SECOND AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
dated as of
January 30, 2001
among
AMCON DISTRIBUTING COMPANY
AMCON MERGER SUB, INC.
and
HAWAIIAN NATURAL WATER COMPANY, INC.
SECOND AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
SECOND AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of
January 30, 2001 (the "Agreement"), by and among AMCON Distributing
Company, a Delaware corporation ("AMCON"), AMCON Merger Sub, Inc., a
Delaware corporation and a wholly-owned subsidiary of AMCON ("Merger
Sub"), and Hawaiian Natural Water Company, Inc., a Hawaii corporation
("HNWC").
RECITALS:
WHEREAS, the Boards of Directors of AMCON and HNWC deem it advisable
and in the best interests of each corporation and its respective
stockholders that AMCON and HNWC engage in a business combination
which shall be effected by the terms of this Agreement through the
merger as outlined below;
WHEREAS, the respective Boards of Directors of HNWC, Merger Sub and
AMCON have each (i) determined that the merger of HNWC with and into
Merger Sub (the "Merger") is fair to, and in the best interests of,
their respective companies and stockholders, (ii) have approved and
declared the advisability of this Agreement and (ii) have approved the
Merger, and (iii) in the case of HNWC, has recommended the approval
and adoption of this Agreement, this Merger and the transactions
contemplated hereby by its stockholders;
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (a "368
Reorganization"), and the regulations promulgated thereunder;
WHEREAS, simultaneously with the execution and delivery of this
Agreement, AMCON has entered into an agreement (the "Stockholders
Agreement" in the form attached as Exhibit A hereto) with certain
stockholders of HNWC pursuant to which such HNWC stockholders have
agreed to vote the shares of HNWC Common Stock owned by them in favor
of the Merger under certain circumstances, which agreement is
accompanied by irrevocable proxies to vote such shares in accordance
therewith.
NOW, THEREFORE, in consideration of the premises, which are
incorporated into and made part of this Agreement, and of the mutual
representations, warranties, covenants, agreements and conditions set
forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the capitalized terms used in this
Agreement shall have the meanings specified or referred to in Appendix
I hereto which is incorporated herein by reference.
ARTICLE II
THE MERGER
Section 2.1. Effects of the Merger.
(a) The Surviving Corporation. Upon the terms and subject to the
conditions of this Agreement and in accordance with the Hawaii
Business Corporation Act (the "Hawaii Law"), and the Delaware General
Corporation Law of the State of Delaware (the "Delaware Law"), at the
Effective Time (as defined below), HNWC shall be merged with and into
Merger Sub. As a result of the Merger, the separate corporate
existence of HNWC shall cease and Merger Sub shall continue as the
surviving corporation in the Merger (the "Surviving Corporation").
(b) Effective Time. As soon as practicable after the Closing of
the Merger, the Articles of Merger for the Merger in substantially the
form attached hereto as Exhibit B, prepared and executed in accordance
with the relevant provisions of the Hawaii Law, shall be filed with
the Secretary of State of Hawaii, and the Certificate of Merger for
the Merger, in substantially the form attached hereto as Exhibit C,
prepared and executed in accordance with the relevant provisions of
the Delaware Law, shall be filed with the Secretary of State of
Delaware. The parties hereto agree to take all such further actions
as may be required by law to make the Merger effective. The Merger
shall become effective in accordance with the terms of this Agreement,
the Articles of Merger and the Certificate of Merger at the time and
date contemplated therein (such time and date being referred to herein
as the "Effective Time").
(c) The Closing. The Closing of the Merger and transactions
contemplated by this Agreement will take place at 10:00 a.m., west
coast time, on a date mutually agreed upon by the parties hereto,
which shall be no later than the third Business Day following the date
on which all of the conditions to the obligations of the parties
hereunder set forth in Article VIII hereof have been satisfied or
waived. The place of Closing shall be at such place as may be
mutually agreed upon by the parties hereto.
(d) Effects of the Merger. At and after the Effective Time, the
Merger will have the effects set forth in the Delaware Law and Hawaii
Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges,
powers and franchises of Merger Sub and HNWC shall be vested in the
Surviving Corporation, and all debts, liabilities and duties of Merger
Sub and HNWC shall become the debts, liabilities and duties of the
Surviving Corporation. In addition, the Merger shall have the
following effects:
(i) ARTICLES OF INCORPORATION. The Certificate of Incorporation
of Merger Sub as in effect immediately prior to the Effective Time (as
set forth in Exhibit D hereto) shall be the Certificate of
Incorporation of the Surviving Corporation.
(ii) BYLAWS. The Bylaws of Merger Sub as in effect immediately prior
to the Effective Time (as set forth in Exhibit E hereto) shall be the
Bylaws of the Surviving Corporation.
(iii) BOARD OF DIRECTORS. At the Effective Time, the Board of
Directors of the Surviving Corporation shall be as listed on Exhibit F
hereto.
(iv) MANAGEMENT. At the Effective Time, the principal officers of
the Surviving Corporation at the Effective Time shall be as listed on
Exhibit G.
Section 2.2. Effect of the Merger on HNWC Capital Stock. Subject
to the provisions of this Article II, at the Effective Time, by virtue
of the Merger and without any action on the part of the parties hereto
or their respective stockholders:
(a) Merger Consideration. Each share of HNWC Common Stock
outstanding immediately prior to the Effective Time shall be converted
into and become a right to receive a fractional share of AMCON Common
Stock equal to the product of the Exchange Ratio times one share of
HNWC Common Stock, which stock, together with any cash in lieu of
fractional shares of AMCON Common Stock to be paid pursuant to Section
2.4 of this Agreement, are referred to herein as (the "Merger
Consideration"), (i) except for shares of HNWC Common Stock held by
persons who object to the Merger and comply with all provisions of the
Hawaii Law concerning the right of such holders to dissent from the
Merger and demand appraisal for their shares ("Dissenters' Shares")
which shall be cancelled and shall cease to exist and as to which
consideration shall be paid solely in accordance with Section 2.6 of
this Agreement, (ii) except for shares of HNWC Common Stock held by
HNWC as treasury stock which shall be cancelled without payment of any
consideration therefor and shall cease to exist, and (iii) except for
shares of HNWC Common Stock owned by AMCON or Merger Sub immediately
prior to the Effective Time, other than the 750,000 shares of HNWC
Common Stock purchased from HNWC by AMCON pursuant to a Subscription
Agreement dated January __, 2001 (the "HNWC Cash Shares"), all of
which shares, other than the Cash Shares, shall be cancelled without
payment of any consideration therefor and shall cease to exist and the
Cash Shares shall be converted into the Merger Consideration. The
shares of HNWC Common Stock referred to in clauses in (i), (ii) and
(iii) of this Section 2.2(a) as being excluded from the conversion
into Merger Consideration (which does not encompass the Cash Shares)
are sometimes referred to collectively in this Agreement as (the
"Excluded Shares"). Fractions of a share determined pursuant to this
Section 2.2(a) shall be rounded to three decimal places.
(b) Exchange Ratio. The Exchange Ratio shall be equal to the
quotient of (i) the quotient of (x) $2,865,348, divided by (y) the
Average AMCON Stock Price, divided by (ii) the number of shares of
HNWC Common Stock outstanding immediately prior to the Effective Time
(excluding the Excluded Shares). Notwithstanding the foregoing, (i)
if the Average AMCON Stock Price is greater than $8.00, then the
Average AMCON Stock Price shall be deemed to be $8.00 and thus the
Exchange Ratio shall be the quotient of (A) 358,168, divided by (B)
the number of shares of HNWC Common Stock outstanding immediately
prior to the Effective Time (excluding the Excluded Shares), or
(ii) if the Average AMCON Stock Price is less than $6.00, then the
Average AMCON Stock Price shall be deemed to be $6.00 and thus the
Exchange Ratio shall be the quotient of (C) 477,558, divided by (D)
the number of shares of HNWC Common Stock outstanding immediately
prior to the Effective Time (excluding the Excluded Shares). The
Exchange Ratio determined pursuant to this Section 2.2(b) shall be
rounded to three decimal places.
(c) At the Effective Time, each certificate ("Certificate(s)")
theretofore representing shares of HNWC Common Stock, except for the
Excluded Shares, shall, without any action on the part of AMCON, HNWC,
Merger Sub or the holder thereof, represent, and shall be deemed to
represent from and after the Effective Time, the number of shares of
AMCON. Common Stock as determined in accordance with Section 2.2(a)
and (b) and shall cease to represent any rights in any shares of
capital stock of HNWC. At the Effective Time, each holder of a
Certificate which, prior to the Effective Time, represented shares of
HNWC Common Stock (except for Dissenters' Shares), shall cease to have
any rights with respect to any shares of HNWC Common Stock. In
accordance herewith, former holders of HNWC Common Stock (except for
the Excluded Shares other than the Cash Shares) shall, from and after
the Effective Time, be deemed from and after the Effective Time to be
holders of the shares of AMCON Common Stock into which such shares of
HNWC Common Stock have been converted in accordance with Section
2.2(a) and (b) hereof.
Section 2.3. Merger Sub Common Stock. Each share of common stock
of Merger Sub outstanding and each share held in treasury immediately
prior to the Effective Time shall be converted into and become one
share of AMCON Common Stock.
Section 2.4. Fractional Shares. No fraction of a share of AMCON
Common Stock shall be issued in connection with the conversion of HNWC
Common Stock in the Merger and the distribution of AMCON Common Stock
in respect thereof, but in lieu of such fraction, the Exchange Agent
shall make a cash payment (without interest and subject to the payment
of any applicable withholding Taxes) equal to the same fraction of the
market value of a full share of AMCON Common Stock, computed on the
basis of the mean of the high and low sales prices of AMCON Common
Stock as reported on the American Stock Exchange ("AMEX") on the first
full day on which AMCON Common Stock is traded on the AMEX after the
Effective Time (all such fractions of share of AMCON Common Stock are
referred to herein as "Fractional Shares").
Section 2.5. Stock Options, Warrants and Other Stock Related
Rights.
(a) On or prior to the Effective Time, HNWC will take all action
necessary such that each stock option, warrant or other stock related
right prior to the Effective Time and which remains outstanding
immediately prior to the Effective Time shall cease to represent a
right with respect to shares of HNWC Common Stock and shall be
converted, at the Effective Time, into a right, on the same terms and
conditions as were applicable under such stock option, warrant or
other stock related right (but taking into account any changes
thereto), with respect to that number of shares of AMCON Common Stock
determined by multiplying the number of shares of HNWC Common Stock
subject to such stock option, warrant or other stock related right, as
applicable, by the Exchange Ratio, rounded, if necessary, to the
nearest whole share of AMCON Common Stock, at a price per share
(rounded to the nearest one-hundredth of a cent) equal to the per-
share exercise price specified in such stock option, warrant or stock
related right, as applicable, divided by the Exchange Ratio; provided,
however, that in the case of any stock option to which Section 421 of
the Code applies by reason of its qualification under Section 422 of
the Code, the option price, the number of shares subject to such
option and the terms and conditions of exercise of such option shall
be determined in a manner consistent with the requirements of Section
424(a) of the Code.
(b) As soon as practicable after the Effective Time, AMCON shall
deliver to the holders of stock options, warrants or other stock
related rights appropriate notices setting forth such holders' rights
pursuant to the applicable documents and instruments (except that
there shall be no acceleration in the vesting or exercisability of
such option, warrants or stock related rights by reason of this
Agreement, the Merger or the other matters contemplated by this
Agreement) and the agreements evidencing the grants of such stock
options, warrants or other stock related rights shall continue in
effect on the same terms and conditions (subject to the adjustments
required by this Section 2.5 after giving effect to the Merger). To
the extent permitted by law, AMCON shall comply with the terms of the
HNWC Employee Plans and shall take such reasonable steps as are
necessary or required by, and subject to the provisions of, such HNWC
Employee Plans, to have the stock options which qualified as incentive
stock options prior to the Effective Time continue to qualify as
incentive stock options of AMCON after the Effective Time.
(c) AMCON shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of AMCON Common Stock for
delivery upon exercise of stock options, warrants or other stock
related rights in accordance with this Section 2.5.
Section 2.6. Appraisal Rights. Notwithstanding Section 2.2,
shares of HNWC Common Stock outstanding immediately prior to the
Effective Time and held by a holder other than AMCON or Merger Sub who
has not voted in favor of the Merger or consented thereto in writing
and who has demanded appraisal for such shares of HNWC Common Stock in
accordance with the Hawaii Law shall not be converted into the Merger
Consideration unless such holder fails to perfect or withdraws or
otherwise loses his right to appraisal. If after the Effective Time
such holder fails to perfect or withdraws or loses his right to
appraisal, such shares of HNWC Common Stock shall be treated as if
they had been converted as of the Effective Time into the Merger
Consideration. HNWC shall give the Surviving Corporation and AMCON
prompt notice of any demands received by HNWC for appraisal of shares
of HNWC Common Stock, and the Surviving Corporation and AMCON shall
have the right to participate in all negotiations and proceedings with
respect to such demands. HNWC shall not, except with the prior
written consent of the Surviving Corporation and AMCON, make any
payment with respect to, or settle or offer to settle, any such
demands.
Section 2.7. Affiliates. Notwithstanding anything to the
contrary herein, to the fullest extent permitted by law, no
certificates representing shares of AMCON Common Stock or cash shall
be delivered to a Person who may be deemed an "affiliate" of HNWC in
accordance with Section 7.8 hereof for purposes of Rule 145 under the
Securities Act, until such Person has executed and delivered a HNWC
Affiliate Agreement (as defined in Section 7.8) pursuant to Section
7.8.
Section 2.8. Exchange Fund. Prior to the Effective Time, AMCON
shall appoint a commercial bank or trust company reasonably acceptable
to HNWC having net capital of not less than $50,000,000, or a
subsidiary thereof, to act as exchange agent hereunder for the purpose
of exchanging Certificates representing the Merger Consideration (the
"Exchange Agent"). At or prior to the Effective Time, HNWC shall
deposit with the Exchange Agent, in trust for the benefit of holders
of Certificates which immediately prior to the Effective Time
represented outstanding shares of HNWC Common Stock whose shares will
be converted into shares of AMCON Common Stock at the Effective Time,
certificates representing the AMCON Common Stock issued pursuant to
Section 2.2 upon conversion of outstanding shares of HNWC Common
Stock. AMCON agrees to make available to the Exchange Agent from time
to time as needed, cash sufficient to pay cash in lieu of fractional
shares pursuant to Section 2.4 and any dividends and other
distributions pursuant to Section 2.10. Any cash and certificates
representing AMCON Common Stock deposited with the Exchange Agent
shall hereinafter be referred to as the "Exchange Fund."
Section 2.9. Exchange Procedures. As soon as reasonably
practicable after the Effective Time, AMCON shall cause the Exchange
Agent to mail to each holder of a Certificate (i) a letter of
transmittal which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent, and which letter
shall be in customary form and have such other provisions as AMCON may
reasonably specify and (ii) instructions for effecting the surrender
of such Certificates in exchange for the certificates representing the
Merger Consideration. Upon surrender of a Certificate to the Exchange
Agent together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and such other
documents as may reasonably be required by the Exchange Agent, the
holder of such Certificate shall be entitled to receive in exchange
therefor (i) certificates representing one or more shares of AMCON
Common Stock representing, in the aggregate, the whole number of
shares into which such holder's shares of HNWC Common Stock have been
converted pursuant to Section 2.2 (after taking into account all
shares of HNWC Common Stock then held by such holder), and (B) a check
in the amount equal to the cash that such holder has the right to
receive in lieu of any fractional shares of AMCON Common Stock
pursuant to Section 2.4 and dividends and other distributions pursuant
to Section 2.10. No interest will be paid or will accrue on any cash
payable pursuant to Section 2.4 or Section 2.10. In the event of a
transfer of ownership of HNWC Common Stock which is not registered in
the transfer records of HNWC, certificates representing one or more
shares of AMCON Common Stock representing, in the aggregate, the
proper number of shares of AMCON Common Stock, a check in the proper
amount of cash in lieu of any fractional shares of AMCON Common Stock
pursuant to Section 2.4 and any dividends or other distributions to
which such holder is entitled pursuant to Section 2.10, may be issued
with respect to such HNWC Common Stock to such a transferee if the
Certificate which formerly represented such shares is presented to the
Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
Section 2.10. Distributions with Respect to Unexchanged
Certificates. No dividends or other distributions declared or made
with respect to shares of AMCON Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the certificate representing shares of
AMCON Common Stock that such holder would be entitled to receive upon
surrender of such Certificate and no cash payment in lieu of
fractional shares of AMCON Common Stock shall be paid to any such
holder pursuant to Section 2.4 until such holder shall surrender such
Certificate in accordance with Section 2.9. Subject to the effect of
applicable laws, following surrender of any such Certificate, there
shall be paid to such holder of shares of AMCON Common Stock issuable
in exchange therefor, without interest, (a) promptly after the time of
such surrender, the amount of any cash payable in lieu of fractional
shares of AMCON Common Stock to which such holder is entitled pursuant
to Section 2.4 and the amount of dividends or other distributions with
a record date after the Effective Time theretofore paid with respect
to such whole shares of AMCON Common Stock and (b) at the appropriate
payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to such surrender and a
payment date subsequent to such surrender payable with respect to such
shares of AMCON Common Stock.
