bylaws, (ii) split, combine or reclassify its outstanding
capital stock or declare, set aside or pay any dividend or distribution payable
in cash, stock, property or otherwise, (iii) spin-off any assets or businesses,
(iv) engage in any transaction for the purpose of effecting a recapitalization
of any party or subsidiary or (v) engage in any transaction or series of related
transactions which has a similar effect to any of the foregoing;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell,
pledge or dispose of, any additional shares of, or any options, warrants or
rights of any kind to acquire any shares of capital stock of any class or any
debt or equity securities convertible into or exchangeable for such capital
stock or amend or modify the terms and conditions of any of the foregoing,
except that nothing herein will prevent Algiers from issuing Algiers Common
Stock upon exercise of outstanding warrants or the Company from issuing
securities in a bridge or permanent financing (each, a "Company Financing"),
provided the Merger Consideration is adjusted for the issuance of Company Common
Stock;
(d) not (i) incur or become contingently liable with respect to any
indebtedness for borrowed money, except in the ordinary course of business or in
connection with a Company Financing, (ii) redeem, purchase, acquire or offer to
purchase or acquire any shares of its respective capital stock, other than as
required by the governing terms of such securities, (iii) take or fail to take
any action which action or failure to take action would cause the Company or the
Company's stockholders to recognize gain or loss for federal income tax purposes
as a result of the consummation of the Merger, (iv) make any acquisition of any
assets (except in the ordinary course of business) or businesses, (v) sell any
assets (except in the ordinary course of business) or businesses or (vi) enter
into any contract, agreement, commitment or arrangement with respect to any of
the foregoing;
15
(e) use all reasonable efforts to preserve intact its respective
business organization and goodwill, keep available the services of its present
officers and key employees and preserve the goodwill and business relationships
with suppliers, distributors, customers and others having business relationships
with the Company or Algiers and not engage in any action, directly or
indirectly, with the intent to impact adversely the transactions contemplated by
this Agreement;
(f) not enter into or amend any employment, severance, special pay
arrangement with respect to termination of employment or other similar
arrangements or agreements with any directors or officers;
(g) not increase the rate of remuneration payable to any of its
respective directors or officers, except in the customary and usual course of
business and consistent with past practices, or agree to do so;
(h) not adopt, enter into or amend any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation, health
care, employment or other employee benefit plan, agreement, trust, fund or
arrangement for the benefit or welfare of any employee or retiree, except in the
ordinary and usual course of business, consistent with past practices or as
required to comply with changes in applicable law and except as contemplated on
Schedule 6.1(h) attached hereto;
(i) file with the SEC all forms, statements, reports and documents
(including all exhibits, amendments and supplements thereto) required to be
filed by Algiers pursuant to the Exchange Act, including Algiers' Form 10-KSB
which is required to be filed with the SEC prior to the Effective Time, for
which the Company shall pay all expenses incurred in connection with the filing
of such Form 10-KSB on behalf of Algiers; and
6.2. Certain Actions.
Except with respect to this Agreement and the transactions contemplated
hereby, the Company, Algiers and Algiers Merger Co. shall not, directly or
indirectly, solicit any "Acquisition Proposal," which term, for purposes of this
Agreement, shall mean any tender offer or exchange offer or any proposal for a
merger, acquisition of all of the stock or assets of, or other business
combination involving the acquisition of, such party or any of its subsidiaries,
or the acquisition of a substantial equity interest in, or a substantial portion
of the assets of, such party or any of its respective subsidiaries. The Company,
Algiers and Algiers Merger Co. shall not, directly or indirectly, furnish to any
third party any non-public information that it is not legally obligated to
furnish, negotiate with respect to, or enter into any agreement with respect to,
any Acquisition Proposal, but may communicate information about such an
Acquisition Proposal to its stockholders if and to the extent that it is
required to do so in order to comply with its legal obligations. The Company,
Algiers and Algiers Merger Co., as applicable, shall promptly advise the other
parties hereto following the receipt of any Acquisition Proposal and the details
thereof, and advise such other parties hereto of any developments with respect
to such Acquisition Proposal promptly upon the occurrence thereof. The Company,
Algiers and Algiers Merger Co. shall (a) immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any person
or entity conducted heretofore with respect to any of the foregoing, and (b)
direct and use its reasonable efforts to cause all of its investment bankers,
financial advisors, attorneys, accountants, consultants or other representatives
not to engage in any of the foregoing.
