AGREEMENT AND PLAN OF MERGER by and among RIVULET MEDIA, INC., a Delaware corporation, MAUGHAN MUSIC, INC., a Delaware corporation, and MAUGHAN MUSIC GROUP LLC, an Arizona limited liability company Dated as of May 28, 2020
EXHIBIT
2.1
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AGREEMENT AND PLAN OF MERGER
by and
among
a
Delaware corporation,
▇▇▇▇▇▇▇ MUSIC, INC.,
a
Delaware corporation,
and
▇▇▇▇▇▇▇ MUSIC GROUP LLC,
an
Arizona limited liability company
Dated
as of May 28, 2020
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TABLE OF CONTENTS
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER
(“Agreement”) is made and
entered into as of May 28, 2020, by and among: RIVULET MEDIA, INC., a Delaware
corporation (“Parent”); ▇▇▇▇▇▇▇ MUSIC, INC., a Delaware
corporation and a wholly owned subsidiary of Parent
(“Merger
Sub”); and ▇▇▇▇▇▇▇
MUSIC GROUP LLC, an Arizona limited liability company (the
“Company”). Certain
capitalized terms used in this Agreement are defined in
Section
8.16.
RECITALS
A. Parent, Merger Sub,
and the Company intend to effect a merger of the Company with and
into Merger Sub (the “Merger”) in accordance
with this Agreement and the Delaware General Corporation Law
(“DGCL”) and the Arizona
Revised Statutes (“ARS”). Upon consummation
of the Merger, the Company will cease to exist and Merger Sub will
continue as a wholly owned subsidiary of Parent.
B. It is intended that
the Merger qualify as a tax free reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the “Code”).
C. The respective
boards of directors or members of Parent, Merger Sub and the
Company have approved this Agreement and approved the
Merger.
AGREEMENT
The
parties to this Agreement, intending to be legally bound, agree as
follows:
ARTICLE 1
1.1 MERGER OF MERGER SUB INTO THE
COMPANY. Upon the terms
and subject to the conditions set forth in this Agreement, at the
Effective Time, Merger Sub shall be merged with and into the
Company and the separate existence of the Company shall cease.
Following the Effective Time, Merger Sub shall continue as the
surviving corporation of the Merger (the “Surviving
Corporation”).
1.2 EFFECT OF THE
MERGER. The Merger shall
have the effects set forth in this Agreement and in the applicable
provisions of the DGCL.
1.3 CLOSING; EFFECTIVE
TIME. The closing of
the transactions contemplated by this Agreement (the
“Closing”) shall take
place at the offices of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A., ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. local time on
a date to be designated by Parent (the “Closing Date”), which
shall be no later than the fifth Business Day after the
satisfaction or waiver of the last to be satisfied or waived of the
conditions set forth in Article 5 and Article 6 (other than those
conditions that by their nature cannot be satisfied prior to the
Closing, but subject to the satisfaction or waiver of those
conditions at the Closing) or at such other time and date as may be
mutually agreed by Parent and the Company. Subject to the
provisions of this Agreement, a certificate of merger or articles
of merger, as applicable, satisfying the applicable requirements of
the DGCL and the ARS (the “Certificate of Merger”)
shall be duly executed by Merger Sub and the Company and, as soon
as practicable following the Closing, filed with the Secretary of
State of the State of Delaware (the “Secretary of State”) and
the Arizona Corporation Commission (the “ACC”). The Merger shall
become effective upon the later of: (a) the date and time of the
filing of the Certificate of Merger with the Secretary of State and
the ACC, or (b) such later date and time as may be specified in the
Certificate of Merger as agreed to by the Parties. The date and
time the Merger becomes effective is referred to in this Agreement
as the “Effective
Time.”
1.4 CERTIFICATE OF INCORPORATION AND
BYLAWS; DIRECTORS AND OFFICERS. At the Effective
Time:
(a) the certificate of
incorporation of the Merger Sub as in effect immediately prior to
the Effective Time shall remain the certificate of incorporation of
the Surviving Corporation;
(b) the bylaws of
Merger Sub as in effect immediately prior to the Effective Time
shall remain the bylaws of the Surviving Corporation, until
thereafter amended in accordance with the terms thereof, the
certificate of incorporation of the Surviving Corporation, or as
provided by law; and
(c) the directors and
officers of the Surviving Corporation immediately after the
Effective Time shall be the respective individuals who were
directors and officers of Merger Sub immediately prior to the
Effective Time.
(a) At the Effective
Time, by virtue of the Merger and without any further action on the
part of Parent, Merger Sub, the Company, or any equityholder of the
Company:
(i) any equitable
interests of Company (“Company Equity”) then
owned by the Company or any wholly owned Subsidiary of the Company
(or held in the Company’s treasury) shall be canceled and
retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor;
(ii) any
shares of Company Equity then owned by Parent, Merger Sub, or any
other wholly owned Subsidiary of Parent shall be canceled and
retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor;
(iii) except as provided in clauses
(i) and (ii) of this Section 1.5(a) and subject to
Sections
1.5(b) and
1.5(c), all Company
Equity then outstanding shall be converted into the right to
receive the 925,000 shares of Parent Common Stock as set forth on
Schedule
1.5(a)(iii) hereto; and
(iv) each
share of the common stock, $0.0001 par value per share, of Merger
Sub then outstanding shall be converted into one share of common
stock of the Surviving Corporation.
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The
fraction of a share of Parent Common Stock specified in
Section
1.5(a)(iii) (as
such fraction may be adjusted in accordance with Section 1.5(b)) is referred to as the
“Exchange
Ratio.”
(b) If, between the
date of this Agreement and the Effective Time, the outstanding
Company Equity or shares of Parent Common Stock are changed into a
different number or class of shares by reason of any stock split,
stock dividend, reverse stock split, reclassification,
recapitalization, or other similar transaction or event, or there
occurs a record date with respect to any of the foregoing, then the
Exchange Ratio shall be appropriately adjusted.
(c) No fractional
shares of Parent Common Stock shall be issued in connection with
the Merger, and no certificates or scrip for any such fractional
shares shall be issued. Any holder of Company Equity who would
otherwise be entitled to receive a fraction of a share of Parent
Common Stock (after aggregating all fractional shares of Parent
Common Stock issuable to such holder), in lieu of such fraction of
a share and, upon surrender of such holder’s Company Equity
Certificate or Book Entry Equity, shall be paid in cash the dollar
amount (rounded to the nearest whole cent), without interest,
determined by multiplying such fraction by the closing price of a
share of Parent Common Stock on the OTC Pink Market (the
“OTC”)
on the day that includes the Effective Time (or if such day is not
a day on which the OTC is open, the immediately preceding day on
which the OTC is open).
1.6 CLOSING OF THE COMPANY’S
TRANSFER BOOKS. At the Effective
Time: (a) all holders of shares of Company Equity that were
outstanding immediately prior to the Effective Time shall cease to
have any rights as equityholders of the Company other than the
right to receive shares of Parent Common Stock (and cash in lieu of
any fractional share of Parent Common Stock) as contemplated by
Section
1.5 and any
dividends or other distributions payable pursuant to Section 1.7(c); and 1.7(b) the transfer books of
the Company shall be closed with respect to all shares of Company
Equity outstanding immediately prior to the Effective Time. No
further transfer of any Company Equity shall be made on such
transfer books after the Effective Time. If, after the Effective
Time, any Company Equity is presented to the Exchange Agent or to
the Surviving Corporation or Parent, such Company Equity shall be
cancelled and shall be exchanged as provided in Section 1.7.
(a) On or prior to
the Closing Date, Parent shall select an exchange agent in the
Merger (the “Exchange Agent”). Parent
shall make available to the Exchange Agent (by instruction to
Parent’s transfer agent) (i) promptly after the Effective
Time, certificates representing the shares of Parent Common Stock
issuable pursuant to Section 1.5 (or make appropriate
alternative arrangements if uncertificated shares of Parent Common
Stock represented by a book entry will be issued) and (ii) as
needed, cash sufficient to make payments in lieu of fractional
shares in accordance with Section 1.5(c). The shares of Parent
Common Stock and cash amounts so deposited with the Exchange Agent
are referred to collectively as the “Exchange
Fund.”
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(b) As soon as
reasonably practicable after the Effective Time, the Exchange Agent
shall mail to the record holders of Company Equity (i) a letter of
transmittal in customary form and containing such provisions as
Parent may reasonably specify (including a provision confirming
that delivery shall be effected, and risk of loss and title shall
pass, only upon proper delivery of the Company Equity Certificates
to the Exchange Agent or, in the case of Book Entry Equity, upon
adherence to the procedures set forth in the letter of
transmittal), and (ii) instructions for use in effecting the
surrender of such holder’s Company Equity Certificates and
Book Entry Equity in exchange for certificates representing Parent
Common Stock (or appropriate alternative arrangements if
uncertificated shares of Parent Common Stock represented by a book
entry will be issued). Exchange of any Book Entry Equity shall be
effected in accordance with the Exchange Agent’s customary
procedures with respect to securities represented by book entry.
Upon surrender of a Company Equity Certificate or Book Entry Equity
to the Exchange Agent for exchange, together with a duly executed
letter of transmittal and such other documents as may be reasonably
required by the Exchange Agent or Parent, the holder of such
Company Equity Certificate or Book Entry Equity shall be entitled
to receive in exchange therefor a certificate representing the
number of whole shares of Parent Common Stock (or uncertificated
shares of Parent Common Stock represented by a book entry) that
such holder has the right to receive pursuant to the provisions of
Section
1.5 (and cash in
lieu of any fractional share of Parent Common Stock). The Company
Equity Certificate or Book Entry Equity so surrendered shall be
canceled. Until surrendered as contemplated by this Section 1.7, each Company Equity
Certificate or Book Entry Equity shall be deemed, from and after
the Effective Time, to represent only the right to receive shares
of Parent Common Stock (and cash in lieu of any fractional share of
Parent Common Stock) as contemplated by Section 1.5. If any Company Equity
Certificate shall have been lost, stolen, or destroyed, Parent or
the Exchange Agent may, in its discretion and as a condition
precedent to the issuance of any certificate representing Parent
Common Stock, require the owner of such lost, stolen, or destroyed
Company Equity Certificate to provide an appropriate affidavit and
to deliver a bond (in such sum as Parent or the Exchange Agent may
reasonably direct) as indemnity against any claim that may be made
against the Exchange Agent, Parent, or the Surviving Corporation
with respect to such Company Equity Certificate.
(c) No dividends or
other distributions declared or made with respect to Parent Common
Stock with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Company Equity Certificate or Book
Entry Equity with respect to the shares of Parent Common Stock that
such holder has the right to receive in the Merger until such
holder surrenders such Company Equity Certificate or Book Entry
Equity in accordance with this Section 1.7 (at which time such holder
shall be entitled, subject to the effect of applicable escheat law
or similar Legal Requirement, to receive all such dividends and
distributions, without interest).
(d) Any portion of the
Exchange Fund that remains undistributed to holders of Company
Equity Certificates or Book Entry Equity as of the date 180 days
after the Effective Time shall be delivered to Parent upon demand,
and any holders of Company Equity Certificates or Book Entry Equity
who have not theretofore surrendered their Company Equity
Certificates or Book Entry Equity in accordance with this
Section
1.7 shall
thereafter look only to Parent for satisfaction of their claims for
Parent Common Stock, cash in lieu of fractional shares of Parent
Common Stock, and any dividends or distributions with respect to
Parent Common Stock, in each case without interest
thereon.
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(e) Each of the
Exchange Agent, Parent, and the Surviving Corporation shall be
entitled to deduct and withhold from any consideration payable or
otherwise deliverable pursuant to this Agreement to any holder or
former holder of Company Equity such amounts as may be required to
be deducted or withheld therefrom under the Code or any provision
of state, local, or foreign Tax law or under any other applicable
Legal Requirement. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this
Agreement as having been paid to the Person to whom such amounts
would otherwise have been paid.
