PLAN AND AGREEMENT OF MERGER
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THIS PLAN AND AGREEMENT OF MERGER dated September 22, 2003, by and
between XXXXXXXXX EDUCATIONAL ALTERNATIVES, INC., a Florida corporation
("Xxxxxxxxx") and NALC ACQUISITION, INC., a Florida corporation
("Subsidiary"), and NOR-AMERICAN LIABILITY CORPORATION, an Florida
corporation ("NALC"), NALC and Subsidiary hereinafter being sometimes
referred to as the "constituent corporations."
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Xxxxxxxxx, Subsidiary and NALC
deem the merger of NALC with and into Subsidiary on the terms herein
set forth (the "Merger") to be desirable and in the best interests of
their respective shareholders, and have adopted and approved this Plan
and Agreement of Merger ("Agreement"); and
WHEREAS, The Boards of Directors of NALC and Subsidiary have
directed that this Agreement and the merger contemplated hereby be
submitted to their respective shareholders for approval in accordance
with the applicable laws of the State of Florida;
WHEREAS, Xxxxxxxxx, as the sole shareholder of Subsidiary, has
approved this Agreement and the Merger contemplated hereby;
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, warranties and representations contained in this Agreement
and in order to consummate the transactions described above, Xxxxxxxxx,
Subsidiary and NALC agree as follows:
ARTICLE I
THE MERGER
1. Merger. The parties agree that NALC shall be merged into
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Subsidiary, as a single corporation, upon the terms and conditions of
this agreement and that Subsidiary shall continue under the laws of the
State of Florida as the Surviving Corporation (the "Surviving
Corporation"), and they further agree as follows:
(a) Articles of Incorporation. The purposes, the registered
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agent, the address of the registered office, number of directors and
the capital stock of the Surviving Corporation shall be as appears in
the Articles of Incorporation of Subsidiary on file with the office of
the Secretary of State of the State of Florida on the date of this
Agreement. From and after the Effective Date and until further
amended, altered or restated as provided by law, the Articles of
Incorporation separate and apart from this Agreement shall be and may
be separately certified as the Articles of Incorporation of the
Surviving Corporation.
(b) Amendment of Articles. The Articles of Incorporation of
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Subsidiary, on the Effective Date, shall be amended by striking out all
of the present Article I and substituting a new Article I, which shall
read as follows: "The name of this corporation shall be Nor-American
1
Liability Corporation." and such Articles as amended shall be the
Articles of the Surviving Corporation.
(c) Bylaws. The Bylaws of Subsidiary in effect on the
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Effective Date shall be the Bylaws of the Surviving Corporation until
they shall be altered, amended or repealed.
(d) Directors. The persons who upon the Effective Date shall
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constitute the Board of Directors of the Surviving Corporation shall be
the persons constituting the Board of Directors of Subsidiary on the
Effective Date. If on the Effective Date any vacancy exists on the
Board of Directors of the Surviving Corporation, that vacancy may be
filled in the manner provided in the Bylaws of the Surviving
Corporation.
(e) Officers. The persons who upon the Effective Date shall
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constitute the officers of the Surviving Corporation shall be the
persons constituting the officers of Subsidiary on the Effective Date.
2. Submission to Shareholders. This Agreement shall be submitted
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to the shareholders of NALC for their consent and approval by October
2, 2003, or such later date as the Boards of Directors of NALC and
Subsidiary shall mutually approve, and, if it is adopted and approved
in accordance with the laws of Florida, as promptly as practicable
thereafter, the fact that this Agreement has been adopted and approved
as above provided shall be certified by their respective secretaries,
and this Agreement and appropriate Articles of Merger shall be signed
and acknowledged or sworn pursuant to the laws of Florida.
3. Effective Date. The Merger of NALC into Subsidiary shall
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become effective upon filing of the Articles of Merger with the State
of Florida. The date on which the merger of NALC into Subsidiary
becomes effective is referred to in this Agreement as the "Effective
Date".
4. Effect of Merger. On the Effective Date, the separate
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existence of NALC shall cease and NALC shall be merged into Subsidiary
in accordance with this Agreement, and the Surviving Corporation shall
continue unaffected and unimpaired by the merger and shall possess all
of the rights, privileges, powers, franchises, patents, trademarks,
licenses and registrations, both of a public and private nature, and
shall be subject to all the restrictions, disabilities and duties, of
each of the constituent corporations so merged, and all the rights,
privileges, powers, franchises, patents, trademarks, licenses, and
registrations of each of the constituent corporations; and all
property, real, personal and mixed, and all debts to either of the
constituent corporations on whatever account as well as for stock
subscriptions and all other things in action or belonging to each of
the constituent corporations shall be vested in the Surviving
Corporation; and all property, rights, privileges, powers, franchises,
patents, trademarks, licenses and registrations and every other
interest thereafter shall be effectively the property of the Surviving
Corporation as they were of the respective constituent corporations,
and the title to any real estate, whether vested by deed or otherwise
in either of the constituent corporations under the laws of the State
of Florida or the State of Indiana, or any other state where real
estate may be located, shall not revert or in any way be impaired by
reason of the merger, provided that all rights of creditors and all
liens upon the property of any of the constituent corporations shall be
preserved unimpaired; and all debts, liabilities and duties of the
constituent corporations shall then attach to the Surviving Corporation
and may be enforced against it to the same extent as if those debts,
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liabilities and duties had been incurred or contracted by it.
5. Conversion Ratio. The manner and basis converting and
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exchanging the shares of common stock of NALC shall be as follows:
(a) Ratio. On the Effective Date, each share of
common stock, no par value, of NALC issued and outstanding
immediately before the Effective Date, except shares of NALC
stock issued and held in the treasury of NALC ("NALC Stock"),
by virtue of the Merger and without any action on the part of
the holder of any share of NALC Stock, shall be converted
into shares of Xxxxxxxxx Stock (as defined below), based upon
the following formula: for each share of NALC stock, 16
shares of Xxxxxxxxx Stock shall be issued. Each share of
NALC common stock issued and held in the treasury of NALC on
the Effective Date shall be canceled and retired, and no
Xxxxxxxxx Stock shall be issuable with respect thereto.
For all purposes of this Agreement, the term "Xxxxxxxxx Stock"
shall mean fully paid and nonassessable common stock of Xxxxxxxxx, no
par value per share, and all securities or property (including cash)
issued or exchanged with respect thereto from and after the date of
this Agreement upon any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
shareholders, or combination of such stock or any change in the capital
structure of Xxxxxxxxx. In the event of any such change, the number of
shares of Xxxxxxxxx Stock into which NALC Stock is to be converted
pursuant to Section 5(a) hereof shall be appropriately adjusted.
(b) Fractional Shares. No certificates or scrip
representing fractional shares of Xxxxxxxxx Common Stock
shall be issued upon surrender for exchange of certificates
representing NALC stock, no dividend or distributions of
Xxxxxxxxx shall be payable on or with respect to any
fractional share, and any such fractional share interest will
not entitle the owner thereof to vote or to any rights of the
stockholders of Xxxxxxxxx. In lieu of any such fractional
share, Xxxxxxxxx will pay to each holder of NALC Stock who
otherwise would be entitled to receive a fractional share of
Xxxxxxxxx Common Stock an amount of cash determined by
multiplying (i) the Xxxxxxxxx Stock Value, by (ii) the
fraction of a share of Xxxxxxxxx Common Stock to which such
holder would otherwise be entitled.