Section 2.11. No Further Ownership Rights in HNWC Common Stock.
All shares of AMCON Common Stock and cash paid upon conversion of
shares of HNWC Common Stock in accordance with the terms of Article II
(including any cash paid pursuant to Section 2.4 or Section 2.10)
shall be deemed to have been issued or paid in full satisfaction of
all rights pertaining to the shares of HNWC Common Stock.
Section 2.12. Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the holders of
Certificates for six months after the Effective Time shall be
delivered to AMCON or otherwise on the instruction of AMCON, and any
holders of the Certificates who have not theretofore complied with
this Article II shall thereafter look only to AMCON for the
certificates representing the Merger Consideration with respect to the
shares of HNWC Common Stock formerly represented thereby to which such
holders are entitled pursuant to Section 2.2, any cash in lieu of
fractional shares of AMCON Common Stock to which such holders are
entitled pursuant to Section 2.4 and any dividends or distributions
with respect to shares of AMCON Common Stock. Any such portion of the
Exchange Fund remaining unclaimed by holders of Certificates which,
prior to the Effective Time, represented shares of HNWC Common Stock
five years after the Effective Time (or such earlier date immediately
prior to such time as such amounts would otherwise escheat to or
become property of any Governmental Entity) shall, to the extent
permitted by law, become the property of AMCON free and clear of any
claims or interest of any Person previously entitled thereto.
Section 2.13. No Liability. None of AMCON, the Surviving
Corporation or the Exchange Agent shall be liable to any Person in
respect of any Merger Consideration from the Exchange Fund delivered
to a public official pursuant to any applicable abandoned property,
escheat or similar law.
Section 2.14. Investment of the Exchange Fund. The Exchange
Agent shall invest any cash included in the Exchange Fund as directed
by AMCON on a daily basis. Any interest and other income resulting
from such investments shall promptly be paid to AMCON.
Section 2.15. Lost Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost, stolen
or destroyed and, if required by AMCON, the posting by such Person of
a bond in such reasonable amount as AMCON may direct as indemnity
against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will deliver in exchange for such
lost, stolen or destroyed Certificate a certificate representing the
applicable Merger Consideration with respect to the shares of HNWC
Common Stock any cash in lieu of fractional shares of AMCON Common
Stock, and unpaid dividends and distributions on shares of AMCON
Common Stock issued in respect thereof, pursuant to this Agreement.
Section 2.16. Withholding Rights. Each of the Surviving
Corporation and AMCON shall be entitled to deduct and withhold from
the consideration otherwise payable pursuant to this Agreement to any
holder of Certificates which, prior to the Effective Time, represented
shares of HNWC Common Stock such amounts as it is required to deduct
and withhold with respect to the making of such payment under the Code
and the rules and regulations promulgated thereunder, or any provision
of state, local or foreign tax law. To the extent that amounts are so
withheld by the Surviving Corporation or AMCON, as the case may be,
such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of HNWC
Common Stock in respect of which such deduction and withholding was
made by the Surviving Corporation or AMCON, as the case may be.
Section 2.17. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of HNWC
or Merger Sub, any deeds, bills of sale, assignments or assurances and
to take and do, in the name and on behalf of HNWC or Merger Sub, any
other actions and things to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets
acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger.
Section 2.18. Stock Transfer Books. The stock transfer books of
HNWC shall be closed immediately upon the Effective Time and there
shall be no further registration of transfers of shares of HNWC Common
Stock thereafter on the records of HNWC. On or after the Effective
Time, any Certificates presented to the Exchange Agent or AMCON for
any reason shall be exchanged for certificates representing the Merger
Consideration with respect to the shares of HNWC Common Stock formerly
represented thereby, any cash in lieu of fractional shares of AMCON
Common Stock to which the holders thereof are entitled pursuant to
Section 2.4 and any dividends or other distributions to which the
holders thereof are entitled pursuant to Section 2.10.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMCON
Except as disclosed in (i) the AMCON Disclosure Schedule dated
___________, 2001 (each section or subsection of which Disclosure
Schedule qualifies the correspondingly numbered representation,
warranty or covenant to the extent specified therein) or (ii) the
AMCON SEC Documents filed prior to the date hereof, AMCON represents
and warrants to HNWC that, as of the date hereof (except for
representations and warranties that address matters only as of a
specific date, in which case such representations are true and correct
on and as of such specific date):
Section 3.1. Corporate Existence and Power. AMCON is a
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, and has all corporate powers
required to carry on its business as now conducted. AMCON is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property
owned or leased by it or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified,
individually or in the aggregate, would not be reasonably likely to
have an AMCON Material Adverse Effect. AMCON has heretofore made
available to HNWC true and complete copies of AMCON's certificate of
incorporation and bylaws as currently in effect.
Section 3.2. Corporate Authorization. The execution, delivery
and performance by AMCON of this Agreement and the consummation by
AMCON of the transactions contemplated hereby are within AMCON's
corporate powers and, as of the date hereof, have been duly authorized
by all necessary corporate action. Assuming that this Agreement
constitutes the valid and binding obligation of HNWC, this Agreement
constitutes, as of the date hereof, a valid and binding agreement of
AMCON, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in
effect, relating to or affecting creditors' rights and remedies
generally and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
Section 3.3. Governmental Authorization. The execution, delivery
and performance by AMCON of this Agreement and the consummation by
AMCON of the transactions contemplated hereby require no action by or
in respect of, or filing with, any Governmental Entity other than (a)
the filing of (i) Articles of Merger in accordance with the Hawaii
Law, (ii) a Certificate of Merger in accordance with the Delaware Law,
and (iii) appropriate documents with the relevant authorities of other
states or jurisdictions in which AMCON or any AMCON Subsidiary is
qualified to do business; (b) compliance with any applicable
requirements of the Securities Act and the Exchange Act; (c) such as
may be required under any applicable state securities or blue sky
laws; and (d) such other consents, approvals, actions, orders,
authorizations, registrations, declarations and filings that, if not
obtained or made, would not, individually or in the aggregate, (x) be
reasonably likely to have an AMCON Material Adverse Effect or
(assuming for this purpose that the Effective Time had occurred) a
Surviving Corporation Material Adverse Effect, or (y) prevent or
materially impair the ability of AMCON to consummate the transactions
contemplated by this Agreement.
Section 3.4. Non-Contravention. The execution, delivery and
performance by AMCON of this Agreement and the consummation by AMCON
of the transactions contemplated hereby do not and will not (a)
contravene or conflict with AMCON's certificate of incorporation or
bylaws, (b) assuming compliance with the matters referred to in
Section 3.3, contravene or conflict with or constitute a violation of
any provision of any law, regulation, judgment, injunction, order or
decree binding upon or applicable to AMCON or any AMCON Subsidiary,
(c) constitute a default under or give rise to a right of termination,
cancellation or acceleration of any right or obligation of AMCON or
any AMCON Subsidiary or to a loss of any benefit or status to which
AMCON or any AMCON Subsidiary is entitled under any provision of any
agreement, contract or other instrument binding upon AMCON or any
AMCON Subsidiary or any license, franchise, permit or other similar
authorization held by AMCON or any AMCON Subsidiary, or (d) result in
the creation or imposition of any Lien on any asset of AMCON or any
AMCON Subsidiary other than, in the case of each of (b), (c) and (d),
any such items that would not, individually or in the aggregate (x) be
reasonably likely to have an AMCON Material Adverse Effect or (y)
prevent or materially impair the ability of AMCON to consummate the
transactions contemplated by this Agreement.
Section 3.5. Capitalization.
(a) The authorized capital stock of AMCON consists of 15,000,000
shares of AMCON Common Stock, $0.01 per value per share, and 1,000,000
shares of preferred stock, $0.01 par value per share, of AMCON ("AMCON
Preferred Stock"). At the close of business on September 30, 2000,
(i) 2,737,551 shares of AMCON Common Stock were issued and
outstanding, (ii) stock options ("AMCON Stock Options") to purchase an
aggregate of 389,620 shares of AMCON Common Stock were issued and
outstanding (of which options to purchase an aggregate of 188,166
shares of AMCON Common Stock were exercisable), (iii) no shares of
AMCON Common Stock were held in its treasury and (iii) no shares of
AMCON Preferred Stock were issued and outstanding. All outstanding
shares of capital stock of AMCON have been duly authorized and validly
issued and are fully paid and nonassessable.
(b) As of the date hereof, except (i) as set forth in this
Section 3.5, and (ii) for changes since September 30, 2000, resulting
from the exercise of stock options outstanding on such date, there are
no outstanding (x) shares of capital stock or other voting securities
of AMCON, (y) securities of AMCON convertible into or exchangeable for
shares of capital stock or voting securities of AMCON, or (z) options
or other rights to acquire from AMCON, and no obligation of AMCON to
issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of AMCON
(the items in clauses (x), (y) and (z) being referred to collectively
as the "AMCON Securities"). There are no outstanding obligations of
AMCON or any AMCON Subsidiary to repurchase, redeem or otherwise
acquire any AMCON Securities. There are no outstanding contractual
obligations of AMCON to provide funds to, or make any investment (in
the form of a loan, capital contribution or otherwise) in, any other
Person other than in the ordinary course of business consistent with
past practice. There are no stockholder agreements, voting trusts or
other agreements or understandings to which AMCON is a party, or of
which AMCON is aware, relating to voting, registration or disposition
of any shares of capital stock of AMCON or granting to any person or
group of persons the right to elect, or to designate or nominate for
election, a director to the board of directors of AMCON.
Section 3.6. Subsidiaries.
(a) Each Significant Subsidiary of AMCON is a corporation duly
incorporated or an entity duly organized, and is validly existing and
in good standing under the laws of its jurisdiction of incorporation
or organization, has all powers and authority and all material
governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted and is duly qualified to do
business as a foreign entity and is in good standing in each
jurisdiction where the character of the property owned or leased by it
or the nature of its activities makes such qualification necessary, in
each case with such exceptions as, individually or in the aggregate,
would not be reasonably likely to have, an AMCON Material Adverse
Effect.
(b) All of the outstanding shares of capital stock of, or other
ownership interest in, each AMCON Subsidiary has been validly issued
and is fully paid and nonassessable. All of the outstanding capital
stock of, or other ownership interest in, each of AMCON's
Subsidiaries, is owned, directly or indirectly, by AMCON, is owned
free and clear of any Lien and free of any other limitation or
restriction (including any limitation or restriction on the right to
vote, sell or otherwise dispose of such capital stock or other
ownership interests) with such exceptions as, individually or in the
aggregate, would not be reasonably likely to have, an AMCON Material
Adverse Effect. There are no outstanding (i) securities of AMCON or
any of the AMCON Subsidiaries convertible into or exchangeable or
exercisable for shares of capital stock or other voting securities or
ownership interests in any of the AMCON Subsidiaries, (ii) options,
warrants or other rights to acquire from AMCON or any of the AMCON
Subsidiaries, and no other obligation of AMCON or any of the AMCON
Subsidiaries to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or
exchangeable or exercisable for any capital stock, voting securities
or ownership interests in, any of the AMCON Subsidiaries or (iii)
obligations of AMCON or any of the AMCON Subsidiaries to repurchase,
redeem or otherwise acquire any outstanding securities of any of the
AMCON Subsidiaries or any capital stock of, or other ownership
interests in, any of the AMCON Subsidiaries.
Section 3.7. AMCON SEC Documents.
(a) AMCON has made available to HNWC the AMCON SEC Documents.
AMCON has filed all reports, filings, registration statements and
other documents required to be filed by it with the SEC since
September 30, 1997. No AMCON Subsidiary is required to file any form,
report, registration statement or prospectus or other document with
the SEC.
(b) As of its filing date, each AMCON SEC Document complied as to
form in all material respects with the applicable requirements of the
Securities Act and/or the Exchange Act, as the case may be.
(c) No AMCON SEC Document filed pursuant to the Exchange Act
contained, as of its filing date, any untrue statement of a material
fact or omitted to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under
which they were made, not misleading. No AMCON SEC Document, as
amended or supplemented, if applicable, filed pursuant to the
Securities Act contained, as of the date such document or amendment
became effective, any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
Section 3.8. Financial Statements; No Material Undisclosed
Liabilities.
(a) The audited consolidated financial statements of AMCON
included in the AMCON 10-K fairly present in all material respects, in
conformity with GAAP consistently applied (except as may be indicated
in the notes thereto), the consolidated financial position of AMCON
and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations, consolidated cash flows and
changes in stockholders' equity for the periods then ended (subject to
normal year-end adjustments in the case of any unaudited interim
financial statements).
(b) There are no liabilities of AMCON or any AMCON Subsidiary of
any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, in each case, that are required
by GAAP to be set forth on a consolidated balance sheet of AMCON,
other than:
(i) liabilities or obligations disclosed or provided for in the
AMCON Balance Sheet or disclosed in the notes thereto;
(ii) liabilities or obligations under this Agreement or incurred in
connection with the transactions contemplated hereby;
(iii) current liabilities incurred in the ordinary course of business
since September 30, 2000; and
(iv) other liabilities or obligations that individually or in the
aggregate, would not be reasonably likely to have an AMCON Material
Adverse Effect.
(c) AMCON and the AMCON Subsidiaries keep proper accounting
records in which all material assets and liabilities, and all material
transactions, of AMCON and the AMCON Subsidiaries are recorded in
conformity with GAAP. No part of AMCON's or any AMCON Subsidiary's
accounting system or records, or access thereto, is under the control
of a Person who is not an employee of AMCON or such Subsidiary.
Section 3.9. Information to be Supplied.
(a) The information to be supplied by AMCON expressly for
inclusion or incorporation by reference in the Proxy
Statement/Prospectus will (i) in the case of the Registration
Statement, at the time it becomes effective, not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading and (ii) in the case of the
remainder of the Proxy Statement/Prospectus, at the time of the
mailing thereof, and at the time of the Special Meeting, not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement/Prospectus will comply
(with respect to information relating to AMCON) as to form in all
material respects with the provisions of the Securities Act and the
Exchange Act.
(b) Notwithstanding the foregoing, AMCON makes no representation
or warranty with respect to any statements made or incorporated by
reference in the Proxy Statement/Prospectus based on information
supplied by HNWC.
Section 3.10. Absence of Certain Changes. Since September 30,
2000, except as otherwise expressly contemplated by this Agreement,
AMCON and the AMCON Subsidiaries have conducted their business in the
ordinary course consistent with past practice and there has not been
(a) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of AMCON or any
AMCON Subsidiary that, individually or in the aggregate, has had or
would be reasonably likely to have an AMCON Material Adverse Effect,
(b) any action, event, occurrence, development or state of
circumstances or facts that, individually or in the aggregate, has had
or would be reasonably likely to have an AMCON Material Adverse Effect
or (c) any incurrence, assumption or guarantee by AMCON of any
material indebtedness for borrowed money other than in the ordinary
course and in amounts and on terms consistent with past practices.