(f) Neither Parent nor
the Surviving Corporation shall be liable to any holder or former
holder of Company Equity or to any other Person with respect to any
shares of Parent Common Stock (or dividends or distributions with
respect thereto), or for any cash amounts, properly delivered to
any public official pursuant to any applicable abandoned property
law, escheat law, or similar Legal Requirement.
1.8 TAX
CONSEQUENCES. For federal
income tax purposes, the Merger is intended to constitute a
reorganization within the meaning of Section 368(a) of the Code.
The parties to this Agreement hereby adopt this Agreement as a
“plan of reorganization” within the meaning of Sections
1.368 2(g) and 1.368 3(a) of the United States Treasury
Regulations.
1.9 FURTHER
ACTION.
If, at any time after the Effective Time, any further action is
determined by Parent to be necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation
with full right, title, and possession of and to all rights and
property of Merger Sub and the Company, the officers and directors
of the Surviving Corporation and Parent shall be fully authorized
(in the name of Merger Sub, in the name of the Company, and
otherwise) to take such action.
ARTICLE 2
The
Company represents and warrants to Parent and Merger Sub as
follows:
2.1 ORGANIZATION AND GOOD
STANDING.
(a) The Company and
each of its Subsidiaries are limited liability companies,
corporations or other entities duly organized, validly existing,
and in good standing under the laws of their respective
jurisdictions of incorporation or organization, with full corporate
or other entity power and authority to conduct their respective
businesses as now being conducted, to own or use the respective
properties and assets that they purport to own or use, and to
perform all their respective obligations under each of the Company
Contracts. The Company and each of its Subsidiaries are duly
qualified to do business as foreign corporations or other entities
and are in good standing under the laws of each state or other
jurisdiction in which either the ownership or use of the properties
owned or used by them, or the nature of the activities conducted by
it, requires such qualification, except where the failure to be so
qualified, individually or in the aggregate, has not had and could
not reasonably be expected to have a Company Material Adverse
Effect.
(b) The Company has
delivered to Parent copies of the certificate or articles of
organization or incorporation, by-laws, and other organizational
documents (collectively, “Organizational
Documents”) of the Company and each of its
Subsidiaries, as currently in effect.
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2.2 AUTHORITY; NO
CONFLICT.
(a) The Company has
all necessary corporate power and authority to execute and deliver
this Agreement and the other agreements referred to in this
Agreement to which it is or will be a party, and to perform its
obligations hereunder and thereunder. The execution and delivery of
this Agreement by the Company and the consummation by the Company
of the Merger and the other transactions contemplated hereby and
thereby (collectively, the “Contemplated
Transactions”) have been duly and validly authorized
by all necessary corporate action and no other corporate
proceedings on the part of the Company are necessary to authorize
this Agreement or to consummate the Contemplated Transactions
(other than, with respect to the Merger, the adoption of this
Agreement by the holders of a majority of the then outstanding
Company Equity (the “Required Member Vote”)).
The Company’s managing member has approved this Agreement,
declared it to be advisable, and resolved to recommend to the
equityholders of the Company that they vote in favor of the
adoption of this Agreement in accordance with the ARS. This
Agreement has been duly and validly executed and delivered by the
Company and constitutes the legal, valid, and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium, or other similar Legal
Requirement affecting the enforcement of creditors’ rights
generally, and subject to general principles of equity (whether
considered in a proceeding whether in equity or at
law).
(b) Neither the
execution and delivery of this Agreement nor the consummation of
any of the Contemplated Transactions do or will, directly or
indirectly (with or without notice or lapse of time or
both):
(i) contravene,
conflict with, or result in a violation of (A) any provision of the
Organizational Documents of the Company or any of its Subsidiaries
or (B) any resolution adopted by the members, board of directors or
the equityholders of the Company or any of its
Subsidiaries;
(ii) contravene,
conflict with, or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which the
Company or any of its Subsidiaries, or any of the assets owned or
used by any of the Company or any of its Subsidiaries, is or may be
subject;
(iii) contravene,
conflict with, or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate, or modify, any Governmental
Authorization that is held by the Company or any of its
Subsidiaries, or that otherwise relates to the business of, or any
of the assets owned or used by, the Company or any of its
Subsidiaries;
(iv) cause
the Company or any of its Subsidiaries to become subject to, or to
become liable for the payment of, any Tax;
(v) cause any of the
assets owned by the Company or any of its Subsidiaries to be
reassessed or revalued by any Taxing Authority or other
Governmental Body;
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(vi) contravene,
conflict with, or result in a violation or breach of any provision
of, result in the loss of any benefit or the imposition of any
additional payment or other liability under, give any Person the
right to declare a default or exercise any remedy under, to
accelerate the maturity or performance of, or to cancel, terminate,
redeem, or modify any Company Contract, exercise any change in
control or similar put rights with respect to, or to require a
greater rate of interest on, any debt obligations of the Company;
or
(vii) result
in the imposition or creation of any Encumbrance upon or with
respect to any of the assets owned or used by the Company or any of
its Subsidiaries, except, in the case of clauses (ii), (iii), (iv),
(v), (vi), and (vii), for any such conflicts, violations, breaches,
defaults, or other occurrences that, individually or in the
aggregate, have not had and could not reasonably be expected to
have a Company Material Adverse Effect.
(c) The execution and
delivery of this Agreement by the Company do not, and the
performance of this Agreement and the consummation of the
Contemplated Transactions by the Company will not, require any
Consent of, or filing with or notification to, any Person, except
(i) for (A) applicable requirements, if any, of the Exchange Act,
the Securities Act and state securities or “blue sky”
Legal Requirements (“Blue Sky Laws”) and (B)
filing of articles of merger as required by the ARS and (ii) where
failure to obtain such Consents, or to make such filings or
notifications, individually or in the aggregate, have not had and
could not reasonably be expected to have a Company Material Adverse
Effect.
2.3
CAPITALIZATION.
The entire authorized equity of the Company consists of the
membership interests owned by its members (“the Company Equity”). All of
the issued and outstanding Company Equity has been duly authorized,
are validly issued, fully paid, and non-assessable and are held of
record by the respective holders as set forth in Section 2.3 of the Company Disclosure
Schedule. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could
require the Company to issue, sell, or otherwise cause to become
outstanding any of its equity. There are no outstanding or
authorized equity appreciation, phantom equity, profit
participation, or similar rights with respect to the Company. There
are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of the equity of the
Company.
2.4
NON-CONTRAVENTION. Neither the
execution and the delivery of this Agreement, nor the consummation
of the transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Company or
any of its Subsidiaries is subject or any provision of the charter
or bylaws of the Company or any of its Subsidiaries or (ii)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other
arrangement to which the Company or any of its Subsidiaries is a
party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Lien upon any of its
assets), except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to
give notice, or Lien would not have a Company Material Adverse
Effect. Neither the Company nor any of its Subsidiaries needs to
give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement, except where the
failure to give notice, to file, or to obtain any authorization,
consent, or approval would not have a Company Material Adverse
Effect.
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2.5 BROKERS’
FEES. Neither the
Company nor any of its Subsidiaries has any liability or obligation
to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this
Agreement.
2.6 TITLE TO
ASSETS. The Company and
its Subsidiaries have good and marketable title to, or a valid
leasehold interest in, the properties and assets used by them
located on their premises, free and clear of all Liens, except for
properties and assets disposed of in the Ordinary Course of
Business.
2.7 [Intentionally
Omitted].
2.8 FINANCIAL
STATEMENTS. Within
seventy-five (75) days of Closing Date, the Company shall deliver
the following financial statements (collectively the
“Company Financial
Statements”): (i) audited consolidated balance sheets
and statements of income, changes in equityholders’ equity,
and cash flow (“Company Most Recent Balance
Sheet”) as of and for the Company’s most recent
fiscal year, (the “Company Most Recent Fiscal Year
End”) for the Company and its Subsidiaries; and (ii)
unaudited consolidated balance sheets and statements of income,
changes in equityholders’ equity, and cash flow (the
“Company Most Recent
Financial Statements”) as of and for the most-recent
two quarters prior to the Closing Date (the “Company Most Recent Fiscal Month
End”) for the Company and its
Subsidiaries.
2.9 [Intentionally
Omitted].
2.10 UNDISCLOSED
LIABILITIES. Neither the
Company nor its Subsidiaries has any material liability (whether
known or unknown, whether asserted or unasserted, whether absolute
or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due, including any
liability for taxes).
2.11 [Intentionally
Omitted].
2.12 TAX MATTERS.
(a) Each of the Company
and its Subsidiaries has filed all federal Income Tax Returns and
all other material Tax Returns that it was required to file. All
such Tax Returns were true, correct, and complete in all material
respects. All material Taxes due and owing by the Company or any of
its Subsidiaries (whether or not shown on any Tax Return) have been
paid. Neither the Company nor any of its Subsidiaries currently is
the beneficiary of any extension of time within which to file any
Tax Return. No written claim has been made within the past three
(3) years by an authority in a jurisdiction where the Company or
any of its Subsidiaries does not file Tax Returns that the Company
or any of its Subsidiaries is or may be subject to taxation by that
jurisdiction. There are no Liens for Taxes (other than Taxes not
yet due and payable) upon any of the assets of the Company or any
of its Subsidiaries. Each of the Company and its Subsidiaries has
withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any employee,
independent contractor, creditor, equityholder, or other third
party, and all Forms W-2 and 1099 required with respect thereto
have been properly completed and timely filed.
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(b) There is no
material dispute or claim concerning any Tax liability of the
Company or any of its Subsidiaries either (A) claimed or raised by
any authority in writing or (B) as to which any of the Company and
the members, directors and officers of the Company and its
Subsidiaries has Knowledge based upon personal contact with any
agent of such authority.
2.13 [Intentionally
Omitted].
2.14 INTELLECTUAL
PROPERTY.
(a) Neither the Company
nor its Subsidiaries, or any of its or their respective businesses
as presently conducted and as presently proposed to be conducted,
has or will interfere with, has or will infringe upon, has or will
dilute, has or will misappropriate, or otherwise has or will come
into conflict with, any Intellectual Property rights of third
parties; there are no facts indicating a likelihood of the
foregoing; and the Company has never received any charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, dilution, misappropriation, or conflict (including
any claim that the Company or any of its Subsidiaries must license
or refrain from accessing or using any Intellectual Property rights
of any third party). To the Knowledge of the Company, no third
party has interfered with, infringed upon, diluted,
misappropriated, or otherwise come into conflict with, any
Intellectual Property rights of the Company or any of its
Subsidiaries.
(b) Neither the Company
nor any of its Subsidiaries is party to any material license,
sublicense, agreement, covenant not to ▇▇▇, or permission pursuant
to which the Company or any of its Subsidiaries accesses or uses
any Intellectual Property owned by a third party.
2.15 CERTAIN BUSINESS RELATIONSHIPS
WITH THE COMPANY AND ITS SUBSIDIARIES. Neither the
Company, its Affiliates, members, directors, officers, employees,
and shareholders and the Company’s and its
Subsidiaries’ members, directors, officers, employees, and
shareholders has been involved in any material business arrangement
or relationship with the Company or any of its Subsidiaries within
the past 12 months, and neither the Company’s, or its
Affiliates’, members, directors, officers, employees, and
shareholders and the Company’s and its Subsidiaries’
members, directors, officers, employees, and shareholders owns any
material asset, tangible or intangible, that is used in the
business of the Company or any of its Subsidiaries.
2.16 DISCLOSURE. The
representations and warranties contained in this Section 2 do not contain any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information
contained in this Section
2 not misleading.
ARTICLE 3
Each of
Parent and Merger Sub represents and warrants to the Company as
follows:
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3.1 ORGANIZATION AND GOOD
STANDING.
