EXHIBIT 2.1
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT ("AGREEMENT"), is made and entered into as
of July 8, 2005, by and among Wien Group, Inc., a New York corporation ("WIEN
(NY)", Wien Group, Inc., a New Jersey corporation ("WIEN (NJ)"), Xxxxxxx Xxxx,
MM(2) Group, Inc., a New Jersey corporation ("MM2"), and Xxxx Xxxxxx and Xxxxxx
Xxxxxxx (each a "MM2 SHAREHOLDER" and, together, the "MM2 SHAREHOLDERS"), each
herein sometimes being referred to individually as a "party" and collectively as
the "parties," is made with reference to the following facts:
R E C I T A L S
A. Wien (NY) is a publicly held corporation that currently has no
business operations.
B. MM2 is a privately held company that has not had any business
operations since its inception.
C. Wien (NJ) is a wholly owned subsidiary of Wien (NY).
D. Immediately prior to the Closing Date (as hereinafter defined), Wien
(NY) shall merge with and into Wien (NJ) (the "REINCORPORATION") pursuant to a
Plan and Agreement of Merger (the "MERGER AGREEMENT") between Wien (NY) and Wien
(NJ), as a result of which Wien (NJ)'s certificate of incorporation will be in
the form attached hereto as EXHIBIT A. Such Merger Agreement shall provide that
Wien (NY) shall file an estimated or final cessation franchise tax report prior
to the Closing Date.
E. The parties propose, as of the Effective Time (as hereinafter
defined), that Wien (NJ) shall acquire ownership (the "ACQUISITION") of 100% of
both the outstanding Class A Common Shares of MM2 (the "CLASS A MM2 SHARES") and
Class B Common Shares of MM2 (the "CLASS B MM2 SHARES" and, together with the
Class A MM2 Shares, the "MM2 SHARES"), as a result of which (a) MM2 will become
a wholly-owned subsidiary of Wien (NJ), and (b) the MM2 Shareholders will
receive as consideration for the Acquisition shares of Wien (NJ) Class A Common
Stock and Wien (NJ) Class B Common Stock as hereinafter set forth.
E. The Acquisition is to be effectuated as a non-taxable transfer of
property in exchange for stock in accordance with Section 351 of the Internal
Revenue Code of 1986, as amended (the "CODE") and a non-taxable reorganization
under Section 368(a)(1)(B) of the Code.
NOW, THEREFORE, in consideration of the promises and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereby agree as follows:
ARTICLE ONE
ACQUISITION
1.01 THE ACQUISITION. On the terms and subject to the conditions
set forth in this Agreement, Wien (NJ) shall acquire 100% of the MM2 Shares from
the MM2 Shareholders in exchange for a total of (i) 115,933,333 newly issued
shares of Wien (NJ) Class A Common Stock (the "CLASS A WIEN (NJ) SHARES") and
(ii) 10,000,000 newly issued shares of Wien (NJ)
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Class B Common Stock (the "CLASS B WIEN (NJ) SHARES" and, together with the
Class A Shares, the "WIEN (NJ) SHARES") to be issued to the MM2 Shareholders in
amounts calculated in accordance with ARTICLE Two. Wien (NJ) shall also assume
all of the then outstanding warrants to purchase Class A MM2 Shares, and secured
convertible debentures convertible into Class A MM2 Shares, in each case as set
forth on SCHEDULE 4.09.
ARTICLE TWO
SHARE EXCHANGE
2.01 CALCULATION OF EXCHANGE RATIO.
(a) The number of Class A Wien (NJ) Shares to be issued
to each of the MM2 Shareholders for their respective Class A MM2 Shares shall be
calculated in accordance with the formula in SECTION 2.02(A), using an exchange
ratio of 11.593333 (the "CLASS A EXCHANGE RATIO"). The Class A Exchange Ratio
was derived by dividing the total number of Class A Wien (NJ) Shares to be
issued (115,933,333) by the total number of Class A MM2 Shares (10,000,000).
(b) The number of Class B Wien (NJ) Shares to be issued
to each of the MM2 Shareholders for their respective Class B MM2 Shares shall be
calculated in accordance with the formula in SECTION 2.02(B), using an exchange
ratio of .25 (the "CLASS B EXCHANGE RATIO"). The Class B Exchange Ratio was
derived by dividing the total number of Class B Wien (NJ) Shares to be issued
(10,000,000) by the total number of Class B MM2 Shares (40,000,000).
2.02 CALCULATION OF WIEN (NJ) SHARES TO BE ISSUED.
(a) The number of Class A Wien (NJ) Shares to be issued
to each of the MM2 Shareholders for their respective Class A MM2 Shares shall be
calculated by (i) multiplying (a) the total number of Class A MM2 Shares held by
such MM2 Shareholder by (b) the Class A Exchange Ratio and (ii) rounding the
product to the nearest whole number (subject to other reasonable adjustments
needed to maintain the total number of Class A Wien (NJ) Shares to be issued at
115,933,333).
(b) The number of Class B Wien (NJ) Shares to be issued
to each of the MM2 Shareholders for their respective Class B MM2 Shares shall be
calculated by (i) multiplying (a) the total number of Class B MM2 Shares held by
such MM2 Shareholder by (b) the Class B Exchange Ratio and (ii) rounding the
product to the nearest whole number (subject to other reasonable adjustments
needed to maintain the total number of Class B Wien (NJ) Shares to be issued at
10,000,000).
(c) No fractional shares of Wien (NJ) common stock shall
be issued in connection with the Acquisition.
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ARTICLE THREE
CLOSING
3.01 THE CLOSING. The consummation of the transactions contemplated
by this Agreement (the "CLOSING") shall take place as soon as practicable after
or upon the satisfaction or waiver in writing of all of the conditions precedent
to the obligations of the parties hereto, on such date as may be designated by
mutual consent of the parties (the "CLOSING DATE"). The parties will conduct the
Closing at the offices of Dechert LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX,
00000, or such other place as the parties may mutually agree. At the Closing,
the parties will determine that each condition to the obligations of the parties
hereunder has been satisfied or waived or will, at such Closing, be satisfied or
waived.
3.02 THE EFFECTIVE TIME. The Acquisition shall become effective
when all of the items required by this Agreement to be delivered at the Closing
have been delivered (the "EFFECTIVE TIME").
3.03 OFFICERS OF WIEN AT THE EFFECTIVE TIME. As provided in SECTION
8.05 hereof, the board of directors of Wien (NJ) shall adopt resolutions
appointing Xxxx Xxxxxx and Xxxxxx Xxxxxxx as Chief Executive Officer and
Chairman of the Board of Directors, respectively, of Wien (NJ) (the "NEW OFFICER
RESOLUTIONS"), which by their terms shall become operative only at the Effective
Time.
3.04 LIABILITIES AS OF THE EFFECTIVE TIME. At the Effective Time,
all of the obligations of Xxxx (NY) and Xxxx (NJ), including, without
limitation, all accounts payable, contingent obligations and obligations
pursuant to contracts, shall be assigned to and assumed by Xxxxxxx Xxxx.
3.05 CERTAIN ASSETS AS OF THE EFFECTIVE TIME. At the Effective
Time, the accounts receivable and software of Xxxx (NY) and Xxxx (NJ) shall be
assigned to Xxxxxxx Xxxx.
3.06 DELIVERY OF WIEN (NJ) SHARES. At the Closing, the certificates
representing the Wien (NJ) Shares shall have been delivered to the MM2
Shareholders in accordance with ARTICLES 1 and 2 of this Agreement.
ARTICLE FOUR
MM2 REPRESENTATIONS
MM2 and the MM2 shareholders represent and warrant to Wien (NY) and
Wien (NJ) with respect to MM2 as follows:
4.01 ORGANIZATION AND GOOD STANDING. MM2 is a corporation duly
organized, validly existing and in good standing under the laws of the state of
New Jersey and has all requisite corporate power and authority to own or lease
its assets as now owned or leased by it and to otherwise conduct its business.
All corporate proceedings required by law or by the provisions of this Agreement
to be taken by MM2 on or before the Closing Date in connection
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with the execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been or will be duly and
validly taken.
4.02 DUE AUTHORIZATION. MM2 has all requisite corporate power and
authority to execute and deliver this Agreement and each of the other
transaction documents to which it is or is specified to be a party, perform its
obligations hereunder and thereunder and consummate the transactions
contemplated hereby and thereby. This Agreement constitutes, and all other
transaction documents to which MM2 is a party, when executed and delivered by
MM2, will constitute, legal, valid and binding obligations of MM2, enforceable
against MM2 in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and moratorium
laws and other laws of general application affecting the enforcement of
creditors' rights generally. The execution and delivery by MM2 of this Agreement
and each of the other transaction documents to which it is, or is specified to
be, a party, and the consummation of the stock exchange and other transactions
contemplated hereby and thereby have been duly authorized by all necessary
action (corporate and other) of MM2.
4.03 AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS. Except as set
forth on SCHEDULE 4.03, the execution and delivery of this Agreement by MM2 and
the consummation of the transactions contemplated hereby will not result in a
breach of any of the terms and provisions of, or constitute a default under, or
conflict with, any material agreement, indenture or other instrument to which
MM2 is a party or by which its assets are bound.
4.04 ABSENCE OF CERTAIN CHANGES. Since the MM2 Balance Sheet Date
(as defined in SECTION 4.19), there has not been any material adverse change in
the working capital, financial condition, assets, liabilities, reserves,
contractual allowances, business operations or prospects of MM2, and, except as
contemplated by or set forth in this Agreement, MM2 has not:
(a) Except for this Agreement, engaged in any material
transaction outside the ordinary course of business;
(b) Made any capital expenditures other than in the
ordinary course of business;
(c) Paid, loaned or advanced (other than the payment of
salaries or reimbursement of expenses in the ordinary course of business) any
amounts to, or sold, transferred or leased any properties or assets to or
entered into any other transactions with any of its officers or directors, any
of its affiliates, or any officer or director of its affiliates;
(d) Made any material change in any method of accounting
or accounting practice;
(e) Incurred any material indebtedness or leasehold
expense in excess of $15,000;
(f) Entered into any material guaranties or otherwise
incurred or suffered to exist any material contingent liabilities;
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(g) Paid or declared any dividend or other distribution
in respect of its capital stock, or set aside any sums for the payment of any
such dividend or other distribution;
(h) Issued or sold any common shares or other equity
security, granted any stock option or warrant, or otherwise issued any security
convertible into capital stock;
(i) Canceled any indebtedness due it except upon full
payment thereof;
(j) Increased the compensation payable or to become
payable by it to any of its respective directors, officers, employees or agents,
or any bonus payments or arrangement made to or with any thereof;
(k) Agreed, whether in writing or otherwise, to do any of
the foregoing;
(l) Suffered any labor trouble or any controversies with
any of its employees;
(m) Suffered any damage, destruction or loss, whether or
not covered by insurance, materially adversely affecting its business or
properties; or
(n) Received notice that any person or entity with which
it has a significant business relationship intends to cancel or terminate such
business relationship.