Section 3.11. Litigation. Section 3.11 of the AMCON Disclosure
Schedule contains a list and description of each action, suit,
investigation, arbitration or proceeding pending against, or to the
Knowledge of AMCON threatened against, AMCON or any AMCON Subsidiary
or any of their respective assets or properties before any arbitrator
or Governmental Entity. None of such actions, suits, investigations,
arbitrations or proceedings, individually or in the aggregate, would
be reasonably likely to have, an AMCON Material Adverse Effect. There
are no outstanding judgments, decrees, injunctions, awards or orders
against AMCON that would be reasonably likely to have, individually or
in the aggregate, an AMCON Material Adverse Effect.
Section 3.12. Taxes.
(a) All Tax returns, statements, reports and forms (collectively,
the "AMCON Returns") required to be filed with any taxing authority
by, or with respect to, AMCON and the AMCON Subsidiaries have been
filed in substantial compliance with all applicable laws.
(b) AMCON and the AMCON Subsidiaries have timely paid all Taxes
shown as due and payable on the AMCON Returns that have been so filed,
and all other Taxes not subject to reporting obligations, and, as of
the time of filing, the AMCON Returns correctly reflected the facts
regarding the income, business, assets, operations, activities and the
status of AMCON and the AMCON Subsidiaries (other than Taxes that are
being contested in good faith and for which adequate reserves are
reflected on the AMCON Balance Sheet).
(c) AMCON and the AMCON Subsidiaries have made provision for all
Taxes payable by them for which no AMCON Return has yet been filed.
(d) The charges, accruals and reserves for Taxes with respect to
AMCON and the AMCON Subsidiaries reflected on the AMCON Balance Sheet
are adequate under GAAP to cover the tax liabilities accruing through
the date thereof.
(e) There is no action, suit, proceeding, audit or claim now
proposed or pending against or with respect to AMCON or any of the
AMCON Subsidiaries in respect of any Tax that would be reasonably
likely to have an AMCON Material Adverse Effect.
(f) Neither AMCON nor any of the AMCON Subsidiaries has been a
member of an affiliated, consolidated, combined or unitary group other
than one of which AMCON was the common parent.
(g) Neither AMCON nor any of the AMCON Subsidiaries holds any
asset subject to a consent under Section 341(f) of the Code.
Section 3.13. Employee Benefits.
(a) Section 3.13(a) of the AMCON Disclosure Schedule contains a
correct and complete list identifying each material "employee benefit
plan", as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA"), each employment, severance or similar
contract, plan, arrangement or policy and each other plan or
arrangement (written or oral) providing for compensation, bonuses,
profit-sharing, stock option or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health
or medical benefits, disability benefits, workers' compensation,
supplemental unemployment benefits, severance benefits and post-
employment or retirement benefits (including compensation, pension,
health, medical or life insurance benefits) that is maintained,
administered or contributed to by AMCON or any ERISA Affiliate (as
defined below) of AMCON and covers any employee or former employee of
AMCON or any AMCON Subsidiary. Copies of such plans (and, if
applicable, related trust agreements) and all amendments thereto and
written interpretations thereof have been furnished, or will be made
available upon request, to HNWC together with the most recent annual
report (Form 5500 including, if applicable, Schedule B thereto) and
summary plan description prepared in connection with any such plan.
Such plans are referred to collectively herein as the "AMCON Employee
Plans". For purposes of this Section 3.13, "ERISA Affiliate" of any
Person means any other Person which, together with such Person, would
be treated as a single employer under Section 414 of the Code.
(b) No AMCON Employee Plan is now or at any time has been subject
to Part 3, Subtitle B of Title I or ERISA or Title IV of ERISA. At no
time has AMCON or any of its ERISA Affiliates contributed to, or been
required to contribute to, any "multiemployer plan," as defined in
Section 3(37) or ERISA (a "Multiemployer Plan"), and neither AMCON nor
any of its ERISA Affiliates has, or ever has had, any liability
(contingent or otherwise) relating to the withdrawal or partial
withdrawal from a multiemployer Plan. To the Knowledge of AMCON,
nothing has been done or omitted to be done and no transaction or
holding of any asset under or in connection with any AMCON Employee
Plan has occurred that will make AMCON or any AMCON Subsidiary, or any
officer or director of AMCON or any AMCON Subsidiary, subject to any
liability under Title I of ERISA or liable for any tax pursuant to
Section 4975 of the Code (assuming the taxable period of any such
transaction expired as of the date hereof) that would be reasonably
likely to have an AMCON Material Adverse Effect.
(c) Each AMCON Employee Plan that is intended to be qualified
under Section 401(a) of the Code now meets, and at all time since its
inception have met, the requirements for such qualification, and each
trust forming a part thereof is now, and at all times since its
inception has been, exempt from tax pursuant to Section 501(a) of the
Code. Each such plan has received a determination letter from the
Internal Revenue Service to the effect that such plan is qualified and
its related trust is exempt from federal income taxes. AMCON has
furnished, or will make available upon request, to HNWC copies of the
most recent Internal Revenue Service determination letters with
respect to each such AMCON Employee Plan. Each AMCON Employee Plan has
been maintained and administered in substantial compliance with its
terms (except that in any case in which any AMCON Employee Plan is
currently required to comply with a provision of ERISA or of the Code,
but is not yet required to be amended to reflect such provision, such
plan has been maintained and administered in accordance with the
provision) and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including but not limited to
ERISA and the Code, which are applicable to such AMCON Employee Plan.
All material reports, returns and similar documents with respect to
each AMCON Employee Plan required to be filed with any government
agency or distributed to any AMCON Employee Plan participant have been
duly timely filed and distributed.
(d) There is no contract, agreement, plan or arrangement that, as
a result of the Merger, would be reasonably likely to obligate AMCON
to make any payment of any amount that would not be deductible
pursuant to the terms of Section 162(m) or Section 280G of the Code.
(e) Except as disclosed in writing to HNWC prior to the date
hereof, there has been no amendment to, written interpretation or
announcement (whether or not written) relating to, or change in
employee participation or coverage under, any AMCON Employee Plan that
would increase materially the expense of maintaining such AMCON
Employee Plan above the level of the expense incurred in respect
thereof for the fiscal year ended September 30, 2000.
(f) No AMCON Employee Plan promises or provides post-retirement
medical, life insurance or other benefits due now or in the future to
current, former or retired employees of AMCON or any Subsidiary.
Section 3.14. Compliance with Laws; Licenses, Permits and
Registrations.
(a) Neither AMCON nor any AMCON Subsidiary is in violation of, or
has violated, any applicable provisions of any laws, statutes,
ordinances, regulations, judgments, injunctions, orders or consent
decrees, except for any such violations that, individually or in the
aggregate, would not be reasonably likely to have an AMCON Material
Adverse Effect.
(b) Each of AMCON and the AMCON Subsidiaries has all permits,
licenses, approvals, authorizations of and registrations with and
under all federal, state, local and foreign laws, and from all
Governmental Entities required by AMCON and the AMCON Subsidiaries to
carry on their respective businesses as currently conducted, except
where the failure to have any such permits, licenses, approvals,
authorizations or registrations, individually or in the aggregate,
would not be reasonably likely to have an AMCON Material Adverse
Effect.
Section 3.15. Title to Properties.
(a) AMCON and each AMCON Subsidiary have good and marketable
title to, or valid leasehold interests in, all their properties and
assets except for such as are no longer used or useful in the conduct
of their businesses or as have been disposed of in the ordinary course
of business and except for defects in title, easements, restrictive
covenants and similar Liens, encumbrances or impediments that do not
materially interfere with the ability of AMCON and its Subsidiaries to
use their respective assets and conduct their businesses, as currently
used or conducted. All such assets and properties, other than assets
and properties in which AMCON or any AMCON Subsidiary has leasehold
interests, are free and clear of all Liens, except for Liens that, in
the aggregate, do not and will not materially interfere with the
ability of AMCON and the AMCON Subsidiaries to use their respective
assets and conduct their businesses, as currently conducted.
(b) AMCON and each AMCON Subsidiary (i) are in substantial
compliance with the terms of all leases to which they are a party and
under which they are in occupancy, and all such leases are in full
force and effect and (ii) enjoy peaceful and undisturbed possession
under all such leases.
Section 3.16. Intellectual Property.
(a) AMCON and the AMCON Subsidiaries own or have a valid license
to use (i) all fictional business names, trading names, registered and
unregistered trademarks, service marks, domain names and applications
(collectively, "Marks"); (ii) all patents, patent applications, and
inventions and discoveries that may be patentable (collectively,
"Patents"); (iii) all copyrights in both published works and
unpublished works (collectively, "Copyrights"); (iv) all rights in
mask works (collectively, "Rights in Mask Works"); and (v) all know-
how, trade secrets, confidential information, customer lists,
software, technical information, data, process technology, plans,
drawings, and blue prints (collectively, "Trade Secrets"); necessary
to (x) carry on the business of AMCON as currently conducted or as
proposed to be conducted by the Surviving Corporation, to (y) make,
have made, use, distribute and sell all products currently sold by
AMCON and all products in development.
(b) There are no outstanding and, to AMCON's Knowledge, no
Threatened disputes or disagreements with respect to any agreement to
which AMCON or an AMCON subsidiary is a party, relating to any of
AMCON's Marks, Patents, Copyrights, Rights in Mask Works, or Trade
Secrets (collectively, "AMCON Intellectual Property").
(c) AMCON is the owner of all right, title, and interest in and
to the AMCON Intellectual Property, free and clear of all liens,
security interests, charges, encumbrances, equities, and other adverse
claims.
(d) All former and current employees of AMCON have executed
written contracts with AMCON that assign to AMCON all rights to any
inventions, improvements, discoveries, or information relating to the
business of AMCON. To AMCON's knowledge, no employee of AMCON has
entered into any contract that restricts or limits in any way the
scope or type of work in which the employee may be engaged or requires
the employee to transfer, assign, or disclose information concerning
his work to anyone other than AMCON.
(e) All of the Patents are currently in compliance in all
material respects with formal legal requirements (including payment of
filing, examination, and maintenance fees and proofs of working or
use), are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions.
(f) No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To AMCON's
Knowledge, there is no potentially interfering patent or patent
application of any third party.
(g) No Patent is infringed or, to AMCON's Knowledge, has been
challenged or threatened in any way. To AMCON's Knowledge, none of the
products manufactured and sold or proposed to be sold, nor any process
or know-how used, by AMCON infringes or is alleged to infringe any
Patent or other proprietary right of any other Person.
(h) AMCON is not required to make any payments to any third
parties in connection with its use of AMCON Intellectual Property.
(i) All products made, used, or sold under the Patents have been
marked with the proper patent notice.
Section 3.17. Environmental Matters.
(a) With such exceptions as, individually or in the aggregate,
would not be reasonably likely to have an AMCON Material Adverse
Effect, (i) no written notice, notification, demand, request for
information, citation, summons, complaint or order has been received
by, and no investigation, action, claim, suit, proceeding or review is
pending or threatened by any Person against AMCON or any AMCON
Subsidiary with respect to any applicable Environmental Law and (ii)
AMCON and the AMCON Subsidiaries are and have been in compliance with
all applicable Environmental Laws.
(b) For purposes of this Section 3.17 and Section 4.16, the term
"Environmental Laws" means any federal, state, local and foreign
statutes, laws (including, without limitation, common law), judicial
decisions, regulations, ordinances, rules, judgments, orders, codes,
injunctions, permits or governmental agreements relating to human
health and safety, the environment or to pollutants, contaminants,
wastes, or chemicals, hazardous substances, hazardous materials or
hazardous wastes as any of those terms is regulated or defined by
Environmental Laws.
Section 3.18. Finders' Fees; Opinions of Financial Advisor.
There is no investment banker, broker, finder or other intermediary
that has been retained by, or is authorized to act on behalf of, AMCON
or any AMCON Subsidiary who might be entitled to any fee or commission
from HNWC or any of its Affiliates upon consummation of the
transactions contemplated by this Agreement.
Section 3.19. Board Approval; Required Vote.
(a) As of the date hereof, this Agreement and the transactions
contemplated hereby have been approved by AMCON's Board of Directors.
(b) No votes of the holders of any class or series of capital
stock of AMCON is required by law, rule, regulation or rule of the
American Stock Exchange to approve and adopt this Agreement and/or any
of the other transactions contemplated hereby, including the Merger.
Section 3.20. Tax Treatment. Neither AMCON nor any of its
Affiliates has taken or agreed to take, or will take, any action or is
aware of any fact or circumstance that would prevent or impede the
Merger from qualifying as a 368 Reorganization.
Section 3.21. Certain Agreements. None of AMCON, any AMCON
Subsidiary or any of their respective Affiliates (i) are parties to or
otherwise bound by any agreement or arrangement that limits or
otherwise restricts AMCON, any AMCON Subsidiary, the Surviving
Corporation or any of their respective Affiliates from engaging or
competing in any line of business or in any locations, which agreement
or arrangement is material to the business of AMCON and the AMCON
Subsidiaries or would be material to the business of the Surviving
Corporation (assuming the Merger has taken place), in either case
taken as a whole and (ii) except in the ordinary course of business,
have amended, modified or terminated any material contract, agreement
or arrangement of AMCON or any AMCON Subsidiary or otherwise waived,
released or assigned any material rights, claims or benefits of AMCON
or any AMCON Subsidiary thereunder.
Section 3.22. Employment Agreements. There exists (i) no union,
guild or collective bargaining agreement to which AMCON or any AMCON
Subsidiary is a party, (ii) no employment, consulting or severance
agreement between AMCON or any Subsidiary of AMCON and any Person
(except for consulting agreements that individually, and in the
aggregate, are not material to AMCON), and (iii) no employment,
consulting, severance or indemnification agreement or other agreement
or plan to which AMCON or any AMCON Subsidiary is a party that would
be altered or result in any bonus, golden parachute, severance or
other payment or obligation to any Person, or result in any
acceleration of the time of payment or in the provision or vesting of
any benefits, as a result of the execution or performance of this
Agreement or as a result of the Merger or the other transactions
contemplated hereby.
Section 3.23. Transactions With Directors, Officers and
Affiliates. Except for any of the following matters which would not
be required to be disclosed pursuant to Item 402 or Item 404 of
Regulation S-K of the U.S. Securities and Exchange Commission (the
"Commission"), since September 30, 2000, there have been no
transactions between AMCON or any of its Subsidiaries and any
director, officer, employee, stockholder or Affiliate of AMCON or any
of its Subsidiaries, including, without limitation, loans, guarantees
or pledges to, by or for AMCON or any of AMCON's Subsidiaries from,
to, by or for any of such Persons. Since September 30, 2000, none of
the officers or directors of AMCON or any of its Subsidiaries, and no
spouse or relative of any of such Persons, has been a director or
officer of, or has had any material direct or indirect interest in,
any Person which during such period has been a supplier, customer or
sales agent of AMCON or any of its Subsidiaries or has competed with
or been engaged in any business of the kind being conducted by AMCON
or any of its Subsidiaries.