(c) Subsidiary Stock. The Merger shall effect no change in
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any of the shares of stock of Subsidiary, and none of its shares shall
be converted as a result of the Merger.
6. Exchange of Certificates.
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(a) Generally. As soon as practicable after the Effective Date,
each holder of an outstanding certificate or certificates representing
NALC stock shall surrender the same to Atlas Stock Transfer
Corporation, (the "Transfer Agent"), and such holders shall be entitled
upon such surrender to receive in exchange a certificate representing
the number of shares of Xxxxxxxxx Stock into which those shares of NALC
stock previously represented by the certificate or certificates so
3
surrendered shall have been converted as above stated. Until so
surrendered, each outstanding certificate that, before the Effective
Date, represented shares of NALC Stock shall be deemed for all
corporate purposes, other than the payment of dividends, to evidence
ownership of the respective shares of Xxxxxxxxx stock into which they
shall have been converted. Unless and until an outstanding certificate
that, before the Effective Date, represented shares of NALC Stock shall
be surrendered, no dividends payable to the holders of record of NALC
Stock as of any date subsequent to the Effective Date shall be paid to
the holder of such outstanding certificate, but upon surrender of the
outstanding certificate there shall be paid to the record holder of the
certificate for shares of Xxxxxxxxx Stock into which those shares shall
have been converted the amount of dividends that previously were
payable from the Effective Date with respect to those shares of
Xxxxxxxxx Stock.
(b) Specific Procedure. Prior to the Effective Date, Xxxxxxxxx
shall prepare certificates representing the shares of Xxxxxxxxx Stock
into which NALC Stock shall be converted (the "Xxxxxxxxx
Certificates"). Promptly after the Effective Date, Xxxxxxxxx or the
transfer agent shall deliver to each record holder, as of the Effective
Date, of an outstanding certificate or certificates which immediately
prior to the Effective Date represented NALC stock (the "NALC
Certificates") a form of letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the NALC
Certificates shall pass, only upon proper delivery of the NALC
Certificates to the Surviving Corporation) and instructions for use in
effecting the surrender and exchange of the NALC Certificates. Upon
surrender to the Surviving Corporation or its designated agent of a
NALC Certificate or Certificates, together with such letter of
transmittal duly executed, Xxxxxxxxx or Transfer Agent shall promptly
deliver to the recordholder of such NALC Certificate or Certificates,
in exchange therefor, Xxxxxxxxx Certificates representing an aggregate
number of shares of Xxxxxxxxx Stock to which such holder is entitled
pursuant to Section 5 above, plus any cash payment to which such holder
is entitled pursuant to Section 5(b) above and such NALC Certificate or
Certificates shall forthwith be cancelled. If Xxxxxxxxx Certificates
are to be issued to a person or entity other than the person or entity
in whose name the NALC Certificate or Certificates surrendered is
registered, it shall be a condition of delivery of Xxxxxxxxx
Certificates and cash payments for fractional shares in such other
person's or entity's name that (i) the NALC Certificate or Certificates
so surrendered shall be properly endorsed or accompanied by a properly
executed stock power or powers for transfer and (ii) such other person
or entity shall pay any transfer or other taxes required by reason of
the issuance to a person other than the registered holder of the NALC
Certificate or Certificates surrendered or shall establish to the
satisfaction of the Surviving Corporation that such tax has been paid
or is not applicable.
(c) No Transfers After Effective Date. At and after the
Effective Date, there shall be no transfers of NALC Stock which were
outstanding immediately prior to the Effective Date on the stock
transfer books of NALC. If, after the Effective Date, NALC
Certificates are presented to the Surviving Corporation, they shall be
cancelled and exchanged for Xxxxxxxxx Certificates as provided in this
Article II. At the close of business On the Effective Date, the stock
transfer books of NALC shall be closed.
(d) Stock Options and Related Matters. Except as NALC and any
holder of an option to purchase NALC Stock may otherwise agree with the
consent in writing of Xxxxxxxxx, each holder of such an option that was
granted by NALC prior to the date hereof will continue to be entitled
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at and immediately after the Effective Date to acquire Xxxxxxxxx stock
in accordance with the terms and conditions of such holder's option,
subject to the conversion ratios set forth in Section 5(a).
7. Shareholders' Rights. All shares of Xxxxxxxxx Stock for and
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into which shares of NALC Stock shall have been converted and exchanged
pursuant to this Agreement shall be fully paid and nonassessable and
shall be deemed to have been issued in full satisfaction of all rights
pertaining to the converted and exchanged shares. Unless the Merger is
abandoned, the holders of NALC Certificates shall cease on the
Effective Date to be shareholders of NALC and shall have no rights with
respect to NALC Stock except the rights to receive the consideration
set forth in Section 5 above.
8. Compliance with Laws. NALC, Subsidiary and Xxxxxxxxx shall
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each take all appropriate corporate action to comply with the
applicable laws of the State of Florida and the United States in
connection with the contemplated Merger.
9. Transfer Books. At the close of business on the Effective
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Date, the transfer books of NALC shall be closed and no transfer of
shares of NALC Stock shall be made or consummated thereafter.
10. Further Assurances. Prior to and from and after the
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Effective Date, the constituent corporations and Xxxxxxxxx shall take
all actions necessary or appropriate in order to effectuate the merger.
In case at any time after the Effective Date the Surviving Corporation
or Xxxxxxxxx shall determine that any further conveyance, assignment or
other document or any further action is necessary and desirable to vest
in the Surviving Corporation full title to all properties, assets,
rights, privileges and franchises of NALC, the officers and directors
of the constituent corporations shall execute and deliver all
instruments and take all action the Surviving Corporation or Xxxxxxxxx
may reasonably determine to be necessary or desirable in order to vest
in and confirm to the Surviving Corporation title to and possession of
all those properties, assets, privileges and franchises, and otherwise
to carry out the purposes of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF NALC
1. NALC's Representations and Warranties. Except as set forth in
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the NALC Merger Disclosure Statement previously furnished to Xxxxxxxxx
and Subsidiary by NALC (the "NALC Disclosure Statement"), NALC
represents and warrants to and agrees with Subsidiary and Xxxxxxxxx as
follows:
(a) Corporate Organization and Good Standing. NALC is a
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corporation duly organized, and validly existing under the laws of the
State of Florida, and has full corporate power and authority to carry
out its business as it is now being conducted and to own and lease
property, and is duly qualified or authorized to do business and is in
good standing in each jurisdiction in which the character and location
of the properties owned or leased by it or the nature of business
transacted by it makes those qualifications or authorizations
5
necessary, except for jurisdictions in which the failure to be so
qualified or authorized or to be in good standing would not,
individually or in the aggregate, have a material adverse effect on the
business or financial condition of NALC. NALC is not presently being
challenged as to its right to do business as presently conducted in any
jurisdiction. The copies of the articles of incorporation, as amended
to date, and the Bylaws, as amended to date, of NALC previously
delivered to Subsidiary and Xxxxxxxxx are true, correct and complete
copies as now in full force and effect. No provision of those
instruments prohibits, limits or otherwise affects the right, power and
authority of NALC to enter into this Agreement or to cause consummation
of the merger.