(a) Parent and each of
its Subsidiaries are corporations or other entities duly organized,
validly existing, and in good standing under the laws of their
respective jurisdictions of incorporation or organization, with
full corporate or other entity power and authority to conduct their
respective businesses as now being conducted, to own or use the
respective properties and assets that they purport to own or use,
and to perform all their respective obligations under Contracts to
which Parent or any of its Subsidiaries is a party or by which
Parent or any of its Subsidiaries or any of their respective assets
are bound. Parent and each of its Subsidiaries are duly qualified
to do business as foreign corporations or other entities and are in
good standing under the laws of each state or other jurisdiction in
which either the ownership or use of the properties owned or used
by them, or the nature of the activities conducted by them,
requires such qualification, except where the failure to be so
qualified, individually or in the aggregate, has not had and could
not reasonably be expected to have a Parent Material Adverse
Effect.
(b) Merger Sub is a
direct, wholly owned subsidiary of Parent that was formed solely
for the purpose of engaging in the Contemplated Transactions. Since
the date of its incorporation and prior to the Effective Time,
Merger Sub has not carried on any business or conducted any
operations other than the execution of this Agreement, the
performance of its respective obligations hereunder, and matters
ancillary thereto.
(c) Parent has
delivered or will deliver to the Company copies of the
Organizational Documents of Parent and Merger Sub, as currently in
effect.
3.2 AUTHORITY; NO
CONFLICT.
(a) Each of Parent and
Merger Sub has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the Contemplated Transactions. The
execution and delivery of this Agreement by Parent and Merger Sub
and the consummation by Parent and Merger Sub of the Contemplated
Transactions have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of
Parent or Merger Sub are necessary to authorize this Agreement or
to consummate the Contemplated Transactions. This Agreement has
been duly and validly executed and delivered by Parent and Merger
Sub and constitutes the legal, valid, and binding obligation of
Parent and Merger Sub, enforceable against Parent and Merger Sub in
accordance with its terms.
(b) Neither the
execution and delivery of this Agreement nor the consummation of
any of the Contemplated Transactions do or will, directly or
indirectly (with or without notice or lapse of time or
both):
(i) contravene,
conflict with, or result in a violation of (A) any provision of the
Organizational Documents of Parent or any of its Subsidiaries, or
(B) any resolution adopted by the board of directors or the
stockholders of Parent or any of its Subsidiaries;
(ii) contravene,
conflict with, or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which Parent or
any of its Subsidiaries, or any of the assets owned or used by
Parent or any of its Subsidiaries, is or may be
subject;
10
(iii) contravene,
conflict with, or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate, or modify, any Governmental
Authorization that is held by Parent or any of its Subsidiaries, or
that otherwise relates to the business of, or any of the assets
owned or used by, Parent or any of its Subsidiaries;
(iv) cause
Parent or any of its Subsidiaries to become subject to, or to
become liable for the payment of, any Tax;
(v) cause any of the
assets owned by Parent or any of its Subsidiaries to be reassessed
or revalued by any Taxing Authority or other Governmental
Body;
(vi) contravene,
conflict with, or result in a violation or breach of any provision
of, result in the loss of any benefit or the imposition of any
additional payment or other liability under, give any Person the
right to declare a default or exercise any remedy under, to
accelerate the maturity or performance of, or to cancel, terminate,
redeem, or modify, any Contract to which Parent or any of its
Subsidiaries is party or by which Parent or any of its Subsidiaries
or any of their respective assets are bound; or
(vii) result
in the imposition or creation of any Encumbrance upon or with
respect to any of the assets owned or used by Parent or any of its
Subsidiaries, except, in the case of clauses (ii), (iii), (iv),
(v), (vi) and (vii), for any such conflicts, violations, breaches,
defaults, or other occurrences that, individually or in the
aggregate, have not had and could not reasonably be expected to
have a Parent Material Adverse Effect.
(c) The execution and
delivery of this Agreement by Parent and Merger Sub do not, and the
performance of this Agreement and the consummation of the
Contemplated Transactions by Parent and Merger Sub will not,
require any Consent of, or filing with, or notification to, any
Person, except (i) for (A) applicable requirements, if any, of the
Exchange Act, the Securities Act, and Blue Sky Laws, (B) the
pre-merger notification requirements of the HSR Act, (C) filing of
a certificate of merger as required by the DGCL and (D) the
non-United States competition, antitrust, and investment laws set
forth in Section 3.2(c) of
the Parent Disclosure Schedule and (ii) where failure to
obtain such Consents, or to make such filings or notifications,
individually or in the aggregate, have not had and could not
reasonably be expected to have a Parent Material Adverse
Effect.
3.3
CAPITALIZATION.
(a) The Parent. The entire
authorized capital stock of Parent consists of 200,000,000 shares
of common stock, par value of $0.0001 (“Parent Common Stock”), of
which 89,964,632 shares
are outstanding, and 20,000,000 shares of preferred stock, par
value of $0.0001 (“Parent Preferred Stock”
and together with Parent Common Stock, the “Parent Capital Shares”).
All of the issued and outstanding Parent Capital Shares have been
duly authorized, are validly issued, fully paid, and
non-assessable. Other than 9 million options pending issuance to a
prospective employee, there are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that
could require Parent to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation,
or similar rights with respect to Parent. There are no voting
trusts, proxies, or other agreements or understandings with respect
to the voting of the capital stock of Parent.
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(b) Merger Sub. The entire
authorized capital stock of Merger Sub consists of 100,000 shares
of common stock, par value of $0.0001 (“Merger Sub Shares”), of
which 10,000 Merger Sub Shares are outstanding, all of which are
owned by Parent. All of the issued and outstanding Merger Sub
Shares have been duly authorized, are validly issued, fully paid,
and non-assessable. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could
require the Merger Sub to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation,
or similar rights with respect to the Merger Sub. There are no
voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of the Merger
Sub.
3.4
NON-CONTRAVENTION. Neither the
execution and the delivery of this Agreement, nor the consummation
of the transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Parent or any of
its Subsidiaries is subject or any provision of the charter or
bylaws of Parent or any of its Subsidiaries or (ii) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other
arrangement to which Parent or any of its Subsidiaries is a party
or by which it is bound or to which any of its assets is subject
(or result in the imposition of any Lien upon any of its assets),
except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to
give notice, or Lien would not have a Parent Material Adverse
Effect. Neither Parent nor any of its Subsidiaries needs to give
any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated
by this Agreement, except where the failure to give notice, to
file, or to obtain any authorization, consent, or approval would
not have a Parent Material Adverse Effect.
3.5 BROKERS’
FEES. Neither Parent
nor any of its Subsidiaries has any liability or obligation to pay
any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this
Agreement.
3.6 TITLE TO
ASSETS. Parent and its
Subsidiaries have good and marketable title to, or a valid
leasehold interest in, the properties and assets used by them,
located on their premises, or shown on Parent Most Recent Balance
Sheet or acquired after the date thereof, free and clear of all
Liens, except for properties and assets disposed of in the Ordinary
Course of Business since the date of Parent Most Recent Balance
Sheet.
3.7 SUBSIDIARIES. Section 3.7 of the Parent Disclosure
Schedule sets forth for each Subsidiary of Parent, including
the Merger Sub, (i) its name and jurisdiction of incorporation;
(ii) the number of authorized shares for each class of its capital
stock; (iii) the number of issued and outstanding shares of each
class of its capital stock, the names of the holders thereof, and
the number of shares held by each such holder; and (iv) the number
of shares of its capital stock held in treasury. All of the issued
and outstanding shares of capital stock of each Subsidiary of
Parent have been duly authorized and are validly issued, fully
paid, and non-assessable. Parent and/or one or more of its
Subsidiaries hold of record and own beneficially all of the
outstanding shares of each Subsidiary of Parent, free and clear of
any restrictions on transfer (other than restrictions under the
Securities Act and state securities laws), taxes, Liens, options,
warrants, purchase rights, contracts, commitments, equities,
claims, and demands. There are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that
could require Parent or any of its Subsidiaries to sell, transfer,
or otherwise dispose of any capital stock of any of its
Subsidiaries or that could require any Subsidiary of Parent to
issue, sell, or otherwise cause to become outstanding any of its
own capital stock. There is no outstanding stock appreciation,
phantom stock, profit participation, or similar rights with respect
to any Subsidiary of Parent. There are no voting trusts, proxies,
or other agreements or understandings with respect to the voting of
any capital stock of any Subsidiary of Parent. Neither Parent nor
any of its Subsidiaries controls directly or indirectly or has any
direct or indirect equity participation in any corporation,
partnership, trust, or other business association that is not a
Subsidiary of Parent. Except for the Subsidiaries set forth in
Section 3.7 of the Parent
Disclosure Schedule, neither Parent nor any of its
Subsidiaries owns or has any right to acquire, directly or
indirectly, any outstanding capital stock of, or other equity
interests in, any Person.
12
3.8 FINANCIAL
STATEMENTS. Set forth in
Section 3.8 of the Parent
Disclosure Schedule are the following financial statements
(collectively the “Parent Financial
Statements”): (i) audited consolidated balance sheets
and statements of income, changes in stockholders’ equity,
and cash flow (“Parent Most Recent Balance
Sheet”) as of and for the fiscal year ended July 31,
2019, (the “Parent
Most Recent Fiscal Year End”) for Parent and its
Subsidiaries; and (ii) unaudited consolidated balance sheets and
statements of income, changes in stockholders’ equity, and
cash flow (the “Parent Most Recent Financial
Statements”) as of and for the quarters ended October
31, 2019 and January 31, 2020 (the “Parent Most Recent Fiscal Month
End”) for Parent and its Subsidiaries included in
Parent’s Form 10-Qs filed with the Commission under the
Securities Exchange Act. The Parent Financial Statements (including
the notes thereto) have been prepared in accordance with GAAP
throughout the periods covered thereby and present fairly the
financial condition of Parent and its Subsidiaries as of such dates
and the results of operations of Parent and its Subsidiaries for
such periods; provided, however, that the Parent Most Recent
Financial Statements are subject to normal year-end adjustments
(which will not be material individually or in the aggregate) and
have been prepared on a condensed consolidated basis.
3.9 DATA PRIVACY. Parent’s
and its Subsidiaries’ respective businesses have complied
with and, as presently conducted, are in compliance with, all Data
Laws except, in each case, to the extent that a failure to comply
would not have a Parent Material Adverse Effect. Parent and its
Subsidiaries have complied with, and are presently in compliance
with, its and their respective policies applicable to data privacy,
data security, and/or personal information except, in each case, to
the extent that a failure to comply would not have a Parent
Material Adverse Effect. Neither Parent nor any of its Subsidiaries
has experienced any incident in which personal information or other
sensitive data was or may have been stolen or improperly accessed,
and neither Parent nor any of its Subsidiaries is aware of any
facts suggesting the likelihood of the foregoing, including without
limitation, any breach of security or receipt of any notices or
complaints from any Person regarding personal information or other
data.
13
3.10 PARENT NOT AN “INVESTMENT
COMPANY”. Parent
understands the rules and requirements under the Investment Company
Act of 1940, as amended (the “Investment Company Act”).
Parent is not an “investment company”
within the meaning of Investment Company Act and has not conducted
its business in a manner so that it will not become subject to the
Investment Company Act.
3.11 NO PRICE STABILIZATION OR
MANIPULATION. Neither Parent
nor its Subsidiaries, nor any of its or their respective directors,
officers or, to the Knowledge of Parent, controlling persons has
taken, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of Parent to facilitate
the sale or resale of any Parent Capital Shares.