4.05 CONTRACTS AND COMMITMENTS. Attached as SCHEDULE 4.05 is a list
of all material agreements to which MM2 is a party or by which any of its assets
are bound that exist as of the date of execution of this Agreement (including,
without limitation, joint venture or partnership agreements, personal property
leases, conditional sales contracts, notes or other evidence of indebtedness, or
other contracts, agreements, or commitments) (collectively, the "MM2
CONTRACTS"). MM2 now has, and at the Closing will have, valid and enforceable
interests in and to the MM2 Contracts. Except as set forth on SCHEDULE 4.03, MM2
is not in default with respect to any material term or condition of any such MM2
Contract, nor has any event occurred which through the passage of time or the
giving of notice, or both, would constitute a default thereunder. MM2 has
received no notice that any party to a MM2 Contract intends to cancel or
terminate such MM2 Contract or to exercise or not to exercise any option
thereunder.
4.06 LICENSES AND PERMITS. SCHEDULE 4.06 lists all licenses ("MM2
LICENSES") and permits ("MM2 PERMITS") held by MM2 in connection with the
operation of its business as currently conducted or the occupancy and use of the
premises upon which its business is conducted. No breach of any such MM2 License
or MM2 Permit currently exists, nor has any event occurred which through the
passage of time or the giving of notice, or both, would constitute a breach
thereunder.
4.07 LITIGATION.
(a) There is no action, suit or proceeding to which MM2
or any of MM2's officers or directors, is a party (either as a plaintiff or
defendant) pending before any court or governmental agency, authority or body,
or any arbitrator or arbitral body, which, if decided or concluded adversely,
would have a material adverse impact upon the operation by MM2 of its business
or on MM2's ability to consummate the transactions contemplated herein, and MM2
has no knowledge that any such action, suit or proceeding has been threatened
against MM2; and
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(b) none of MM2, its officers or its directors has been
permanently or temporarily enjoined by any order, judgment or decree of any
court or tribunal or any other agency from engaging in or continuing any conduct
or practice.
4.08 COMPLIANCE WITH LAW.
(a) MM2 currently has no outstanding notice or
notification from any court or governmental agency, authority or body that it is
in violation in any material respect of or not in substantial compliance with
any federal, state or local laws, statutes, ordinances, rules, regulations,
decrees, orders, permits or other similar items (including, but not limited to,
those related to employee safety, employment discrimination and environmental
protection or conservation) or that upon the passage of time it will be in
violation in any material respect of any of the foregoing;
(b) MM2 has not been in violation of any federal, state
or local laws, statutes, ordinances, rules, regulations, decrees, orders,
permits or other similar items (including, but not limited to, those related to
employee safety, employment discrimination and environmental protection or
conversation) in force on the date hereof, the violation of which would
materially and adversely affect the condition (financial or otherwise), business
or properties of MM2;
(c) Neither MM2, nor any shareholder, officer, employee
or agent of MM2 has, directly or indirectly, given or agreed to give any gift or
similar benefit to any customer, supplier, competitor or governmental employee
or official or has engaged in any other practice, which in any such case would
subject MM2 to any damage or penalty in any civil, criminal or governmental
litigation or proceeding or which would be grounds for termination or
modification of any material contract, license or other instrument to which MM2
is a party; and
(d) All outstanding securities issued by MM2 (including
all common stock and securities convertible into or exercisable for common
stock) were issued in compliance with all applicable securities laws. All of the
outstanding common shares of MM2 are, and any common shares of MM2 issuable upon
conversion or exercise of any other security, when issued pursuant to such
conversion or exercise will be, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights created by statute, the
charter documents of MM2 or any agreement to which MM2 is a party or is bound.
4.09 CAPITALIZATION. The authorized capital stock of MM2 consists
of (i) 10,000,000,000 shares of Class A Common Stock, no par value per share, of
which 10,000,000 shares are outstanding on the date hereof, (ii) 50,000,000
shares of Class B Common Stock, no par value per share, of which 40,000,000
shares are outstanding on the date hereof, (iii) 20,000,000 shares of Class C
Common Stock, $0.01 par value per share, no shares of which are outstanding, and
(iv) 1,000,000 shares of Preferred Stock, $1.00 par value per share, no shares
of which are outstanding. Any of such shares that are issued and outstanding
shares have been duly and validly authorized and are fully paid and
non-assessable. Except as set forth on SCHEDULE 4.09, there are no other shares
of capital stock of MM2 outstanding, authorized or reserved for issuance; there
are no outstanding options, warrants, or rights to purchase or acquire, or
securities convertible into or exchangeable for, any shares of capital stock of
MM2, and there are no contracts, commitments, agreements, understandings,
arrangements or restrictions which require MM2 to issue, sell or deliver any
shares of capital stock of MM2. Attached as SCHEDULE
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4.09 is a list of the shareholders of MM2 as of the date hereof, indicating the
number of MM2 common shares owned by them beneficially and of record.
4.10 LABOR AND EMPLOYMENT MATTERS. Except as set forth on SCHEDULE
4.10, MM2 has no collective bargaining agreement, service or employment contract
or other labor or employment agreement or scheme to which MM2 is a party or by
which MM2 is bound; no profit sharing, deferred compensation, bonus, stock
option, stock purchase, pension, retainer, consulting, retirement, welfare or
incentive plan, contract, arrangement or scheme to which MM2 is a party or by
which MM2 is bound; and no plan, contract, arrangement or scheme under which
fringe benefits (including, but not limited to, vacation plans or programs, sick
leave plans or programs and related benefits) are afforded to employees of MM2.
4.11 TAXES.
(a) As used in this Agreement, (i) "CODE" shall mean the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations
promulgated thereunder; (ii) "TAXES" shall mean all Federal, state and local,
domestic and foreign, income, franchise, property, sales, excise, employment,
payroll, withholding and other taxes of any nature, including any interest,
penalties or additions with respect thereto and any obligations under any
agreements or arrangements with any other Person with respect to such amounts;
(iii) "TAXING AUTHORITY" shall mean any Governmental Entity (including any
subdivision, agency or commission thereof) exercising regulatory authority in
respect of Taxes or liability for Taxes of any other Person as required by
Applicable Law; (iv) "TAX RETURN" shall mean all returns, reports, forms,
including information returns, with respect to Taxes; (v) "PERSON" shall mean an
individual, partnership, corporation, business trust, joint stock company,
estate, trust, unincorporated association, joint venture, Governmental Authority
or other entity, of whatever nature; and (vi) "GOVERNMENTAL AUTHORITY" shall
mean any governmental, regulatory or administrative body, agency, commission,
board, arbitrator or authority, any court or judicial authority, any public,
private or industry regulatory authority, whether international, foreign,
national, federal, state or local, and any entity or official exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to any laws or regulations.
(b) MM2 has filed, when due, all Tax Returns except as
set forth in SCHEDULE 4.11(B). All such Tax Returns are true and complete in all
respects. All Taxes due from MM2 with respect to the taxable periods covered by
such Tax Returns and all other Taxes have been or will be timely paid. MM2 has
not requested any extension of time to file any Tax Return that has not yet been
filed.
(c) No Tax Return of MM2 is currently under audit,
examination, or dispute by any Taxing Authority, and no written or unwritten
notice of such an audit, examination or dispute has been received by MM2. No
issues relating to Taxes have been raised in the last five years by any Taxing
Authority that can reasonably be expected to recur in a later taxable period. No
deficiency for any material amount of Taxes has been asserted or assessed or
threatened by any Taxing Authority against MM2. No Liens for Taxes exist with
respect to any assets or properties of MM2.
4.12 SUBSIDIARIES AND AFFILIATES. MM2 has no direct or indirect
equity investment in any corporation, partnership, joint venture or other
business entity.
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4.13 INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS AND SHAREHOLDERS.
Except as set forth in the financial statements dated as of the MM2 Balance
Sheet Date, (i) MM2 is not indebted to any officer, director, or shareholder of
MM2 in any amount whatsoever, and (ii) no officer, director, or stockholder of
MM2 is indebted to MM2 in any amount whatsoever.
4.14 RELATED PARTY TRANSACTIONS. Except as set forth on SCHEDULE
4.14, no officer or director, in such person's capacity as such, or any
shareholder of MM2, nor any affiliate or relative of any such person, now has or
within the last three (3) years has had, either directly or indirectly, a
material interest in any contract, agreement or commitment to which MM2 is or
was a party, or under which MM2 is or was obligated or bound, or to which any of
MM2's properties may be or may have been subject, other than any contract,
agreement or commitment between MM2 and such persons in their capacities as
employees, officers or directors of MM2.
4.15 NO LEGAL BAR. MM2 is not prohibited by any order, writ,
injunction or decree of any body of competent jurisdiction from consummating the
transactions contemplated by this Agreement, and no such action or proceeding is
pending against MM2 which questions the validity of this Agreement or any of the
transactions contemplated hereby.
4.16 FINDER'S FEES AND BROKERAGE FEES. MM2 has not had any dealings
with any person that would entitle such person to any finder's fee or brokerage
fees in connection with this Agreement or any transaction contemplated hereby.
4.17 REQUIRED CONSENTS. Except as set forth on SCHEDULE 4.03, no
consent, waiver or other authorization of any third party (including, without
limitation, any third party to a real property lease, equipment lease, MM2
Contract, MM2 License, MM2 Permit or other instrument to which MM2 is a party or
by which MM2 is bound) is required for the consummation of the transactions
contemplated by this Agreement.