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ARTICLE 7 - COVENANTS
7.1. Approval of Stockholders.
The Company and Algiers Merger Co. shall, in accordance with applicable
law and subject to the fiduciary duties of their respective Boards of Directors
under applicable law as determined by such directors in good faith after
consultation with and based upon the advice of outside counsel, use their best
efforts to obtain the approval of the Merger by their respective stockholders as
required under Delaware Law.
7.2 Disclosure Document.
Algiers shall prepare and file with the SEC with information provided
by the Company and at the Company's expense exclusive of the time of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, information statement in accordance with the requirements of Rule
14(f) (the "Disclosure Statements") of the rules and regulations under the
Exchange and shall use its best efforts to cause the Disclosure Statement to be
distributed to Algiers stockholders.
7.3. Access to Information.
Subject to any applicable contractual confidentiality obligations
(which the Company and Algiers shall use their best efforts to cause to be
waived), the Company and Algiers shall afford each other and their respective
accountants, counsel and other representatives, reasonable access during normal
business hours during the period prior to the Effective Time to (a) all of their
respective properties, books, contracts, agreements and records and (b) all
other information concerning the business, properties and personnel (subject to
restrictions imposed by applicable law) of the Company and Algiers, as
applicable, as may be reasonably requested by the other.
7.4. Confidentiality.
Each of the parties hereto hereby agrees to maintain the
confidentiality of the information obtained in any investigation pursuant to
Section 7.3, or pursuant to the negotiation of this Agreement.
7.5. Public Disclosure.
No disclosure (whether or not in response to an inquiry) of the
existence or nature of this Agreement shall be made by any party hereto unless
approved in writing by duly authorized officers of both Algiers and the Company,
or of any third parties identified in such disclosure, prior to release,
provided that such approval shall not be unreasonably withheld and subject in
any event to Algiers's obligation to comply with securities laws.
17
7.6 Reasonable Efforts/Consents.
Subject to the terms and conditions provided in this Agreement, each of
the parties hereto shall use its reasonable efforts to take promptly, or cause
to be taken, all actions, and to do promptly, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated hereby to obtain all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings and to remove any injunctions or other impediments or
delays, legal or otherwise, in order to consummate and make effective the
transactions contemplated by this Agreement for the purpose of securing to the
parties hereto the benefits contemplated by this Agreement.
7.7. Notification of Certain Matters.
The Company shall give prompt notice to Algiers, and Algiers shall give
prompt notice to the Company, of (a) the occurrence or non-occurrence of any
event, the occurrence or non-occurrence of which is likely to cause any
representation or warranty of the Company, Algiers or Algiers Merger Co.,
respectively, contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time except as contemplated by
this Agreement (including the schedules of the Company attached hereto) and (b)
any failure of the Company, Algiers, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 7.7 shall not limit or otherwise affect any remedies available to
the party receiving such notice.
7.8. Affiliate Agreement.
Schedule 7.8 attached hereto sets forth those persons who, in the
Company's reasonable judgment, are "affiliates" of the Company (each, an
"Affiliate") within the meaning of Rule 145 ("Rule 145") promulgated under the
Act. The Company shall provide Algiers such information and documents as Algiers
shall reasonably request for purposes of reviewing such list. The Company has
delivered or shall cause to be delivered to Algiers prior to the Effective Time
from the Company's Affiliates an executed affiliate agreement substantially in
the form attached hereto as Exhibit 7.8 (the "Affiliate Agreement"). Algiers
shall be entitled to place appropriate legends on the certificates evidencing
any Algiers Common Stock to be received by Affiliates of the Company pursuant to
the terms of this Agreement, and to issue appropriate stop transfer instructions
to the transfer agent for Algiers Common Stock consistent with the terms of such
Affiliate Agreement.