(b) Capitalization. The authorized capitalization of NALC
--------------
consists of 100,000,000 shares of common stock, no par value per share,
of which 10,000,000 shares are presently issued and outstanding, all of
which are validly issued, fully paid and nonassessable. Except as set
forth on the NALC Disclosure Statement, there are no existing options,
warrants, convertible securities or similar rights granted by NALC, or
any commitments or agreements of a similar nature to which NALC is a
party, relating to the authorized or issued stock of NALC.
(c) Subsidiaries. NALC presently has no subsidiaries. NALC
also does not (a) own of record or beneficially, directly or
indirectly, (i) any shares of capital stock or securities convertible
into capital stock of any other corporation or (ii) any interest in any
partnership, joint venture or other non-corporate business entity or
(b) control, directly or indirectly, any other entity.
(d) Authorization. The execution, delivery and performance
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of this Agreement has been duly and effectively adopted and authorized
by the Board of Directors of NALC and will be submitted to the
shareholders of NALC for approval.
(e) Financial Statements. NALC will deliver to Subsidiary
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and Xxxxxxxxx the balance sheets of NALC from inception, and the
statement of operations and cash flows of NALC from inception with
related notes and schedules, and will assist Xxxxxxxxx in combining its
financial information with that of Xxxxxxxxx for reporting purposes.
These financial statements, including the related notes and schedules,
fairly present, in conformity with generally accepted accounting
principles applied on a consistent basis, the financial position of
NALC as of the date of the balance sheets and the results of the
operations of NALC for the periods covered by the statements of
operations.
(f) Information Provided by NALC. The information provided
----------------------------
and to be provided by NALC in reports filed with the Securities and
Exchange Commission (the "SEC") under Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Act"), and to
Xxxxxxxxx and Subsidiary for use in any application made by Xxxxxxxxx
or Subsidiary to the Internal Revenue Service or to any other
governmental or regulatory body in connection with the merger, did not
as of the date of such reports and will not contain any untrue
statement of a material fact or omit 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.
(g) No Violation. NALC is not, and by the execution and
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performance of this Agreement, will not be, in breach of any term or
provision of or in default under, and no event has occurred that with
the lapse of time or action by a third party could result in a default
6
under, any outstanding indenture, mortgage, contract or agreement to
which NALC is a party or to which NALC may be subject, or under any
provision of its articles of organization or Bylaws, except for
possible defaults that individually or in the aggregate would not have
any materially adverse effect on the business of NALC. The execution
and performance of this Agreement by NALC will not violate any order,
injunction, decree, statute, rule or regulation applicable to NALC or
any of its properties or assets.
(h) Title. NALC owns good and merchantable title free and
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clear of any liens, claims, encumbrances, options, charges or
assessments to all of its properties and other assets used in
connection with its business, including, but not limited to, those
reflected in the balance sheet of NALC since inception.
(i) Litigation, Actions, and Proceedings. As of the date
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hereof there are no actions, suits, claims or legal, administrative or
arbitration proceedings or investigations (whether or not the defense
thereof or liabilities in respect thereof are covered by policies of
insurance), pending or threatened against NALC, or any of the
properties or assets of NALC, or to which NALC is a party or a target,
and there are no outstanding orders, writs, injunctions or decrees of
any court, governmental agency or arbitration tribunal against NALC or
to which NALC is a party or a target, and there are no facts or
circumstances known to NALC which would constitute a valid basis for
any such action, suit, claim or legal, administrative or arbitration
proceeding or investigation which in any such case, if there were an
adverse outcome, would have a material adverse effect on the NALC taken
as a whole. NALC is not in default with respect to, nor in violation
of, any regulation, order or decree of any court or of any governmental
agency or instrumentality.
(j) Capital Stock: Options, Dividends, Etc. Since August
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31, 2003, NALC has not: (1) issued or agreed to issue any options to
purchase or rights to subscribe to, or securities convertible into, any
additional shares of NALC stock; (2) entered into any transaction
outside the ordinary course of business, or suffered any material
adverse change in its financial position, assets, liabilities or
business; (3) declared or paid any dividends or authorized or made any
distribution upon or with respect to its capital stock or purchased or
agreed to purchase any shares of its capital stock; (4) made any loans
or advances or payments of any kind to any person, except (a) payments
made in the ordinary course of business, (b) payments of amounts due on
indebtedness incurred in the ordinary course of business or in respect
of indebtedness reflected in the consolidated balance sheet of NALC and
subsidiaries; (5) mortgaged or pledged any of its assets or properties
or incurred any indebtedness, for money borrowed or otherwise, or other
liabilities, contingent or otherwise, other than liabilities incurred
in the ordinary course of business; (6) sold, exchanged or otherwise
disposed of any of its capital assets, except in the ordinary course of
business; or (7) increased the salaries of its officers, directors or
employees (making over $60,000.00 per annum) or paid or incurred any
obligation to pay any bonus or other compensation, directly or
indirectly, to its officers, directors or employees, other than
salaries, wages and commissions at the rates being paid on August 31,
2003.
(k) Brokers. All negotiations relative to this Agreement
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and the transactions contemplated by it have been carried on by NALC
directly with Subsidiary and Xxxxxxxxx without the intervention of any
person in a manner that gives rise to any valid claim against any of
the parties to this Agreement for a brokerage or similar commission.
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(l) Permits. NALC and its subsidiaries own or have the
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right to use in accordance with the terms thereof all franchises,
licenses, permits, consents, approvals and authorizations of or from
any public or governmental agency, patents, trademark registrations,
service xxxx registrations, trade names and copyright registrations,
used in or otherwise necessary for the conduct of their businesses,
without any known conflict with the rights of others and subject to no
claim, and in each case valid and in full force and effect, except
for those the absence or unavailability of which do not or could
in the future reasonably be expected not to have a material adverse
effect on the business of NALC.
(m) Certain Practices. Neither NALC nor any of it's
-----------------
respective officers or employees have, during the last three years, in
connection with the conduct of its business, directly or indirectly,
given or agreed to give any significant rebate, gift or similar benefit
to any supplier, customer, governmental employee or other person who
was, is or may be in a position to help or hinder the business of
NALC (or assist in connection with any actual or proposed transaction)
which (i) could subject NALC to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, or (ii) if not
continued in the future, could have a material adverse effect on the
business conducted in any state by NALC.
(n) Compliance With Laws. In all material respects, NALC is
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in compliance with and is not in violation of, and all of its assets
are owned, leased and utilized in compliance with and not in violation
of, all laws, ordinances, requirements, rules regulations, decrees or
orders applicable to its business, except for any failure or failures
to comply, or violation or violations which, individually or in the
aggregate, is or are not having, or could in the future reasonably be
expected not to have, a material adverse effect on the assets,
liabilities, operations, business or prospects of the NALC. NALC is
not subject to any judgment, order, writ, injunction or decree which,
individually or in the aggregate, materially and adversely affects or
could in the future reasonably be expected to materially and adversely
affect the assets, liabilities, operations, business or prospects of
NALC.
(o) Assumptions, Guaranties, Etc. of Indebtedness of Other
-------------------------------------------------------
Persons. NALC has not assumed, guaranteed, endorsed or otherwise
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become directly or contingently liable on any indebtedness of any
person other than a subsidiary (including, without limitation,
liability by way of agreement, contingent or otherwise, to purchase, to
provide funds for payment, to supply funds to or otherwise invest in
the debtor, or otherwise to assure the creditor against loss), except
for guaranties by endorsement of negotiable instruments for deposit or
collection in the ordinary course of business.