4.18 OTHER INFORMATION. MM2 has disclosed to Wien (NY) and Wien
(NJ) all information that is material to the condition (financial or otherwise),
business and properties of MM2. The information concerning MM2 set forth in this
Agreement, in the schedules hereto furnished by MM2, and in any other document,
statement or certificate furnished or to be furnished to Wien (NY) or Wien (NJ)
pursuant hereto, does not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated herein or
therein or necessary to make the statements and facts contained herein or
therein, in light of the circumstances in which they are made, not false or
misleading. All information contained or referred to in the schedules hereto
furnished by MM2 is accurate in all material respects and MM2 (after having made
reasonable inquiry) is not aware of any other fact or matter which renders any
such information misleading. Copies of all documents heretofore or hereafter
delivered or made available to Wien (NY) or Wien (NJ) were or will be complete
and accurate copies of such documents on the date such copies are delivered.
4.19 MM2 UNAUDITED FINANCIAL STATEMENTS. SCHEDULE 4.19 contains
MM2's unaudited consolidated financial statements for the year ended December
31, 2004, and the three months ended March 31, 2005 (the "MM2 BALANCE SHEET
DATE"), and such financial statements are true and correct and fully represent
the financial condition of MM2 at such dates and comply with United States
generally accepted accounting principles consistently applied throughout the
periods covered.
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4.20 ABSENCE OF UNDISCLOSED LIABILITIES. As of the MM2 Balance
Sheet Date, MM2 did not have any material debt, liability, or obligation of any
nature, whether accrued, absolute, contingent or otherwise, and whether due or
to become due, that is not reflected on the balance sheet of such date or
incurred in the ordinary course of business following the MM2 Balance Sheet
Date.
4.21 REGULATORY INVESTIGATIONS. To MM2's knowledge, there are no
investigations or inquiries pending against MM2 or its directors or officers by
any stock exchange, securities regulatory authority, taxing authority or any
other governmental department or agency.
4.22 CORPORATE RECORDS. All of the minute books and corporate and
financial records of MM2 are, or prior to the Closing will be, in all material
respects, complete, up to date and accurate.
4.23 FOREIGN CORRUPT PRACTICES ACT. Neither MM2 nor any officer,
director or employee of MM2, or any agent or other Person acting on behalf of
MM2 has with respect to MM2 (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
4.24 CORPORATE NAME. MM2 has not received any written or unwritten
notice of conflict during the past five (5) years with respect to the rights of
others regarding the corporate names of MM2, and has the exclusive right to use
its name as the name of a corporation in the jurisdictions in which MM2 has
operations. No Person is presently authorized by MM2 to use the name of MM2.
4.25 REPRESENTATIONS. All representations and warranties of MM2 are
true, accurate and complete as of the date hereof and will be true, accurate and
complete as of the Closing as if made at such time, except with respect to the
effect of transactions in the ordinary course of business and transactions
contemplated or permitted by this Agreement. Any exception to a representation
or warranty of MM2 which is disclosed in any of the schedules hereto furnished
by MM2 shall be deemed to apply only to the representation or warranty
referenced by such schedule, and shall not, unless scheduled separately, be
considered an exception to any other representation or warranty of MM2 in this
Agreement.
ARTICLE FIVE
WIEN REPRESENTATIONS
Wien (NY), Wien (NJ) and Xxxxxxx Xxxx each represent and warrant to MM2
as follows:
5.01 ORGANIZATION, STANDING AND POWER. Wien (NY) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New York and has all requisite corporate power and authority to own or
lease its assets as now owned or leased by it and to otherwise conduct its
business. Wien (NJ) is a corporation duly organized, validly existing and in
good standing under the laws of the State of New Jersey and has all requisite
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corporate power and authority to own or lease its assets as now owned or leased
by it and to otherwise conduct its business. All corporate proceedings required
by law or by the provisions of this Agreement to be taken by Wien (NY) and Wien
(NJ) (each a "WIEN ENTITY") on or before the Closing Date in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been or will be duly and
validly taken.
5.02 DUE AUTHORIZATION. Each Wien Entity has all requisite
corporate power and authority to execute and deliver this Agreement and each of
the other transaction documents to which it is or is specified to be a party, to
perform its obligations hereunder and thereunder and consummate the transactions
contemplated hereby and thereby. This Agreement constitutes, and all other
transaction documents to which a Wien Entity is a party, when executed and
delivered by such Wien Entity, will constitute, legal, valid and binding
obligations of such Wien Entity, enforceable against such Wien Entity in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and moratorium laws and other
laws of general application affecting the enforcement of creditors' rights
generally. The execution and delivery by each Wien Entity of this Agreement and
each of the other transaction documents to which it is, or is specified to be, a
party, and the consummation of the stock exchange and other transactions
contemplated hereby and thereby have been duly authorized by all necessary
action (corporate and other) of such Wien Entity.
5.03 AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS. The execution
and delivery of this Agreement by each Wien Entity and the consummation of the
transactions contemplated hereby will not result in a breach of any of the terms
and provisions of, or constitute a default under, or conflict with, any material
agreement, indenture or other instrument to which a Wien Entity is a party or by
which it or its assets are bound.
5.04 STATUS OF COMMON STOCK. Upon consummation of the transactions
contemplated by this Agreement, the Wien (NJ) Shares to be issued to the MM2
Shareholders, when issued and delivered, will be duly authorized, validly
issued, fully paid and non-assessable and free of any and all liens, claims or
encumbrances.
5.05 NO BANKRUPTCY. No Wien Entity or its assets are the subject of
any proceeding involving either a voluntary or an involuntary bankruptcy,
insolvency or receivership.
5.06 ABSENCE OF CERTAIN CHANGES. Since the Wien Balance Sheet Date
(as defined in SECTION 5.21), there has not been any material adverse change in
the working capital, financial condition, assets, liabilities, reserves,
contractual allowances, business operations or prospects of Wien, and, except as
contemplated by or set forth in this Agreement, no Wien Entity has:
(a) Except for this Agreement, engaged in any material
transaction outside the ordinary course of business;
(b) Made any capital expenditures other than in the
ordinary course of business;
(c) Paid, loaned or advanced (other than the payment of
salaries or reimbursement of expenses in the ordinary course of business) any
amounts to, or sold,
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transferred or leased any properties or assets to or entered into any other
transactions with any of its officers or directors, any of its affiliates, or
any officer or director of its affiliates;
(d) Made any material change in any method of accounting
or accounting practice;
(e) Incurred any material indebtedness or leasehold
expense in excess of $15,000;
(f) Entered into any material guaranties or otherwise
incurred or suffered to exist any material contingent liabilities;
(g) Paid or declared any dividend or other distribution
in respect of its capital stock, or set aside any sums for the payment of any
such dividend or other distribution;
(h) Issued or sold any common shares or other equity
security, granted any stock option or warrant, or otherwise issued any security
convertible into capital stock;
(i) Canceled any indebtedness due it except upon full
payment thereof;
(j) Increased the compensation payable or to become
payable by it to any of its respective directors, officers, employees or agents,
or any bonus payments or arrangement made to or with any thereof;
(k) Agreed, whether in writing or otherwise, to do any of
the foregoing;
(l) Suffered any labor trouble or any controversies with
any of its employees;
(m) Suffered any damage, destruction or loss, whether or
not covered by insurance, materially adversely affecting its business or
properties; or
(n) Received notice that any person or entity with which
it has a significant business relationship intends to cancel or terminate such
business relationship.
5.07 CONTRACTS AND COMMITMENTS. All agreements including, without
limitation, joint venture or partnership agreements, personal property leases,
conditional sales contracts, notes or other evidence of indebtedness, or other
contracts, agreements, or commitment which materially affect a Wien Entity, to
which a Wien Entity is a party or by which a Wien Entity or any of its property
is bound which exist as of the date of execution of this Agreement have been
filed as exhibits to documents filed by Wien (NY) with the Securities and
Exchange Commission (the "COMMISSION") under the Securities Exchange Act of 1934
(collectively, the "WIEN CONTRACTS"). Each Wien (NY) now has, and at the Closing
Wien (NJ) will have, valid and enforceable interests in and to the Wien
Contracts. No Wien Entity is in default with respect to any material term or
condition of any such Wien Contract, nor has any event occurred which through
the passage of time or the giving of notice, or both, would constitute a default
thereunder. No Wien Entity has received notice that any party to a Wien Contract
intends to cancel or terminate such Wien Contract or to exercise or not to
exercise any option thereunder.
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5.08 LICENSES AND PERMITS. SCHEDULE 5.08 lists all licenses ("WIEN
LICENSES") and permits ("WIEN PERMITS") held by each Wien Entity in connection
with the operation of its business as currently conducted or the occupancy and
use of the premises upon which its business is conducted. No breach of any such
Wien License or Wien Permit currently exists, nor has any event occurred which
through the passage of time or the giving of notice, or both, would constitute a
breach thereunder.
5.09 LITIGATION.
(a) There is no action, suit or proceeding to which a
Wien Entity or any of its officers or directors is a party (either as a
plaintiff or defendant) pending before any court or governmental agency,
authority or body, or any arbitrator or arbitral body, which, if decided or
concluded adversely, would have a material adverse impact upon the operation by
such Wien Entity of its business or on such Wien Entity's ability to consummate
the transactions contemplated herein, and no Wien Entity has any knowledge that
any such action, suit or proceeding has been threatened against any Wien Entity;
and
(b) none of any Wien Entity, its officers or its
directors has been permanently or temporarily enjoined by any order, judgment or
decree of any court or tribunal or any other agency from engaging in or
continuing any conduct or practice.
5.10 COMPLIANCE WITH LAW.
(a) No Wien Entity currently has any outstanding notice
or notification from any court or governmental agency, authority or body that,
with respect to the operations of such Wien Entity's business, it is in
violation in any material respect of or not in substantial compliance with any
federal, state or local laws, statutes, ordinances, rules, regulations, decrees,
orders, permits or other similar items (including, but not limited to, those
related to employee safety, employment discrimination and environmental
protection or conservation) or that upon the passage of time it will be in
violation in any material respect of any of the foregoing;
(b) No Wien Entity has been in violation of any federal,
state or local laws, statutes, ordinances, rules, regulations, decrees, orders,
permits or other similar items (including, but not limited to, those related to
employee safety, employment discrimination and environmental protection or
conversation) in force on the date hereof, the violation of which would
materially and adversely affect the condition (financial or otherwise), business
or properties of such Wien Entity;
(c) No Wien Entity nor any shareholder, officer, employee
or agent of any Wien Entity has, directly or indirectly, given or agreed to give
any gift or similar benefit to any customer, supplier, competitor or
governmental employee or official or has engaged in any other practice, which in
any such case would subject such Wien Entity to any damage or penalty in any
civil, criminal or governmental litigation or proceeding or which would be
grounds for termination or modification of any material contract, license or
other instrument to which such Wien Entity is a party; and
(d) All outstanding securities issued by a Wien Entity
(including all common stock and securities convertible into or exercisable for
common stock) were issued in compliance
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with all applicable securities laws. All of the outstanding shares of a Wien
Entity's common stock are, and any shares of a Wien Entity's common stock
issuable upon conversion or exercise of any other security, when issued pursuant
to such conversion or exercise will be, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights created by statute,
the charter documents of such Wien Entity or any agreement to which such Wien
Entity is a party or is bound.