18
7.9. Blue Sky Laws.
Algiers shall take such steps as may be necessary to comply with the
federal securities laws and Blue Sky Laws of all jurisdictions which are
applicable to the issuance of Algiers Common Stock pursuant to this Agreement.
The Company shall use its best efforts to assist Algiers as may be necessary to
comply with the federal securities laws and Blue Sky Laws of all jurisdictions
which are applicable in connection with the issuance of Algiers Common Stock
pursuant to this Agreement. In that regard, in the event that there is no
available exemption under the federal and/or state securities laws for any or
all of the shares of Algiers to be issued to the Company's stockholders and/or
the stockholders of CIG, as described in Section 4.3 above, such shares shall be
held in escrow until registered with the SEC or the Company receives an opinion
of counsel that an exemption from registration exists for such shares.
7.10 Private Financing.
The Company will use its best efforts following the completion of the
Merger to raise at least $250,000 for Algiers in a private financing.
7.11 Solvency of the Surviving Corporation.
The Company shall use its best efforts to maintain adequate funds in
the account of the Surviving Corporation and to pay bills as they become due.
7.12 Indemnification of Algiers and Algiers Merger Co.
The Company shall indemnify and defend Algiers and Algiers Merger Co.,
and each of their respective officers, directors, employees, shareholders, and
agents (collectively, the "Algiers Indemnified Parties") against, and hold the
Algiers Indemnified Parties harmless from, any and all claims, actions or causes
of action, suits, demands, judgments, losses, liabilities, costs, and expenses,
including, without limitation, interest, penalties and reasonable attorneys'
fees and expenses (collectively "Claims"), asserted against, resulting to,
imposed upon or incurred by any Algiers Indemnified Party, directly or
indirectly, prior to or after the Effective Time, arising out of or pertaining
to the transactions contemplated by this Agreement or by reason of or resulting
from any breach of any representation, warranty or covenant made by the Company;
provided, however, that such Claim has not resulted from any breach of any
representation, warranty or covenant made by Algiers or Algiers Merger Co. for
which they shall indemnify and defend the Company and each of their respective
officers, directors, employees, shareholders and agents (collectively the
"Company Indemnified Parties") against, and hold the Company Indemnified Parties
harmless from any and all Claims asserted against, resulting to, imposed upon or
incurred by any Company Indemnified Party, directly or indirectly, prior to or
after the Effective Time, arising out of or pertaining to the transactions
contemplated by this Agreement or by reason of or resulting from any breach of
any representation, warranty or covenant made by Algiers and Algiers Merger Co
prior to the Effective Time.
ARTICLE 8 - CONDITIONS TO THE MERGER
Section 8.1. Conditions to Obligations of Each Party to Effect the Merger.
The respective obligations of each party to this Agreement to effect
the Merger shall be subject to the satisfaction at or prior to the Effective
Time of the following conditions, any of which may be deferred or waived by
written instrument executed by the Company and Algiers:
19
(a) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint or prohibition
preventing the consummation of the Merger shall be in effect;
(b) Regulatory Approvals and Third Party Consents. All governmental and
third party consents, orders and approvals legally required for the consummation
of the Merger and the transactions contemplated hereby shall have been obtained
and be in effect at the Effective Time;
(c) Waiver. Notwithstanding anything to the contrary herein, any party
may waive compliance of the other party to any condition contained in this
Section 8.1, if such waiver is made by a writing executed by the party and
delivered to the other parties hereto, provided, however, a single or partial
waiver of any condition will not be deemed a waiver of any other part of such
condition or any other condition.
(d) No Dissenter's Appraisal Rights. No stockholder of the Company
shall have made any demand to exercise, or take any other step to effect,
dissenter's appraisal rights under Delaware Law.