Section 3.24. Material Contracts. Schedule 3.24 delivered to
HNWC by AMCON prior to the execution of this Agreement lists all
material contracts and agreements to which, as of the date hereof,
AMCON or any AMCON Subsidiary is a party or by which AMCON or any
AMCON Subsidiary is bound or under which AMCON or any AMCON Subsidiary
has or may acquire any rights, which were not filed prior to the date
hereof as exhibits to AMCON SEC Documents, which involve or relate to
(i) obligations of AMCON or any AMCON Subsidiary for borrowed money or
other indebtedness where the amount of such obligations exceeds
$6,000,000 individually, (ii) the lease by AMCON or any AMCON
Subsidiary, as lessee or lessor, of real property for rent of more
than $6,000,000 per annum, (iii) the purchase or sale of goods (other
than raw material to be purchased by AMCON on terms that are customary
and consistent with the past practice of AMCON and in amounts and at
prices substantially consistent with past practices of AMCON) or
services with an aggregate minimum purchase price of more than
$6,000,000 per annum, (iv) rights to manufacture and/or distribute any
product which accounted for more than $45,000,000 of the consolidated
revenues of AMCON and its Subsidiaries during the fiscal year ended
September 30, 2000 or under which AMCON or any AMCON Subsidiary
received or paid license or other fees in excess of $1,000,000 during
any year, (v) the purchase or sale of assets or properties not in the
ordinary course of business having a purchase price in excess of
$6,000,000, (vi) the right (whether or not currently exercisable) to
use, license (including any "in-license" or "outlicense"), sublicense
or otherwise exploit any intellectual property right or other
proprietary asset of AMCON or of any of Subsidiary of AMCON or any
other Person which, is material to AMCON; (vii) any material
collaboration or joint venture or similar arrangement; (viii) the
restriction on the right or ability of AMCON or any Subsidiary of
AMCON (A) to compete with any other Person, (B) to acquire any product
or other asset or any services from any other Person, (C) to solicit,
hire or retain any Person as an employee, consultant or independent
contractor, (D) to develop, sell, supply, distribute, offer, support
or service any product or any technology or other asset to or for any
other Person, (E) to perform services for any other Person, or (F) to
transact business or deal in any other manner with any other Person;
(ix) any currency hedging; or (x) individual capital expenditures or
commitments in excess of $6,000,000. All such contracts and
agreements are duly and validly executed by AMCON or such AMCON
Subsidiary, and are in full force and effect in all material respects.
Neither AMCON nor any of its Subsidiaries has violated or breached, or
committed any default under, any contract or agreement, and, to the
knowledge of AMCON, no other Person has violated or breached, or
committed any default under, any contract or agreement, which
violation, breach or default (alone or in combination with other
violations, breaches or defaults under such contract or agreement or
under other contracts or agreements) has had or may reasonably be
expected to have an AMCON Material Adverse Effect. No event has
occurred which, after notice or the passage of time or both, would
constitute a default by AMCON or any Subsidiary of AMCON under any
contract or agreement or give any Person the right to (A) declare a
default or exercise any remedy under any contract or agreement,
(B) receive or require a rebate, chargeback, penalty or change in
delivery schedule under any contract or agreement, (C) accelerate the
maturity or performance of any contract or agreement, or (D) cancel,
terminate or modify any contract or agreement, in each case which,
together with all other events of the types referred to in clauses
(A), (B), (C) and (D) of this sentence has had or may reasonably be
expected to have an AMCON Material Adverse Effect. All such contracts
and agreements will continue, after the Effective Time, to be binding
in all material respects in accordance with their respective terms
until their respective expiration dates.
Section 3.25. Insurance. AMCON has made available to HNWC a
summary of all material insurance policies and all material self
insurance programs and arrangements relating to the business, assets
and operations of AMCON and its Subsidiaries. Each of such insurance
policies is in full force and effect. Since September 30, 2000,
neither AMCON nor any of its Subsidiaries has received any notice or
other communication regarding any actual or possible (i) cancellation
or invalidation of any material insurance policy, (ii) refusal of any
coverage or rejection of any material claim under any insurance
policy, or (iii) material adjustment in the amount of the premiums
payable with respect to any insurance policy. There is no pending
workers' compensation or other claim under or based upon any insurance
policy of AMCON or any of its Subsidiaries other than claims incurred
in the ordinary course of business.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HNWC
Except as disclosed in the (i) HNWC Disclosure Schedule delivered to
AMCON dated _________________, 2001 (each section or subsection of
which Disclosure Schedule qualifies the correspondingly numbered
representation, warranty or covenant to the extent specified therein),
or (ii) the HNWC SEC Documents filed prior to the date hereof, HNWC
represents and warrants to AMCON that, as of the date hereof (except
for representations and warranties that address matters only as of a
specific date, in which case such representations are true and correct
on and as of such specific date):
Section 4.1. Corporate Existence and Power. HNWC is a
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Hawaii, and has all corporate powers
required to carry on its business as now conducted. HNWC is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property
owned or leased by it or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified,
individually or in the aggregate, would not be reasonably likely to
have a HNWC Material Adverse Effect. HNWC has heretofore made
available to AMCON true and complete copies of HNWC's articles of
incorporation and bylaws as currently in effect.
Section 4.2. Corporate Authorization. The execution, delivery
and performance by HNWC of this Agreement and the consummation by HNWC
of the transactions contemplated hereby are within HNWC's corporate
powers and, except for the HNWC Stockholder Approval (as defined
herein), have been duly authorized by all necessary corporate action.
Assuming that this Agreement constitutes the valid and binding
obligation of AMCON, this Agreement constitutes a valid and binding
agreement of HNWC, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in
effect, relating to or affecting creditors' rights and remedies
generally and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
Section 4.3. Governmental Authorization. The execution, delivery
and performance by HNWC of this Agreement and the consummation by HNWC
of the transactions contemplated hereby require no action by or in
respect of, or filing with, any Governmental Entity other than (a) the
filing of (i) the Articles of Merger in accordance with the Hawaii
Law, (ii) the Certificate of Merger in accordance with the Delaware
Law, and (iii) appropriate documents with the relevant authorities of
other states or jurisdictions in which HNWC or any HNWC Subsidiary is
qualified to do business; (b) compliance with any applicable
requirements of the Securities Act and the Exchange Act; (c) such as
may be required under any applicable state securities or blue sky
laws; and (d) such other consents, approvals, actions, orders,
authorizations, registrations, declarations and filings that, if not
obtained or made, would not, individually or in the aggregate, (x) be
reasonably likely to have a HNWC Material Adverse Effect or (assuming
for this purpose that the Effective Time had occurred) a Surviving
Corporation Material Adverse Effect, or (y) prevent or materially
impair the ability of HNWC to consummate the transactions contemplated
by this Agreement.
Section 4.4. Non-Contravention. The execution, delivery and
performance by HNWC of this Agreement and the consummation by HNWC of
the transactions contemplated hereby do not and will not (a)
contravene or conflict with HNWC's articles of incorporation or
bylaws, (b) assuming compliance with the matters referred to in
Section 4.3, contravene or conflict with or constitute a violation of
any provision of any law, regulation, judgment, injunction, order or
decree binding upon or applicable to HNWC, (c) constitute a default
under or give rise to a right of termination, cancellation or
acceleration of any right or obligation of HNWC or any HNWC Subsidiary
or to a loss of any benefit or status to which HNWC is entitled under
any provision of any agreement, contract or other instrument binding
upon HNWC or any HNWC Subsidiary or any license, franchise, permit or
other similar authorization held by HNWC, or (d) result in the
creation or imposition of any Lien on any asset of HNWC other than, in
the case of each of (b), (c) and (d), any such items that would not,
individually or in the aggregate (x) be reasonably likely to have a
HNWC Material Adverse Effect or (y) prevent or materially impair the
ability of HNWC to consummate the transactions contemplated by this
Agreement.
Section 4.5. Capitalization.
(a) The authorized capital stock of HNWC consists of 20,000,000
shares of HNWC Common Stock and 5,000,000 shares of HNWC Preferred
Stock (of which 1,250 shares of HNWC Series A Convertible Preferred
Stock were authorized and 250 shares of HNWC Series B Convertible
Preferred Stock were authorized and 750,000 shares of HNWC Series C
Preferred Stock were authorized). At the close of business on
September 29, 2000, (i) _____________ shares of HNWC Common Stock were
issued and outstanding, (ii) stock options ("HNWC Stock Options") to
purchase an aggregate of ____________ shares of HNWC Common Stock were
issued and outstanding (of which options to purchase an aggregate of
________________ shares of HNWC Common Stock were exercisable),
(iii) warrants ("HNWC Warrants") to purchase an aggregate of
_______________ shares of HNWC Common Stock were issued and
outstanding (of which warrants to purchase an aggregate of
_______________ shares of HNWC Common Stock were exercisable),
(iv) _______________ shares of HNWC Common Stock were held in its
treasury, (v) 240 shares of HNWC Preferred Stock were issued and
outstanding, of which 140 shares of Series A Convertible Preferred
Stock were issued and outstanding, 100 shares of Series B Convertible
Preferred Stock were issued and outstanding, and no shares of Series C
Convertible Preferred Stock were issued and outstanding and (vi) stock
options and warrants to purchase an aggregate of __________ shares of
HNWC Preferred Stock were issued and outstanding (of which options and
warrants to purchase an aggregate of _______________ shares of HNWC
Preferred Stock were exercisable). All outstanding shares of capital
stock of HNWC have been duly authorized and validly issued and are
fully paid and nonassessable.
(b) As of the date hereof, except (i) as set forth in this
Section 4.5, (ii) for changes since September 29, 2000, resulting from
the exercise of stock options outstanding on such date, (iii) the
issuance of secured convertible promissory notes to AMCON in an
aggregate principal amount of $750,000, bearing interest at 10% per
annum and which are convertible into HNWC Series C Convertible
Preferred Stock or HNWC Common Stock (the "Convertible Notes"), and
(iv) the issuance of the Cash Shares to AMCON, there are no
outstanding (x) shares of capital stock or other voting securities of
HNWC, (y) securities of HNWC convertible into or exchangeable for
shares of capital stock or voting securities of HNWC, or (z) options
or other rights to acquire from HNWC, and no obligation of HNWC to
issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of HNWC
(the items in clauses (x), (y) and (z) being referred to collectively
as the "HNWC Securities"). There are no outstanding obligations of
HNWC or any HNWC Subsidiary to repurchase, redeem or otherwise acquire
any HNWC Securities. There are no outstanding contractual obligations
of HNWC to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any other Person. There
are no stockholder agreements, voting trusts or other agreements or
understandings to which HNWC is a party, or of which HNWC is aware,
relating to voting, registration or disposition of any shares of
capital stock of HNWC or granting to any person or group of persons
the right to elect, or to designate or nominate for election, a
director to the board of directors of HNWC, except for the
Stockholders Agreement attached hereto as Exhibit A.
Section 4.6. Subsidiaries. HNWC does not have any subsidiaries
and does not own or control, directly or indirectly, any stock or
equity interest in any corporation or other Person.
Section 4.7. HNWC SEC Documents.
(a) HNWC has made available to AMCON the HNWC SEC Documents.
HNWC has filed all reports, filings, registration statements and other
documents required to be filed by it with the SEC since December 31,
1997.
(b) As of its filing date, each HNWC SEC Document complied as to
form in all material respects with the applicable requirements of the
Securities Act and/or the Exchange Act, as the case may be.
(c) No HNWC SEC Document filed pursuant to the Exchange Act
contained, as of its filing date, any untrue statement of a material
fact or omitted to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under
which they were made, not misleading. No HNWC SEC Document, as
amended or supplemented, if applicable, filed pursuant to the
Securities Act contained, as of the date such document or amendment
became effective, any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
Section 4.8. Financial Statements; No Material Undisclosed
Liabilities.
(a) The audited HNWC financial statements and unaudited
consolidated interim financial statements of HNWC included in the HNWC
10-KSB and the HNWC 10-QSB fairly present in all material respects, in
conformity with GAAP consistently applied (except as may be indicated
in the notes thereto and except that financial statements on Form 10-
QSB do not contain all GAAP notes to such financial statements), the
financial position of HNWC as of the dates thereof and its results of
operations, stockholders' equity and consolidated cash flows for the
periods then ended (subject to normal year-end adjustments in the case
of any unaudited interim financial statements).
(b) There are no liabilities of HNWC of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or
otherwise, in each case, that are required by GAAP to be set forth on
a balance sheet of HNWC, other than:
(i) liabilities or obligations disclosed or provided for in the
HNWC Balance Sheet or disclosed in the notes there;
(ii) liabilities or obligations under this Agreement or incurred
in connection with the transactions contemplated hereby;
(iii) current liabilities incurred in the ordinary course of
business since December 31, 1999; and
(iv) other liabilities or obligations that individually or in the
aggregate, would not be reasonably likely to have a HNWC Material
Adverse Effect.
(c) HNWC keeps proper accounting records in which all material
assets and liabilities, and all material transactions, of HNWC are
recorded in conformity with GAAP. No part of HNWC's accounting system
or records, or access thereto, is under the control of a Person who is
not an employee of HNWC.
Section 4.9. Information to be Supplied.
(a) The information to be supplied by HNWC expressly for
inclusion or incorporation by reference in the Proxy
Statement/Prospectus will (i) in the case of the Registration
Statement, at the time it becomes effective, not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading and (ii) in the case of the
remainder of the Proxy Statement/Prospectus, at the time of the
mailing thereof, and at the time of the Special Meeting, not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement/Prospectus will comply
(with respect to information relating to HNWC) as to form in all
material respects with the provisions of the Securities Act and the
Exchange Act.
(b) Notwithstanding the foregoing, HNWC makes no representation
or warranty with respect to any statements made or incorporated by
reference in the Proxy Statement/Prospectus based on information
supplied by AMCON.
Section 4.10. Absence of Certain Changes. Since December 31,
1999, except as otherwise expressly contemplated by this Agreement,
HNWC has conducted its business in the ordinary course consistent with
past practice and there has not been (a) any damage, destruction or
other casualty loss (whether or not covered by insurance) affecting
the business or assets of HNWC that, individually or in the aggregate,
has had or would be reasonably likely to have a HNWC Material Adverse
Effect, (b) any action, event, occurrence, development or state of
circumstances or facts that, individually or in the aggregate, has had
or would be reasonably likely to have a HNWC Material Adverse Effect
or (c) any incurrence, assumption or guarantee by HNWC of any material
indebtedness for borrowed money other than in the ordinary course and
in amounts and on terms consistent with past practices.
Section 4.11. Litigation. Section 4.11 of the HNWC Disclosure
Schedule contains a list of each action, suit, investigation,
arbitration or proceeding pending against, or to the Knowledge of HNWC
threatened against, HNWC or any of its respective assets or properties
before any arbitrator or Governmental Entity. None of such actions,
suits, investigations, arbitrations or proceedings, individually or in
the aggregate, would be reasonably likely to have a HNWC Material
Adverse Effect. There are no outstanding judgments, decrees,
injunctions, awards or orders against HNWC that would be reasonably
likely to have, individually or in the aggregate, a HNWC Material
Adverse Effect.
Section 4.12. Taxes.
(a) All Tax returns, statements, reports and forms (collectively,
the "HNWC Returns") required to be filed with any taxing authority by,
or with respect to, HNWC and the HNWC Subsidiaries have been filed in
substantial compliance with all applicable laws.
(b) HNWC has timely paid all Taxes shown as due and payable on
the HNWC Returns that have been so filed, and all other Taxes not
subject to reporting obligations, and as of the time of filing, the
HNWC Returns correctly reflected the facts regarding the income,
business, assets, operations, activities and the status of HNWC and
the HNWC Subsidiaries (other than Taxes that are being contested in
good faith and for which adequate reserves are reflected on the HNWC
Balance Sheet).
(c) HNWC has made provision for all Taxes payable by them for
which no HNWC Return has yet been filed.
(d) The charges, accruals and reserves for Taxes with respect to
HNWC reflected on the HNWC Balance Sheet are adequate under GAAP to
cover the Tax liabilities accruing through the date thereof.
(e) There is no action, suit, proceeding, audit or claim now
proposed or pending against or with respect to HNWC in respect of any
Tax that would be reasonably likely to have a HNWC Material Adverse
Effect.
(f) HNWC has not been a member of an affiliated, consolidated,
combined or unitary group other than one of which HNWC was the common
parent.
(g) HNWC does not hold any asset subject to a consent under
Section 341(f) of the Code.
Section 4.13. Employee Benefits.