5.11 CAPITALIZATION. The authorized capital stock of Wien (NY)
consists of (i) 25,000,000 shares of common stock, of which 3,689,636 shares are
outstanding on the date hereof, and (ii) 1,000 shares of convertible preferred
stock, none of which are outstanding. At the Closing, the authorized capital
stock of Wien (NJ) will consist of (i) 450,000,000 shares of Class A Common
Stock, of which 123,312,605 shares will be outstanding, (ii) 50,000,000 shares
of Class B Common Stock, of which 10,000,000 shares will be outstanding, and
(iii) 1,000,000 shares of Preferred Stock, none of which will be outstanding.
Such issued and outstanding shares have been or will be duly and validly
authorized and are or will be fully paid and nonassessable. Other than as
contemplated by SECTION 1.01, there are no other shares of capital stock of a
Wien Entity outstanding, authorized or reserved for issuance, there are no
outstanding options, warrants, or rights to purchase or acquire, or securities
convertible into or exchangeable for, any shares of capital stock of a Wien
Entity, and there are no contracts, commitments, agreements, understandings,
arrangements or restrictions which require a Wien Entity to issue, sell or
deliver any shares of capital stock of a Wien Entity. Attached as SCHEDULE 5.11
is a list of the stockholders of each Wien Entity indicating the number of Wien
common shares owned of record by them as of a recent date.
5.12 LABOR AND EMPLOYMENT MATTERS. No Wien Entity has any
collective bargaining agreement, service or employment contract or other labor
or employment agreement or scheme to which such Wien Entity is a party or by
which such Wien Entity is bound; no profit sharing, deferred compensation,
bonus, stock option, stock purchase, pension, retainer, consulting, retirement,
welfare or incentive plan, contract, arrangement or scheme to which a Wien
Entity is a party or by which a Wien Entity is bound; and no plan, contract,
arrangement or scheme under which fringe benefits (including, but not limited
to, vacation plans or programs, sick leave plans or programs and related
benefits) are afforded to employees of a Wien Entity.
5.13 TAXES.
(a) Each Wien Entity has filed, when due, all Tax Returns
except as set forth in SCHEDULE 5.13(a). All such Tax Returns are true and
complete in all respects. All Taxes due from a Wien Entity with respect to the
taxable periods covered by such Tax Returns and all other Taxes have been or
will be timely paid. No Wien Entity has requested any extension of time to file
any Tax Return that has not yet been filed.
(b) No Tax Return of a Wien Entity is currently under
audit, examination, or dispute by any Taxing Authority, and no written or
unwritten notice of such an audit, examination or dispute has been received by a
Wien Entity. No issues relating to Taxes have been raised in the last five years
by any Taxing Authority that can reasonably be expected to recur in a later
taxable period. No deficiency for any material amount of Taxes has been asserted
or assessed or threatened by any Taxing Authority against a Wien Entity. No
Liens for Taxes exist with respect to any assets or properties of a Wien Entity.
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5.14 SUBSIDIARIES AND AFFILIATES. No Wien Entity has any direct or
indirect equity investment in any corporation, partnership, joint venture or
other business entity.
5.15 INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS AND STOCKHOLDERS.
Except as set forth in the financial statements dated as of the Wien Balance
Sheet Date (i) no Wien Entity is indebted to any officer, director, or
stockholder of any Wien Entity in any amount whatsoever, and (ii) no officer,
director, or stockholder of any Wien Entity is indebted to any Wien Entity in
any amount whatsoever.
5.16 RELATED PARTY TRANSACTIONS. Except as set forth on SCHEDULE
5.16, no officer or director, in such person's capacity as such, or, to a Wien
Entity's knowledge, any shareholder of a Wien Entity, nor any affiliate or
relative of any such person, now has or within the last three (3) years has had,
either directly or indirectly, a material interest in any contract, agreement or
commitment to which a Wien Entity is or was a party, or under which a Wien
Entity is or was obligated or bound, or to which any of a Wien Entity's
properties may be or may have been subject, other than any contract, agreement
or commitment between a Wien Entity and such persons in their capacities as
employees, officers or directors of such Wien Entity.
5.17 NO LEGAL BAR. No Wien Entity is prohibited by any order, writ,
injunction or decree of any body of competent jurisdiction from consummating the
transactions contemplated by this Agreement, and no such action or proceeding is
pending against a Wien Entity which questions the validity of this Agreement or
any of the transactions contemplated hereby.
5.18 FINDER'S FEES AND BROKERAGE FEES. No Wien Entity has had any
dealings with any person that would entitle such person to any finder's fee or
brokerage fees in connection with this Agreement or any transaction contemplated
hereby.
5.19 REQUIRED CONSENTS. No consent, waiver or other authorization
of any third party (including, without limitation, any third party to a real
property lease, equipment lease, Wien Contract, Wien License, Wien Permit or
other instrument to which a Wien Entity is a party or by which a Wien Entity is
bound) is required to the consummation of the transactions contemplated by this
Agreement.
5.20 OTHER INFORMATION. Each Wien Entity has disclosed to MM2 all
information that is material to the condition (financial or otherwise), business
and properties of such Wien Entity. The information concerning each Wien Entity
set forth in this Agreement, in Wien's Annual Report attached hereto as SCHEDULE
5.21 (including the audited financial statements contained therein (the "WIEN
FINANCIAL STATEMENTS")), in any schedules hereto furnished by a Wien Entity, and
in any other document, statement or certificate furnished or to be furnished to
a Wien Entity pursuant hereto, does not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated herein or therein or necessary to make the statements and facts contained
herein or therein, in light of the circumstances in which they are made, not
false or misleading. All information contained or referred to in the schedules
hereto furnished by a Wien Entity is accurate in all material respects and no
Wien Entity (after having made reasonable inquiry) is not aware of any other
fact or matter which renders any such information misleading. Copies of all
documents heretofore or hereafter delivered or made available to MM2 were or
will be complete and accurate copies of such documents on the date such copies
are delivered.
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5.21 WIEN FINANCIAL STATEMENTS. SCHEDULE 5.21 attached hereto
contains the Wien Financial Statements and Wien (NY)'s unaudited consolidated
financial statements for the three months ended March 31, 2005 (the "WIEN
BALANCE SHEET DATE"). Such financial statements are true and correct and fully
represent the financial condition of Wien (NY) at such dates and comply with
United States generally accepted accounting principles consistently applied
throughout the periods covered.
5.22 ABSENCE OF UNDISCLOSED LIABILITIES. As of the Wien Balance
Sheet Date, no Wien Entity had any material debt, liability, or obligation of
any nature, whether accrued, absolute, contingent or otherwise, and whether due
or to become due, that is not reflected in its balance sheet of such date or
incurred in the ordinary course of business following the Wien Balance Sheet
Date.
5.23 REPORTING COMPANY. Wien (NY) is, and at the Effective Time
Wien (NJ) will be, a reporting company registered under Section 12(g) of the
Securities Exchange Act of 1934 since May 14, 2003. Wien (NY) has filed with the
SEC all reports (collectively, the "SEC DOCUMENTS") required to be filed by
reporting companies pursuant to the Exchange Act and is current with such
filings. As of their respective filing dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act, each as in effect
on the date so filed, and at the time filed with the SEC 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 therein, in light of the circumstances under which they were made,
not misleading. The financial statements of Wien (NY) included in the SEC
Documents comply as of their respective dates as to form in all material
respects with then applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except as may be
indicated therein or in the notes thereto) and fairly present the financial
position of Wien (NY) (as at the dates thereof and the results of operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments and to any other adjustments
described therein).
5.24 OTC BULLETIN BOARD. Wien (NY)'s common stock is posted for
trading on the OTC Bulletin Board under the symbol "WIGR.OB."
5.25 STOP TRADE ORDERS. There are no pending, and there have never
been any, stop trade orders issued against Wien (NY) or any of its directors or
officers or those of any affiliates of Wien (NY) by any securities regulatory
authority whether in the United States or in any other jurisdiction.
5.26 REGULATORY INVESTIGATIONS. To each Wien Entity's knowledge,
there are no investigations or inquiries pending against a Wien Entity or its
directors or officers by any stock exchange, securities regulatory authority,
self-regulatory authority, taxing authority or any other governmental department
or agency.
5.27 CORPORATE RECORDS. All of the minute books and corporate and
financial records of each Wien Entity are, or prior to the Closing will be, in
all material respects, complete, up to date and accurate.
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5.28 FOREIGN CORRUPT PRACTICES ACT. Neither a Wien Entity nor any
officer, director or employee of a Wien Entity, or any agent or other Person
acting on behalf of a Wien Entity has with respect to such Wien Entity (i) used
any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any unlawful payment
to any foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
5.29 CORPORATE NAME. Wien (NY) has not received any written or
unwritten notice of conflict during the past five (5) years with respect to the
rights of others regarding the corporate names of Wien (NY), and has the
exclusive right to use its name as the name of a corporation in the
jurisdictions in which Wien (NY) has operations. No Person is presently
authorized by Wien (NY) to use the name of Wien (NY).
5.30 REPRESENTATIONS. All representations and warranties of each
Wien Entity are true, accurate and complete as of the date hereof and will be
true, accurate and complete as of the Closing as if made at such time, except
with respect to the effect of transactions in the ordinary course of business
and transactions contemplated or permitted by this Agreement. Any exception to a
representation or warranty of a Wien Entity which is disclosed in any of the
schedules hereto furnished by a Wien Entity shall be deemed to apply only to the
representation or warranty referenced by such schedule, and shall not, unless
scheduled separately, be considered an exception to any other representation or
warranty of a Wien Entity in this Agreement.