3.12 BROKER-DEALER
STATUS. None of Parent
nor any of their related entities (i) is required to register as a
“broker” or “dealer” in accordance with the
provisions of the Securities Exchange Act or (ii) directly or
indirectly through one or more intermediaries, controls or is a
“person associated with a member” or “associated
person of a member” (within the meaning of Article I of the
NASD Manual administered by FINRA). To Parent’s Knowledge,
there are no affiliations or associations between any member of
FINRA and any of Parent’s officers, directors or 5% or
greater security holders. All of the information (including, but
not limited to, information regarding affiliations, security
ownership and trading activity) provided to the Company by Parent
its officers and directors and the holders of any securities (debt
or equity) or warrants, options or rights to acquire any securities
of Parent in connection with the filing to be made and other
supplemental information to be provided to FINRA pursuant to Rule
5110 of FINRA in connection with the transactions contemplated by
this Agreement is true, complete and correct, and copies of any
Parent filings required to be filed with FINRA have been filed with
the Commission.
3.13 COMMISSION FILINGS;
SARBANES–OXLEY ACT. Parent is current
with and has timely met its Securities and Exchange Commission (the
“Commission”) reporting
obligations and its current financial statements are available on
the Commission’s ▇▇▇▇▇ database (the “Commission Reports”).
There have not been any unreported Parent Material Adverse Changes
in the business or condition, financial or otherwise, of Parent.
There is and has been no failure on the part of Parent or any of
Parent’s directors or officers, in their capacities as such,
to comply in all material respects with any applicable provision of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated in connection therewith (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”),
including Section 402 related to loans and Section 302 and 906
related to certifications. As of their respective dates, the
Commission Reports complied in all material respects with the
requirements of the Securities Act and the Securities Exchange Act,
as applicable, and none of the Commission Reports, when filed,
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not
misleading.
3.14 DISCLOSURE CONTROLS AND
PROCEDURES. Parent has
established and maintains “disclosure controls and
procedures” (as defined in Rules 13a–15(e) and
15d–15(e) of the Securities Exchange Act); Parent’s
“disclosure controls and procedures” are reasonably
designed to ensure that all information (both financial and
non–financial) required to be disclosed by Parent in the
reports that it will file or furnish under the Securities Exchange
Act is recorded, processed, summarized and reported within the time
periods specified in the rules and regulations of the Commission
and that all such information is accumulated and communicated to
Parent’s management as appropriate to allow timely decisions
regarding required disclosure and to make the certifications of the
Chief Executive Officer and Chief Financial Officer of Parent
required under the Securities Exchange Act with respect to such
reports.
14
3.15 PARENT’S ACCOUNTING
SYSTEM. Parent maintains
a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in
accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only
in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
3.16 NO UNLAWFUL CONTRIBUTIONS OR
OTHER PAYMENTS. No payments or
inducements have been made or given, directly or indirectly, to any
federal or local official or candidate for, any federal or state
office in the United States or foreign offices by Parent or any of
its officers or directors, or, to the Knowledge of Parent, by any
of its employees or agents or any other person in connection with
any opportunity, contract, permit, certificate, consent, order,
approval, waiver or other authorization relating to the business of
Parent, except for such payments or inducements as were lawful
under applicable laws, rules and regulations. Neither Parent, nor,
to the Knowledge of Parent, any director, officer, agent, employee
or other person associated with or acting on behalf of Parent, (i)
has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to any
government official or employee from corporate funds; or (iii) made
any bribe, unlawful rebate, payoff, influence payment, kickback or
other unlawful payment in connection with the business of
Parent.
3.17 FOREIGN CORRUPT PRACTICES
ACT. Neither Parent
nor any Subsidiary or, to the Knowledge of Parent, any director,
officer, agent, employee, affiliate or other person acting on
behalf of Parent or any of its Subsidiaries, is aware of or has
taken any action, directly or indirectly, that would result in a
violation by such persons of the FCPA, including, without
limitation, making use of the mails or any means or instrumentality
of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization
of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or
official thereof or any candidate for foreign political office, in
contravention of the FCPA. Parent and its Subsidiaries have
conducted their respective businesses in compliance with the FCPA
and have instituted and maintain policies and procedures designed
to ensure, and which are reasonably expected to continue to ensure,
continued compliance therewith.
3.18 MONEY LAUNDERING
LAWS. The operations of
Parent and its Subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and
reporting requirements of the Money Laundering Laws and no action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving Parent or any of its
Subsidiaries with respect to the Money Laundering Laws is pending
or, to the Knowledge of Parent, threatened.
15
3.19 OFAC. None of Parent,
any Parent Subsidiary or, to the Knowledge of Parent, any director,
officer, agent, employee, affiliate or person acting on behalf of
Parent or any of its Subsidiaries is currently subject to any U.S.
sanctions administered by OFAC and Parent will not directly or
indirectly use the proceeds of the transaction, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint
venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
3.20 EXCHANGE LISTING. The Parent Common
Stock is currently listed on the OTC Pink Market (the
“OTC”)
under the trading symbol “BMSN”. Parent is
currently designated as a “Current Information
Company” on the OTC. Parent has not, in the twelve
(12) months preceding the date of the Parent Disclosure
Schedule, received notice from the OTC to the effect that Parent is
not in compliance with the listing or maintenance requirements or
that its designation as a Current Information Company is in
jeopardy. Parent has no reason to believe that it will not in the
foreseeable future continue to be in compliance with all such
listing and maintenance requirements.
3.21 FINRA. Parent has not,
in the two (2) years preceding the date hereof, received notice
from FINRA to the effect that Parent or its Affiliates is not in
compliance with any FINRA regulations, rule or other requirement.
Parent has no reason to believe that it will not in the foreseeable
future continue to be in compliance with all such
requirements.
3.22 SHELL STATUS. Parent is not now
and has never been a shell company as defined in Commission Release
33-8587 and is not subject to Footnote 32 of Commission Release
33-8587.
ARTICLE 4
(a) During the
Pre-Closing Period (except with the prior written Consent of
Parent) the Company shall:
(i) ensure that each of
the Company and each of its Subsidiaries (A) conducts its business
in the ordinary course of business consistent with past practice
and (B) complies with all applicable Legal Requirements and all
Company Material Contracts (which for the purpose of this
Section
4.1 shall include
any Contract that would be a Company Material Contract if existing
on the date of this Agreement); and
(ii) use
commercially reasonable efforts to ensure that the Company and each
of its Subsidiaries preserve intact their current business
organizations, keep available the services of their current
officers and employees, and maintain their relations and goodwill
with all suppliers, customers, landlords, creditors, licensors,
licensees, employees, and other Persons having business
relationships with the Company and each of its Subsidiaries,
respectively.
16
(b) During the
Pre-Closing Period (except with the prior written Consent of
Parent), the Company shall not, and shall not permit any of its
Subsidiaries to:
(i) (A) declare, set
aside, or pay any dividends on, or make any other distributions
(whether in cash, equity, or property) in respect of, any of its
capital equity or other equity or voting interests, except for
dividends by a direct or indirect wholly owned Subsidiary of the
Company to its parent, (B) split, combine, or reclassify any of its
capital equity or other equity or voting interests, or issue or
authorize the issuance of any other securities in respect of, in
lieu of, or in substitution for shares of its capital equity or
other equity or voting interests, (C) purchase, redeem, or
otherwise acquire any shares of capital equity or any other
securities of the Company or any of its Subsidiaries or any
options, warrants, calls, or rights to acquire any such shares or
other securities or (D) take any action that would result in any
change of any term (including any conversion price thereof) of any
debt security of the Company or any of its
Subsidiaries;
(ii) issue,
deliver, sell, pledge, or otherwise encumber any shares of its
capital equity, any other equity or voting interests or any
securities convertible into, or exchangeable for, or any options,
warrants, calls, or rights to acquire or receive, any such shares,
interests, or securities or any equity appreciation rights, phantom
equity awards, or other rights that are linked in any way to the
price of the Company Equity or the value of the Company or any part
thereof;
(iii) amend
or propose to amend its certificate of incorporation or bylaws (or
similar organizational documents) or effect or become a party to
any merger, consolidation, share exchange, business combination,
recapitalization, or similar transaction;
(iv) acquire
by merger or consolidation, or by purchasing all or a substantial
portion of the assets of, or by purchasing all or a substantial
equity or voting interest in, or by any other manner, all or a
substantial portion of any business or any Entity or division
thereof;
(v) acquire any
material assets or a license therefor, other than in the ordinary
course of business consistent with past practice, or make any
capital expenditures, or incur any obligations or liabilities in
connection therewith, except pursuant to existing Contracts or
that, in the aggregate, would not exceed $1,000 during any fiscal
quarter;
(vi) except
in the ordinary course of business consistent with past practice,
enter into, amend, or terminate any lease or sublease of real
property (whether as a lessor, sublessor, lessee, or sublessee) or
fail to exercise any right to renew any lease or sublease of real
property;
(vii) sell,
grant a license in, or otherwise subject to any Encumbrance or
otherwise dispose of any of its material properties or assets,
other than the sale of inventory and the granting of nonexclusive
licenses in the ordinary course of business consistent with past
practice;
17
(viii) repurchase,
prepay, or incur any indebtedness or guarantee any indebtedness of
another person or issue or sell any debt securities or options,
warrants, calls, or other rights to acquire any debt securities of
the Company or any of its Subsidiaries, guarantee any debt
securities of another person, enter into any “keep
well” or other agreement to maintain the financial condition
of another Person, or enter into any arrangement having the
economic effect of any of the foregoing;
(ix) make
any loans, advances, or capital contributions to, or investments
in, any other Person, other than the Company or any direct or
indirect wholly owned Subsidiary of the Company;
(x) (A) pay, discharge,
settle, or satisfy any material claims or Legal Proceeding
(including claims of equityholders and any equityholder litigation
relating to this Agreement, the Merger, or any other Contemplated
Transaction or otherwise), (B) waive, release, grant, or transfer
any right of material value other than in the ordinary course of
business consistent with past practice, or (C) commence any Legal
Proceeding;
(xi) enter
into any Material Contract:
(A) except in the
ordinary course of business consistent with past
practice;
(B) if consummation of
the Contemplated Transactions or compliance by the Company with the
provisions of this Agreement will conflict with, or result in any
violation or breach of, or default (with or without notice or lapse
of time or both) under, or give rise to a right of, or result in,
termination, cancellation, or acceleration of any obligation or to
a loss of a material benefit under, or result in the creation of
any Encumbrance in or upon any of the properties or assets of the
Company or any of its Subsidiaries or Parent or any of its
Subsidiaries under, or give rise to any increased, additional,
accelerated, or guaranteed rights or entitlements under, any
provision of such Contract; or
(C) that in any way
purports to restrict the business activity of the Company or any of
its Subsidiaries or any of their Affiliates or to limit the freedom
of the Company or any of its Subsidiaries or any of their
Affiliates to engage in any line of business or to compete with any
Person or in any geographic area.
(xii) amend,
modify, change, or terminate any Company Material Contract to which
the Company or any of its Subsidiaries is a party, or waive,
release, or assign any rights or claims thereunder, in each case
other than in the ordinary course of business;
(xiii) except
as required by applicable Legal Requirements, adopt or enter into
any collective bargaining agreement or other labor union Contract
applicable to the employees of the Company or any of its
Subsidiaries;
(xiv) hire
any new employee at the level of manager or above or with an annual
base salary in excess of $1,000, promote any employee except in
order to fill a position vacated after the date of this Agreement,
or engage any independent contractor whose engagement may not be
terminated by the Company without penalty on 30 days’ notice
or less;
18
(xv) increase
in any manner the compensation or benefits of, or pay any bonus to,
any employee, officer, member, director, or independent contractor
of the Company or any of its Subsidiaries, except for such
increases or bonuses that were disclosed to Parent prior to the
date of this Agreement;
(xvi) except
as required to comply with Legal Requirements or any Contract in
effect on the date of this Agreement:
(A) pay to any
employee, officer, member, director, or independent contractor of
the Company or any of its Subsidiaries any benefit not provided for
under any Contract or Company Benefit Plan in effect on the date of
this Agreement,
(B) take any action to
fund any future payment of, or in any other way secure the payment
of, compensation or benefits under any Contract or Employee Benefit
Plan,
(C) take any action to
accelerate the vesting or payment of any compensation or benefit
under any Contract or Employee Benefit Plan,
(D) adopt, enter into,
or amend any Employee Benefit Plan other than offer letters entered
into with new employees in the ordinary course of business
consistent with past practice that provide, except as required by
applicable Legal Requirements, for “at will employment”
with no severance benefits, or
(xvii) (A)
fail to accrue a reserve in its books and records and financial
statements in accordance with past practice for Taxes payable by
the Company or any of its Subsidiaries, (B) settle or compromise
any Legal Proceeding relating to any Tax, or (C) make, change, or
revoke any Tax election;
(xviii) except
as required by GAAP or applicable Legal Requirements, change its
fiscal year, revalue any of its material assets, or make any
changes in financial or Tax accounting methods, principles, or
practices;
(xix) take
any action (or omit to take any action) if such action (or
omission) would, or would be reasonably likely to result in (A) any
representation and warranty of the Company set forth in this
Agreement that is qualified as to materiality becoming untrue (as
so qualified) or (B) any such representation and warranty that is
not so qualified becoming untrue in any material respect;
and
(xx) authorize
any of, or commit, resolve, or agree to take any of, the foregoing
actions.