(p) Approvals. No registration or filing with, or consent
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or approval of or other action by, any federal, state or other
governmental agency or instrumentality or other third party is or will
be necessary for the valid execution, delivery or performance by NALC
of this Agreement other than pursuant to the Securities Act, the
Exchange Act, the Florida Business Corporation Act, and state
securities laws.
(q) Employee Benefits. NALC has no "employee benefit plan"
-----------------
(as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) covering any present or former
employee of NALC and each other plan or arrangement providing for
8
severance benefits, deferred compensation, fringe benefits, insurance
benefits or any similar type of benefit or compensation covering any
present or former NALC employee (an "Employee Plan"), whether or not
such Employee Plan has been terminated. NALC has provided Xxxxxxxxx
with complete and correct copies of the documents comprising each
Employee Plan and (where applicable) the summary plan description for
each Employee Plan. Except as set forth on the NALC Disclosure
Statement, each Employee Plan which is subject to ERISA conforms to,
and its operation and administration are in all material respects
in compliance with, all applicable requirements of ERISA. Each
Employee Plan which is maintained outside of the United States and
is a tax exempt approved plan has been operated in all material
respects in conformance with the applicable statutes or governmental
regulations and rulings relating to tax exempt approved plans. There
has been no prohibited transaction under Section 406 of ERISA or
Section 4975 of the Internal Revenue Code with respect to any
Employee Plan. There are no actions, suits or claims pending (other
than routine claims for benefits) or threatened against any Employee
Plan or against the assets of any Employee Plan.
(r) Full Disclosure. This Agreement and all documents,
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schedules and certificates required to be delivered by NALC to
Xxxxxxxxx pursuant to this Agreement do not contain any untrue
statement of a material fact and do not omit to state any material fact
necessary to make the statements contained herein and therein, in light
of the circumstances in which made, not misleading.
ARTICLE III
REPRESENTATIONS OF XXXXXXXXX AND SUBSIDIARY
1. Representations and Warranties of Subsidiary. Subsidiary and
--------------------------------------------
Xxxxxxxxx represent and warrant to and agree with NALC as follows:
(a) Corporate Organization, Good Standing and Capitalization.
Subsidiary is a corporation duly organized, existing and in good
standing under the laws of the State of Florida, with authorized
capital stock of 100,000 shares of common stock, no par value per
share, all of which are issued, outstanding and owned on the date
hereof by Xxxxxxxxx. The copies of the Articles of Incorporation, as
amended to date, and the Bylaws, as amended to date, of Subsidiary
previously delivered to NALC are true, correct and complete copies as
now in full force and effect. No provision of those instruments nor
any other instrument to which Subsidiary is subject prohibits, limits
or otherwise affects the right, power and authority of Subsidiary to
enter into this Agreement or to cause consummation of the merger.
(b) Authorization. This Agreement and all actions required
-------------
of Subsidiary hereunder have been approved by the Board of Directors of
Subsidiary , and its sole shareholder, Xxxxxxxxx. Neither the
execution and delivery of this Agreement, nor performance hereunder,
will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, the articles of
incorporation or Bylaws of Subsidiary or any agreement or instrument to
which Subsidiary is a party or by which it is bound.
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(c) Liabilities. Subsidiary has no liabilities except
-----------
liabilities for organizational expenses and expenses in connection with
the merger contemplated by this Agreement.
(d) Tax Matters.
-----------
(i) Subsidiary will continue at least one significant
historic business line of NALC, or to use at least a significant
portion of NALC's historic business assets in a business, in each case
within the meaning of Treas. Reg. 1.368-1(d).
(ii) Subsidiary is aware of no plan or intention on the
part of any NALC shareholders to dispose of Xxxxxxxxx Stock to be
received in connection with the Merger such that, following any such
disposition, the aggregate fair market value of Xxxxxxxxx Stock
(measured as of the Effective Date) retained by former NALC
shareholders would be less than 50% of the aggregate fair market value
of NALC Stock immediately prior to the Merger.
(iii) Following the merger, Subsidiary will not
issue additional shares of its stock that would result in Xxxxxxxxx
failing to control subsidiary, within the meaning of Section 368(c) of
the Internal Revenue Code of 1986, as amended.
2. Representations and Warranties of Xxxxxxxxx. Xxxxxxxxx
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represents and warrants to and agrees with NALC as follows:
(a) Corporate Organization and Good Standing. Xxxxxxxxx is a
----------------------------------------
corporation duly organized, validly existing and in good standing under
the laws of the State of Florida, and has full corporate power and
authority to carry out its business as it is now being conducted and to
own and lease property, and is duly qualified or authorized to do
business and is in good standing in each jurisdiction in which the
character and location of the properties owned or leased by it or the
nature of business transacted by it makes those qualifications or
authorizations necessary when failure to qualify would have a material
and adverse effect on the business of Xxxxxxxxx. Xxxxxxxxx is not
presently being challenged as to its right to do business as presently
conducted in any jurisdiction. The copies of the Articles of
Incorporation, as amended to date, and the Bylaws, as amended to date,
of Xxxxxxxxx previously delivered to NALC are true, correct and
complete copies as now in full force and effect. No provision of those
instruments prohibits, limits or otherwise affects the right, power and
authority of Xxxxxxxxx to enter into this Agreement or to cause
consummation of the merger.
(b) Capitalization. The authorized capitalization of
--------------
Xxxxxxxxx consists of 150,000,000 shares of preferred stock, no par
value per share, 1,530,000 of which have been issued as Series 2001A
Convertible Preferred Stock, and 500,000,000 shares of common stock, no
par value per share, of which 70,553 shares are presently outstanding,
(which includes the contingent shares held in escrow) and all of which
shares are validly issued, fully paid and nonassessable. There are no
existing options, warrants, convertible securities or similar rights
granted by Xxxxxxxxx, except as set forth on the Xxxxxxxxx Disclosure
Statement or any commitments or agreements of a similar nature to which
Xxxxxxxxx is a party, relating to the authorized or issued stock of
Xxxxxxxxx.
(c) Subsidiaries. Xxxxxxxxx has one Subsidiary. Xxxxxxxxx
------------
does not (a) own of record or beneficially, directly or indirectly, (i)
10
any shares of capital stock or securities convertible into capital
stock of any other corporation or (ii) any interest in any partnership,
joint venture or other non-corporate business entity or (b) control,
directly or indirectly, any other entity.
(d) Authorization. The execution, delivery and performance
-------------
of this agreement by Xxxxxxxxx have been duly and effectively
authorized by the Board of Directors of Xxxxxxxxx. This Agreement is
not subject to approval of the shareholders of Xxxxxxxxx under the
Florida Business Corporation Act, and it will not be submitted to the
shareholders for approval.
(e) Shares to be Issued. The shares of Xxxxxxxxx Stock to be
-------------------
issued and delivered pursuant to this Agreement have been duly
authorized for issuance by the Board of Directors of Xxxxxxxxx and when
so issued and delivered upon conversion will be validly issued and
outstanding, fully paid and nonassessable.