5.31 GOVERNMENT APPROVALS. Other than (i) the filing of the Proxy
Statement with the SEC described in SECTION 8.12, (ii) the filing of Schedule
14F-1 with the SEC as described in SECTION 8.13, and (iii) the filings to be
made in connection with the Reincorporation, no governmental notices, filings,
approvals or consents are required in order for a Wien Entity to complete the
transactions contemplated by this Agreement.
ARTICLE SIX
MM2 SHAREHOLDER REPRESENTATIONS
Each MM2 Shareholder, severally and not jointly, represents and
warrants as follows:
6.01 CAPACITY. Such MM2 Shareholder has the legal right and
capacity to execute and deliver this Agreement and each of the other transaction
documents to which such MM2 Shareholder is or is specified to be a party,
perform his obligations hereunder and thereunder and consummate the transactions
contemplated hereby and thereby. This Agreement constitutes, and all other
transaction documents to which such MM2 Shareholder is a party, when executed
and delivered by such Shareholder, will constitute, legal, valid and binding
obligations of such Shareholder, enforceable against such Shareholder in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and moratorium laws and other
laws of general application affecting the enforcement of creditors' rights
generally.
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6.02 AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS. The execution
and delivery of this Agreement by such MM2 Shareholder and the consummation of
the transactions contemplated hereby will not result in a breach of any of the
terms and provisions of, or constitute a default under, or conflict with, any
material agreement, indenture or other instrument to which such MM2 Shareholder
is a party or by which he or his properties are bound.
6.03 OWNERSHIP. Such MM2 Shareholder is the legal and beneficial
owner of the MM2 Shares set forth next to such MM2 Shareholder's name on
SCHEDULE 4.09, free and clear of any claims, charges, equities, liens, security
interests, and encumbrances, and such MM2 Shareholder has full right, power, and
authority to transfer, assign, convey, and deliver the MM2 Shares owned by him;
and delivery of such MM2 Shares at the Closing will convey to Wien good and
marketable title to such MM2 Shares free and clear of any claims, charges,
equities, liens, security interests, and encumbrances whatsoever.
6.04 RESTRICTED STOCK. Such MM2 Shareholder understands that the
Wien (NJ) Shares to be acquired pursuant to this Agreement have not been
registered under the Securities Act with the Commission in reliance upon the
exemption from the registration requirements thereof afforded by Section 4(2)
under the Securities Act, nor with any state securities commission or agency.
Such MM2 Shareholder agrees and acknowledges that Wien (NJ) will issue stop
transfer instructions to its registrar and transfer agent prohibiting the
transfer of the Wien (NJ) Shares delivered under this Agreement. Such MM2
Shareholder and his designees understand that the Wien (NJ) Shares will have the
following restrictive legend or similar legend affixed thereto:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
APPLICABLE STATE SECURITIES ACTS. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR
VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND/OR ANY
APPLICABLE STATE SECURITIES ACT OR AN OPINION OF COUNSEL
ACCEPTABLE TO WIEN GROUP, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR ACTS.
6.05 RESTRICTIONS ON TRANSFER. Such MM2 Shareholder agrees that the
Wien (NJ) Shares acquired by him pursuant to this Agreement shall not be
voluntarily sold, transferred or otherwise disposed of for a minimum period of
one year from the Closing Date, except by registration of such Wien (NJ) Shares
under the Securities Act and any applicable state securities laws or applicable
exemptions from such requirements.
6.06 TRANSFERS. Such MM2 Shareholder understands that any
disposition of the Wien (NJ) Shares by him in violation of this Agreement shall
be null and void. No transfer of the Wien (NJ) Shares shall be made by Wien
(NJ)'s registrar and transfer agent upon Wien (NJ)'s transfer books or records
unless there has been compliance with the terms of this Agreement, including the
above provisions. Wien (NJ) will issue stop transfer instructions to its
registrar and
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transfer agent to the effect that the Wien (NJ) Shares may not be transferred
for a period of one year after the Closing Date and may be transferred
thereafter only as provided herein.
6.07 INVESTMENT INTENT. Such MM2 Shareholder is acquiring the Wien
(NJ) Shares only for his own account, for investment purposes only, and not with
a view to, or for sale in connection with, any distribution thereof and with no
present intention of distribution or reselling any part of the Wien (NJ) Shares.
ARTICLE SEVEN
MM2 PRE-CLOSING COVENANTS
MM2 hereby covenants and agrees, between the date hereof and the
earlier of the termination of this Agreement or the Closing as follows:
7.01 CONDUCT OF BUSINESS. Except as otherwise contemplated by or in
furtherance of this Agreement or consented to by Wien (NJ) in writing, between
the date of this Agreement and the Closing, MM2 shall not:
(a) Engage in any material transaction outside the
ordinary course of business;
(b) Make any capital expenditures other than in the
rdinary course of business;
(c) Enter into any material guaranties or otherwise incur
or suffer to exist any material contingent liabilities;
(d) Other than in connection with the indebtedness under
MM2's outstanding $1,250,000 Secured Convertible Debenture and the documents
related thereto, enter into any material new indebtedness, or cancel any
indebtedness due it except upon full payment thereof;
(e) Make any payment of dividends or other unusual
distribution of cash or assets to shareholders or employees, including repayment
of outstanding indebtedness;
(f) Make any material change in any method of accounting
or accounting practice;
(g) Make any change to any of its organizational
documents;
(h) Enter into or engage in any transaction with any
officer, director, shareholder or affiliate, except for the payment of salaries
and other activities in the ordinary course of business;
(i) Fail to pay when due, or fail to maintain a reserve
adequate for the payment when due of, any applicable local, state or federal
taxes;
(j) Issue or sell any common shares or other equity
security, grant any stock option or warrant, or otherwise issue any security
convertible into capital stock;
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(k) Take any other action which would render any
representation or warranty of MM2 herein inaccurate as of the date such action
is taken; or
(l) Agree, whether in writing or otherwise, to do any of
the foregoing.
7.02 FULFILLMENT OF CONDITIONS AND COVENANTS. MM2 shall not
voluntarily undertake any course of action inconsistent with the satisfaction of
the requirements or conditions applicable to it as set forth in this Agreement
and shall promptly do all acts and take all such measures as may be necessary or
appropriate to enable it to perform as early as possible the obligations herein
provided.
7.03 ACCESS TO INFORMATION. Upon reasonable notice from Wien (NY),
MM2 shall deliver to the representatives of Wien (NY), or grant such
representatives access during normal business hours to, the books, records and
financial statements of MM2 to make such reviews, examinations and
investigations thereof as Wien (NY) deems necessary.
7.04 FINANCIAL RECORDS. MM2 shall accurately maintain its books and
records and promptly advise Wien (NY) in writing of any material adverse change
in the condition (financial or otherwise) of its assets, liabilities, or
business.
7.05 AUDITED FINANCIAL STATEMENTS. MM2 shall complete an audit of
the financial statements of MM2 in conformance with the requirements of Form 8-K
and other applicable rules and regulations of the Commission. Such audit shall
be completed in time for Wien (NY) to timely file the audited financial
statements of MM2, together with all required pro forma financial statements,
with the Commission on Form 8-K.
7.06 TRANSFER OF LICENSES, PERMITS AND AUTHORIZATIONS. Between the
date hereof and the Closing, MM2 shall, if required by applicable law or
regulations, at its cost, obtain new licenses and permits or transfers of
existing MM2 Licenses and MM2 Permits and any governmental or other consents or
authorizations required for the consummation of the Acquisition; provided,
however, that the terms and conditions of such new or transferred licenses and
permits shall not be less favorable than those terms and conditions to which MM2
is currently subject.
7.07 AGREEMENT WITH RESPECT TO OTHER REGULATORY FILINGS. MM2 agrees
that it shall cooperate with each Wien Entity in the preparation of any document
or other material which may be required by any governmental agency as a
predicate to or result of the transactions herein contemplated.
7.08 SOLICITATION OF INQUIRIES. From the date hereof to the earlier
to occur of (i) the Closing or (ii) the termination of this Agreement pursuant
to ARTICLE ELEVEN hereof (which period shall be referred to herein as the
"NO-SHOP PERIOD"), neither MM2 nor its directors, employees, agents or
representatives shall, without the prior written consent of Wien (NY), solicit
from any other person, firm or corporation any inquiry or proposal relating to a
merger, consolidation, amalgamation, purchase or sale of assets, exchange of
securities or similar transaction involving MM2, other than in the ordinary
course of business, nor shall they deliver to any other person any information
concerning MM2 or its business, financial affairs or prospects for the purpose
or
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with the intent of permitting such person or entity to evaluate the possibility
of such a transaction involving MM2.
7.09 PUBLIC ANNOUNCEMENTS. Except as required by any applicable
law, rule or regulation, prior to the Closing, MM2 shall not issue nor permit to
be issued any press release or otherwise make or permit to be made any public
statement with respect to the transactions contemplated by this Agreement
without the prior written consent of Wien (NY), which consent shall not be
unreasonably withheld.
7.10 COLD COMFORT LETTER. Upon Wien (NY)'s request, MM2 shall use
its commercially reasonable efforts to arrange for a cold comfort letter from
the institutional investor that is a lender under MM2's financing documents
entered into in April 2005, confirming the existence of such arrangement.
ARTICLE EIGHT
WIEN PRE-CLOSING COVENANTS
Each Wien Entity hereby covenants and agrees, between the date hereof
and the earlier of the termination of this Agreement or the Closing as follows:
8.01 FULFILLMENT OF CONDITIONS AND COVENANTS. No Wien Entity shall
voluntarily undertake any course of action inconsistent with the satisfaction of
the requirements and conditions applicable to it as set forth in this Agreement
and shall promptly do all acts and take all such measures as may be necessary or
appropriate to enable it to perform as early as possible the obligations herein
provided.
8.02 ACCESS TO INFORMATION. Upon reasonable notice from MM2, each
Wien Entity shall deliver to the representatives of MM2, or grant such
representatives access during normal business hours to, the books, records and
financial statements of such Wien Entity to make such reviews, examinations and
investigations thereof as MM2 deems necessary.
8.03 COMPLIANCE WITH SECURITIES LAWS. Each Wien Entity agrees to
use its best efforts to comply with all securities laws, including, without
limitation, securities laws applicable to the issuance of the Wien (NJ) Shares
to the MM2 Shareholders, and will pay all expenses incident thereto.