(a) Section 4.13(a) of the HNWC Disclosure Schedule contains a
correct and complete list identifying each material "employee benefit
plan", as defined in Section 3(3) of ERISA, each employment, severance
or similar contract, plan, arrangement or policy and each other plan
or arrangement (written or oral) providing for compensation, bonuses,
profit-sharing, stock option or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health
or medical benefits, disability benefits, workers' compensation,
supplemental unemployment benefits, severance benefits and post-
employment or retirement benefits (including compensation, pension,
health, medical or life insurance benefits) that is maintained,
administered or contributed to by HNWC or any of its ERISA Affiliates
and covers any employee or former employee of HNWC or any HNWC
Subsidiary. Copies of such plans (and, if applicable, related trust
agreements) and all amendments thereto and written interpretations
thereof have been furnished, or will be made available upon request,
to AMCON together with the most recent annual report (Form 5500
including, if applicable, Schedule B thereto) and summary plan
description prepared in connection with any such plan. Such plans are
referred to collectively herein as the "HNWC Employee Plans". For
purposes of this Section 4.13, "ERISA Affiliate" of any Person means
any other Person which, together with such Person, would be treated as
a single employer under Section 414 of the Code.
(b) No HNWC Employee Plan is now or at any time has been subject
to Part 3, Subtitle B of Title I or ERISA or Title IV of ERISA. At no
time has HNWC or any of its ERISA Affiliates contributed to, or been
required to contribute to, any "multiemployer plan," as defined in
Section 3(37) of ERISA (a "Multiemployer Plan"), and neither HNWC nor
any of its ERISA Affiliates has, or ever has had, any liability
(contingent or otherwise) relating to the withdrawal or partial
withdrawal from a Multiemployer Plan. To the Knowledge of HNWC, no
condition exists and no event has occurred that would be reasonably
likely to constitute grounds for termination of any HNWC Employee Plan
that is a Retirement Plan or, with respect to any HNWC Employee Plan
that is a Multiemployer Plan, presents a material risk of a complete
or partial withdrawal under Title IV of ERISA and neither HNWC nor any
of its ERISA Affiliates has incurred any liability under Title IV of
ERISA arising in connection with the termination of, or complete or
partial withdrawal from, any plan covered or previously covered by
Title IV of ERISA that would be reasonably likely to have a HNWC
Material Adverse Effect. To the Knowledge of HNWC, nothing has been
done or omitted to be done and no transaction or holding of any asset
under or in connection with any HNWC Employee Plan has occurred that
will make HNWC or any HNWC Subsidiary, or any officer or director of
HNWC or any HNWC Subsidiary, subject to any liability under Title I of
ERISA or liable for any tax pursuant to Section 4975 of the Code
(assuming the taxable period of any such transaction expired as of the
date hereof) that would be reasonably likely to have a HNWC Material
Adverse Effect.
(c) Each HNWC Employee Plan that is intended to be qualified
under Section 401(a) of the Code now meets, and at all times since its
inception have met, the requirements for such qualification, and each
trust forming a part thereof is now, and at all times since its
inception has been, exempt from tax pursuant to Section 501(a) of the
Code. Each such plan has received a determination letter from the
Internal Revenue Service to the effect that such plan is qualified and
its related trust is exempt from federal income taxes. HNWC has
furnished, or will make available upon request, to AMCON copies of the
most recent Internal Revenue Service determination letters with
respect to each such HNWC Employee Plan. Each HNWC Employee Plan has
been maintained and administered in substantial compliance with its
terms (except that in any case in which any HNWC Employee Plan is
currently required to comply with a provision of ERISA or of the Code,
but is not yet to be amended to reflect such provision, such plan has
been maintained and administered in accordance with the provision) and
with the requirements prescribed by any and all statutes, orders,
rules and regulations, including but not limited to ERISA and the
Code, which are applicable to such HNWC Employee Plan. All material
reports, returns and similar documents with respect to each HNWC
Employee Plan required to be filed with any governmental agency or
distributed to any HNWC Employee Plan participant have been duly
timely filed and distributed.
(d) There is no contract, agreement, plan or arrangement that, as
a result of the Merger, would be reasonably likely to obligate HNWC to
make any payment of any amount that would not be deductible pursuant
to the terms of Section 162(m) or Section 280G of the Code.
(e) Except as disclosed in writing to AMCON prior to the date
hereof, there has been no amendment to, written interpretation or
announcement (whether or not written) relating to, or change in
employee participation or coverage under, any HNWC Employee Plan that
would increase materially the expense of maintaining such HNWC
Employee Plan above the level of the expense incurred in respect
thereof for the fiscal year ended December 31, 1999.
(f) No HNWC Employee Plan promises or provides post-retirement
medical, life insurance or other benefits due now or in the future to
current, former or retired employees of HNWC or any Subsidiary.
Section 4.14. Compliance with Laws; Licenses, Permits and
Registrations.
(a) HNWC is not in violation of, nor has HNWC violated, any
applicable provisions of any laws, statutes, ordinances, regulations,
judgments, injunctions, orders or consent decrees, except for any such
violations that, individually or in the aggregate, would not be
reasonably likely to have a HNWC Material Adverse Effect.
(b) HNWC has all permits, licenses, approvals, authorizations of
and registrations with and under all federal, state, local and foreign
laws, and from all Governmental Entities required by HNWC to carry on
its business as currently conducted, except where the failure to have
any such permits, licenses, approvals, authorizations or
registrations, individually or in the aggregate, would not be
reasonably likely to have a HNWC Material Adverse Effect.
Section 4.15. Title to Properties.
(a) HNWC has good and marketable title to, or valid leasehold
interests in, all its properties and assets except for such as are no
longer used or useful in the conduct of its business or as have been
disposed of in the ordinary course of business and except for defects
in title, easements, restrictive covenants and similar Liens,
encumbrances or impediments that do not materially interfere with the
ability of HNWC to conduct its business as currently conducted. All
such assets and properties, other than assets and properties in which
HNWC has leasehold interests, are free and clear of all Liens, except
for Liens that do not and will not materially interfere with the
ability of HNWC to conduct its business as currently conducted.
(b) HNWC (i) is in substantial compliance with the terms of all
leases to which it is a party and under which it is in occupancy, and
all such leases are in full force and effect and (ii) enjoys peaceful
and undisturbed possession under all such leases.
Section 4.16. Intellectual Property.
(a) HNWC owns or has a valid license to use (i) all Marks; (ii)
all Patents; (iii) all Copyrights; (iv) all Rights in Mask Works' and
(v) all Trade Secrets; necessary to (x) carry on the business of HNWC
as currently conducted or as proposed to be conducted by the Surviving
Corporation, to (y) make, have made, use, distribute and sell all
products currently sold by HNWC and all products in development.
(b) There are no outstanding and, to HNWC's Knowledge, no
threatened disputes or disagreements with respect to any agreement to
which HNWC is a party, relating to any of HNWC's Marks, Patents,
Copyrights, Rights in Mask Works, or Trade Secrets (collectively,
"HNWC Intellectual Property").
(c) HNWC is the owner of all right, title, and interest in and to
the HNWC Intellectual Property, free and clear of all liens, security
interests, charges, encumbrances, equities, and other adverse claims.
(d) All former and current employees of HNWC have executed
written contracts with HNWC that assign to HNWC all rights to any
inventions, improvements, discoveries, or information relating to the
business of HNWC. To HNWC's knowledge, no employee of HNWC has entered
into any contract that restricts or limits in any way the scope or
type of work in which the employee may be engaged or requires the
employee to transfer, assign, or disclose information concerning his
work to anyone other than HNWC.
(e) All of the Patents are currently in compliance with formal
legal requirements (including payment of filing, examination, and
maintenance fees and proofs of working or use), are valid and
enforceable, and are not subject to any maintenance fees or taxes or
actions.
(f) No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To HNWC's Knowledge,
there is no potentially interfering patent or patent application of
any third party.
(g) No Patent is infringed or, to HNWC's Knowledge, has been
challenged or threatened in any way. To HNWC's knowledge, none of the
products manufactured and sold or proposed to be sold, nor any process
or know-how used, by HNWC infringes or is alleged to infringe any
Patent or other proprietary right of any other Person.
(h) HNWC is not required to make any payments to any third
parties in connection with its use of the HNWC Intellectual Property.
(i) All products made, used, or sold under the Patents have been
marked with the proper patent notice.
Section 4.17. Environmental Matters. With such exceptions as,
individually or in the aggregate, would not be reasonably likely to
have a HNWC Material Adverse Effect, (i) no written notice,
notification, demand, request for information, citation, summons,
complaint or order has been received by, and no investigation, action,
claim, suit, proceeding or review is pending or threatened by any
Person against, HNWC with respect to any applicable Environmental Law
and (ii) HNWC is and has been in compliance with all applicable
Environmental Laws.
Section 4.18. Finders' Fees. There is no investment banker,
broker, finder or other intermediary that has been retained by, or is
authorized to act on behalf of, HNWC or who might be entitled to any
fee or commission from AMCON or any of its Affiliates upon
consummation of the transactions contemplated by this Agreement.
Section 4.19. Required Vote and Waiver; Board Approval.
(a) The only vote or waiver of rights of the holders of any class
or series of capital stock of HNWC required by law, rule or regulation
to approve and adopt this Agreement and/or any of the other
transactions contemplated hereby, including the Merger (collectively,
the "HNWC Stockholder Approval") is the affirmative vote of the
holders of more than fifty percent of the outstanding shares of HNWC
Common Stock in favor of the approval and adoption of this Agreement
and approval of the Merger.
(b) HNWC's Board of Directors has unanimously (i) determined and
declared that this Agreement and the transactions contemplated hereby,
including the Merger, are advisable and in the best interests of HNWC
and its stockholders, (ii) approved and adopted this Agreement, the
Merger and the other transactions contemplated hereby and (iii)
resolved to recommend to such stockholders that they vote in favor of
adopting and approving this Agreement and the Merger in accordance
with the terms hereof at a special meeting of the stockholders of HNWC
duly held for such purpose (the "HNWC Stockholders Meeting").
Section 4.20. State Takeover Statutes. HNWC has taken all
actions required to be taken by it in order to exempt this Agreement
and the transactions contemplated hereby from the provisions of all
"control share acquisition," "business combination," "fair price" or
other anti-takeover laws or regulations enacted under state or federal
laws in the United States that might apply to this Agreement or any of
the transactions contemplated hereby.
Section 4.21. Tax Treatment. Neither HNWC nor any of its
Affiliates has taken or agreed to take, or will take, any action or is
aware of any fact or circumstance that would prevent or impede the
Merger from qualifying as a 368 Reorganization.
Section 4.22. Certain Agreements. Neither HNWC nor any of its
Affiliates (i) are parties to or otherwise bound by any agreement or
arrangement that limits or otherwise restricts HNWC, the Surviving
Corporation or any of their respective Affiliates from engaging or
competing in any line of business or in any locations, which agreement
or arrangement is material to the business of HNWC or would be
material to the business of the Surviving Corporation (assuming the
Merger has taken place), in either case taken as a whole and (ii)
except in the ordinary course of business, have amended, modified or
terminated any material contract, agreement or arrangement of HNWC or
any HNWC Subsidiary or otherwise waived, released or assigned any
material rights, claims or benefits of HNWC or any HNWC Subsidiary
thereunder.
Section 4.23. Employment Agreements. There exists (i) no union,
guild or collective bargaining agreement to which HNWC is a party,
(ii) no employment, consulting or severance agreement between HNWC and
any Person (except for consulting agreements that individually, and in
the aggregate, are not material to HNWC), and (iii) no employment,
consulting, severance or indemnification agreement or other agreement
or plan to which HNWC is a party that would be altered or result in
any bonus, golden parachute, severance or other payment or obligation
to any Person, or result in any acceleration of the time of payment or
in the provision or vesting of any benefits, as a result of the
execution or performance of this Agreement or as a result of the
Merger or the other transactions contemplated hereby.
Section 4.24. Transactions With Directors, Officers and
Affiliates. Except for any of the following matters which would not
be required to be disclosed pursuant to Item 402 or Item 404 of
Regulation S-K of the Commission (assuming HNWC was subject to such
Items), since December 31, 1999, there have been no transactions
between HNWC or any of its Subsidiaries and any director, officer,
employee, stockholder or "Affiliate" (as identified pursuant to
Section 7.8 hereof) of HNWC, including, without limitation, loans,
guarantees or pledges to, by or for HNWC, from, to, by or for any of
such Persons. Except for any of the following matters which would not
be required to be disclosed pursuant to Item 402 or Item 404 of
Regulation S-K of the Commission (assuming that HNWC was subject to
such Items), since December 31, 1999, none of the officers or
directors of HNWC, and no spouse or relative of any of such Persons,
has been a director or officer of, or has had any material direct or
indirect interest in, any Person which during such period has been a
supplier, customer or sales agent of HNWC or has competed with or been
engaged in any business of the kind being conducted by HNWC.
Section 4.25. Material Contracts. Schedule 4.25 delivered to
AMCON by HNWC prior to the execution of this Agreement lists all
material contracts and agreements to which, as of the date hereof,
HNWC is a party or by which is bound or under which HNWC has or may
acquire any rights, which involve or relate to (i) obligations of HNWC
for borrowed money or other indebtedness where the amount of such
obligations exceeds $50,000 individually, (ii) the lease by HNWC, as
lessee or lessor, of real property for rent of more than $25,000 per
annum, (iii) the purchase or sale of goods (other than raw material to
be purchased by HNWC on terms that are customary and consistent with
the past practice of HNWC and in amounts and at prices substantially
consistent with past practices of HNWC) or services with an aggregate
minimum purchase price of more than $25,000 per annum, (iv) rights to
manufacture and/or distribute any product which accounted for more
than $25,000 of the consolidated revenues of HNWC during the fiscal
year ended December 31, 1999 or under which HNWC received or paid
license or other fees in excess of $25,000 during any year, (v) the
purchase or sale of assets or properties not in the ordinary course of
business having a purchase price in excess of $25,000, (vi) the right
(whether or not currently exercisable) to use, license (including any
"in-license" or "outlicense"), sublicense or otherwise exploit any
intellectual property right or other proprietary asset of HNWC or any
other Person which, when considered together with all such other
rights, is material to HNWC; (vii) any material collaboration or joint
venture or similar arrangement; (viii) the restriction on the right or
ability of HNWC (A) to compete with any other Person, (B) to acquire
any product or other asset or any services from any other Person, (C)
to solicit, hire or retain any Person as an employee, consultant or
independent contractor, (D) to develop, sell, supply, distribute,
offer, support or service any product or any technology or other asset
to or for any other Person, (E) to perform services for any other
Person, or (F) to transact business or deal in any other manner with
any other Person; (ix) any currency hedging; (x) individual capital
expenditures or commitments in excess of $25,000; or (xi) any license,
lease or other right to use any water used by HNWC in its bottling
operations. All such contracts and agreements are duly and validly
executed by HNWC and are in full force and effect in all material
respects. HNWC has not violated or breached, or committed any default
under, any contract or agreement, and, to the knowledge of HNWC, no
other Person has violated or breached, or committed any default under,
any contract or agreement, which violation, breach or default (alone
or in combination with other violations, breaches or defaults under
such contract or agreement or under other contracts or agreements) has
had or may reasonably be expected to have a HNWC Material Adverse
Effect. No event has occurred which, after notice or the passage of
time or both, would constitute a default by HNWC under any contract or
agreement or give any Person the right to (A) declare a default or
exercise any remedy under any contract or agreement, (B) receive or
require a rebate, chargeback, penalty or change in delivery schedule
under any contract or agreement, (C) accelerate the maturity or
performance of any contract or agreement, or (D) cancel, terminate or
modify any contract or agreement, in each case which, together with
all other events of the types referred to in clauses (A), (B), (C) and
(D) of this sentence has had or may reasonably be expected to have a
HNWC Material Adverse Effect. All such contracts and agreements will
continue, after the Effective Time, to be binding in all material
respects in accordance with their respective terms until their
respective expiration dates.
Section 4.26. Certain Business Practices. Neither HNWC nor to the
knowledge of HNWC any director, officer, agent or employee of HNWC has
(i) used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity, (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or
violated any provision of the Foreign Corrupt Practices Act of 1977,
as amended, (assuming for purposes of this Section 4.26 that HNWC is
subject to Section 30A of the Exchange Act) or (iii) made any other
unlawful payment.