(f) Financial Statements. Xxxxxxxxx has delivered to NALC
--------------------
the audited balance sheet of Xxxxxxxxx as of December 31, 2002, and the
statements of earnings and cash flows of Xxxxxxxxx for the year ended
December 31, 2002, with the related notes and schedules, all as
certified by Xxxxxx, Xxxxx Xxxxxx & Associates, P.A.., independent
certified public accountants. All these financial statements
(including in each case the related schedules and notes) fairly present
in accordance with generally accepted accounting principles applied on
a consistent basis the financial condition of Xxxxxxxxx as of the date
of the balance sheet and the results of its operations for the period
covered by the statement of income and retained earnings. Since
December 31, 2002, there has been no material adverse change in the
financial condition of Xxxxxxxxx or any transaction outside the
ordinary course of business.
(g) No Violation. Xxxxxxxxx is not, and by the execution and
------------
performance of this Agreement, will not be, in breach of any term or
provision of or in default under, and no event has occurred that with
the lapse of time or action by a third party could result in a default
under, any outstanding indenture, contract or agreement to which it is
a party or to which it may be subject, or under any provision of its
Articles of Incorporation or Bylaws, except for possible defaults that
individually or in the aggregate would not have any materially adverse
effect on the business of Xxxxxxxxx. The execution and performance of
this Agreement by Xxxxxxxxx will not violate any order, injunction,
decree, statute, rule or regulation applicable to Xxxxxxxxx or any of
its properties or assets.
(h) Information Provided by Xxxxxxxxx. The information
------------------------------------
provided by Xxxxxxxxx in reports filed with the Securities and Exchange
Commission (the "SEC") under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Act"), and to NALC for use in
any application made by NALC to the Internal Revenue Service or to any
other governmental or regulatory body in connection with the Merger,
did not as of the date of such reports and will not contain any untrue
statement of a material fact or omit 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.
(i) Brokers. The negotiations relative to this Agreement and
-------
the transactions contemplated by it have been carried on by Xxxxxxxxx
directly with NALC, without the intervention of any person in a manner
11
that gives rise to any valid claim against any of the parties for a
brokerage or similar commission.
(j) Litigation, Actions, and Proceedings. Other than those
------------------------------------
listed and described in the Xxxxxxxxx Form 10-K for the year ended
December 31, 2003, as of the date hereof there are no actions, suits,
claims or legal, administrative or arbitration proceedings or
investigations (whether or not the defense thereof or liabilities in
respect thereof are covered by policies of insurance), pending or
threatened against Xxxxxxxxx, or any of the properties or assets of
Xxxxxxxxx, or to which Xxxxxxxxx is a party or a target, and there are
no outstanding orders, writs, injunctions or decrees of any court,
governmental agency or arbitration tribunal against Xxxxxxxxx or to
which Xxxxxxxxx is a party or a target. Xxxxxxxxx is not in default
with respect to, nor in violation of, any regulation, order or decree
of any court or of any governmental agency or instrumentality.
(k) Capital Stock: Options, Dividends, Etc. Except as
-------------------------------------------
otherwise contemplated by this Agreement, or disclosed in filings with
the Securities and Exchange Commission, since December 31, 2002,
Xxxxxxxxx has not: (1) issued or agreed to issue any options to
purchase or rights to subscribe to, or securities convertible into, any
additional shares of Xxxxxxxxx stock; (2) entered into any transaction
outside the ordinary course of business, or suffered any material
adverse change in its financial position, assets, liabilities or
business; (3) declared or paid any dividends or authorized or made any
distribution upon or with respect to its capital stock or purchased or
agreed to purchase any shares of its capital stock; (4) made any loans
or advances or payments of any kind to any person, except (a) payments
made in the ordinary course of business, (b) payments of amounts due on
indebtedness currently incurred in the ordinary course of business or
in respect of indebtedness reflected in the balance sheet of Xxxxxxxxx
as of December 31, 2002; (5) mortgaged or pledged any of its assets or
properties or incurred any indebtedness, for money borrowed or
otherwise, or other liabilities, contingent or otherwise, or (6) sold,
exchanged or otherwise disposed of any of its capital assets, except in
the ordinary course of business.
(l) Tax Returns. Stanfield has filed all United States,
------------
foreign, state, county, local and other tax and duty returns and
reports required to be filed and has paid all income, franchise,
property, sales, employment, ad valorem and other taxes and duties
required to be paid in respect of the periods covered by those returns,
and has set up reasonable and adequate reserves, which are reflected in
the financial statements referred to in subparagraph (f) of this
paragraph for the payment of all taxes or duties required to be paid or
anticipated to be required to be paid in respect of the periods
subsequent to the last of those periods covered by the returns and
prior to the Effective Date.
(m) Proprietary Information of Third Parties. To the best
----------------------------------------
of Xxxxxxxxx'x knowledge, no third party has claimed or has reason to
claim that any person employed by or affiliated with Xxxxxxxxx has (a)
violated or may be violating any of the terms or conditions of such
person's employment, non-competition or non-disclosure agreement with
such third party, (b) disclosed or may be disclosing or utilized or may
be utilizing any trade secret or proprietary information or
documentation of such third party, or (c) interfered or may be
interfering in the employment relationship between such third party and
any of its present or former employees, and no third party has
requested information from Xxxxxxxxx which suggests that such a claim
might be contemplated. To the best of Xxxxxxxxx'x knowledge, no person
12
employed by or affiliated with Xxxxxxxxx has employed or proposes to
employ any trade secret or any information or documentation proprietary
to any former employer and, to the best of Xxxxxxxxx'x knowledge, no
person employed by or affiliated with Xxxxxxxxx has violated any
confidential relationship which such person may have had with any third
party, in connection with the development, manufacture or sale of any
product or proposed product or the development or sale of any service
or proposed service of Xxxxxxxxx, and Xxxxxxxxx has no reason to
believe there will be any such employment or violation. To the best of
Xxxxxxxxx'x knowledge, none of the execution or delivery of this
Agreement, or the carrying on of the business of Xxxxxxxxx as officers,
employees or agents by any director, officer or key employee of
Xxxxxxxxx, or the conduct or proposed conduct of the business of
Xxxxxxxxx, will conflict with or result in a breach of the terms,
conditions or provisions of or constitute a default under any contract,
covenant or instrument under which any such person is obligated.
(n) Permits. Xxxxxxxxx and its subsidiaries own or have
-------
the right to use in accordance with the terms thereof all franchises,
licenses, permits, consents, approvals and authorizations of or from
any public or governmental agency, patents, trademark registrations,
service xxxx registrations, trade names and copyright registrations,
used in or otherwise necessary for the conduct of their businesses,
without any known conflict with the rights of others and subject to no
claim, and in each case valid and in full force and effect, except for
those the absence or unavailability of which do not or could in the
future reasonably be expected not to have a material adverse effect on
the business of Xxxxxxxxx.
(o) Certain Practices. Neither Xxxxxxxxx nor any of it's
-----------------
respective officers or employees have, during the last three years, in
connection with the conduct of its business, directly or indirectly,
given or agreed to give any significant rebate, gift or similar benefit
to any supplier, customer, governmental employee or other person who
was, is or may be in a position to help or hinder the business of
Xxxxxxxxx (or assist in connection with any actual or proposed
transaction) which (i) could subject Xxxxxxxxx to any damage or penalty
in any civil, criminal or governmental litigation or proceeding, or
(ii) if not continued in the future, could have a material adverse
effect on the business conducted in any state by Xxxxxxxxx.