8.04 RESIGNATIONS OF EXISTING DIRECTORS AND OFFICERS. The board of
directors of Wien (NJ) shall obtain written resignations of each of the existing
directors and officers of Wien (NJ), to become effective at the Effective Time,
and shall deliver them to MM2 at the Closing.
8.05 APPOINTMENT OF NEW DIRECTORS AND OFFICERS. The board of
directors of Wien (NJ) shall adopt the New Officer Resolutions (as defined in
SECTION 3.03) and shall deliver certified copies of such resolutions to MM2 at
the Closing.
8.06 CONDUCT OF BUSINESS. Each Wien Entity shall conduct the
operations of its business such that at the Closing it shall have no assets and
no liabilities. Except for actions
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taken in connection with the preceding sentence or consented to by MM2 in
writing, between the date of this Agreement and the Closing, no Wien Entity
shall:
(a) Engage in any material transaction outside the
ordinary course of business;
(b) Make any capital expenditures other than in the
ordinary course of business;
(c) Enter into any material guaranties or otherwise incur
or suffer to exist any material contingent liabilities;
(d) Enter into any material new indebtedness, or cancel
any indebtedness due it except upon full payment thereof;
(e) Make any payment of dividends or other unusual
distribution of cash or assets to stockholders or employees, including repayment
of outstanding indebtedness;
(f) Make any material change in any method of accounting
or accounting practice;
(g) Make any change to any of its organizational
documents;
(h) Enter into or engage in any transaction with any
officer, director, shareholder or affiliate, except for the payment of salaries
and other activities in the ordinary course of business;
(i) Fail to pay when due, or fail to maintain a reserve
adequate for the payment when due of, any applicable local, state or federal
taxes;
(j) Except for stock issued in connection with that
certain 1 for 1 stock dividend declared by Wien (NY)'s board of directors on
June 24, 2005, issue or sell any shares of common stock or other equity
security, grant any stock option or warrant, or otherwise issue any security
convertible into capital stock;
(k) Take any other action which would render any
representation or warranty of Wien herein inaccurate as of the date such action
is taken; or
(l) Agree, whether in writing or otherwise, to do any of
the foregoing.
8.07 FINANCIAL RECORDS. Each Wien Entity shall accurately maintain
its books and records and promptly advise MM2 in writing of any material adverse
change in the condition (financial or otherwise) of its, assets, liabilities or
business of such Wien Entity.
8.08 TRANSFER OF LICENSES, PERMITS AND AUTHORIZATIONS. Between the
date hereof and the Closing, each Wien Entity shall, if required by applicable
law or regulations, at its cost, obtain new licenses and permits or transfers of
existing Wien Licenses and Wien Permits and any governmental or other consents
or authorizations required for the consummation of the Acquisition; provided,
however, that the terms and conditions of such new or transferred licenses
- 21 -
and permits shall not be less favorable than those terms and conditions to which
such Wien Entity is currently subject.
8.09 AGREEMENT WITH RESPECT TO OTHER REGULATORY FILINGS. Each Wien
Entity agrees that it shall cooperate with MM2 in the preparation of any
document or other material which may be required by any governmental agency as a
predicate to or result of the transactions herein contemplated.
8.10 SOLICITATION OF INQUIRIES. Unless otherwise permitted by this
Agreement, during the No-Shop Period (as defined in SECTION 7.08) neither any
Wien Entity nor its directors, employees, agents or representatives shall,
without the prior written consent of MM2, solicit from any other person, firm or
corporation any inquiry or proposal relating to a merger, consolidation,
amalgamation, arrangement, purchase or sale of assets, exchange of securities or
similar transaction involving a Wien Entity, other than in the ordinary course
of business, nor shall they deliver to any other person any information
concerning a Wien Entity or its business, financial affairs or prospects for the
purpose or with the intent of permitting such person or entity to evaluate the
possibility of such a transaction involving a Wien Entity.
8.11 PUBLIC ANNOUNCEMENTS. Except as required by any applicable
law, rule or regulation, prior to the Closing no Wien Entity shall issue nor
permit to be issued any press release or otherwise make or permit to be made any
public statement with respect to the transactions contemplated by this Agreement
without the prior written consent of MM2, which consent shall not be
unreasonably withheld.
8.12 PROXY STATEMENT. Wien (NY) will use all commercially
reasonable efforts to promptly prepare and file a proxy statement with the SEC
to obtain the consent of its shareholders (the "WIEN SHAREHOLDER CONSENT") to
the Reincorporation.
8.13 SCHEDULE 14F-1. Wien (NY) will use all commercially reasonable
efforts to promptly prepare and file a Schedule 14F-1 with the SEC to notify
Wien's shareholders of the election of new members to Wien's board of directors
pursuant to this Agreement.
8.14 FRANCHISE TAX REPORT. Wien (NY) shall have filed an estimated
or final cessation franchise tax report with the State of New York.
ARTICLE NINE
MM2 CLOSING CONDITIONS
The obligations of MM2 and each MM2 Shareholder contemplated herein are
subject to the satisfaction, at or before the Closing, of all of the conditions
set out below. If any such condition is not satisfied, MM2 or either MM2
Shareholder shall have the right, at its or his sole election, either to waive
the condition in question and proceed with the Closing or, in the alternative,
to terminate this Agreement without liability. In the event that MM2 elects to
waive the condition in question and proceed with the Closing, the condition in
question shall be deemed to have been satisfied and shall have no further force
or effect hereunder in the absence of any misrepresentation of a Wien Entity to
MM2 with respect to such condition.
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9.01 ACCURACY OF AND CERTIFICATE AS TO REPRESENTATIONS AND
WARRANTIES. The representations and warranties of each Wien Entity contained
herein and in all documents to be delivered pursuant hereto shall, in the case
of representations and warranties that are not qualified as to materiality, be
true and correct in all material respects as of the Closing and, in the case of
representations and warranties that are qualified as to materiality, be true and
correct in all respects as of the Closing, and MM2 shall have received a
certificate to such effect from each Wien Entity dated as of the Closing and
signed by an executive officer of such Wien Entity.
9.02 COMPLIANCE WITH COVENANTS. Each Wien Entity shall have
performed and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed or satisfied by such
Wien Entity.
9.03 ACTION/PROCEEDING. No court shall have issued an order
effective against a party to restrain or prohibit the transactions herein
contemplated.
9.04 CONSENTS. Each Wien Entity shall have obtained all required
consents from the parties from whom consent is required, including, without
limitation, the Wien Shareholder Consent, and from any other third party
(including any federal, state or local governmental agency or instrumentality)
as may be necessary or appropriate in connection with the execution and delivery
of this Agreement, or to the consummation of the transactions contemplated
hereby, and MM2 shall have obtained from a Wien Entity documentation or other
evidence confirming same.
9.05 REINCORPORATION. The Reincorporation shall have been validly
consummated and the form of the certificate of incorporation attached hereto as
EXHIBIT A shall have been accepted for filing with the State of New Jersey in
connection therewith.
9.06 COMPLIANCE WITH LAW. There shall have been obtained any and
all permits, approvals and consents of all governmental bodies or agencies which
counsel for MM2 may reasonably deem necessary or appropriate so that
consummation of the transactions contemplated by this Agreement will be in
compliance in all material respects with applicable laws.
9.07 OPINION OF COUNSEL FOR WIEN. MM2 shall have received an
opinion of L. Xxxxxxx Xxxxxxxx, counsel to Wien (NY) and Wien (NJ), dated as of
the Closing, which is addressed to MM2 and the MM2 Shareholders and is
satisfactory in form and substance to MM2 and its counsel, to the effect that:
(a) The Reincorporation has been validly consummated in
accordance with the terms of the merger agreement related thereto.
(b) On the date of signing of this Agreement (the
"SIGNING DATE"), Wien (NY) was a corporation duly organized, validly existing
and in good standing under the laws of the State of New York;
(c) Wien (NJ) is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey;
- 23 -
(d) On the Signing Date, Wien (NY) had corporate power
and authority to enter into this Agreement and the transactions and documents
contemplated thereby and to perform its obligations thereunder, and Wien (NY)
had corporate power and authority to own its properties and assets and to
conduct its present business;
(e) Wien (NJ) has corporate power and authority to
perform its obligations under this Agreement and the transactions and documents
contemplated thereunder, and Wien (NJ) has corporate power and authority to own
its properties and assets and to conduct its present business;
(f) The execution, delivery and performance of this
Agreement and the other agreements to be delivered pursuant hereto by the
applicable Wien Entities have been duly authorized and approved by such Wien
Entities, and such agreements constitute the valid and binding obligations of
each Wien Entity, duly enforceable in accordance with their terms except as such
enforcement may be limited by bankruptcy, insolvency and other similar laws
affecting the rights of creditors generally, and such agreements do not
contravene any applicable law, judgments, outstanding documents, by-laws,
contracts or instruments by which a Wien Entity or its assets are bound or to
which they are subject;
(g) Immediately after the Reincorporation, the authorized
capital stock of Wien (NJ) consists of 450,000,000 shares of Class A Common
Stock, 7,379,272 of which are outstanding, 50,000,000 shares of Class B Common
Stock, none of which are outstanding, and 1,000,000 shares of Preferred Stock,
none of which are outstanding; and
(h) The Wien (NJ) Shares to be issued and delivered at
the Closing are duly authorized, validly issued, fully paid and non-assessable,
and free of pre-emptive rights.
9.08 DELIVERY OF RESOLUTIONS. The board of directors of Wien (NJ)
shall have adopted the New Director Resolutions (as defined in SECTION 3.04) and
the New Officer Resolutions (as defined in SECTION 3.05) and shall have
delivered certified copies of such resolutions to MM2 at the Closing.
9.09 SECURITIES LAW COMPLIANCE. All applicable securities laws have
been satisfied in connection with the offer and sale of the Wien (NJ) Shares.
9.10 OTHER INFORMATION. MM2 shall have received such other
certificates and other documents as it or its counsel may reasonably require in
order to consummate the transactions contemplated hereby, all of which shall be
in form and substance satisfactory to it and its counsel.
9.11 ADVERSE CHANGE. No Wien Entity shall have suffered any
material change, loss or damage, whether or not covered by insurance, since the
date of execution of this Agreement.
9.12 CORPORATE AUTHORIZATION. Each Wien Entity shall have delivered
to MM2 certified copies of all appropriate resolutions of such Wien Entity's
board of directors authorizing the transactions contemplated by this Agreement.