4.2 ACCESS AND
INVESTIGATION.
(a) During the period
from the date of this Agreement through the Effective Time or the
earlier termination of this Agreement in accordance with
Article 7 hereof
(the “Pre-Closing
Period”), the Company shall, and shall cause the
Representatives of the Company and its Subsidiaries to, (i) provide
Parent and Parent’s Representatives with access to the
Representatives of the Company and its Subsidiaries, personnel and
assets, books, records, Tax Returns, work papers, and other
documents, and additional financial, operating, and other data and
information regarding the Company and its Subsidiaries, and provide
copies thereof to Parent, in each case as Parent may request and
(ii) cause its officers to confer regularly with Parent concerning
the status of the Company’s business as Parent may request.
In addition, during the Pre-Closing Period, the Company shall
promptly provide Parent with (A) all material operating and
financial reports prepared by the Company and its Subsidiaries for
the Company’s management, including copies of the unaudited
monthly consolidated financial statements; and (B) any other
written reports or other written materials requested by
Parent.
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(a) During the
Pre-Closing Period, the Company shall promptly, but in any event no
less than one Business Day following any such event, notify Parent
in writing of:
(i) the discovery by
the Company of any event, condition, fact, or circumstance that
occurred or existed on or prior to the date of this Agreement and
that caused or constitutes a material inaccuracy in any
representation or warranty made by the Company in this
Agreement;
(ii) any
event, condition, fact, or circumstance that occurs, arises, or
exists after the date of this Agreement and that would have caused
or constituted a material inaccuracy in any representation or
warranty made by the Company in this Agreement if such
representation or warranty had been made as of the time of the
occurrence, existence, or discovery of such event, condition, fact,
or circumstance;
(iii) any
material breach of any covenant of the Company under this
Agreement;
(iv) any
event, condition, fact, or circumstance that would make the timely
satisfaction of any of the conditions set forth in Article 5 or Article 6 impossible or
unlikely or that has had or could reasonably be expected to have a
Parent Material Adverse Effect; and
(v) (A) any notice or
other communication from any Person alleging that the Consent of
such Person is or may be required in connection with the
Contemplated Transactions, and (B) any Legal Proceeding or material
claim threatened, commenced, or asserted against or with respect to
the Company or any of its Subsidiaries or the Contemplated
Transactions.
(b) No notification
given to Parent pursuant to this Section 4.3 shall limit or otherwise
affect any of the representations, warranties, covenants, or
obligations of the Company contained in this
Agreement.
4.4 COMPANY EQUITYHOLDERS
MEETING.
(a) The Company shall
take all action necessary under all applicable Legal Requirements
to call, give notice of, and hold a meeting of the holders of
Company Equity to vote on a proposal to adopt this Agreement (the
“Company
Equityholders Meeting”), shall submit such proposal to
such holders at the Company Equityholders Meeting. The Company (in
consultation with Parent) shall set a single record date for
persons entitled to notice of, and to vote at, the Company
Equityholders Meeting and shall not change such record date
(whether in connection with the Company Equityholders Meeting or
any adjournment or postponement thereof) without the prior written
Consent of Parent. The Company shall ensure that all proxies
solicited in connection with the Company Equityholders Meeting are
solicited in compliance with all applicable Legal Requirements. At
its election, the Company may utilize an equityholder’s
consent in lieu of the Company Equityholders Meeting, subject to
compliance with all applicable Legal Requirements.
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4.5 COOPERATION.
(a) Parent and the
Company shall cooperate fully with each other and shall use
commercially reasonable efforts to take, or cause to be taken, all
actions necessary to consummate the Merger and make effective the
other Contemplated Transactions. Without limiting the generality of
the foregoing. Parent and the Company (i) shall make all filings
(if any) and give all notices (if any) required to be made and
given by such Party in connection with the Merger and the other
Contemplated Transactions, and shall submit promptly any additional
information requested in connection with such filings and notices,
(ii) shall use commercially reasonable efforts to obtain each
Consent (if any) required to be obtained (pursuant to any
applicable Legal Requirement or Contract, or otherwise) by such
Party in connection with the Merger or any of the other
Contemplated Transactions, and (iii) shall use commercially
reasonable efforts to oppose or to lift, as the case may be, any
restraint, injunction, or other legal bar to the Merger. The
Company shall promptly deliver to Parent a copy of each such filing
made, each such notice given, and each such Consent obtained, by
the Company during the Pre-Closing Period.
(b) Each of the Company
and Parent shall (i) give the other Party prompt notice of the
commencement or threat of commencement of any Legal Proceeding by
or before any Governmental Body with respect to the Merger or any
of the other Contemplated Transactions, and (ii) keep the other
Party informed as to the status of any such Legal Proceeding or
threat.
4.6 DISCLOSURE. Parent and the
Company shall consult with each other before issuing any press
release or otherwise making any public statement or disclosure with
respect to the Merger or any of the other Contemplated Transactions
and neither shall issue any press release or make any public
statement or disclosure regarding the Merger or any of the other
Contemplated Transactions without the prior approval of the other
(which approval shall not be unreasonably withheld, conditioned, or
delayed), except as may be required by applicable Legal
Requirements or by obligations pursuant to any listing agreement
with any national securities exchange, in which case the party
proposing to issue such press release or make such public statement
or disclosure shall first, to the extent practicable, consult with
the other party about, and allow the other party reasonable time to
comment in advance on, such press release, public announcement, or
disclosure.
4.7 TAX MATTERS. Parent and the
Company shall not take any action prior to Closing that could
reasonably be expected to cause the Merger not to qualify as a
reorganization under Section 368(a) of the Code.
4.8 RULE 16B-3. Parent, Merger
Sub, and the Company shall take all such steps as may be required
to cause the transactions contemplated by Article 1 and any other
dispositions of equity securities of the Company (including
derivative securities) or acquisitions of equity securities of
Parent in connection with this Agreement by each individual who (a)
is a director or officer of the Company subject to Section 16 of
the Exchange Act, or (b) at the Effective Time is or will become a
director or officer of Parent subject to Section 16 of the Exchange
Act, to be exempt under Rule 16b-3 promulgated under the Exchange
Act.
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(a) All rights to
indemnification under the Company’s articles of organization,
operating agreement, bylaws, or indemnification Contracts or
undertakings existing in favor of those Persons who are, or were,
members, directors and officers of the Company at or prior to the
date of this Agreement (the “Indemnified Persons”)
shall survive the Merger and shall be observed by the Surviving
Corporation to the fullest extent permitted by DGCL and ARS for a
period of six (6) years from the Effective Time.
(b) This Section 4.9 shall survive the
consummation of the Merger and continue in full force and effect
and is intended to benefit, and shall be enforceable by each
Indemnified Person as a third-party beneficiary.
ARTICLE 5
The
obligations of Parent and Merger Sub to effect the Merger and
otherwise consummate the Contemplated Transactions are subject to
the satisfaction, or waiver by Parent, at or before the Closing, of
each of the following conditions:
5.1 ACCURACY OF
REPRESENTATIONS. Each of the
representations and warranties of the Company (i) set forth in
Section
2.2(a),
Section 2.3 and
Section 2.5 shall
be true and correct in all respects as of the date of this
Agreement, and as of the Closing as though made on the Closing,
(ii) set forth in this Agreement, other than those described in
clause above, shall be true and correct (disregarding all
qualifications or limitations as to “materiality,”
“Company Material Adverse Effect” and words of similar
import set forth therein) as of the date of this Agreement, and as
of the Closing as though made on the Closing, except, in the case
of this clause (ii), where the failure of such representations and
warranties to be so true and correct would not, individually or in
the aggregate, reasonably be expected to have a Company Material
Adverse Effect; provided in each case that representations and
warranties made as of a specific date shall be required to be so
true and correct (subject, in the case of the representations and
warranties described in this clause (ii), to such qualifications)
as of such date only.
5.2 PERFORMANCE OF
COVENANTS. Each of the
covenants and obligations in this Agreement that the Company is
required to comply with or perform at or prior to the Closing shall
have been complied with or performed in all material
respects.
5.3 [Intentionally
omitted.]
5.4 EQUITYHOLDER
APPROVAL. The Required
Member Vote shall have been obtained.
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5.5 NO MATERIAL ADVERSE
EFFECT. Since the date of
this Agreement, a Company Material Adverse Effect shall not have
occurred.
5.6 CONSENTS. The Consents set
forth on Schedule
5.6 shall have been obtained and shall remain in
effect.
5.7 NO RESTRAINTS. No temporary
restraining order, preliminary or permanent injunction, or other
Order of a Governmental Body prohibiting the consummation of the
Merger shall be in effect, and no Legal Requirement shall be in
effect that makes consummation of the Merger illegal or otherwise
prohibits or interferes with the consummation of the
Merger.
5.8 NO LITIGATION. No Legal
Proceeding shall be pending or threatened: (a) challenging or
seeking to restrain or prohibit the consummation of the Merger or
any of the other Contemplated Transactions; (b) seeking to prohibit
or limit Parent’s ability to vote, receive dividends with
respect to or otherwise exercise ownership rights with respect to
the stock of the Surviving Corporation; (c) which would materially
and adversely affect the right of the Surviving Corporation to own
the assets or operate the business of the Company and its
Subsidiaries; or (d) seeking to compel Parent or the Company or any
Subsidiary of Parent or the Company to dispose of or hold separate
any material assets, as a result of the Merger or any of the other
Contemplated Transactions.
ARTICLE 6
The
obligation of the Company to effect the Merger and otherwise
consummate the Contemplated Transactions is subject to the
satisfaction, or waiver by the Company, at or before the Closing,
of each of the following conditions:
6.1 ACCURACY OF
REPRESENTATIONS. Each of the
representations and warranties of Parent and Merger Sub set forth
in this Agreement shall be true and correct (disregarding all
qualifications or limitations as to “materiality,”
“Parent Material Adverse Effect” and words of similar
import set forth therein) as of the date of this Agreement, and as
of the Closing as though made on the Closing, except where the
failure of such representations and warranties to be so true and
correct would not, individually or in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect; provided in each
case that representations and warranties made as of a specific date
shall be required to be so true and correct (subject to such
qualifications) as of such date.
6.2 PERFORMANCE OF
COVENANTS. Each of the
covenants and obligations in this Agreement that Parent or Merger
Sub, as applicable, is required to comply with or perform at or
prior to the Closing Date shall have been complied with or
performed in all material respects.
6.3 [Intentionally
omitted.]
6.4 EQUITYHOLDER
APPROVAL. The Required
Member Vote shall have been obtained.