8.2. Additional Conditions to the Obligations of Algiers and Algiers Merger Co.
The obligations of Algiers and Algiers Merger Co. to consummate the
Merger and the transactions contemplated by this Agreement shall be subject to
the satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, exclusively by Algiers:
(a) Representations and Warranties. The representations and warranties
of the Company contained in this Agreement shall be true and correct in all
material respects on and as of the date made and the Closing Date, except for
changes contemplated by this Agreement (including the schedules of the Company)
and except for those representations and warranties which address matters only
as of a particular date (which shall remain true and correct as of such date),
with the same force and effect as if made on and as of the Effective Time,
except, in all such cases, for such breaches, inaccuracies or omissions of such
representations and warranties which have neither had nor reasonably would be
expected to have a Material Adverse Effect on the Company or Algiers. For the
purposes of this Agreement, the term "Material Adverse Effect" on a party shall
mean an event, change or occurrence which, individually or together with any
other event, change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of such party and its
subsidiaries, taken as a whole or (ii) the ability of such party to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement; provided, however, that a Material
Adverse Effect shall not be deemed to include the impact of (i) changes in laws
of general applicability or interpretations thereof by courts or governmental
authorities, (ii) changes in GAAP, (iii) actions and omissions of a party (or
any of its subsidiaries) taken with the prior written consent of the other party
in contemplation of the transactions contemplated hereby and (iv) the direct
effects of compliance with this Agreement on the operating performance of the
parties, including expenses incurred by the parties in consummating the
transactions contemplated by this Agreement;
20
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time;
(c) Material Adverse Change. Since September 30, 2002, no event shall
have occurred that would constitute a Material Adverse Effect to the Company;
(d) Due Diligence. Algiers shall have conducted its due diligence of
Company with results, in the sole discretion of the Board of Directors of
Algiers, satisfactory to it;
(e) Additional Certificates. The Company shall have furnished to
Algiers such additional certificates, opinions and other documents as Algiers
may have reasonably requested as to any of the conditions set forth in this
Section 8.2;
(f) Approval by Company Stockholders. The stockholders of the Company
shall have approved the Merger, and if such approval was obtained by written
consent in lieu of meeting stockholders, the Company shall have given
stockholders who did not sign said consent written notice required by Section
228 of Delaware Law; and
(g) Assignment of CIG Agreement. The Company shall have assigned its
rights under the CIG Agreement, which shall be in full force and effect, to
Algiers, effective as of the Effective Time.
8.3. Additional Conditions to Obligations of the Company.
The obligations of the Company to consummate the Merger and the
transactions contemplated by this Agreement shall be subject to the satisfaction
at or prior to the Closing, or such time as specified herein, of each of the
following conditions, any of which may be waived, in writing, exclusively by the
Company:
(a) Representations and Warranties. The representations and warranties
of Algiers and Algiers Merger Co. contained in this Agreement shall be true and
correct in all material respects on and as of the date made and the Effective
Time, except for changes contemplated by this Agreement and except for those
representations and warranties which address matters only as of a particular
date (which shall remain true and correct as of such date), with the same force
and effect as if made on and as of the Effective Time, except, in all such
cases, for such breaches, inaccuracies or omissions of such representations and
warranties which have neither had nor reasonably would be expected to have a
Material Adverse Effect on Algiers or any of its subsidiaries;
(b) Agreements and Covenants. Algiers shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them on or prior to the Effective
Time;
21
(c) Material Adverse Change. Since September 30, 2002, no event shall
have occurred that would constitute a Material Adverse Effect to Algiers or any
of its subsidiaries;
(d) Due Diligence. The Company shall have conducted its due diligence
of Algiers and its subsidiaries with results, in the sole discretion of the
Board of Directors of the Company, satisfactory to it;
(e) Additional Certificates. Algiers and Algiers Merger Co. shall have
furnished to the Company such additional certificates, opinions and other
documents as the Company may have reasonably requested as to any of the
conditions set forth in this Section 8.3;
(f) Approval by Algiers Merger Co.'s Stockholder. Algiers, as sole