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9.13 CERTIFICATE OF GOOD STANDING. A Wien Entity shall have
delivered to MM2 a certificate of good standing from the States of New Jersey
and New York with respect to Wien (NJ) and Wien (NY), respectively, in each case
dated not more than ten (10) days prior to the Closing, together with
confirmation of good standing of Wien (NJ) on the date of Closing.
9.14 INCUMBENCY CERTIFICATE. Wien (NJ) shall have delivered to MM2
a certificate of incumbency with respect to those persons who are the directors
and officers of Wien (NJ) at the time of the Closing.
9.15 NO ASSETS OR LIABILITIES. Wien (NJ) shall have no assets or
liabilities, either contingent or absolute or otherwise.
ARTICLE TEN
WIEN CLOSING CONDITIONS
The obligations of each Wien Entity contemplated herein are subject to
the satisfaction, at or before the Closing, of all of the conditions set out
herein below. If any such condition is not satisfied, each Wien Entity shall
have the right, at its sole election, either to waive the condition in question
and proceed with the Closing or, in the alternative, to terminate this Agreement
without liability. In the event that a Wien Entity elects to waive the condition
in question and proceed with the Closing, the condition in question shall be
deemed to have been satisfied and shall have no further force or effect
hereunder in the absence of any misrepresentation of MM2 to a Wien Entity with
respect to such condition.
10.01 EQUITY LINE OF CREDIT. MM2 shall have secured, pursuant to
financing documents executed in April, 2005, an equity line of credit facility
for advances of not less than Ten Million Dollars ($10,000,000), in the
aggregate.
10.02 BALANCE SHEET. MM2 shall have a least $900,000 in cash on its
balance sheet.
10.03 ACCURACY OF AND CERTIFICATE AS TO REPRESENTATIONS AND
WARRANTIES. The representations and warranties of MM2 and the MM2 Shareholders
contained herein and in all documents to be delivered pursuant hereto shall, in
the case of representations and warranties that are not qualified as to
materiality, be true and correct in all material respects as of the Closing and,
in the case of representations and warranties that are qualified as to
materiality, be true and correct in all respects as of the Closing, and each
Wien Entity shall have received from MM2 and the MM2 Shareholders a certificate
to such effect dated as of the Closing and signed by an authorized officer of
MM2 and each MM2 Shareholder.
10.04 COMPLIANCE WITH COVENANTS. MM2 and each MM2 Shareholder shall
have performed and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed or
satisfied by MM2 or such MM2 Shareholder.
10.05 ACTION/PROCEEDING. No court shall have issued an order
effective against a party to restrain or prohibit the transactions herein
contemplated.
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10.06 CONSENTS. MM2 shall have obtained all required consents from
the parties from whom consent is required, and from any other third party
(including any federal, state or local governmental agency or instrumentality)
as may be necessary or appropriate in connection with the execution and delivery
of this Agreement, or to the consummation of the transactions contemplated
hereby, and Wien (NJ) shall have obtained from MM2 documentation or other
evidence confirming same.
10.07 COMPLIANCE WITH LAW. There shall have been obtained any and
all permits, approvals and consents of all governmental bodies or agencies which
counsel for Wien (NJ) may reasonably deem necessary or appropriate so that
consummation of the transactions contemplated by this Agreement will be in
compliance in all material respects with applicable laws.
10.08 OPINION OF COUNSEL FOR MM2. Each Wien Entity shall have
received an opinion of Xxxxxxxx X. Xxxxxx, Esquire, counsel to MM2, dated as of
the Closing, which is addressed to each Wien Entity and is satisfactory in form
and substance to each Wien Entity and its counsel, to the effect that:
(a) MM2 is a corporation duly organized, validly existing
and in good standing under the laws of the State of New Jersey;
(b) MM2 has corporate power and authority to enter into
this Agreement and the transactions and documents contemplated thereby and to
perform its obligations thereunder, and MM2 has corporate power and authority to
own its properties and assets and to conduct its present business; and
(c) The execution, delivery and performance of this
Agreements and the other agreements to be delivered pursuant hereto by MM2 have
been duly authorized and approved by MM2 and constitute the valid and binding
obligations of MM2 duly enforceable in accordance with their terms except as
such enforcement may be limited by bankruptcy, insolvency and other similar laws
affecting the rights of creditors generally, and will not contravene any
applicable law, judgments, outstanding documents, by-laws, contracts or
instruments by which MM2 or its assets are bound or to which they are subject.
10.09 CONSULTING AGREEMENT. MM2 shall have entered into a consulting
agreement with Xxxxxxx Xxxx, substantially in the form attached hereto as
EXHIBIT B.
10.10 SECURITIES LAW COMPLIANCE. All applicable securities laws have
been satisfied in connection with the offer and sale of the Wien (NJ) Shares.
10.11 OTHER INFORMATION. Each Wien Entity shall have received such
other certificates and documents as it or its counsel may reasonably require in
order to consummate the transactions contemplated hereby, all of which shall be
in form and substance satisfactory to it and its counsel.
10.12 ADVERSE CHANGE. MM2 shall not have suffered any material
change, loss or damage, whether or not covered by insurance, since the date of
execution of this Agreement.
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10.13 CORPORATE AUTHORIZATION. MM2 shall have delivered to Wien (NJ)
certified copies of all appropriate resolutions of MM2's board of directors
authorizing the transactions contemplated by this Agreement.
10.14 CERTIFICATE OF GOOD STANDING. MM2 shall have delivered to Wien
(NJ) a certificate of good standing from the state of New Jersey with respect to
MM2 dated not more than ten (10) days prior to the Closing, together with
confirmation of good standing on the date of Closing.
10.15 INCUMBENCY CERTIFICATE. MM2 shall have delivered to Wien (NJ)
a certificate of incumbency with respect to those persons who are the directors
and officers of Wien at the time of the Closing.
ARTICLE ELEVEN
TERMINATION
11.01 TERMINATION. This Agreement may be terminated and the
Acquisition abandoned (notwithstanding any shareholder approval of the
Acquisition) prior to the Effective Time:
(a) by mutual written consent of Wien (NY) and MM2 at any
time;
(b) by Wien (NY) or MM2 at any time if an order is
entered by any court or governmental agency having jurisdiction enjoining a Wien
Entity or MM2, respectively, from consummating any of the transactions
contemplated by this Agreement and such order shall not have been vacated,
reversed or withdrawn on or before the thirtieth (30th) day after the date on
which such order was first issued; or
(c) by Wien (NY) or MM2 if (i) any representation or
warranty of the other hereunder shall not have been materially true and correct
as of the time at which made, (ii) any conditions precedent to the obligations
of such party as set forth in ARTICLE NINE or TEN are not able to be satisfied
in a timely fashion, or (iii) default shall be made by the other hereunder in
the due and timely observance or performance of any of its covenants and
agreements herein contained, in the event of subsections (i) and (iii), only if
such representation or warranty cannot be made true and correct or such default
cannot be cured on or prior to the fifteenth (15th) day after the non-defaulting
or non-breaching party notifies the other in writing of such default or breach,
specifying the nature thereof.
11.02 NOTICE OF TERMINATION. The power of termination provided for
by SECTION 11.01 hereof may be exercised only by a notice given in writing and
signed on behalf of Wien by Xxxxxxx Xxxx and on behalf of MM2 by Xxxx Xxxxxx or
Xxxxxx Xxxxxxx.
11.03 EFFECT OF TERMINATION. In the event of termination and
abandonment pursuant to this ARTICLE ELEVEN, this Agreement shall become void
and have no effect, without any liability on the part of any of the parties,
except as otherwise provided in ARTICLES THIRTEEN and FOURTEEN hereof. Any
announcement of the termination of this Agreement and the abandonment of the
Acquisition shall be made by means of a press release issued jointly by Wien
(NY) and MM2
- 27 -
unless otherwise required to be made by Wien (NY) pursuant to the federal or
state securities laws.
ARTICLE TWELVE
INDEMNIFICATION
12.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of each party hereto shall survive the Closing
for a period of five years, and shall not be affected by any investigation made
by or on behalf of a Wien Entity, MM2 or the MM2 Shareholders, as the case may
be. After the applicable expiration with respect to any particular
representation or warranty, neither a Wien Entity nor MM2 nor the MM2
Shareholders shall be under any liability whatsoever with respect to any such
representation or warranty. All covenants and agreements of the parties
contained herein shall survive the Closing Date and shall continue for the
period required to fulfill the applicable covenant or agreement.
12.02 INDEMNIFICATION. The parties shall indemnify each other as
follows:
(a) MM2'S INDEMNITY OF WIEN. MM2 shall indemnify, defend
and hold harmless Wien (NJ) and its stockholders, directors, officers and agents
from and against all losses, judgments, liabilities, claims, damages, or
expenses (including reasonable attorneys' fees) of every kind, nature and
description, whether known or unknown, absolute or contingent, joint or several
("LOSS"), arising out of or relating to (i) any misrepresentation, breach of any
representation or warranty, or non-fulfillment, non-performance, failure to
timely or fully perform, or breach of any covenant, agreement or other
obligation to be performed by MM2 contained in this Agreement or any exhibit or
schedule hereto, or (ii) the conduct of MM2's business prior to the Effective
Time.
(b) MM2 SHAREHOLDER'S INDEMNITY OF WIEN. Each MM2
Shareholder shall, severally with respect to such MM2 Shareholder only and not
jointly, indemnify, defend and hold harmless Wien (NJ) and its stockholders,
directors, officers and agents from and against all Loss arising out of or
relating to any misrepresentation, breach of any representation or warranty, or
non-fulfillment, non-performance, failure to timely or fully perform, or breach
of any covenant, agreement or other obligation to be performed by such MM2
Shareholder contained in this Agreement or any exhibit or schedule hereto.
(c) WIEN'S INDEMNITY OF MM2. Xxxxxxx Xxxx and Wien (NJ)
shall jointly and severally indemnify, defend and hold harmless MM2, the MM2
Shareholders and MM2's directors, officers and agents from and against any Loss
arising out of or relating to (i) any misrepresentation, breach of any
representation or warranty, or non-fulfillment, non-performance, failure to
timely or fully perform, or breach of any covenant, agreement or other
obligation to be performed by a Wien Entity contained in this Agreement or any
exhibit or schedule hereto, or (ii) the conduct of Wien (NY)'s and Wien (NJ)'s
business prior to the Effective Time.