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6.5 NO RESTRAINTS. No temporary
restraining Order, preliminary or permanent injunction, or other
Order of a Government Body prohibiting the consummation of the
Merger shall be in effect, and no Legal Requirement shall be in
effect that makes consummation of the Merger illegal or otherwise
prohibits or interferes with the consummation of the
Merger.
ARTICLE 7
7.1 TERMINATION. This Agreement
may be terminated prior to the Effective Time (whether before or
after adoption of this Agreement by the Company’s
equityholders):
(b) by Parent or the
Company if the Merger shall not have been consummated by 11:59 p.m.
MST Time on September 30, 2020 (the “End Date”); provided, that the right to terminate
this Agreement pursuant to this Section 7.1(b) shall not be available
to a party whose failure to perform any material obligation
required to be performed by such Party has been a cause of, or
results in, the failure of the Merger to be consummated by the End
Date;
(c) by Parent or the
Company if (i) a court of competent jurisdiction or other
Governmental Body shall have issued a final and nonappealable
Order, or shall have taken any other action, having the effect of
permanently restraining, enjoining, or otherwise prohibiting the
Merger, or (ii) a Legal Requirement shall be in effect that makes
consummation of the Merger illegal or otherwise prohibits or
prevents the consummation of the Merger;
(d) by Parent or the
Company if (i) the Company Equityholders Meeting (including any
adjournments thereof) shall have been held and completed and (ii)
this Agreement shall not have been adopted at such meeting by the
Required Member Vote; provided,
however, that a Party shall not be permitted to terminate
this Agreement pursuant to this Section 7.1(d) if the failure to obtain
the Required Member Vote is attributable to a failure on the part
of such Party to perform any material obligation required to be
performed by such Party;
(e) by Parent if (i)
the Company’s managing member shall have failed to recommend
that the Company’s equityholders vote to adopt this
Agreement, (ii) there shall have occurred a Change in
Recommendation, (iii) the Company’s managing member shall
have approved, endorsed, or recommended any Acquisition Proposal,
or (iv) the Company’s managing member shall have resolved or
proposed to take any action described in clauses (i) through (iii)
of this sentence;
(f) by Parent (i) if
any of the Company’s representations and warranties shall
have been inaccurate as of the date of this Agreement, such that
the condition set forth in Section 5.1 would not be satisfied, or
(ii) if (A) any of the Company’s representations and
warranties become inaccurate as of a date subsequent to the date of
this Agreement (as if made on such subsequent date), such that the
condition set forth in Section 5.1 would not be satisfied if
the condition were then being tested, and (B) such inaccuracy, if
capable of cure, has not been cured by the Company within 10
Business Days after its receipt of written notice thereof, or (iii)
if any of the Company’s covenants contained in this Agreement
shall have been breached, such that the condition set forth in
Section
5.2 would not be
satisfied;
24
(g) by the Company (i)
if any of Parent’s representations and warranties shall have
been inaccurate as of the date of this Agreement, such that the
condition set forth in Section 6.1 would not be satisfied, or
(ii) if (A) any of Parent’s representations and warranties
shall have become inaccurate as of a date subsequent to the date of
this Agreement (as if made on such subsequent date), such that the
condition set forth in Section 6.1 would not be satisfied if
the condition were then being tested, and (B) such inaccuracy, if
capable of cure, has not been cured by Parent within 10 Business
Days after its receipt of written notice thereof, or (iii) if any
of Parent’s covenants contained in this Agreement shall have
been breached such that the condition set forth in Section 6.2 would not be satisfied;
or
(h) by Parent if, since
the date of this Agreement, there shall have been a Company
Material Adverse Effect.
Any
termination pursuant to this Section 7.1 (other than pursuant to
Section
7.1(a)) shall be
effected by written notice from the terminating party to the other
parties.
7.2 EFFECT OF
TERMINATION. In the event of
the termination of this Agreement as provided in Section 7.1, this Agreement shall be of
no further force or effect; provided, however, that (a) this
Section
7.2, Section 7.3, and Article 8 shall survive the
termination of this Agreement and shall remain in full force and
effect, and (b) the termination of this Agreement shall not relieve
any Party from any liability for fraud or any material inaccuracy
in or breach of any representation or any material breach of any
warranty, covenant, or other provision contained in this
Agreement.
7.3 EXPENSES. All fees and
expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the
Party incurring such expenses, whether or not the Merger is
consummated.
ARTICLE 8
8.1 AMENDMENT. This Agreement
may be amended at any time prior to the Effective Time by the
Parties (by action taken or authorized by their respective boards
of directors or members, in the case of the Company and Merger
Sub), whether before or after adoption of this Agreement by the
equityholders of the Company or Merger Sub; provided, however, that after any such
equityholder approval of this Agreement, no amendment shall be made
to this Agreement that by law requires further approval or
authorization by the equityholders of the Company or Merger Sub
without such further approval or authorization. This Agreement may
not be amended, except by an instrument in writing signed by or on
behalf of each of the Parties.
8.2 REMEDIES CUMULATIVE;
WAIVER.
(a) The rights and
remedies of the Parties are cumulative and not alternative. Neither
any failure nor any delay by any Party in exercising any right,
power, or privilege under this Agreement or any of the documents
referred to in this Agreement will operate as a waiver of such
right, power, or privilege and no single or partial exercise of any
such right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege. To the maximum extent permitted
by applicable Legal Requirements, (i) no waiver that may be given
by a Party will be applicable except in the specific instance for
which it is given; and (ii) no notice to or demand on one Party
will be deemed to be a waiver of any obligation of that Party or of
the right of the Party giving such notice or demand to take further
action without notice or demand as provided in this Agreement or
the documents referred to in this Agreement.
25
(b) At any time prior
to the Effective Time, Parent (with respect to the Company) and the
Company (with respect to Parent and Merger Sub), may, to the extent
legally allowed, (i) extend the time for the performance of any of
the obligations or other acts of such Party, (ii) waive any
inaccuracies in the representations and warranties contained in
this Agreement or any document delivered pursuant to this Agreement
and (iii) waive compliance with any covenants, obligations, or
conditions contained in this Agreement. Any agreement on the part
of a Party to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such
Party.
8.3 NO SURVIVAL. None of the
representations and warranties contained in this Agreement, or any
covenant in this Agreement other than Section 4.9, shall survive the
Effective Time.
8.4 ENTIRE
AGREEMENT. This Agreement,
including the schedules, exhibits, and amendments hereto constitute
the entire agreement among the Parties and supersede all other
prior or contemporaneous agreements and understandings, both
written and oral, among or between any of the Parties with respect
to the subject matter hereof and thereof.
8.5 EXECUTION OF AGREEMENT;
COUNTERPARTS; ELECTRONIC SIGNATURES.
(a) The Agreement may
be executed in several counterparts, each of which shall be deemed
an original and all of which shall constitute one and the same
instrument and shall become effective when counterparts have been
signed by each of the Parties and delivered to the other Parties;
it being understood that all Parties need not sign the same
counterpart.
(b) The exchange of
signed copies of this Agreement or of any other document
contemplated by this Agreement (including any amendment or any
other change thereto) by any electronic means intended to preserve
the original graphic and pictorial appearance of a document shall
constitute effective execution and delivery of this Agreement as to
the Parties and may be used in lieu of an original Agreement or
other document for all purposes. Signatures of the Parties
transmitted by any electronic means referenced in the preceding
sentence shall be deemed to be original signatures for all
purposes.
(c) Notwithstanding the
E-SIGN Act or any other Legal Requirement relating to or enabling
the creation, execution, delivery, or recordation of any contract
or signature by electronic means, and notwithstanding any course of
conduct engaged in by the Parties, no Party shall be deemed to have
executed this Agreement or any other document contemplated by this
Agreement (including any amendment or other change thereto) unless
and until such Party shall have executed this Agreement or such
document on paper by a handwritten original signature or any other
symbol executed or adopted by a Party with current intention to
authenticate this Agreement or such other contemplated document and
an original of such signature has been exchanged by the Parties
either by physical delivery or in the manner set forth in
Section
8.5(b).
“Originally signed” or “original signature”
means or refers to a signature that has not been mechanically or
electronically reproduced.
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8.6 GOVERNING LAW. This Agreement
and the agreements, instruments, and documents contemplated hereby,
shall be governed by, and construed in accordance with, the Legal
Requirements of the State of Delaware, without regard to any
applicable principles of conflicts of law that might require the
application of the Legal Requirements of any other
jurisdiction.
8.7 EXCLUSIVE JURISDICTION;
VENUE. In any action or
proceeding between any of the Parties arising out of or relating to
this Agreement or any of the Contemplated Transactions, each of the
Parties: (a) irrevocably and unconditionally consents and submits
to the exclusive jurisdiction and venue of the Court of Chancery of
the State of Delaware or to the extent such court does not have
subject matter jurisdiction, the Superior Court of the State of
Delaware or the United States District Court for the District of
Delaware, (b) agrees that all claims in respect of such action or
proceeding shall be heard and determined exclusively in accordance
with clause (a) of this Section, (c) waives any objection to laying
venue in any such action or proceeding in such courts, (d) waives
any objection that such courts are an inconvenient forum or do not
have jurisdiction over any party, and (e) agrees that service of
process upon such party in any such action or proceeding shall be
effective if such process is given as a notice in accordance with
Section
8.12 of this
Agreement.
8.8 WAIVER OF JURY
TRIAL. Each of the
parties irrevocably waives any and all rights to trial by jury in
any action or proceeding between the Parties arising out of or
relating to this Agreement and the Contemplated
Transactions.
(a) The Company
Disclosure Schedule and the Parent Disclosure Schedule shall be
arranged in separate sections corresponding to the numbered and
lettered sections contained in Article 2 and Article 3, respectively. The
information disclosed in any numbered or lettered Section shall be
deemed to relate to and to qualify only the particular
representation or warranty set forth in the corresponding numbered
or lettered section in Article 2 or Article 3, as the case may be,
and shall not be deemed to relate to or to qualify any other
representation or warranty.
(b) Every statement
made in the Company Disclosure Schedule shall be deemed to be a
representation of the Company in this Agreement as if set forth in
Article 2. Every
statement made in the Parent Disclosure Schedule shall be deemed to
be a representation of Parent in this Agreement as if set forth in
Article
3.
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8.10 ASSIGNMENTS AND
SUCCESSORS. No Party may
assign any of its rights or delegate any of its obligations under
this Agreement without the prior written Consent of the other
Parties. Any attempted assignment of this Agreement or of any such
rights or delegation of obligations without such consent shall be
void and of no effect This Agreement will be binding upon, and
shall be enforceable by and inure solely to the benefit of, the
parties hereto and their respective successors and permitted
assigns.
8.11 NO THIRD-PARTY
RIGHTS. Nothing in this
Agreement, express or implied, is intended to or shall confer upon
any Person (other than the Parties) any right, benefit, or remedy
of any nature whatsoever under or by reason of this Agreement;
provided, however, that
after the Effective Time, the Indemnified Persons shall be
third-party beneficiaries of, and entitled to enforce, Section 4.9, and provided further that
no Consent of the Indemnified Persons shall be required to amend
any provision of the Agreement prior to the Effective
Time.
8.12 NOTICES. All notices and
other communications hereunder shall be in writing and shall be
delivered by hand, by facsimile, or by overnight courier service
(except for notices specifically required to be delivered orally).
Such communications shall be deemed given to a Party (a) at the
time and on the date of delivery, if delivered by hand or by
facsimile (with, in the case of delivery by facsimile, confirmation
of date and time of transmission by the transmitting equipment, and
such delivery by facsimile subsequently confirmed with a copy
delivered as provided in clause (b) on the next Business Day) and
(b) at the end of the first Business Day following the date on
which sent by overnight service by a nationally recognized courier
service (costs prepaid).