(p) Compliance With Laws. In all material respects,
----------------------
Xxxxxxxxx is in compliance with and is not in violation of, and all of
its assets are owned, leased and utilized in compliance with and not in
violation of, all laws, ordinances, requirements, rules regulations,
decrees or orders applicable to its business, except for any failure or
failures to comply, or violation or violations which, individually or
in the aggregate, is or are not having, or could in the future
reasonably be expected not to have, a material adverse effect on the
assets, liabilities, operations, business or prospects of the
Xxxxxxxxx. Xxxxxxxxx is not subject to any judgment, order, writ,
injunction or decree which, individually or in the aggregate,
materially and adversely affects or could in the future reasonably be
expected to materially and adversely affect the assets, liabilities,
operations, business or prospects of Xxxxxxxxx.
(q) Outstanding Commitments. The Xxxxxxxxx Disclosure
------------------------
Statement sets forth each existing material contract, agreement,
instrument, franchise, mortgage, indenture, and other commitment,
whether written or oral, to which Xxxxxxxxx is a party or by which any
of its assets may be subject and which in each case is material to
Xxxxxxxxx and required to be included as a "material contract"
(pursuant to Regulation S-K, item 601) in Xxxxxxxxx'x Form 10-K.
13
Xxxxxxxxx has satisfied in all material respects its liabilities and
obligations which have become due and payable thereunder, and are not
in material default under any of them. To the best knowledge of
Xxxxxxxxx no other party to any such contract, agreement, instrument,
franchise, mortgage, indenture, or commitment is in material default
thereunder, and no event has occurred or circumstance exists which with
the giving of notice or the passage of time or otherwise would
constitute such a material default by Xxxxxxxxx or any other party
thereto.
(r) Approvals. No registration or filing with, or consent
---------
or approval of or other action by, any federal, state or other
governmental agency or instrumentality or other third party is or will
be necessary for the valid execution, delivery or performance by
Xxxxxxxxx of this Agreement other than pursuant to the Securities Act,
the Exchange Act, the Florida Business Corporation Act, and state
securities laws.
(s) Employee Benefits. Xxxxxxxxx has no "employee benefit
-----------------
plan" (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) covering any present or
former employee of Xxxxxxxxx and each other plan or arrangement
providing for severance benefits, deferred compensation, fringe
benefits, insurance benefits or any similar type of benefit or
compensation covering any present or former Xxxxxxxxx employee (an
"Employee Plan"), whether or not such Employee Plan has been
terminated. Xxxxxxxxx has provided NALC with complete and correct
copies of the documents comprising each Employee Plan and (where
applicable) the summary plan description for each Employee Plan. Each
Employee Plan which is subject to ERISA conforms to, and its operation
and administration are in all material respects in compliance with, all
applicable requirements of ERISA. Each Employee Plan which is
maintained outside of the United States and is a tax exempt approved
plan has been operated in all material respects in conformance with the
applicable statutes or governmental regulations and rulings relating to
tax exempt approved plans. There has been no prohibited transaction
under Section 406 of ERISA or Section 4975 of the Internal Revenue Code
with respect to any Employee Plan. There are no actions, suits or
claims pending (other than routine claims for benefits) or threatened
against any Employee Plan or against the assets of any Employee Plan.
(t) Full Disclosure. This Agreement and all documents,
----------------
schedules and certificates required to be delivered by Xxxxxxxxx to
NALC pursuant to this Agreement do not contain any untrue statement of
a material fact and do not omit to state any material fact necessary to
make the statements contained herein and therein, in light of the
circumstances in which made, not misleading.
(u) Tax Matters.
-----------
(i) Subsidiary will continue at least one significant
historic business line of NALC, or to use at least a significant
portion of NALC's historic business assets in a business, in each case
within the meaning of Treas. Reg. 1.368-1(d).
(ii) Xxxxxxxxx is aware of no plan or intention on the
part of any NALC shareholders to dispose of Xxxxxxxxx Stock to be
received in connection with the Merger such that, following any such
disposition, the aggregate fair market value of Xxxxxxxxx Stock
(measured as of the Effective Date) retained by former NALC
14
shareholders would be less than 50% of the aggregate fair market value
of NALC Stock immediately prior to the Merger.
(iii) None of Xxxxxxxxx or any Xxxxxxxxx Subsidiary
is potentially liable to any other party for any deficiency in tax of
any other affiliated group of corporations by reason of Treas. Reg.
1.1502-6.
(iv) Xxxxxxxxx has no plan or intention to reacquire
any of the Xxxxxxxxx Stock issued in connection with the Merger.
(v) Xxxxxxxxx has no plan or intention to liquidate
Subsidiary, to merge Subsidiary with and into another corporation, to
sell or otherwise dispose of the stock of Subsidiary, or to cause
Subsidiary to sell or otherwise dispose of any of the assets of NALC
to be acquired in the Merger, except for dispositions made in the
ordinary course of business or transfers described in Section
368(a)(2)(C) of the Code.
ARTICLE IV
COVENANTS OF XXXXXXXXX, SUBSIDIARY AND NALC
1. No Change in Conduct of Business. Except as contemplated by
--------------------------------
this Agreement or as consented to in writing by the parties to this
agreement, during the period from the date of this Agreement to the
Effective Date, Xxxxxxxxx and its Subsidiary and NALC shall conduct
their respective operations and affairs according to their ordinary
and usual courses of business consistent with past practices. The
businesses of NALC shall be conducted only in the normal, usual and
ordinary course (including the maintenance of all its existing
policies of insurance in full force and effect); and NALC will use its
best efforts to preserve those business organizations intact and to
keep available to the Surviving Corporation the services of NALC's
present officers and NALC employees and to preserve for the Surviving
Corporation the goodwill of NALC's suppliers, customers and others
having business relations with NALC. Without limiting the generality
of the foregoing, and except as otherwise expressly provided in this
Agreement or as consented to in writing by the parties to this
agreement, prior to the Effective Date, neither Xxxxxxxxx and
Subsidiary nor NALC shall, (i) issue, sell or pledge, or authorize or
propose the issuance, sale or pledge of (A) additional shares of
capital stock of any class or securities convertible into any such
shares (other than Xxxxxxxxx Stock or NALC Stock issuable upon the
exercise of currently outstanding options which by their terms are
exercisable), or (B) any rights, warrants or options to acquire any
such shares or other convertible securities, or grant or accelerate
any right to convert or exchange any securities for shares of capital
stock; (ii) redeem, purchase or otherwise acquire, or propose to
redeem, purchase or otherwise acquire, any of its outstanding
securities; (iii) declare, set aside, make or pay any dividend or
distribution (whether in cash, stock or property) on or in respect of
any shares of capital stock; (iv) except for sales and purchases of
inventory in the ordinary course of business, make any acquisition of
assets or securities, any disposition of assets or securities or any
change in capitalization; (v) enter into any contract or release or
relinquish any contract or other rights in excess of $25,000 in
amount; (vi) except for any refinancing of existing indebtedness,
incur any long-term debt for borrowed money or any short-term debt for
borrowed money other than in the ordinary course of business
consistent with past practice in excess of $25,000 in amount; (vii)
propose or adopt any Charter or By-Laws amendments; (viii) other than
as contemplated or permitted by this Agreement, enter into any new
employment agreements with any directors, officers or employees or
grant any increases in the compensation or benefits to, or agree to
pay any bonus, severance or termination payment or other special
compensation to, directors, officers and employees other than
scheduled merit increases in the ordinary course of business
consistent with past practice; (ix) make any loan or advance to any of
its directors, officers, employees, consultants, or agents or to any
member of their families or any other loan or advance otherwise than
in the ordinary course of business consistent with past practices; (x)
15
make or incur any charitable contributions or any nonbusiness expense
except in accordance with past practice and not exceeding $2,500; or
(xi) agree in writing or orally to take any of the foregoing actions
or any other action which would make any representation or warranty in
this Agreement untrue on the date hereof or on the Effective Date.