stockholder of Algiers Merger Co., shall have approved the Merger;
(g) Resignation of Officers and Directors. The offices and directors of
Algiers shall have delivered their resignations effective as of the Effective
Time;
(h) Capitalization of Algiers. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ shall have surrendered
for cancellation 1,272,500 shares of Algiers Common Stock and Algiers shall have
outstanding 1,272,500 shares of Algiers Common Stock. In addition, Warrants to
purchase an additional 51,000 shares of Algiers Common Stock shall be exercised
on a cashless basis (with no cash paid and the entire 51,000 shares issued) and
Algiers shall not have any outstanding warrants or options at the Effective Time
and will then have 1,323,500 shares of Common Stock issued and outstanding;
(i) Registration Rights Agreement. Algiers shall have executed and
delivered the Registration Rights Agreement with the stockholders of the Company
and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in the form annexed hereto as Exhibit B;
(j) Lock-Up Agreement. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ shall have entered into an
agreement with Algiers in form and substance satisfactory to the Company
restricting his right to sell or otherwise dispose of shares of Algiers Common
Stock during any month to 10% of the number of shares of Algiers Common Stock
owned by that stockholder at the beginning of the month for a period not to
exceed 180 days commencing on the Effective Date;
(k) Escrow of Shares for CIG. Algiers shall have deposited in escrow
with Snow ▇▇▇▇▇▇ ▇▇▇▇▇▇ P.C. 5,239,238 shares of Algiers Common Stock, issued in
the name of CIG to be held on behalf of the CIG shareholders upon closing of the
CIG Agreement; and
(l) No SEC Restraint. No order has been issued by the SEC to suspend
trading in Algiers Common Stock or challenging or seeking to prevent the
consummation of the Merger, and no proceedings for that purpose have been
instituted or threatened or, to Algiers knowledge, are contemplated by the SEC.
8.4 Intentionally Left Blank.
22
ARTICLE 9 - TERMINATION, AMENDMENT AND WAIVER
9.1. Termination.
This Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time:
(a) by mutual consent of the Company and Algiers;
(b) by Algiers or the Company, if (i) the Effective Time has not
occurred by April 15, 2003 (provided that the right to terminate this Agreement
under this clause (i) to Section 9.1(b) shall not be available to any party
whose willful or reckless failure to fulfill any obligation hereunder has been
the cause of, or resulted in, the failure of the Effective Time to occur on or
before such date), (ii) there shall be a final non-appealable order of a federal
or state court in effect preventing consummation of the Merger, (iii) there
shall be any statute, rule, regulation or order enacted, promulgated or issued
or deemed applicable to the Merger by any governmental entity that would make
consummation of the Merger illegal or (iv) if any of the conditions precedent to
Closing set forth in this Agreement have not been met and have not been waived
in writing by the party whose consent is required;
(c) by Algiers or the Company, if there shall be any action taken, or
any statute, rule, regulation or order enacted, promulgated or issued or deemed
applicable to the Merger, by any governmental entity, which would (i) prohibit
Algiers's or the Company's ownership or operation of any material portion of the
business of the Company or Algiers, (ii) compel Algiers or the Company to
dispose of or hold separate, as a result of the Merger, any material portion of
the business or assets of the Company or Algiers, or (iii) prohibit or adversely
affect the trading market for Algiers Common Stock;
(d) by Algiers, if it is not in material breach of its obligations
under this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of the
Company and as a result of such breach the conditions set forth in Sections 8.2
(a) or Paragraph 8.2(b), as the case may be, would not then be satisfied;
provided, however, that if such breach is curable by the Company within ten days
after the giving of written notice by Algiers of such breach through the
exercise of the Company's reasonable best efforts, then for so long as the
Company continues to exercise such reasonable best efforts Algiers may not
terminate this Agreement under this Section 9.1(d) unless such breach is not
cured within ten days (but no cure period shall be required for a breach which
by its nature cannot be cured);
(e) by the Company, if it is not in material breach of its obligations
under this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of
Algiers or Algiers Merger Co. and as a result of such breach the conditions set
forth in Section 8.3(a) or Section 8.3(b), as the case may be, would not then be
satisfied; provided, however, that if such breach is curable by Algiers or
Algiers Merger Co. within ten days after the giving of written notice by the
Company of such breach through the exercise of Algiers' or Algiers Merger Co.'s
reasonable best efforts, then for so long as Algiers or Algiers Merger Co.