Section 4.27. Insurance. HNWC has made available to AMCON a
summary of all material insurance policies and all material self
insurance programs and arrangements relating to the business, assets
and operations of HNWC . Each of such insurance policies is in full
force and effect. Since December 31, 1999, HNWC has not received any
notice or other communication regarding any actual or possible (i)
cancellation or invalidation of any material insurance policy, (ii)
refusal of any coverage or rejection of any material claim under any
insurance policy, or (iii) material adjustment in the amount of the
premiums payable with respect to any insurance policy. There is no
pending workers' compensation or other claim under or based upon any
insurance policy of HNWC other than claims incurred in the ordinary
course of business.
Section 4.28. No Actions Inconsistent with Article VI. HNWC has
not taken any of the actions contemplated by Article VI of this
Agreement during the period from and including September 29, 2000
through and including the date of this Agreement, except for the
issuance of the Convertible Notes and the Cash Shares.
Section 4.29. Use of Proceeds of Convertible Notes. None of the
proceeds of the Convertible Notes have been or will be used for any
purposes other than (a) providing working capital and other general
corporate purposes of HNWC, and (b) to redeem the HNWC Series A
Convertible Preferred Stock or Series B Convertible Preferred Stock or
both, in each case, outstanding as of September 29, 2000.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Merger Sub represents and warrants to HNWC as follows:
Section 5.1. Organization. Merger Sub is a corporation duly
incorporated, validly existing and in good standing under the laws of
Delaware. Merger Sub is a direct wholly-owned subsidiary of AMCON.
Section 5.2. Corporate Authorization. Merger Sub has all
requisite corporate power and authority to enter into this agreement
and to consummate the transaction contemplated by this Agreement. The
execution, delivery and performance by each of Merger Sub of this
Agreement and the consummation of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate
action on the part of Merger Sub. This Agreement has been duly
executed and delivered by Merger Sub and constitutes a valid and
binding agreement of Merger Sub, enforceable against it in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors generally or by general equity
principles.
Section 5.3. Non-Contravention. The execution, delivery and
performance by Merger Sub of this Agreement and the consummation by
Merger Sub of the transactions contemplated by this Agreement do not
and will not contravene or conflict with its certificate of
incorporation or bylaws.
Section 5.4. No Business Activities. Merger Sub has not
conducted any activities other than in connection with the
organization of Merger Sub, the negotiation and execution of this
Agreement and the consummation of the transactions contemplated by
this Agreement. Merger Sub has no subsidiaries.
Section 5.5. Taxes. Merger Sub has not taken or agreed to take,
will not take, and is not aware of any fact or circumstance that would
prevent or impede the Merger from qualifying as 368 Reorganizations.
ARTICLE VI
COVENANTS OF HNWC
HNWC agrees as follows:
Section 6.1. HNWC Interim Operations. Except as set forth in the
HNWC Disclosure Schedule or as otherwise expressly contemplated or
permitted hereby, or as required by any Governmental Entity of
competent jurisdiction, without the prior consent of AMCON (which
consent shall not be unreasonably withheld or delayed), from the date
hereof until the Effective Time, HNWC shall conduct its business in
all material respects in the ordinary course consistent with past
practice and shall use commercially reasonable efforts to (i) preserve
intact its present business organization, (ii) maintain in effect all
material foreign, federal, state and local licenses, approvals and
authorizations, including, without limitation, all material licenses
and permits that are required for HNWC to carry on its business and
(iii) preserve existing relationships with its material customers,
lenders, suppliers and others having material business relationships
with it. Without limiting the generality of the foregoing, except as
otherwise expressly contemplated or permitted by this Agreement, or as
required by a Governmental Entity of competent jurisdiction, from the
date hereof until the Effective Time, without the prior consent of
AMCON (which consent shall not be unreasonably withheld or delayed),
HNWC shall not:
(a) amend its certificate of incorporation or by-laws;
(b) split, combine or reclassify any shares of capital stock of
HNWC or declare, set aside or pay any dividend in respect of its
capital stock or redeem, repurchase or otherwise acquire or offer to
redeem, repurchase, or otherwise acquire any of its securities;
(c) (i) issue, deliver or sell, or authorize the issuance,
delivery or sale of, any shares of its capital stock of any class or
any securities convertible into or exercisable for, or any rights,
warrants or options to acquire, any such capital stock or any such
convertible securities, other than (A) a number of shares of capital
stock equal to that number of shares underlying options forfeited
prior to the Closing by former HNWC employees, pursuant to the HNWC
Employee Plans, (B) HNWC Common Stock upon the exercise of stock
options or warrants in accordance with their present terms or upon
exercise of options issued pursuant to clause (A) of this Section
6.1(c)(i), (C) HNWC Common Stock upon the conversion of the
Convertible Notes, or (D) other existing contractual arrangements, or
(ii) amend in any respect any term of any outstanding security of
HNWC;
(d) other than in connection with transactions not prohibited by
Section 6.1(e), incur any capital expenditures or any obligations or
liabilities in respect thereof, except for those (i) contemplated by
the capital expenditure budgets for HNWC previously made available to
AMCON, or (ii) incurred in the ordinary course of business of HNWC and
consistent with past practice;
(e) acquire (whether pursuant to cash merger, stock or asset
purchase or otherwise) in one transaction or series of related
transactions (i) any assets (including any equity interests) having a
fair market value in excess of $25,000, or (ii) all or substantially
all of the equity interests of any Person or any business or division
of any Person having a fair market value in excess of $25,000, but in
no event shall the expenditures, commitments, obligations or
liabilities made, incurred or assumed, as the case may be, by HNWC
pursuant to Sections 6.1(d) and 6.1(e) exceed $50,000 in the
aggregate;
(f) sell, lease, out-license, encumber or otherwise dispose of
any assets, other than (i) sales of finished goods in the ordinary
course of business consistent with past practice, (ii) equipment and
property no longer used in the operation of HNWC's business and (iii)
assets related to discontinued operations of HNWC;
(g) (i) incur any indebtedness for borrowed money or guarantee any
such indebtedness, (ii) issue or sell any debt securities or warrants
or rights to acquire any debt securities of HNWC, (iii) make any
loans, advances or capital contributions to or investments in, any
other Person, or (iv) guarantee any debt securities or indebtedness of
others in any case in an amount in excess of $100,000, except in the
ordinary course of business consistent with past practice (which
exception shall include, without limitation, borrowings under HNWC's
existing credit agreements and overnight borrowings);
(h) (i) enter into any agreement or arrangement that limits or
otherwise restricts HNWC or any of its Affiliates or any successor
thereto or that would, after the Effective Time, limit or restrict
HNWC or the Surviving Corporation, or any of their respective
Affiliates, from engaging or competing in any line of business or in
any location, or (ii) enter into, amend, modify or terminate any
material contract, agreement or arrangement of HNWC or otherwise
waive, release or assign any material rights, claims or benefits of
HNWC thereunder; provided, however, that this Section 6.1(h) shall not
prevent HNWC from entering into material contracts with customers,
suppliers or distributors, so long as such contracts are entered into
in the ordinary course and consistent with HNWC's prior practice;
(i) (i) except as required by law or a written agreement existing
on or prior to the date hereof, increase the amount of compensation of
any director or executive officer or make any increase in or
commitment to increase any employee benefits, (ii) except as required
by law, a written agreement existing on or prior to the date hereof,
or a HNWC severance policy existing as of the date hereof, grant any
severance or termination pay to any director, officer or employee of
HNWC or, (iii) adopt any additional employee benefit plan or, except
in the ordinary course of business consistent with past practice and
containing only normal and customary terms, make any contribution to
any existing such plan or (iv) except as may be required by law or a
written agreement or employee benefit plan existing on or prior to the
date hereof, or as contemplated by this Agreement, enter into, amend
in any respect, or accelerate the vesting under any HNWC Employee
Plan, employment agreement, option, license agreement or retirement
agreements, or (v) hire any employee with an annual base salary in
excess of $40,000;
(j) change (x) HNWC's methods of accounting in effect at
December 31, 1999 except as required by changes in GAAP, as concurred
with by its independent public accountants, (y) HNWC's fiscal year, or
(z) make any material Tax election, other than in the ordinary course
of business consistent with past practice and containing only normal
and customary terms;
(k) (i) settle, propose to settle or commence, any litigation,
investigation, arbitration, proceeding or other claim that is material
to the business of HNWC, other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with past
practice of liabilities (x) recognized or disclosed in the HNWC
Financial Statements (or the notes thereto) or (y) incurred since the
date of such Financial Statements in the ordinary course of business
consistent with past practice, or (ii) make any tax election or enter
into any settlement or compromise of any tax liability;
(l) enter into any new material line of business;
(m) except to the extent required to comply with its obligations
hereunder or required by law, HNWC shall not amend or propose to so
amend its Certificate of Incorporation, Bylaws or other governing
documents;
(n) use any of the proceeds of the Convertible Notes for any
purposes other than (i) providing working capital and other general
corporate purposes, and (ii) to redeem the HNWC Series A Convertible
Preferred Stock or the Series B Convertible Preferred Stock or both,
in each case, outstanding as of September 29, 2000; or
(o) agree, resolve or commit to do any of the foregoing.
Section 6.2. Acquisition Proposals; Board Recommendation. HNWC
agrees that it shall not, nor shall it authorize or knowingly permit
any officer, director, employee, investment banker, attorney,
accountant, agent or other advisor or representative of HNWC, directly
or indirectly, to (i) solicit, initiate or knowingly facilitate or
encourage the submission of any Acquisition Proposal for HNWC, (ii)
participate in any discussions or negotiations regarding, or furnish
to any Person any information with respect to, or take any other
action knowingly to facilitate any inquiries or the making of any
proposal that constitutes an Acquisition Proposal for HNWC, (iii)
grant any waiver or release under any standstill or similar agreement
with respect to any class of HNWC equity securities or (iv) enter into
any agreement with respect to any Acquisition Proposal for HNWC.
Notwithstanding anything in this Agreement to the contrary, HNWC or
its Board of Directors shall be permitted to (A) to the extent
applicable, comply with Rule 14d-9 and Rule 14e-2 promulgated under
the Exchange Act with regard to an Acquisition Proposal for HNWC.
ARTICLE VII
COVENANTS OF HNWC AND AMCON
The parties hereto agree that:
Section 7.1. Reasonable Best Efforts. Subject to the terms and
conditions hereof, each party will use reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws
and regulations to consummate the transactions contemplated by this
Agreement as promptly as practicable.
Section 7.2. Certain Filings; Cooperation in Receipt of Consents;
Listing. As promptly as reasonably practicable after the date hereof,
HNWC and AMCON shall prepare and AMCON shall file with the SEC the
Registration Statement, in which a Proxy Statement/Prospectus will be
included as AMCON's prospectus. Each of HNWC and AMCON shall use all
reasonable efforts to have the Registration Statement declared
effective under the Securities Act as promptly as reasonably
practicable after such filing and to keep the Registration Statement
effective as long as is necessary to consummate the Merger and the
transactions contemplated thereby. HNWC shall mail the Proxy
Statement/Prospectus to its stockholders as promptly as reasonably
practicable after the Registration Statement is declared effective
under the Securities Act and, if necessary, after the Proxy
Statement/Prospectus shall have been so mailed, promptly circulate
amended, supplemental or supplemented proxy material, and, if required
in connection therewith, resolicit proxies. AMCON and HNWC shall take
any action (other than qualifying to do business in any jurisdiction
in which it is not now so qualified or to file a general consent to
service of process) required to be taken under any applicable state
securities or blue sky laws in connection with the issuance of shares
of Surviving Corporation Common Stock in the Merger.
(a) No amendment or supplement to the Proxy Statement/Prospectus
will be made by HNWC or AMCON without the approval of the other party,
which will not be unreasonably withheld or delayed. Each party will
advise the other party, promptly after it receives notice thereof, of
(i) the time when the Registration Statement has become effective or
any supplement or amendment has been filed, (ii) the issuance of any
stop order, (iii) the suspension of the qualification of the shares of
AMCON Common Stock issuable in connection with the Merger for offering
or sale in any jurisdiction, or (iv) any request by the SEC for
amendment of the Proxy Statement/Prospectus or comments thereon and
responses thereto or requests by the SEC for additional information,
in each case, whether orally or in writing. If at any time prior to
the Effective Time, HNWC or AMCON discovers any information relating
to either party, or any of their respective Affiliates, officers or
directors, that should be set forth in an amendment or supplement to
the Proxy Statement/Prospectus, so that such document would not
include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, the
party that discovers such information shall promptly notify the other
party hereto and an appropriate amendment or supplement describing
such information shall be promptly filed with respect thereto, and
with respect to the Registration Statement, as the case may be, with
the SEC and, to the extent required by law or regulation, disseminated
to the stockholders of HNWC.
(b) HNWC and AMCON shall cooperate with one another in (i)
determining whether any other action by or in respect of, or filing
with, any Governmental Entity is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any
material contracts, in connection with the consummation of the
transactions contemplated hereby, (ii) seeking any such other actions,
consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith and seeking promptly to
obtain any such actions, consents, approvals or waivers, (iii) setting
a mutually acceptable date for the HNWC Special Meeting, and
(iv) taking all lawful action to call, give notice of, convene and
hold a meeting of HNWC stockholders for the purpose of obtaining the
requisite vote to approve and adopt this Agreement, the Merger and the
other matters contemplated by this Agreement. The Board of Directors
of HNWC shall, subject to its fiduciary duties under applicable law,
declare the advisability of and recommend adoption and approval of
this Agreement, the Merger and the other matters contemplated by this
Agreement by the stockholders of HNWC, and shall not, subject to its
fiduciary duties under applicable law, withdraw, modify or materially
qualify in any manner adverse to AMCON to such recommendation or take
any action or make any statement in connection with the HNWC
Stockholders Meeting materially inconsistent with such recommendation
(any such withdrawal, modification, qualification or statement
(whether or not required), an "Adverse Change in the HNWC
Recommendation").
(c) Each party shall permit the other party to review any
communication given by it to, and consult with each other in advance
of any meeting or conference with, any Governmental Entity or, in
connection with any proceeding by a private party, with any other
Person, and to the extent permitted by the applicable Governmental
Entity or other Person, give the other party the opportunity to attend
and participate in such meetings and conferences, in each case in
connection with the transactions contemplated hereby.
(d) AMCON and HNWC agree to use their respective reasonable best
efforts to cause the shares of AMCON Common Stock to be issued upon
conversion of shares of HNWC Common Stock in accordance with this
Agreement, the Articles of Merger and the Certificate of Merger to be
approved for listing upon issuance on the American Stock Exchange.
Section 7.3. Headquarters. The parties intend that, by the end
of one year after the AMCON Effective Time, the Surviving Corporation
shall maintain its principal corporate offices and headquarters in
Omaha, Nebraska.
Section 7.4. Public Announcements. AMCON and HNWC shall use
reasonable best efforts to develop a joint communications plan and
each party shall use reasonable best efforts (i) to ensure that all
press releases and other public statements with respect to the
transactions contemplated hereby shall be consistent with such joint
communications plan, and (ii) unless otherwise required by applicable
law or by obligations pursuant to any rules of the American Stock
Exchange, to consult with each other before issuing any press release
or, to the extent practical, otherwise making any public statement
with respect to this Agreement or the transactions contemplated
hereby.
Section 7.5. Access to Information; Notification of Certain
Matters.