2. No Solicitation or Discussion. Except for the transactions
------------------------------
contemplated by this Agreement NALC shall not, and NALC shall use its
best efforts to cause its directors, officers, employees,
representatives, agents and affiliates not to, directly or indirectly,
encourage solicit, initiate or participate in any way in discussions
or negotiations with, or knowingly provide any information to, any
person (other than the parties to this Agreement or any affiliate
thereof) concerning any merger, purchase or sale of asset, purchase or
sale of securities, exchange offer, consolidation, combination or
similar transaction involving NALC. Notwithstanding the foregoing,
NALC may furnish information concerning its business, properties or
assets to a corporation, partnership, person or other entity or group
and may negotiate with such entity or group (i) if counsel to NALC
advises its Board of Directors that, in the exercise of its fiduciary
responsibilities, such information is required to be provided to such
other party or (ii) if NALC reasonably believes that such party or
entity may be prepared to make a bona fide proposal to acquire NALC
for consideration which is greater than the consideration specified in
Article I. NALC shall promptly communicate to Xxxxxxxxx the terms of
any proposal or inquiry which it may receive, or of any such
information requested from it or of any such negotiations or
discussions being sought to be initiated with it in respect of any
such transaction.
3. Access to Information.
---------------------
(a) Between the date of the Agreement and the Effective Date,
each party shall (i) give to the other and its authorized
representatives access during regular business hours upon reasonable
notice to such party's plants, offices, warehouses and other
facilities and to all of its books and records, (ii) permit the other
and its authorized representatives to make such inspections as it may
require, (iii) cause its officers and those of its subsidiaries to
furnish the other and its authorized representatives with such
financial and operating data and other information with respect to its
business and properties and that of its subsidiaries as such party any
from time to time request, (iv) furnish such party promptly with a
copy of each report, schedule and other documents filed or received by
it pursuant to federal or state securities law, if any, and (v) notify
the other promptly in writing of the occurrence of any event or the
existence of any circumstance which would have made any of its
representations and warranties set forth herein untrue. No
information provided pursuant to this Article IV, Section 3 or
otherwise, nor any investigation by any party, shall affect or be
deemed to modify any representation or covenant herein contained.
16
(b) Xxxxxxxxx and NALC agree that, in the event that the
transactions contemplated hereby shall not be consummated, each will
treat in confidence all documents, materials and other information
which either shall have obtained during the course of the negotiations
leading to this Agreement, the investigation of the other party hereto
and the preparation of this Agreement and other documents relating to
this Agreement, and shall return to the other party all copies of non-
public documents and materials which have been furnished in connection
therewith.
4. Reasonable Best Efforts. Subject to the terms and conditions
-----------------------
hereof, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all appropriate action, and to
do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement. In case at any time
after the Effective Date any further action is necessary or useful to
carry out the purpose of this Agreement, the parties shall use their
reasonable best efforts to cause their respective proper officers,
employees and representatives to take all such necessary action.
5. Shareholders Meetings. NALC shall, as soon as practicable,
---------------------
take all action necessary in accordance with the Florida Business
Corporation Act, its Articles of Incorporation and By-Laws and the
resolution of its Board of Directors with respect to obtaining
approval of the Merger by holders of a majority of the NALC Stock
entitled to vote in person or by proxy at a meeting to be convened on
the earliest practicable date for the purposes of considering and
voting on the Merger. The Board of Directors of NALC shall recommend
that NALC's shareholders vote to approve the Merger, and this
Agreement, shall use its best efforts to solicit from shareholders of
NALC proxies in favor of the Merger and shall take all other action in
its judgment reasonably necessary and appropriate to secure the vote
of shareholders required to effect the Merger.
6. Notification of Certain Matters. NALC and Xxxxxxxxx will each
-------------------------------
give prompt notice to the other after it has knowledge of (i) the
occurrence, or failure to occur, of any event which occurrence or
failure would or would be likely to cause any of their respective
representations or warranties contained in this Agreement to be untrue
or incorrect in any material respect at any time from the date hereof
to the Effective Date and (ii) any failure on the part of NALC or
Xxxxxxxxx, as the case may be, or on the part of any of the officers,
directors, employees, representatives or agents of such parties and
their respective subsidiaries to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied
with or satisfied by them under this Agreement; provided, however,
that no such notification will alter or otherwise affect such
representations, warranties, covenants, conditions or agreements of
the parties.
7. Public Announcements. Xxxxxxxxx and NALC shall, to the
--------------------
fullest extent practicable, consult with one another before issuing
any press release or otherwise making any public statement with
respect to the Merger and shall not issue any such press release or
make any such public statement prior to such consultation, except as
may be required by law after consultation with counsel.
17
8. Performance by Subsidiary. Xxxxxxxxx hereby agrees to cause
-------------------------
Subsidiary to comply with its obligations hereunder and to cause
Subsidiary to consummate the Merger as contemplated herein.
ARTICLE V
CONDITIONS TO OBLIGATION TO CONSUMMATE THE MERGER
1. Conditions to Obligations of NALC. All obligations of NALC
---------------------------------
under this Agreement are subject to the fulfillment, prior to the
Effective Date, of each of the following conditions (any one or more of
which, in the absolute discretion of NALC, may be waived in writing by
NALC):
(a) Representations and Warranties. NALC shall not have
------------------------------
discovered any material error, misstatement or omission in the
representations and warranties made by Subsidiary or Xxxxxxxxx in
Article III, of this Agreement or any material adverse change in the
business, operations or properties of Xxxxxxxxx after the date of this
Agreement. The representations, warranties and agreements of Xxxxxxxxx
and Subsidiary contained in this Agreement shall be deemed to have been
made again at and as of the Effective Date (but the representations,
warranties and agreements may reflect the consummation of any
transactions consented to or approved in writing by NALC) and shall
then be true in all material respects; Xxxxxxxxx and Subsidiary shall
have performed and complied with all agreements and conditions required
by this Agreement to be performed or complied with by it prior to or at
the Effective Date; and NALC shall have been furnished with a
certificate of the president or vice president of Xxxxxxxxx and
Subsidiary, dated the Effective Date, certifying in such detail as NALC
may request to the fulfillment of the foregoing conditions.
(b) Xxxxxxxxx Obligations. NALC shall have received copies
---------------------
of resolutions and corporate approval of the following actions by
Xxxxxxxxx: i) cancellation of 775,000 shares of Series 2001A Preferred
Stock acquired by Xxxxxxx Xxxxxx from Xxxxxxxxx'x founder, Xxxx X.