continues to exercise such reasonable best efforts the Company may not terminate
this Agreement under this Section 9.1(e), unless such breach is not cured within
ten days (but no cure period shall be required for a breach which by its nature
cannot be cured);
23
(f) by Algiers, if the Company fails to obtain the requisite vote of
its stockholders required to approve the Merger under Delaware Law;
(g) by Algiers or the Company, if it is not in initial breach of its
obligations under this Agreement and any of the conditions set forth in Section
8.1 have not been satisfied;
(h) by Algiers or the Company, if the CIG Agreement cannot be closed in
accordance with it terms.
Where action is taken to terminate this Agreement pursuant to this
Section 9.1, it shall be sufficient for such action to be authorized by the
Board of Directors of the party taking such action.
9.2. Effect of Termination.
In the event of termination of this Agreement as provided in Section
9.1, this Agreement shall forthwith become void and, except as set forth herein,
there shall be no liability or obligation on the part of Algiers, Algiers Merger
Co., or the Company, or their respective officers, directors or stockholders;
provided, however, that each party shall remain liable for any breaches of this
Agreement prior to its termination; and provided, further, that, the provisions
of this Section 9.2 and Sections 10.8, 10.9 and 10.13 of this Agreement shall
remain in full force and effect and survive any termination of this Agreement.
9.3. Amendment.
Except as is otherwise required by applicable law, this Agreement may
be amended by the parties hereto at any time, but only by an instrument in
writing signed by or validly on behalf of each of the parties to this Agreement.
9.4. Extension, Waiver.
At any time prior to the Effective Time, Algiers and Algiers Merger
Co., on the one hand, and the Company, on the other, may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations of
the other party hereto, (b) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party. The
failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right of such party at a later
time to enforce the same or any other provision of this Agreement. No waiver of
any condition or of the breach of any term in this Agreement in one or more
instances shall be deemed to be or construed as a further or continuing waiver
of such condition or breach or a waiver of any other condition or of the breach
of any other term of this Agreement.
24
ARTICLE 10 - GENERAL PROVISIONS
10.1. Survival.
The representations and warranties set forth in Article 4 and Article 5
shall not survive beyond the Effective Time. This Section 10.1 shall not limit
any covenant or agreement of the parties hereto which by its terms contemplates
performance after the Effective Time.
10.2. Notices.
All notices and other communications hereunder shall be in writing,
shall be effective when received, and shall in any event be deemed to have been
received (a) when delivered, if delivered personally or by commercial delivery
service (in either case, against written receipt therefore), (b) five business
days after deposit with U.S. Mail, if mailed by registered or certified mail
(return receipt requested), (c) one business day after the business day of
deposit with Federal Express or similar nationally recognized overnight courier
for next day delivery (or, two business days after such deposit if deposited for
second business day delivery), if delivered by such means, or (d) one business
day after delivery by facsimile transmission with copy by U.S. Mail, if sent via
facsimile plus mail copy (with acknowledgment of complete transmission), to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
if to the Company, to: Command International Acquisition Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Facsimile: _______
with a copy to: Snow ▇▇▇▇▇▇ ▇▇▇▇▇▇ P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to Algiers, to: Algiers Resources, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
25
With a copy to: Jeffer, Mangels, ▇▇▇▇▇▇ & Marmaro LLP
2121 Avenue of the Stars, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to Algiers Merger Co., to: Algiers Merger Co.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Jeffer, Mangels, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
2121 Avenue of the Stars, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10.3. Interpretation.
The words "include," "includes" and "including" when used herein shall
be deemed in each case to be followed by the words "without limitation." The
word "agreement" when used herein shall be deemed in each case to mean any
contract, commitment or other agreement, whether oral or written, that is
legally binding. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. When reference is made herein to "the business of" an entity,
such reference shall be deemed to include the business of all direct and
indirect subsidiaries of such entity. Reference to the subsidiaries of an entity
shall be deemed to include all direct and indirect subsidiaries of such entity.