(a) From the date hereof until the Effective Time and subject to
applicable law, HNWC and AMCON shall (i) give to the other party, its
counsel, financial advisors, auditors and other authorized
representatives reasonable access during normal business hours to the
offices, properties, books, records, contracts, commitments, officers
and employees and all other information concerning it and its
business, properties, assets, condition (financial or otherwise) or
prospects of such party, (ii) consistent with its legal obligations,
furnish or make available to the other party, its counsel, financial
advisors, auditors and other authorized representatives such financial
and operating data and other information as such Persons may
reasonably request and (iii) instruct its employees, counsel,
financial advisors, auditors and other authorized representatives to
cooperate with the reasonable requests of the other party in its
investigation. Any investigation pursuant to this Section 6.5 shall
be conducted in such manner as not to interfere unreasonably with the
conduct of the business of the other party. Unless otherwise required
by law, each of AMCON and HNWC will hold, and will cause its
respective officers, employees, counsel, financial advisors, auditors
and other authorized representatives to hold, any nonpublic
information obtained in any such investigation in confidence in
accordance with Section 7.9. No information or knowledge obtained in
any investigation pursuant to this Section 7.5 shall affect or be
deemed to modify any representation or warranty made by any party
hereunder.
(b) Each party hereto shall give prompt notice to each other
party hereto of:
(i) the receipt by such party or any of such party's Subsidiaries
of any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement.
(ii) the receipt by such party or any of such party's Subsidiaries
of any notice or other communication from any Governmental Entity in
connection with any of the transactions contemplated by this
Agreement; and
(iii) such party's obtaining Knowledge of any actions, suits,
claims, investigations or proceedings commenced, threatened against,
relating to or involving or otherwise affecting any of HNWC or AMCON,
as the case may be, or any AMCON Subsidiary which relate to the
consummation of the transactions contemplated by this Agreement; and
(iv) such party's obtaining Knowledge of the occurrence, or
failure to occur, of any event which occurrence or failure to occur
will be likely to cause (A) any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material respect,
or (B) any material failure of any party to comply with or satisfy any
covenant, condition or agreement o be complied with or satisfied by it
under this Agreement; provided, however, that no such notification
shall limit or otherwise affect the representations, warranties,
obligations or remedies of the parties to the conditions to the
obligations of the parties hereunder.
Section 7.6. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of AMCON,
HNWC or Merger Sub, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of AMCON,
HNWC or Merger Sub, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights,
properties or assets of HNWC, AMCON or Merger Sub acquired or to be
acquired by the Surviving Corporation as a result of, or in connection
with the Merger.
Section 7.7. Tax Treatment.
(a) Prior to the Effective Time, each party shall cooperate with
the other party and shall use its reasonable best efforts to cause the
Merger to qualify as a 368 Reorganization, and will not take any
action reasonably likely to cause the Merger not so to qualify. The
Surviving Corporation shall not take any action after the Effective
Time that would cause the Merger not to qualify as a 368
Reorganization.
(b) Each party shall cooperate with the other party and shall use
its reasonable best efforts to obtain the opinion referred to in
Section 8.3(b) and in connection therewith, HNWC shall deliver to such
counsel a customary representation letter substantially in the forms
attached hereto as Exhibit H (the "HNWC Representation Letter") or
otherwise in form and substance reasonably satisfactory to such
counsel.
Section 7.8. Affiliates. Not less than 45 days prior to the
Effective Time, HNWC shall deliver to AMCON a letter identifying all
persons who, in the reasonable judgment of HNWC, may be deemed at the
time this Agreement is submitted for adoption by the stockholders of
HNWC, "affiliates" of HNWC for purposes of Rule 145 under the
Securities Act, and such list shall be updated as necessary to reflect
changes from the date hereof. HNWC shall use reasonable best efforts
to cause each Person identified on such list to deliver to AMCON not
less than 30 days prior to the Effective Time, a written agreement
substantially in the form attached as Exhibit I hereto (a "HNWC
Affiliate Agreement").
Section 7.9. Confidentiality.
(a) Prior to the Effective Time and after any termination of this
Agreement each party hereto will hold, and will use its reasonable
best efforts to cause its officers, directors, employees, accountants,
counsel, consultants, advisors, affiliates (as such term is used in
Rule 12b-2 under the Exchange Act) and representatives (collectively,
the "Representatives"), to hold, in confidence all confidential
documents and information concerning the other parties hereto and its
Subsidiaries furnished to such party in connection with the
transactions contemplated by this Agreement, including, without
limitation, all analyses, compilations, studies or records prepared by
the party receiving the information or by such party's
Representatives, that contain or otherwise reflect or are generated
from such information (collectively, the "Confidential Material").
The party furnishing any Confidential Material is herein referred to
as the "Delivering Company" and the party receiving any Confidential
Material is herein referred to as the "Receiving Company."
(b) The Receiving Company agrees that the Confidential Material
will not be used other than for the purpose of the transactions
contemplated by this Agreement, and that such information will be kept
confidential by the Receiving Company and its Representatives;
provided, however, that (i) any of such information may be disclosed
to the Representatives who need to know such information for the
purpose described above (it being understood that (a) each such
Representative shall be informed by the Receiving Company of the
confidential nature of such information, shall be directed by the
Receiving Company to treat such information confidentially and not to
use it other than for the purpose described above and shall agree to
be bound by the terms of this Section 7.9, and (b) in any event, the
Receiving Company shall be responsible for any breach of this
Agreement by any of its Representatives), and (ii) any other
disclosure of such information may be made if the Delivering Company
has, in advance, consented to such disclosure in writing. The
Receiving Company will make all reasonable, necessary and appropriate
efforts to safeguard the Confidential Material from disclosure to
anyone other than as permitted hereby.
(c) Notwithstanding the foregoing, if the Receiving Company or
any of its Representatives is requested or required (by oral question
or request for information or documents in legal proceedings,
interrogatories, subpoena, civil investigative demand or similar
process) to disclose any Confidential Material, the Receiving Company
will promptly notify the Delivering Company of such request or
requirement so that the Delivering Company may seek an appropriate
protective order and/or waive the Receiving Company's compliance with
the provisions of this Agreement. If, in the absence of a protective
order or the receipt of a waiver hereunder, the Receiving Company or
any of its Representatives is nonetheless, in the reasonable written
opinion of the Receiving Company's counsel, compelled to disclose
Confidential Material to any tribunal, the Receiving Company or such
Representative, after notice to the Delivering Company, may disclose
such information to such tribunal. The Receiving Party shall exercise
reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Confidential Material so disclosed.
The Receiving Company or such Representative shall not be liable for
the disclosure of Confidential Material hereunder to a tribunal
compelling such disclosure unless such disclosure to such tribunal was
caused by or resulted from a previous disclosure by the Receiving
Company or any of its Representatives not permitted by this Agreement.
(d) This Section 7.9 shall be inoperative as to particular
portions of the Confidential Material if such information (i) is or
becomes generally available to the public other than as a result of a
disclosure by the Receiving Company or its Representatives, (ii) was
available to the Receiving Company on a non-confidential basis prior
to its disclosure to the Receiving Company by the Delivering Company
or the Delivering Company's Representatives, or (iii) becomes
available to the Receiving Company on a non-confidential basis from a
source other than the Delivering Company or the Delivering Company's
Representatives, provided that such source is not known by the
Receiving Company, after reasonable inquiry, to be bound by a
confidentiality agreement with the Delivering Company or the
Delivering Company's Representatives and is not otherwise prohibited
from transmitting the information to the Receiving Company by a
contractual, legal or fiduciary obligation. The fact that information
included in the Confidential Material is or becomes otherwise
available to the Receiving Company or its Representatives under
clauses (i) through (iii) above shall not relieve the Receiving
Company or its Representatives of the prohibitions of the
confidentiality provisions of this Section 7.9 with respect to the
balance of the Confidential Material.
(e) If this Agreement is terminated, each party hereto will, and
will use its reasonable best efforts to cause its officers, directors,
employees, accountants, counsel, consultants, advisors and agents to,
destroy or deliver to the party from whom such Confidential Material
was obtained, upon request, all documents and other materials, and all
copies thereof, obtained by such party or on its behalf from any such
other parties in connection with this Agreement that are subject to
such confidence.
Section 7.10. Benefit Matters. AMCON and HNWC will work together
to design benefit plans to be adopted by the Surviving Corporation for
the benefit of its employees as soon as practicable following the
Merger. Until such adoption, the Surviving Corporation shall cause
all AMCON Employee Plans and all HNWC Employee Plans to be maintained
in full force and effect.
Section 7.11. Exemption From Liability Under Section 16(b).
(a) Provided that HNWC delivers to AMCON the Section 16
Information with respect to HNWC prior to the Effective Time, the
Board of Directors of AMCON, or a committee of Non-Employee Directors
thereof (as such term is defined for purposes of Rule 16b-3(d) under
the Exchange Act), shall adopt a resolution in advance of the
Effective Time providing that the receipt by the HNWC Insiders of
AMCON Common Stock in exchange for shares of HNWC Common Stock, and of
options to purchase AMCON Common Stock upon assumption and conversion
by the Surviving Corporation of options to purchase HNWC Common Stock,
in each case pursuant to the transactions contemplated hereby and to
the extent such securities are listed in the Section 16 Information,
are intended to be exempt from liability pursuant to Rule 16b-3 under
the Exchange Act.
(b) "Section 16 Information" shall mean information accurate in
all respects regarding the HNWC Insiders, the number of shares of HNWC
Common Stock, or other HNWC equity securities, deemed to be
beneficially owned by each such HNWC Insider and expected to be
exchanged for Surviving Corporation Common Stock in connection with
the Merger.
(c) "HNWC Insiders" shall mean those officers and directors of
HNWC who are subject to the reporting requirements of Section 16(a) of
the Exchange Act who are listed in the Section 16 Information.
ARTICLE VIII
CONDITIONS TO THE MERGER
Section 8.1. Conditions to the Obligations of Each Party. The
respective obligations of HNWC, AMCON and Merger Sub to consummate the
Merger are subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(a) STOCKHOLDER APPROVAL. The HNWC Stockholder Approval shall
have been obtained;
(b) SECURITIES LAWS. (i) The Registration Statement shall have
become effective in accordance with the provisions of the Securities
Act, no stop order suspending the effectiveness of the Registration
Statement shall have been issued by the SEC and no proceedings for
that purpose shall have been initiated or threatened by the SEC and
not concluded or withdrawn and (ii) all state securities or blue sky
authorizations necessary to carry out the transactions contemplated
hereby shall have been obtained and be in effect;
(c) AMEX LISTING. The shares of AMCON Common Stock to be issued
in the Merger shall have been approved for listing upon issuance on
the AMEX, subject to official notice of issuance;
(d) REGULATORY APPROVALS. Other than the filings provided for by
Article II, all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods
imposed by, any Governmental Entity the failure of which to obtain
would have a HNWC Material Adverse Effect, an AMCON Material Adverse
Effect or a Surviving Corporation Material Adverse Effect, shall have
been filed, occurred or been obtained; and
(e) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No Laws shall have
been adopted or promulgated, and no temporary restraining order,
preliminary or permanent injunction or other order issued by a court
or other Governmental Entity of competent jurisdiction shall be in
effect, (i) having the effect of making the Merger illegal or
otherwise prohibiting, enjoining or restraining consummation of the
Merger or (ii) which otherwise would reasonably be expected to have a
Surviving Corporation Material Adverse Effect after giving effect to
the Merger; provided, however, that the provisions of this
Section 8.1(e) shall not be available to any party whose failure to
fulfill its obligations pursuant to Sections 7.1 and 7.2 shall have
been the cause of, or shall have resulted in, such order or
injunction.
Section 8.2. Conditions to the Obligations of AMCON and Merger
Sub. The obligations of AMCON and Merger Sub to consummate the Merger
are subject to the satisfaction, or waiver by AMCON and Merger Sub, on
or prior to the Closing Date, of the following further conditions:
(a) REPRESENTATIONS AND COVENANTS. (i) HNWC shall have performed
in all material respects all of its obligations hereunder required to
be performed by it at or prior to the time of the filing of the
Articles of Merger and the Certificates of Merger; (ii) the
representations and warranties of HNWC in this Agreement that are
qualified as to materiality, HNWC Material Adverse Effect or Surviving
Corporation Material Adverse Effect shall be accurate, and any such
representations and warranties that are not so qualified shall be
accurate, in all material respects, as of the date of this Agreement
and as of the Effective Time (except for representations and
warranties that address matters only as of a specific date, in which
case such representations and warranties qualified as to materiality,
HNWC Material Adverse Effect or Surviving Corporation Material Adverse
Effect shall be true and correct, and those not so qualified shall be
true and correct in all material respects, on and as of such earlier
date); and (iii) AMCON shall have received a certificate signed by the
Chief Executive Officer or Chief Financial Officer of HNWC to the
foregoing effect;
(b) AFFILIATE AGREEMENTS. AMCON shall have received from each
Person named in the letter referred to in Section 7.8 an executed copy
of a HNWC Affiliate Agreement substantially in the form of Exhibit I
to this Agreement;
(c) EMPLOYMENT AGREEMENTS. The Chief Executive Officer of HNWC
shall have executed and delivered to the Surviving Corporation an
employment agreement in the form attached hereto as Exhibit J;
(d) NO MATERIAL ADVERSE CHANGE. There shall have been no
material adverse change in the financial condition, results of
operations or cash flows or assets, liabilities, business or prospects
of HNWC from September 29, 2000 through the Closing Date, except as
disclosed in (i) the HNWC Disclosure Schedule dated ____________,
2001, or (ii) HNWC SEC Documents filed prior to the date hereof;
(e) DISSENTERS. The aggregate number of Dissenters' Shares shall
not exceed 5.0% of the total number of shares of HNWC Common Stock
outstanding and entitled to vote;
(f) REDEMPTION OR REPURCHASE OF SERIES A PREFERRED STOCK. All of
the outstanding shares of Series A Convertible Preferred Stock and
Series B Convertible Preferred Stock of HNWC shall have been redeemed
or repurchased for an amount not in excess of the stated value thereof
plus accumulated dividends thereon (the "Preferred Stock Repurchase
Condition");
(g) CONSENTS. Consents shall have been obtained from all parties
to HNWC Material Contracts (as defined in Section 4.25) that are
needed because of the Merger or the transactions contemplated hereby
in order to permit the Surviving Corporation to enjoy all rights and
benefits thereunder (the "Material Consent Condition"); and
Section 8.3. Conditions to the Obligations of HNWC. The
obligations of HNWC to consummate the Merger are subject to the
satisfaction, or waiver by HNWC, on or prior to the Closing Date, of
the following further conditions:
(a) REPRESENTATIONS AND COVENANTS. (i) AMCON shall have
performed in all material respects all of its obligations hereunder
required to be performed by it at or prior to the time of the filing
of the Articles of Merger and the Certificates of Merger; (ii) the
representations and warranties of AMCON and Merger Sub in this
Agreement that are qualified as to materiality, AMCON Material Adverse
Effect or Surviving Corporation Material Adverse Effect shall be
accurate, and any such representations and warranties that are not so
qualified shall be accurate, in all material respects, as of the date
of this Agreement and as of the Effective Time (except for
representations and warranties which address matters only as of a
specific date, in which case such representations and warranties
qualified as to materiality, AMCON Material Adverse Effect or
Surviving Corporation Material Adverse Effect shall be true and
correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date); and (iii) HNWC
shall have received a certificate signed by the Chief Executive
Officer or Chief Financial Officer of AMCON and Merger Sub to the
foregoing effect;
(b) TAX OPINION. HNWC shall have received an opinion of Squire,
Xxxxxxx & Xxxxxxx L.L.P. in form and substance reasonably satisfactory
to HNWC, on the basis of certain facts, representations and
assumptions set forth in such opinion, dated as of the date of the
filing of the Articles of Merger and the Certificates of Merger, to
the effect that the Merger will qualify for federal income tax
purposes as a 368 Reorganization and that each of AMCON and HNWC will
be a party to the reorganizations within the meaning of Section 368(b)
of the Code. In rendering such opinion, such counsel shall be
entitled to rely upon representations of officers of AMCON and HNWC;
(c) EMPLOYMENT AGREEMENTS. The Chief Executive Officer of HNWC
shall have executed and delivered to the Surviving Corporation an
employment agreement in the form attached hereto as Exhibit J; and
(d) NO MATERIAL ADVERSE CHANGE. There shall have been no
material adverse change in the financial condition, results of
operations or cash flows or assets, liabilities, business or prospects
of AMCON from September 30, 2000 through the Closing Date, except as
disclosed in (i) the AMCON Disclosure Schedule dated __________ __,
2001, or (ii) AMCON SEC Documents filed prior to the date hereof.