Xxxxxx; (ii) approval of a 125 for 1 forward split of the outstanding
Series 2001A Preferred Stock, not to include the 775,000 cancelled
shares referred to above; (iii) approval of the issuance of 75 shares
of Common Stock for each share of outstanding Series 2001A Preferred
Stock; (iv) approval of name change of Xxxxxxxxx to "North American
Liability Group, Inc." within thirty days of the Effective Date.
(c) Corporate Authorization. NALC shall have received copies
-----------------------
of the resolutions adopted by the directors and shareholders of
Xxxxxxxxx and Subsidiary, certified to be true and correct by the
secretaries of the respective corporations.
(d) Approval of NALC shareholders. The shareholders of NALC
-----------------------------
shall have duly approved this Agreement and the transactions
contemplated hereby by requisite vote.
(e) Consents. All consents, permits and approvals of, or
--------
filings with, any government body or agency, or of any third party
under any agreement, contract or document, necessary or appropriate for
the consummation of the Merger shall have been obtained or made.
18
(f) Regulatory Action. There shall not be entered by any
-----------------
court or governmental, regulatory or administrative agency or
instrumentality any order, injunction or decree that prohibits,
restricts or delays consummation of the Merger.
2. Conditions to Obligations of Xxxxxxxxx and Subsidiary. All
-----------------------------------------------------
obligations of Xxxxxxxxx and Subsidiary under this Agreement are
subject to the fulfillment, prior to the Effective Date, of each of the
following conditions (any one or more of which, in the absolute
discretion of Xxxxxxxxx, may be waived in writing by Xxxxxxxxx):
(a) Representations and Warranties. Xxxxxxxxx shall not have
------------------------------
discovered any material error, misstatement or omission in the
representations and warranties made by NALC in Article II of this
Agreement or any material adverse change in the business, operations or
properties of NALC after the date of this Agreement. The
representations, warranties and agreements of NALC contained in this
Agreement shall be deemed to have been made again at and as of the
Effective Date (but the representations, warranties and agreements may
reflect the consummation of any transactions consented to or approved
in writing by Xxxxxxxxx) and shall then be true in all respects; NALC
shall have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by it prior
to or at the Effective Date; and Xxxxxxxxx shall have been furnished
with a certificate of the president of NALC, dated the Effective Date,
certifying in such detail as Xxxxxxxxx may request to the fulfillment
of the foregoing conditions.
(b) Corporate Authorization. The execution, delivery and
------------------------
performance of this Agreement and the Merger shall have been duly and
effectively adopted and approved by the shareholders of NALC in
accordance with the Florida Business Corporation Act, Xxxxxxxxx shall
have received copies of the resolutions adopted by the directors and
shareholders, certified to be true and correct by the secretary of
NALC.
(c) Absence of Litigation. At the Effective Date no suit,
---------------------
action or other proceeding shall be pending or threatened before any
court or other governmental agency in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with this
Agreement or the consummation of the contemplated transactions.
ARTICLE VI
TERMINATION
1. Termination. Anything in this Agreement to the contrary
-----------
notwithstanding, this Agreement may be terminated and abandoned at any
time prior to the Effective Date:
(a) By mutual consent of the Board of Directors of NALC and
Xxxxxxxxx; or
(b) By the Board of Directors of NALC or Xxxxxxxxx if the
19
Merger shall not have become effective before October 15, 2003.
ARTICLE VII
MISCELLANEOUS
1. Nonsurvival of Representations and Warranties. The
--------------------------------------------------
representations and warranties set out in this Agreement shall not
survive the Effective Date, and neither party hereto shall have any
claim thereafter against the other party with respect thereto.
2. Effect of Termination. In the event of the termination of
----------------------
this Agreement pursuant to Article VI, this Agreement shall forthwith
become void and of no further effect, without any liability on the
part of any party or its directors, officers, shareholders or
representatives (except for the provisions of Article IV, Section
3(b); Article VII, Section 2; Article VII, Section 3; and Article VII,
Section 6, which shall remain in effect). Nothing in this Article
VII, Section 2 shall relieve any party to this Agreement of liability
for breach of this Agreement.
3. Post Termination Agreement. For a period of one year from
--------------------------
the date of any termination of this Agreement, without the prior
written consent of Xxxxxxxxx, NALC will not (a) acquire, offer to
acquire, or agree to acquire by purchase or otherwise, beneficial
ownership of any voting securities convertible into or with
appertaining rights to acquire voting securities), of Xxxxxxxxx; (b)
make any solicitation of proxies to vote, or seek to advise or
influence any person, entity or group with respect to the voting of,
any voting securities of Xxxxxxxxx, or initiate or propose any
stockholder proposal with respect to Xxxxxxxxx described in rule 14a-8
under the Exchange Act; (c) form, join or in any way participate in,
or in any manner provide any form of assistance to, a group with
respect to any voting securities of Xxxxxxxxx; or (d) otherwise act to
seek to, assist or encourage any other person, entity or group in
seeking to, control or influence the management, Board of Directors or
policies of Xxxxxxxxx or propose to effect any form of business
combination with Xxxxxxxxx or any restructuring, recapitalization or
similar transaction with respect to Xxxxxxxxx.
4. Amendment and Modification. Subject to applicable law, this
--------------------------
Agreement may be amended, modified or supplemented only by written
agreement of NALC, Xxxxxxxxx and Subsidiary at any time prior to the
Effective Date with respect to any of the terms contained herein
except that after the approval by shareholders of NALC contemplated
herein, the amount r form of consideration to be received by the
holders of NALC Stock in the Merger may not be decreased or altered
without the approval of such holders.
5. Extension; Waiver. At any time prior to the Effective Date,
-----------------
Xxxxxxxxx and Subsidiary, on the one hand, and NALC, on the other
hand, may (i) extend the time for the performance of any of the
obligations or other acts of the other, (ii) waive any inaccuracies in
the representations and warranties contained herein by the other or in
any document, certificate or writing delivered pursuant hereto by or
on behalf of the other or (iii) waive conpliance with any of the
agreements or conditions of the other contained herein, if permitted
by applicable law. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party by its duly authorized
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representative.
6. Expenses. Except as otherwise expressly provided herein,
--------
NALC, Xxxxxxxxx and Subsidiary shall separately pay all expenses
incurred by them in connection with the transactions contemplated by
this Agreement. In the event that the Merger is not consummated, NALC
and Xxxxxxxxx shall share equally the reasonable third party costs of
printing the Registration Statement.
7. Entire Agreement. This Agreement embodies the entire
-----------------
agreement between the parties. There have been and are no agreements,
covenants, representations or warranties between the parties other than
those expressly stated or expressly provided for in this Agreement.
8. Agreement Binding. This Agreement is made pursuant to and
------------------
shall be construed under the laws of the State of Florida. It shall
inure to the benefit of and be binding upon NALC, Xxxxxxxxx and
Subsidiary, and their respective successors and assigns.
9. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, NALC, a Florida corporation, Xxxxxxxxx, a
Florida corporation, and NALC Acquisition, Inc., a Florida corporation,
acting through their duly authorized officers, all parties to this
Agreement, this 22nd day of September, 2003 have signed this Plan and
Agreement of Merger.
XXXXXXXXX EDUCATIONAL ALTERNATIVES, INC.
BY: /s/Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx, President
NALC ACQUISITION, INC
BY: /s/Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx, President
NOR-AMERICAN LIABILITY CORPORATION
BY: /s/Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx, President
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