10.4. Counterparts.
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, it being understood that all parties need not sign
the same counterpart.
10.5. Entire Agreement.
This Agreement, the Schedules and Exhibits hereto, and the documents
and instruments and other agreements among the parties hereto referenced herein:
(a) constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, and (b) are not intended to confer upon any other person any rights or
remedies hereunder.
26
10.6. Severability.
In the event that any provision of this Agreement or the application
thereof, becomes or is declared by a court of competent jurisdiction to be
illegal, void or unenforceable, the remainder of this Agreement will continue in
full force and effect and the application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of
such void or unenforceable provision.
10.7. Other Remedies.
Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity upon such
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
10.8. Specific Performance.
The parties hereto 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 or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
10.9. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof, provided that
issues involving the corporate governance of any of the parties hereto shall be
governed by their respective jurisdictions of incorporation. Each of the parties
hereto agrees that process may be served upon them in any manner authorized by
the laws of the State of New York, and that such process may be served outside
the state of New York, for such persons and waives and covenants not to assert
or plead any objection which they might otherwise have to such jurisdiction and
such process.
10.10. Rules of Construction.
The parties hereto agree that they have been represented by counsel
during the negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
10.11. Assignment.
No party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other parties hereto. 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 permitted assigns.
27
10.12. Absence of Third Party Beneficiary Rights.
No provisions of this Agreement are intended, nor shall be interpreted,
to provide or create any third party beneficiary rights or any other rights of
any kind in any client, customer, affiliate, partner of any party hereto or any
other person or entity unless specifically provided otherwise herein.
10.13. Mediation and Arbitration.
If any dispute, controversy or claim arises in connection with the
performance or breach of this Agreement between the parties, a party hereto may,
upon written notice to the other parties, request facilitated negotiations. Such
negotiations shall be assisted by a neutral facilitator acceptable to all
parties and shall require the best efforts of the parties to discuss with each
other in good faith their respective positions and, respecting their different
interests, to finally resolve such dispute.
A party may disclose any facts to the other parties or to the
facilitator which such party believes, in good faith, to be necessary to resolve
the dispute. All such disclosures shall be deemed in furtherance of settlement
efforts and thus confidential. Except as agreed to by all parties, the
facilitator shall keep confidential all information disclosed during the
negotiations. The facilitator shall not act as a witness for either party in any
subsequent arbitration between the parties. Such facilitated negotiations shall
conclude within sixty days from receipt of the written notice, unless extended
by mutual consent of the parties. The costs incurred by each party in such
negotiations shall be borne by it. Any fees or expenses of the facilitator shall
be borne equally by all parties.
If any dispute, controversy or claim arises in connection with the
performance or breach of this Agreement which cannot be resolved by facilitated
negotiations, then such dispute, controversy or claim shall be settled by
arbitration in accordance with the laws of the State of New York and the then
current Commercial Arbitration Rules of the American Arbitration Association,
except that no pre-hearing discovery will be permitted unless specifically
authorized by the arbitration panel. The confidentiality provisions applicable
to facilitated negotiations shall also apply to arbitration.
The award issued by the arbitration panel may be confirmed in a
judgment by any federal or state court of competent jurisdiction. All reasonable
costs of both parties, as determined by the arbitration panel, including (i) the
fees and expenses of the American Arbitration Association and of the arbitration
panel, and (ii) the costs, including reasonable attorneys' fees, incurred to
confirm the award in court, shall be borne entirely by the non-prevailing party
(to be designated by the arbitration panel in the award) and may not be
allocated between the parties by the arbitration panel.
28
10.14. Schedule Disclosure.
Disclosure on one schedule, attachment or document provided
pursuant to any paragraph or subparagraph of this Agreement shall be deemed
disclosure under any other applicable paragraph or subparagraph of this
Agreement.
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Merger to be signed by their duly authorized respective officers, all as
of the date first written above.
COMMAND INTERNATIONAL ACQUISITION
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
ALGIERS RESOURCES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
ALGIERS MERGER CO.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
30