ARTICLE IX
TERMINATION
Section 9.1. Termination. This Agreement may be terminated at
any time prior to the Effective Time by written notice by the
terminating party to the other party (except if such termination is
pursuant to Section 9.1(a)), notwithstanding approval thereof by the
stockholders of HNWC:
(a) by mutual written agreement of AMCON and HNWC;
(b) by either HNWC or AMCON, if
(i) the Merger shall not have been consummated by May 31, 2001
(the "Expiration Date"); provided, however, that the right to
terminate this Agreement under this Section 9.1(b)(i) shall not be
available to any party whose breach of any provision of this Agreement
has resulted in the failure of the Merger to occur on or before the
Expiration Date; or
(ii) there shall be any Law that makes consummation of the Merger
illegal or otherwise prohibited or any judgment, injunction, order or
decree of any Governmental Entity having competent jurisdiction
enjoining AMCON, HNWC or the Merger Sub from consummating the Merger
is entered and such judgment, injunction, judgment or order shall have
become final and nonappealable and, prior to such termination, the
parties shall have used reasonable best efforts to resist, resolve or
lift, as applicable, such law, regulation, judgment, injunction, order
or decree.
(c) by AMCON, (i) if there shall have occurred a willful and
material breach of Section 6.2 by HNWC or any of its officers,
directors, employees, advisors or agents; (ii) if a breach of any
representation, warranty, covenant or agreement on the part of HNWC
set forth in this Agreement shall have occurred that would cause the
condition set forth in Section 8.2(a) not to be satisfied, and such
condition shall be incapable of being satisfied by the Expiration
Date; (iii) HNWC shall have failed to include in the Proxy
Statement/Prospectus the recommendation of the Board of Directors of
HNWC in favor of the adoption and approval of this Agreement and the
approval of the Merger; (v) the Board of Directors of HNWC shall have
approved, endorsed or recommended any Acquisition Proposal; (vi) a
tender or exchange offer relating to securities of HNWC shall have
been commenced and HNWC shall not have sent to its security holders,
within ten business days after the commencement of such tender or
exchange offer, a statement disclosing that HNWC recommends rejection
of such tender or exchange offer; or (vii) HNWC or HNWC's Board of
Directors or any committee thereof shall have resolved to do or permit
any of the foregoing;
(d) by HNWC, if a breach of any representation, warranty,
covenant or agreement on the part of AMCON set forth in this Agreement
shall have occurred that would cause the condition set forth in
Section 8.3(a) not to be satisfied, and such condition is incapable of
being satisfied by the Expiration Date; or
(e) automatically if the transactions contemplated herein are
enjoined by a court of competent jurisdiction for a period extending
beyond 90 days; or
(f) by AMCON if the Preferred Stock Repurchase Condition or the
Material Consent Condition is not satisfied by January 31, 2001.
Section 9.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 9.1, this Agreement shall forthwith
become void and there shall be no liability or obligation on the part
of AMCON or HNWC or their respective officers or directors (i) except
with respect to the provisions of Sections 7.9, 9.2, 10.1, 10.4, 10.5,
10.10 and 10.11 of this Agreement which provisions shall remain in
full force and effect and survive any termination of this Agreement,
and (ii) except that, notwithstanding anything to the contrary
contained in this Agreement, neither AMCON nor HNWC shall be relieved
or released from any liabilities or damages arising out of its willful
material breach of this Agreement.
Section 9.3. Fees and Expenses. All fees and expenses incurred
in connection herewith and the transactions contemplated hereby shall
be paid by the party incurring such expenses, whether or not the
Merger is consummated. As used in this Agreement, "Expenses" includes
all out-of-pocket expenses (including, without limitation, all fees
and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party
or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement
and the transactions contemplated hereby, including the preparation,
printing, filing and mailing of the Proxy Statement/Prospectus and the
solicitation of stockholder approvals and all other matters related to
the transactions contemplated hereby.
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on
the date of delivery if delivered personally, or by telecopy or
telefacsimile, upon confirmation of receipt, in each case, if on a
Business Day, and otherwise on the next Business Day, (b) on the first
service, or (c) on the fifth Business Day following the date of
mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered
as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
if to the Surviving Corporation, to the address set forth below for
AMCON and HNWC, including copies;
if to AMCON, to:
Xxxxxxx X. Xxxxxx
Chairman of the Board
AMCON Distributing Company
X.X. Xxx 0000
Xxx Xxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxx
Xxxxxxx, Mag & Fizzell, P.C.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
if to HNWC to:
Xxxxxx Xxxxxx
President
Hawaiian Natural Water Company, Inc.
00-000 Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxx
Xxxxxxx, Xxxxxxx & Xxxxxxx L.L.P.
000 X. Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Section 10.2. Survival of Representations, Warranties and
Covenants After the Effective Time. The representations, warranties,
covenants and other agreements contained herein and in any
certificate or other instrument delivered pursuant hereto, including
any rights arising out of any breach of such representations,
warranties, covenants and other agreements, shall not survive the
Effective Time.
Section 10.3. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by AMCON and
HNWC or in the case of a waiver, by the party against whom the waiver
is to be effective; provided that after the HNWC Stockholder Approval,
no such amendment or waiver shall, without the further approval of
such stockholders, be made that would require such approval under any
applicable law, rule or regulation.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by
law.
Section 10.4. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of
the parties hereto, in whole or in part (whether by operation of law
or otherwise), without the prior written consent of the other party,
and any attempt to make any such assignment without such consent shall
be null and void. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
Section 10.5. Governing Law. This Agreement shall be construed
in accordance with and governed by the internal laws of the State of
Delaware without regard to any principles of Hawaii conflicts or
choice of law.
Section 10.6. Counterparts; Effectiveness. This Agreement may be
executed in one or more counterparts, all of which shall be considered
one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to
the other party (including by facsimile transmission), it being
understood that both parties need not sign the same counterpart. This
Agreement shall become effective when each party hereto shall have
received counterparts hereof signed by all of the other parties
hereto.
Section 10.7. No Third Party Beneficiaries. This Agreement shall
be binding upon and inure solely to the benefit of each party hereto,
and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
Section 10.8. Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be
to a Section of or Exhibit or Schedule to this Agreement unless
otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. Whenever the
words "include," "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without limitation."
Section 10.9. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms.
It is accordingly agreed that the parties shall be entitled to
specific performance of the terms hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
Section 10.10. Entire Agreement. This Agreement (together with
the exhibits and schedules hereto) constitutes the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter
hereof.
Section 10.11. Severability. If any term, provision, covenant or
restriction set forth in this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set
forth in this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is
not deemed by a party (acting reasonably and in good faith) to be
materially adverse to that party. Upon such a determination, the
parties shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in
order that the transactions contemplated hereby may be consummated as
originally contemplated to the fullest extent possible.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day
and year first above written.
AMCON DISTRIBUTING COMPANY
By: Xxxxxxx X. Xxxxxx
-------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board
HAWAIIAN NATURAL WATER COMPANY, INC.
By: Xxxxxx Xxxxxx
-------------------
Name: Xxxxxx Xxxxxx
Title: President
AMCON MERGER SUB, INC.
By: Xxxxxxx X. Xxxxxx
------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board
APPENDIX I
DEFINITIONS
"Acquisition Proposal for HNWC" means any offer or proposal for a
merger, consolidation, share exchange, business combination,
reorganization, recapitalization, issuance of securities, liquidation,
dissolution, tender offer or exchange offer or other similar
transaction or series of transactions involving, or any purchase of
10% or more of the assets, or directly or indirectly acquires
beneficial ownership of securities representing, or exchangeable for
or convertible into, more than 10% of the outstanding securities of
any class of voting securities of HNWC or in which HNWC issues
securities representing 10% of the outstanding securities of any class
of voting securities of HNWC, other than the transactions contemplated
by this Agreement.
"Action" means any action, suit, proceeding or investigation by or
before any Governmental Entity or arbitrator.
"Affiliate" means, with respect to any Person, any other Person,
directly or indirectly, controlling, controlled by, or under common
control with, such Person. For purposes of this definition, the term
"control" (including the correlative terms "controlling", "controlled
by" and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities, or partnership or other ownership interests, by
contract, or otherwise.
"AMCON Disclosure Schedule" means the schedule delivered to HNWC by
AMCON pursuant to Article I hereof containing exceptions to the
representations and warranties of AMCON set forth in such Article III.
"AMCON SEC Documents" means (i) AMCON's annual report on Form 10-K for
its fiscal year ended September 30, 2000 (the "AMCON 10-K"), and (ii)
all other reports, filings, registration statements and other
documents filed by it with the SEC since September 30, 2000.
"Articles of Merger" means the Articles of Merger of HNWC with and
into Merger Sub, in substantially the form attached hereto as
Exhibit B.
"Average AMCON Stock Price" means the average of the closing sales
price per share of AMCON Common Stock as reported by AMEX on each of
the 20 consecutive trading days immediately preceding the third
trading day prior to the Determination Date.
"Business Day" means any day other than a Saturday, Sunday or one on
which banks are authorized by law to close in the City of New York.
"Certificate of Merger" means the Certificate of Merger of HNWC with
and into Merger Sub, in substantially the form attached hereto as
Exhibit C.
"Closing" means the closing of the Merger contemplated in this
Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Determination Date" means the date on which the last of the following
occurs: (i) the effective date (including the expiration of any
applicable waiting period by law) of the last required consent or
order of any Governmental Entity having authority over and approving
or exempting the Merger, and (ii) the date on which the stockholders
of HNWC have approved the Merger.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Exchange Agent" means the agent to be agreed upon by AMCON and HNWC
and engaged by the Surviving Corporation to effect the exchange of the
Certificates pursuant to Section 2.9 of this Agreement.
"Governmental Entity" means any federal, state or local governmental
authority, any transgovernmental authority or any court, tribunal,
administrative or regulatory agency or commission or other
governmental authority or agency, domestic or foreign.
"HNWC Common Stock" means the common stock of HNWC, no par value per
share.
"HNWC Disclosure Schedule" means the schedule delivered to AMCON by
HNWC pursuant to Article IV hereof containing exceptions to the
representations and warranties of HNWC set forth in such Article V.
"HNWC SEC Documents" means (i) HNWC annual report on Form 10-KSB for
its fiscal year ended December 31, 1999 (the "HNWC 10-KSB"), (ii) HNWC
quarterly report on Form 10-QSB (the "HNWC 10-QSB") for its fiscal
quarter ended September 30, 2000, (iii) HNWC proxy or information
statements relating to meetings of, or actions taken without a meeting
by, HNWC stockholders held since December 31, 1999, and (iv) all other
reports, filings, registration statements and other documents filed by
it with the SEC since December 31, 1999.
"HNWC Series A Convertible Preferred Stock" means the 1,250 shares of
Series A Convertible Preferred Stock of HNWC, par value $1.00 per
share, authorized by unanimous written consent of the HNWC board of
directors dated March 1, 1999.
"HNWC Series B Convertible Preferred Stock" means the 250 shares of
Series B Convertible Preferred Stock of HWNC, par value $1.00 per
share, authorized by unanimous consent of the HNWC board of directors
dated March 3, 2000.
"HNWC Series C Convertible Preferred Stock" means the 750,000 shares
of Series C Convertible Preferred Stock of HWNC, par value of $1.00
per share, authorized by unanimous consent of the HWNC board of
directors dated as of October __, 2000.
"Knowledge" means, with respect to the matter in question, if any of
(i) in the case of AMCON or Merger Sub, Xxxxxxx Xxxxxx, Chairman of
the Board, Xxxxxxxx Xxxxx, President, and Xxxx Xxxxx, Chief Financial
Officer, and (ii) in the case of HNWC, [insert names and titles of
relevant officers] officers of AMCON or HNWC, as the case may be, has
actual knowledge of such matter.
"Law" means any federal, state, local, municipal, foreign,
international, multinational, or other judicial or administrative
order, judgment, decree, constitution, statute, rule, regulation,
treaty, ordinance or principle of common law.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of
such asset.
"Material Adverse Effect" means a material adverse effect on the
financial condition, business, results of operations or prospects of a
Person and its Subsidiaries, taken as a whole, but shall exclude any
material adverse effect arising out of any change or development
relating to (i) U.S. or global economic or industry conditions, (ii)
changes in U.S. or global financial markets or conditions, and/or
(iii) any generally applicable change in Law or GAAP or interpretation
of any thereof. "AMCON Material Adverse Effect" means a Material
Adverse Effect in respect of AMCON, "HNWC Material Adverse Effect"
means a Material Adverse Effect in respect of HNWC and "Surviving
Corporation Material Adverse Effect" means a Material Adverse Effect
in respect of the Surviving Corporation.
"Merger" has the meaning specified in the Recitals to this Agreement.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including any Governmental Entity.
"Proxy Statement/Prospectus" means the proxy statement of HNWC and the
prospectus of AMCON included in the Registration Statement of AMCON
relating to the HNWC Special Meeting, together with any amendments or
supplements thereto.
"Registration Statement" means the Registration Statement on Form S-4
registering under the Securities Act the AMCON Common Stock issuable
in connection with the Merger.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or
other Persons performing similar functions are directly or indirectly
owned by such Person. "AMCON Subsidiary" means a Subsidiary of AMCON.
"Surviving Corporation Common Stock" means the common stock of Merger
Sub.
"Tax" or "Taxes" means any federal, state, county, local or foreign
taxes, charges, levies, imposts, duties, other assessments or similar
charges of any kind whatsoever, including any interest, penalties and
addition imposed thereon or with respect thereto.
In addition to the definitions set forth above, each of the following
terms is defined in the Section set forth opposite such term:
TERMS Section
368 Reorganization Recitals
Adverse Change in the HNWC Recommendation 7.2(b)
AMCON Preamble
AMCON Employee Plans 3.13(a)
AMCON Intellectual Property 3.16(b)
AMCON Preferred Stock 3.5
AMCON Representation Letter 8.7(b)
AMCON Returns 3.12(a)
AMCON Securities 4.5(b)
AMCON Stock Options 3.5(a)
AMCON Warrants 3.5(a)
Certificates 2.9
Confidential Material 7.9(a)
Confidentiality Agreement 5.2(a)
Delaware Law 3.1(a)
Delivering Company 8.9(a)
Effective Time 2.1(b)
Environmental Laws 3.17(b)
ERISA 3.13(a)
ERISA Affiliate 3.13(a)
Expenses 10.3
Expiration Date 10.1(b)(i)
Hawaii Law 2.1(a)
HNWC Preamble
HNWC Affiliate Agreement 7.8
HNWC Employee Plans 4.13(a)
HNWC Financial Statements 4.8(a)
HNWC Insider 8.11(c)
HNWC Intellectual Property 4.16(b)
HNWC Representation Letter 7.7(b)
HNWC Returns 4.12(a)
HNWC Securities 4.5(b)
HNWC Stock Options 4.5(a)
HNWC Stockholder Approval 4.19(a)
HNWC Stockholders Meeting 4.19(b)
HNWC Warrants 4.5(a)
Merger Recitals
Merger Consideration 2.2(a)
Multiemployer Plan 3.13(b)
Receiving Company 7.9(a)
Representatives 7.9(a)
Retirement Plan 3.13(b)
Section 16 Information 7.11(b)
Stockholder Agreements Recitals
Surviving Corporation 2.1(a)
APPENDICES
Appendix I - Definitions
EXHIBITS
Exhibit A - Stockholders' Agreement
Exhibit B - Articles of Merger
Exhibit C - Certificate of Merger
Exhibit D - Certificate of Incorporation of Merger Sub
Exhibit E - Bylaws of Merger Sub
Exhibit F - List of Surviving Corporations' Directors
Exhibit G - Principal Officers of Surviving Corporation
Exhibit H - HNWC Representation Letter
Exhibit I - Form of HNWC Affiliate Agreement
Exhibit J - Form of Employment Agreement