Such
communication in each case shall be delivered to the following
addresses or facsimile numbers and marked to the attention of the
person (by name or title) designated below (or to such other
address, facsimile number, or person as a Party may designate by
notice to the other Parties):
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If to Company:
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▇▇▇▇▇▇▇ Music Group, LLC
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Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
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Email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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If to Parent and Merger Sub:
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Email: ▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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with a copy to (which shall not
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▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
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constitute notice hereunder):
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Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
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Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
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8.13 CONSTRUCTION;
USAGE.
(a) In this Agreement,
unless a clear contrary intention appears:
(i) the singular number
includes the plural number and vice versa;
(ii) reference
to any Person includes such Person’s successors and assigns
but, if applicable, only if such successors and assigns are not
prohibited by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(iii) reference
to any gender includes each other gender;
(iv) reference
to any agreement, document, or instrument means such agreement,
document, or instrument as amended or modified and in effect from
time to time in accordance with the terms thereof;
(v) reference to any
Legal Requirement means such Legal Requirement as amended,
modified, codified, replaced, or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder, and reference to any section or other
provision of any Legal Requirement means that provision of such
Legal Requirement from time to time in effect and constituting the
substantive amendment, modification, codification, replacement, or
reenactment of such section or other provision;
(vi) “hereunder,”
“hereof,” “hereto,” “herein,”
and words of similar import shall be deemed references to this
Agreement as a whole and not to any particular Section or other
provision;
(vii) “including”
(and with correlative meaning “include”) means
including without limiting the generality of any description
preceding such term;
(viii) all
exhibits or schedules annexed hereto or referred to herein are
hereby incorporated herein and made a part of this Agreement as if
set forth in full herein;
(ix) “or”
is used in the inclusive sense of
“and/or;”
(x) with respect to the
determination of any period of time, “from” means
“from and including” and “to” means
“to but excluding;”
(xi) references
to documents, instruments, or agreements shall be deemed to refer
as well to all addenda, exhibits, schedules, or amendments thereto
(but only to the extent, in the case of documents, instruments, or
agreements that are the subject of representations and warranties
set forth herein, copies of all addenda, exhibits, schedules, or
amendments have been provided on or prior to the date of this
Agreement to the party to whom such representations and warranties
are being made).
(b) This Agreement was
negotiated by the Parties with the benefit of legal representation
and any rule of construction or interpretation otherwise requiring
this Agreement to be construed or interpreted against any Party
shall not apply to any construction or interpretation
hereof.
29
(c) The headings
contained in this Agreement are for convenience of reference only,
shall not be deemed to be a part of this Agreement, and shall not
be referred to in connection with the construction or
interpretation of this Agreement.
8.14 ENFORCEMENT OF
AGREEMENT. The Parties
acknowledge and agree that Parent and Merger Sub would be
irreparably damaged if any of the provisions of this Agreement are
not performed in accordance with their specific terms and that any
breach of this Agreement by the Company could not be adequately
compensated by monetary damages alone. Accordingly, in addition to
any other right or remedy to which Parent or Merger Sub may be
entitled, at law or in equity, it shall be entitled, without proof
of damages, to enforce any provision of this Agreement by a decree
of specific performance and temporary, preliminary, and permanent
injunctive relief to prevent breaches or threatened breaches of any
of the provisions of this Agreement, without posting any bond or
other undertaking. In the event that any action shall be brought by
Parent or Merger Sub in equity to enforce the provisions of the
Agreement, the Company shall not allege, and hereby waives the
defense, that there is an adequate remedy at law or that the award
of specific performance is not an appropriate remedy for any reason
of law or equity.
8.15 SEVERABILITY. If any provision
of this Agreement is held invalid, illegal, or unenforceable by any
court of competent jurisdiction, the other provisions of this
Agreement will remain in full force and effect, so long as the
economic or legal substance of the transactions contemplated by
this Agreement is not affected in any manner materially adverse to
any Party.
“Acquisition
Proposal” means any unsolicited bona fide written
offer, proposal, inquiry, or indication of interest (other than an
offer, proposal, inquiry, or indication of interest by Parent)
contemplating or otherwise relating to any Acquisition
Transaction.
“Acquisition Transaction”
means any transaction or series of transactions
involving:
(a) any merger,
consolidation, share exchange, business combination, issuance of
securities, acquisition of securities, tender offer, exchange
offer, or other similar transaction (i) in which the Company or any
of its Subsidiaries is a constituent corporation, (ii) in which a
Person or “group” (as defined in the Exchange Act and
the rules promulgated thereunder) of Persons directly or indirectly
acquires beneficial or record ownership of securities representing
more than 15% of the outstanding securities of any class of voting
securities of the Company or any of its Subsidiaries, or (iii) in
which the Company or any of its Subsidiaries issues or sells
securities representing more than 15% of the outstanding securities
of any class of voting securities of the Company or any of its
Subsidiaries; or
(b) any sale (other
than sales of inventory in the ordinary course of business), lease
(other than in the ordinary course of business), exchange, transfer
(other than sales of inventory in the ordinary course of business),
license (other than nonexclusive licenses in the ordinary course of
business), acquisition, or disposition of any business or
businesses or assets that constitute or account for 15% or more of
the consolidated net revenues, net income, or assets of the Company
and its Subsidiaries.
30
“Affiliate” of any Person
means with respect to any Person, another Person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first
Person.
“Affiliated Group” means
any affiliated group within the meaning of Code Section 1504(a) or
any similar group defined under a similar provision of state,
local, or non-U.S. law.
“Agreement” shall have the
meaning set forth in the Preamble.
“ARS” shall have the
meaning set forth in the Preamble.
“Blue Sky Laws” shall have
the meaning set forth in Section 2.2(c).
“Book Entry Equity” mean
uncertificated Company Equity represented by a book
entry.
“Business Day” means any
day other than a Saturday, Sunday. or a day on which banking
institutions located in Phoenix, Arizona are authorized pursuant to
Legal Requirement to be closed and shall consist of the time period
from 12:01 a.m. through 12:00 midnight at such
location.
“Certificate of Merger”
shall have the meaning set forth in Section 1.3.
“Closing” shall have the
meaning set forth in Section 1.3.
“Closing Date” shall have
the meaning set forth in Section 1.3.
“Code” shall have the
meaning set forth in the Recitals, paragraph B.
“Commission” shall have
the meaning set forth in Section 3.13.
“Company” shall have the
meaning set forth in the Preamble.
“Company Equity” shall
have the meaning set forth in Section 2.3.
“Company Contract” means
any Contract: (a) to which the Company or any of its Subsidiaries
is a party; (b) by which the Company or any of its Subsidiaries or
any asset of the Company or any of its Subsidiaries is or may
become bound or under which the Company or any of its Subsidiaries
has, or may become subject to, any obligation; or (c) under which
the Company or any of its Subsidiaries has or may acquire any right
or interest.
“Company Disclosure
Schedule” means the disclosure schedule that has been
prepared by the Company in accordance with the requirements of
Section 8.9 and
that has been delivered by the Company to Parent on the date of
this Agreement and signed by the President of the
Company.
“Company Financial
Statements” shall have the meaning set forth in
Section
2.8.
31
“Company IP” means all
Intellectual Property owned, used, held for use, or exploited by
the Company or any of the Company Subsidiaries, including all Owned
Company IP and Licensed Company IP.
“Company Material Adverse
Effect” means events, violations, circumstances, or
other matters which, individually or in the aggregate, had or could
reasonably be expected to have a Company Material Adverse Effect on
(i) the business, condition, capitalization, assets, liabilities,
operations, financial performance, or prospects of the Company and
its Subsidiaries taken as a whole, (ii) the ability of the Company
to consummate the Merger or any of the other Contemplated
Transactions or to perform any of its obligations under the
Agreement, or (iii) Parent’s ability to vote, receive
dividends with respect to, or otherwise exercise ownership rights
with respect to the stock of the Surviving
Corporation.
“Company Most Recent Balance
Sheet” shall have the meaning set forth in
Section
2.8.
“Company Most Recent Financial
Statements” shall have the meaning set forth in
Section
2.8.
“Company Most Recent Fiscal Month
End” shall have the meaning set forth in Section 2.8.
“Company Most Recent Fiscal Year
End” shall have the meaning set forth in Section 2.8.
“Company Equity
Certificate” means a valid certificate representing
Company Equity.
“Company Equityholders
Meeting” shall have the meaning set forth in
Section
4.4(a).
“Consent” means any
approval, consent, ratification, permission, waiver, or
authorization (including any Governmental
Authorization).
“Contemplated
Transactions” shall have the meaning set forth in
Section
2.2(a).
“Contract”
means any written, oral, or other agreement, contract, subcontract,
lease, understanding, instrument, note, option, warranty, purchase
order, license, sublicense, insurance policy, benefit plan, or
commitment or undertaking of any nature.
“Copyrights”
means all copyrights, copyrightable works, semiconductor topography
and mask work rights, and applications for registration thereof,
including all rights of authorship, use, publication, reproduction,
distribution, performance transformation, moral rights, and rights
of ownership of copyrightable works, semiconductor topography
works, and mask works, and all rights to register and obtain
renewals and extensions of registrations, together with all other
interests accruing by reason of international copyright,
semiconductor topography, and mask work conventions.
“Current information
Company” has the meaning set forth in Section 3.20.
“Department of Labor”
means the United States Department of Labor.
“Department of the
Treasury” means United States Department of the
Treasury.
32
“DGCL” shall have the
meaning set forth in the Recitals, Paragraph A.
“E-SIGN Act” means the
Electronic Signatures in Global and National Commerce Act enacted
June 30, 2000, 15 U.S.C. Sections 7001-7006.
“▇▇▇▇▇” means the
Commissions’ Electronic Data Gathering, Analysis, and
Retrieval system.
“Effective Time” shall
have the meaning set forth in Section 1.3.
“Employee Benefit Plan”
means any “employee benefit plan” (as such term is
defined in ERISA §3(3)) and any other material employee
benefit plan, program or arrangement of any kind.
“Encumbrance” means any
lien, pledge, hypothecation, charge, mortgage, security interest,
encumbrance, claim, infringement, interference, option, right of
first refusal, preemptive right, community property interest, or
restriction of any nature (including any restriction on the voting
of any security, any restriction on the transfer of any security or
other asset, any restriction on the receipt of any income derived
from any asset, any restriction on the use of any asset, and any
restriction on the possession, exercise, or transfer of any other
attribute of ownership of any asset).
“End Date” shall have the
meaning set forth in Section 7.1(b).
“Entity” means any
corporation (including any nonprofit corporation), general
partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, company (including any company
limited by shares, limited liability company, or joint stock
company), firm, society, or other enterprise, association,
organization, or entity.
“Environmental, Health, and Safety
Requirements” means all federal, state, local, and
non-U.S. statutes, regulations, ordinances, and similar provisions
having the force or effect of law, all judicial and administrative
orders and determinations, and all common law concerning public
health and safety, worker health and safety, pollution, or
protection of the environment, including all those relating to the
presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control,
exposure to, or cleanup of any hazardous materials, substances,
wastes, chemical substances, mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise, odor, mold, or
radiation.
“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
“Exchange Agent” shall
have the meaning set forth in Section 1.7(a).
“Exchange Fund” shall have
the meaning set forth in Section 1.7(a).
“Exchange Ratio” shall
have the meaning set forth in Section 1.5(a).
33
“Facilities” means any
real property, leaseholds, or other interests currently or formerly
owned or operated by the Company or any of its Subsidiaries and any
buildings, plants, structures, or equipment (including motor
vehicles, tank cars, and rolling stock) currently or formerly owned
or operated by the Company or any of its Subsidiaries.
“FINRA” means the
Financial Industry Regulatory Authority.
“GAAP”
means generally accepted accounting principles for financial
reporting in the United States, applied on a basis consistent with
the basis.
“Governmental
Authorization” means any: (a) permit, license,
certificate, franchise, permission, variance, clearance,
registration, qualification, or authorization issued, granted,
given, or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement; or (b)
right under any Contract with any Governmental Body.