- 28 -
12.03 INDEMNIFICATION NOTICE.
(a) THIRD PARTY CLAIM. In the event that MM2, an MM2
Shareholder, a Wien Entity or any other party entitled to indemnification under
SECTION 12.02 hereof shall choose to assert a claim for Loss or potential Loss
based upon a claim by a third party ("THIRD PARTY CLAIM"), the party seeking
indemnification ("INDEMNIFIED PARTY") shall notify the party against which
indemnification is sought ("INDEMNIFYING PARTY") in writing of such claim,
promptly following the occurrence of the event giving rise thereto, certifying
that such a claim has been asserted and the basis therefor which shall be set
forth in reasonable detail ("NOTIFICATION").
(i) The Indemnifying Party shall acknowledge
receipt of the Notification and advise the Indemnified Party in writing twenty
(20) days after receipt thereof as to whether the Indemnifying Party agrees to
such Third Party Claim and whether the defense of the Third Party Claim shall be
undertaken by counsel of the choice of and at the expense of the Indemnifying
Party. If the Indemnifying Party so agrees, the Indemnifying Party shall be
deemed to have accepted any indemnifiable Loss suffered arising from such Third
Party Claim, the defense of which has been assumed by the Indemnifying Party. If
the Indemnifying Party advises the Indemnified Party that it shall undertake the
defense of the Third Party Claim, the Indemnified Party shall deliver all the
documents related to the Third Party Claim to the Indemnifying Party or to its
counsel, after which the responsibility of the Indemnified Party for the defense
of the Third Party Claim shall cease, except that the Indemnified Party shall
make available all documents, books and records in its possession related to the
Third Party Claim, at no expense to the Indemnifying Party, and shall fully
cooperate with counsel for the Indemnifying Party, including providing its
personnel who are acquainted with the facts or the documents or books and
records related to the Third Party Claim.
(ii) If the Indemnifying Party advises the
Indemnified Party that the defense of the Third Party Claim will not be
undertaken, either the Indemnified Party shall settle such Third Party Claim (in
which case, the amount of such settlement and all attorneys' fees attendant to
the achievement of such settlement shall be deemed included in any computation
to determine Loss), or the Indemnified Party shall notify the Indemnifying Party
of the identity of the counsel for the Indemnified Party who has been selected
to defend the Third Party Claim. The Indemnifying Party shall fully cooperate
with the Indemnified Party and its counsel to the extent that the Indemnifying
Party has knowledge of the facts or circumstances relating to the Third Party
Claim and the Indemnified Party shall cause its counsel to be available to the
Indemnifying Party or its counsel to respond to any inquiries of the
Indemnifying Party concerning the progress of such defense. In the event that
the Indemnified Party shall assert a claim for Loss as a result of any loss
suffered by the Indemnified Party in settling or defending such Third Party
Claim, the Indemnified Party shall notify the Indemnifying Party in writing of
such claim. The Indemnifying Party shall pay all costs related to the settlement
or the defense within thirty (30) days after a demand for the Loss or any
component part is made.
(b) NON-THIRD PARTY CLAIM. In the event the Indemnified
Party shall choose to assert a claim for Loss or potential Loss by reason of
other than a Third Party Claim, the Indemnified Party shall notify the
Indemnifying Party in writing of such claim and the reasons therefor, which
reasons shall be set forth in reasonable detail. The Indemnifying Party shall
pay to the Indemnified Party the amount of the Loss within thirty (30) days of
demand pursuant to this SECTION 12.03.
- 29 -
12.04 DISPUTE.
(a) If the Indemnifying Party disputes any claim for
indemnification or its obligation to indemnify any claim pursuant to this
ARTICLE TWELVE, the Indemnifying Party shall notify the Indemnified Party of
such dispute within twenty (20) days of receipt of the Notification. If the
matter cannot be reconciled by mutual agreement, the matter shall be submitted
to binding arbitration as provided in SECTION 16.05 hereof.
(b) If the Indemnifying Party fails to fulfill its
obligations under this Article, the Indemnified Party may submit the matter to
binding arbitration as provided in SECTION 16.05 hereof.
ARTICLE THIRTEEN
LITIGATION
13.01 LITIGATION COSTS. If any legal action, arbitration or other
proceeding is brought for the enforcement of this Agreement or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees, court costs and other costs
incurred in such action or proceeding, in addition to any other relief to which
it or they may be entitled.
ARTICLE FOURTEEN
CONFIDENTIALITY
14.01 CONFIDENTIALITY. Except as may be required by law or as
otherwise permitted herein, the parties hereto shall cause all information
obtained by them in connection with the negotiation and performance of this
Agreement to be treated as confidential and will not use, and will not knowingly
permit others to use, any such information in any manner detrimental to the
other. Notwithstanding the foregoing, such information may be disclosed (i) in
connection with any filings or permit applications with governmental authorities
as may be necessary in order to complete the transactions contemplated by this
Agreement; (ii) as necessary in order to obtain any required consents of third
parties to the transactions contemplated by this Agreement; or (iii) as
otherwise necessary in order for Wien to close the transactions contemplated by
this Agreement. The provisions of this Section shall survive any termination of
this Agreement.
ARTICLE FIFTEEN
POST CLOSING COVENANT
15.01 ADDITIONAL CASH. After the Closing, Wien (NJ) shall use its
commercially reasonable efforts to file a Form SB-2 with the Commission and,
within five days of the Commission deeming such form effective, MM2 shall use
its commercially reasonable efforts to increase the cash on its balance sheet by
$1,100,000 pursuant to the financing documents executed in March 2005.
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ARTICLE SIXTEEN
MISCELLANEOUS
16.01 NOTICES. All notices, waivers or other communications required
or contemplated hereby shall be deemed given if delivered personally, or sent by
registered or certified mail or air courier, postage prepaid, return receipt
requested, or by telex or telecopier addressed to the parties so to be served as
follows:
If to MM2:
MM(2) Group, Inc.
000 Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Chief Executive Officer
Fax No.: (000) 000-0000
With a copy to:
Dechert LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
If to Wien (NY) or Wien (NJ):
Wien Group, Inc.
000 Xxxxxxxxxx Xxxx.
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx
With a copy to:
L. Xxxxxxx Xxxxxxxx, Esq.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
Service of any such notice or demand so made by mail shall be deemed
complete on the date of actual delivery thereof as shown by the addressee's
registry or certification receipt, or upon the expiration of seven days
following the date of mailing. Any party hereto from time to time by notice in
writing served upon the other as aforesaid may designate a different mailing
address to which, or a different or additional person to whom, all such notices
or demands thereafter shall be addressed.
16.02 ASSIGNMENT. Neither the Agreement nor any of the rights
hereunder may be assigned by either party without the prior written consent of
the other.
- 31 -
16.03 EXPENSES. Except as otherwise provided in this Agreement, each
party hereto shall bear all expenses and costs incurred by it with respect to
this Agreement and the transactions contemplated hereby.
16.04 GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the internal law of the State of New York without reference
to its rules as to conflicts of law.
16.05 DISPUTE. Any controversy or claim arising out of or relating
to this Agreement, or breach thereof, including without limitation claims
against any party or its affiliates, employees, professionals, officers or
directors shall be settled by binding arbitration in New York, New York, in
accordance with the Commercial Rules of the American Arbitration Association.
The arbitrator shall be an active member of the New York bar. In the proceeding,
the arbitrator shall apply New York substantive law and the New York Evidence
Code. The arbitrator shall prepare an award in writing, which shall include
factual findings and any legal conclusions on which the decision is based.
Judgment upon any award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. In any such proceeding, the prevailing party shall
be entitled, in addition to any other relief awarded or adjudged, such sum as
the arbitrator may fix as and for reasonable attorneys' fees and costs, and the
same shall be included in the award and any judgment.
16.06 ENTIRE UNDERSTANDING. All prior agreements, representations,
discussions, negotiations, commitments and understandings between the parties
are incorporated in this Agreement and the exhibits and schedules attached
hereto which constitute the entire contract between the parties. The terms of
this Agreement are intended by the parties as a final expression of their
agreement with respect to such terms as are included herein and may not be
contradicted by evidence of any prior or contemporaneous written or oral
representations, agreements or understandings, whether express or implied. The
parties further intend that this Agreement constitutes the complete and
exclusive statement of its terms and that no extrinsic evidence whatsoever may
be introduced in any judicial proceeding, if any, involving this Agreement. No
amendment or variation of the terms of this Agreement shall be valid unless made
in writing and signed by each of the parties.
16.07 FURTHER ASSURANCES. Each party, both prior to and after the
Closing, shall reasonably cooperate with the other, at the other's request, in
furnishing information, documents, testimony and other assistance in connection
with the transactions contemplated hereby.
16.08 WAIVER. Each party may at any time waive compliance by the
other with any covenants or conditions contained in this Agreement, but only by
a written instrument executed by the party waiving such compliance. If either
party waives a condition of Closing, the other party shall have no liability
hereunder with respect to the matters so waived.
16.09 HEADINGS. All Section and Article headings are included for
convenience only and are not intended to be full or accurate descriptions of the
contents thereof.
16.10 COUNTERPARTS. This Agreement may be executed simultaneously in
one or more counterparts, each of which may be deemed an original but all of
which together shall constitute
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one and the same instrument. In making proof of this Agreement, it shall not be
necessary to produce or account for more than one counterpart.
16.11 SEVERABILITY. If any provision of this Agreement, as applied
to any party or to any circumstance, shall be adjudged by a court to be void,
invalid or unenforceable, the same shall in no way affect any other provision of
this Agreement, the application of such provision in any other circumstance or
the validity or enforceability of this Agreement.
16.12 BINDING ON SUCCESSORS. All of the terms, provisions and
conditions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, successors, assigns
and legal representatives.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
WIEN GROUP, INC.,
a New York corporation
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: XXXXXXX X. XXXX
Title: President
WIEN GROUP, INC.,
a New Jersey corporation
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: XXXXXXX X. XXXX
Title: President
MM(2) GROUP, INC.
By: /s/ Xxxx Xxxxxx
---------------------------------------
Name: Xxxx Xxxxxx
Title: Chief Executive Officer
/s/ Xxxxxx Xxxxxxx
---------------------------------------
Xxxxxx Xxxxxxx
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EXHIBIT A
CERTIFICATE OF INCORPORATION
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EXHIBIT B
CONSULTING AGREEMENT
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