“Governmental Body” means
any: (a) nation, state, commonwealth, province, territory, county,
municipality, district, or other jurisdiction of any nature; (b)
federal, state, local, municipal, foreign, or other government; or
(c) governmental or quasi-governmental authority of any nature
(including any governmental division, department, agency,
commission, instrumentality, official, organization, unit, body, or
Entity and any court or other tribunal).
“HSR Act” means the HSR
Act and any other antitrust, unfair competition, merger or
acquisition notification, or merger or acquisition control Legal
Requirements under any applicable jurisdictions, whether federal,
state, local, or foreign.
“Income Tax Return” means
any return, declaration, report, claim for refund, or information
return or statement relating to Income Taxes, including any
schedule or attachment thereto, and including any amendment
thereof.
“Indemnified Persons”
shall have the meaning set forth in Section 4.9(a).
“Intellectual Property”
means collectively, all intellectual property and other similar
proprietary rights in any jurisdiction throughout the world,
whether owned, used, or held for use under license, whether
registered or unregistered, including such rights in and to: (a)
Trademarks, and the goodwill associated therewith, (b) Patents and
inventions, invention disclosures, discoveries, and improvements,
whether or not patentable, (c) Trade Secrets, and confidential
information and rights to limit the use or disclosure thereof by
any Person, (d) all works of authorship (whether copyrightable or
not), Copyrights, and databases (or other collections of
information, data works, or other materials), (e) software,
including data files, source code, object code, firmware, mask
works, application programming interfaces, computerized databases,
and other software-related specifications and documentation, (f)
designs and industrial designs, (g) Internet domain names, (h)
rights of publicity and other rights to use the names and likeness
of individuals, (i) moral rights, and (j) claims, causes of action,
and defenses relating to the past, present, and future enforcement
of any of the foregoing; in each case of (a) to (i) above,
including any registrations of, applications to register, and
renewals and extensions of, any of the foregoing with or by any
Governmental Body in any jurisdiction.
34
“Issued Patents” means all
issued patents, reissued or reexamined patents, revivals of
patents, utility models, certificates of invention, registrations
of patents, and extensions thereof, regardless of country or formal
name, issued by the United States Patent and Trademark Office and
any other Governmental Body.
“Knowledge” of any Party
means all matters which any of such Party's officers, members or
directors actually knew or should have known acting in their
capacity as an officer, member or director of such
party.
“Legal Proceeding” means
any action, suit, litigation, arbitration, proceeding (including
any civil, criminal, administrative, investigative, or appellate
proceeding), hearing, inquiry, audit, examination, or investigation
commenced, brought, conducted, or heard by or before, or otherwise
involving, any court or other Governmental Body or any arbitrator
or arbitration panel.
“Legal Requirement” means
any federal, state, local, municipal, foreign, or other law,
statute, constitution, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, ruling, or
requirement issued, enacted, adopted, promulgated, implemented, or
otherwise put into effect by or under the authority of any
Governmental Body (or under the authority of the OTC).
“Liabilities” means any
and all debts, liabilities and obligations, whether accrued or
fixed, absolute or contingent, matured or unmatured or determined
or determinable, including those arising under any Legal
Requirement or Governmental Authority and those arising under any
contract, agreement, arrangement, commitment or
undertaking.
“License Agreement” means
any Contract, whether written or oral, and any amendments thereto
(including license agreements, sub-license agreements, consulting
agreements, research agreements, development agreements,
distribution agreements, consent to use agreements, customer or
client contracts, coexistence, nonassertion or settlement
agreements), pursuant to which any interest in, or any right to use
or exploit, any Intellectual Property has been
granted.
“Licensed Company IP”
means the Intellectual Property owned by a third party that the
Company or any of the Company Subsidiaries has a right to use or
exploit by virtue of a License Agreement.
“Lien” means any pledge,
lien, charge, mortgage, encumbrance, or security interest of any
kind or nature.
“Merger” shall have the
meaning set forth in the Recitals, Paragraph A.
“Merger Sub” shall have
the meaning set forth in the Preamble.
“Merger Sub Shares” shall
have the meaning set forth in Section 3.3(b).
“National Labor Relations
Board” means the National Labor Relations Board, an
independent agency of the U.S. government created by Congress
pursuant to the National Labor Relations Act.
35
“Order” means any order,
injunction, judgment, decree, ruling, stipulation, assessment, or
arbitration award of any Governmental Body or
arbitrator.
“Ordinary Course of
Business” means the ordinary course of business
consistent with past custom and practice (including with respect to
quantity and frequency).
“Organizational Documents”
shall have the meaning set forth in Section 2.1(b).
“OTC” shall have the
meaning set forth in Section 1.5(c).
“Owned Company IP” means
the Intellectual Property that is owned by the Company or any of
the Company Subsidiaries.
“Owned Real Property”
means all land, together with all buildings, structures,
improvements, and fixtures located thereon, and all easements and
other rights and interests appurtenant thereto, owned by a party
and its Subsidiaries.
“Parent” shall have the
meaning set forth in the Preamble.
“Parent Capital Shares”
shall have the meaning set forth in Section 3.3(a).
“Parent Common Stock”
shall have the meaning set forth in Section 3.3(a).
“Parent Disclosure
Schedule” means the disclosure schedule that has been
prepared by Parent in accordance with the requirements of
Section
8.9 and that has
been delivered by Parent to the Company on the date of this
Agreement and signed by an authorized officer of
Parent.
“Parent Financial
Statements” has the meaning set forth in Section 3.8.
“Parent Material Adverse
Effect” means events, violations, circumstances, or
other matters which, individually or in the aggregate, had or could
reasonably be expected to have a material adverse effect on (i) the
business, condition, capitalization, assets, liabilities,
operations, financial performance, or prospects of Parent and its
Subsidiaries taken as a whole, or (ii) the ability of Parent to
consummate the Merger or any of the other Contemplated Transactions
or to perform any of its obligations under the
Agreement.
“Parent Most Recent Balance
Sheet” shall have the meaning set forth in
Section
3.8.
“Parent Most Recent Financial
Statements” shall have the meaning set forth in
Section
3.8.
“Parent Most Recent Fiscal Month
End” shall have the meaning set forth in Section 3.8.
“Parent Most Recent Fiscal Year
End” shall have the meaning set forth in Section 3.8.
“Parent Preferred Stock”
shall have the meaning set forth in Section 3.3(a).
“Party” means a party to
the Agreement.
36
“Patent Applications”
means all published or unpublished nonprovisional and provisional
patent applications, reexamination proceedings, invention
disclosures, and records of invention.
“Patents” means the Issued
Patents and the Patent Applications.
“Person” means any
individual, Entity, or Governmental Body.
“Pre-Closing Period” shall
have the meaning set forth in Section 4.2(a).
“Proprietary Rights” means
any: (a)(i) Issued Patents, (ii) Patent Applications, (iii)
Trademarks, fictitious business names, and domain name
registrations, (iv) Copyrights, (v) Trade Secrets, and (vi) all
other ideas, inventions, designs, manufacturing and operating
specifications, technical data, and other intangible assets,
intellectual properties, and rights (whether or not appropriate
steps have been taken to protect, under applicable Legal
Requirements, such other intangible assets, properties, or rights);
or (b) any right to use or exploit any of the
foregoing.
“Real Property” means all
land, together with all buildings, structures, improvements, and
fixtures located thereon, and all easements and other rights and
interests appurtenant thereto.
“Regulation S-K” means
Commission Regulation S-K.
“Regulation S-X” means
Commission Regulation S-X.
“Representatives” means
officers, directors, employees, members, managers, agents,
attorneys, accountants, advisors, and representatives.
“Required Member Vote”
shall have the meaning set forth in Section 2.2(a).
“SEC” means the United
States Securities and Exchange Commission.
“Secretary of State” shall
have the meaning set forth in Section 1.3.
“Securities Act” means the
Securities Act of 1933, as amended.
“Subsidiary” means an
Entity of which another Person directly or indirectly owns,
beneficially or of record, (a) an amount of voting securities or
other interests in such Entity that is sufficient to enable such
Person to elect at least a majority of the members of such
Entity’s board of directors, members or other governing body,
or (b) at least 50% of the outstanding equity or financial
interests of such Entity.
“Superior Proposal” means
an unsolicited, bona fide written offer made by a third party to
acquire, directly or indirectly, by merger or otherwise, all of the
outstanding shares of Company Equity or all or substantially all of
the assets of the Company and its Subsidiaries, which the
Company’s managing member determines in its reasonable
judgment, taking into account, among other things, all legal,
financial, regulatory, and other aspects of the proposal and the
person making the proposal and an opinion of an independent
financial advisor of nationally recognized reputation (a) is more
favorable from a financial point of view to the Company’s
equityholders than the terms of the Merger, and (b) is reasonably
capable of being consummated; provided, however, that any such offer
shall not be deemed to be a “Superior Proposal” if any
financing required to consummate the transaction contemplated by
such offer is not committed and is not reasonably capable of being
obtained by such third party.
37
“Surviving Corporation”
shall have the meaning set forth in Section 1.1.
“Tax” means any tax
(including any income tax, franchise tax, capital gains tax, gross
receipts tax, value added tax, surtax, excise tax, ad valorem tax,
transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax, or payroll tax), levy, assessment, tariff,
duty (including any customs duty), deficiency, or fee, and any
related charge or amount (including any fine, penalty, or
interest), imposed, assessed, or collected by or under the
authority of any Governmental Body.
“Tax Return” means any
return (including any information return), report, statement,
declaration, estimate, schedule, notice, notification, form,
election, certificate, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection, or payment of any Tax or in connection with the
administration, implementation, or enforcement of or compliance
with any Legal Requirement relating to any Tax.
“Taxing Authority” means
any Governmental Body having jurisdiction in matters relating to
Tax matters.
“Trade Secrets” means all
product specifications, data, know-how, formulae, compositions,
processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, research and development,
manufacturing or distribution methods and processes, customer
lists, current and anticipated customer requirements, price lists,
market studies, business plans, computer software and programs
(including object code), computer software and database
technologies, systems, structures and architectures (and related
processes, formulae, composition, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods, and
information), and any other information, however documented, that
is a trade secret within the meaning of the applicable trade-secret
protection Legal Requirements.
“Trademarks” means all (a)
trademarks, service marks, marks, logos, insignias, designs, names,
or other symbols, (b) applications for registration of trademarks,
service marks, marks, logos, insignias, designs, names, or other
symbols, and (c) trademarks, service marks, marks, logos,
insignias, designs, names, or other symbols for which registrations
has been obtained.
“United States Treasury
Regulations” means all temporary and final regulations
promulgated under the Code by the Department of the
Treasury.
“U.S.C.” means the United
States Code of 1926, as amended.
38
IN WITNESS WHEREOF, the Parties have
caused this Agreement to be executed as of the date first above
written.
|
PARENT:
By:
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
CEO
|
COMPANY:
▇▇▇▇▇▇▇ MUSIC GROUP LLC
By:
/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Authorized Member
By:
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Authorized Member
By:
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Authorized Member
By:
/s/ ▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇ ▇▇▇▇▇▇▇
Title:
Authorized Member
|
|
MERGER
SUB:
▇▇▇▇▇▇▇
MUSIC, INC.
By:
/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
President
|
|
|
|
39
SCHEDULE 1.5(a)(iii)
|
MEMBER
|
|
COMMON STOCK
|
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
300,000
Shares
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
300,000
Shares
|
|
▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
300,000
Shares
|
|
▇▇▇
▇▇▇▇▇▇▇
|
|
25,000
Shares
|
|
|
SCHEDULE 2.3
|
MEMBER
|
|
INTEREST
|
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
32.43249
% Membership Interest
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
32.43249
% Membership Interest
|
|
▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
32.43249
% Membership Interest
|
|
▇▇▇
▇▇▇▇▇▇▇
|
|
2.7027
% Membership Interest
|
|
|