AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 20,
2005, is among Xxxxxx International Corp., a Delaware corporation ("Xxxxxx"),
SSE Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Xxxxxx ("Merger Sub") and Sheridan Square Entertainment, Inc., a Delaware
corporation ("Sheridan"). Certain capitalized and non-capitalized terms used
herein are defined in Section 8.11.
RECITALS
WHEREAS, the Boards of Directors of Sheridan, Xxxxxx and Merger Sub
each have, in light of and subject to the terms and conditions set forth herein,
approved this Agreement and the transactions contemplated hereby, including the
Merger (as defined in Section 1.1 below), and declared the Merger advisable and
fair to, and in the best interests of, their respective stockholders;
WHEREAS, pursuant to the Merger, among other things, and subject to the
terms and conditions of this Agreement, all of the issued and outstanding shares
of capital stock of Sheridan (other than shares of Sheridan Series B Preferred
Stock (as defined herein)) shall be converted into the new shares of common
stock, par value $.01 per share, of Xxxxxx (the "Xxxxxx Common Stock") provided
for in the amended certificate of incorporation of Xxxxxx to be adopted prior to
the Effective Time pursuant to Section 1.8(a);
WHEREAS, after the Merger, Sheridan shall become a wholly owned
subsidiary of Xxxxxx.
WHEREAS, for federal income tax purposes, it is intended that the
Merger qualifies as a reorganization under the provisions of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, concurrently with the execution of this Agreement, Xxxxxx and
Sheridan shall enter into a transaction (the "Series B Transaction") pursuant to
which Xxxxxx shall purchase up to $1,000,000 shares of Series B Convertible
Preferred Stock of Sheridan (the "Sheridan Series B Preferred Stock"); and
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants, representations and warranties contained herein, and subject
to the terms and conditions set forth herein, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
upon the terms and subject to the conditions set forth in this Agreement and in
accordance with applicable provisions of the Delaware General Corporation Law
(the "Delaware Law"), Merger Sub shall be merged with and into Sheridan (the
"Merger"), with Sheridan being the surviving corporation of the Merger (the
"Surviving Corporation") and becoming a wholly-owned subsidiary of Xxxxxx.
Following the Merger, the separate existence of Merger Sub shall cease.
Section 1.2 Effective Time. At the Closing (as defined in Section 1.3), the
parties shall cause the Merger to be consummated by executing and filing a duly
executed certificate of merger substantially in the form attached hereto as
Exhibit A and other appropriate documents (the "Certificate of Merger") with
respect to the Merger, with the Secretary of State of the State of Delaware, in
such form as Sheridan and Xxxxxx reasonably determine is required by and in
accordance with the relevant provisions of Delaware Law. The Merger shall become
effective upon the filing of the Certificate of Merger or such later date as may
be set forth therein (the "Effective Time").
Section 1.3 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Ruskin Moscou
Faltischek, P.C., 000 XXX Xxxxx, Xxxx Xxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxx Xxxx
00000 as soon as practicable following satisfaction or waiver of all of the
conditions to the obligations of the parties to consummate the transactions
contemplated hereby, or at such other time and place as Xxxxxx and Xxxxxxxx
shall mutually agree (the date on which such closing occurs being herein
referred to as the "Closing Date"); provided, however, that this Agreement has
not been terminated pursuant to Article VI hereof.
Section 1.4 Merger Consideration.
(a) For purposes of this Agreement, the following terms have the following
meanings:
"Effective Time Sheridan Share Number" means the sum of (i)
the number of Sheridan Common Shares plus (ii) the aggregate number of Sheridan
Common Share Equivalents as of immediately prior to the Effective Time
attributable to all of the Sheridan Preferred Shares.
"Exchange Ratio" means (i) the number of Merger Shares divided
by (ii) the Effective Time Sheridan Share Number.
"Merger Shares" means 15,046,697 shares of Xxxxxx Common
Stock, all unencumbered and free and clear of all liens, charges, pledges,
security interests or any other restrictions, except for those as may be imposed
by federal and state securities laws.
"Sheridan Certificate of Incorporation" means Sheridan's
Certificate of Incorporation, as in effect as of the date hereof.
"Sheridan Class A Stock" means Sheridan's Class A Common
Stock, par value $.01 per share.
"Sheridan Class B Stock" means Sheridan's Class B Common
Stock, par value $.01 per share.
"Sheridan Common Share Equivalents" means with respect to any
Sheridan Preferred Share as of any time, that number of shares of Sheridan Class
A Stock that would be issuable with respect to such Sheridan Preferred Share if
such Sheridan Preferred Share was converted into shares of Sheridan Class A
Stock as of such time pursuant to an Automatic Conversion Event (as such term is
defined in the Sheridan Certificate of Incorporation) and Sheridan elected for
the holder of such Sheridan Preferred Share to receive the then accrued and
unpaid dividends on such Sheridan Preferred Share in additional shares of
Sheridan Class A Stock in the manner provided for in the Sheridan Certificate of
Incorporation.
"Sheridan Common Shares" means the 107,422.72 shares of
Sheridan Common Stock issued and outstanding as of the date hereof.
"Sheridan Common Stock" means the Sheridan Class A Stock and
the Sheridan Class B Stock.
"Sheridan Preferred Shares" means the 901.90621 shares of
Sheridan Series A Preferred Stock issued and outstanding as of the date hereof.
"Sheridan Series A Preferred Stock" means Sheridan's Series A
Convertible Preferred Stock, par value $1.00 per share.
The number of Merger Shares shall be subject to adjustment as
provided in Sections 1.4(b) and 1.4(c) below. At the Effective Time, by virtue
of the Merger, and without further action by any Person or entity, (i) each
issued and outstanding share of Sheridan Class A Stock shall automatically be
converted into the right to receive that number of shares of Xxxxxx Common Stock
equal to the Exchange Ratio, (ii) each issued and outstanding share of Sheridan
Class B Stock shall automatically be converted into the right to receive that
number of shares of Xxxxxx Common Stock equal to the Exchange Ratio, (iii) each
issued and outstanding share of Sheridan Series A Preferred Stock shall
automatically be converted into the right to receive that number of shares of
Xxxxxx Common Stock equal to the number of Sheridan Common Share Equivalents
attributable to such share of Sheridan Series A Preferred Stock as of
immediately prior to the Effective Time multiplied by the Exchange Ratio, and
(iv) each issued and outstanding share of Sheridan Series B Preferred Stock
shall automatically be cancelled without consideration therefore. Fractional
shares of Xxxxxx Common Stock that would otherwise by issuable hereunder to any
holder of Sheridan Common Shares and/or Sheridan Preferred Shares (such holders,
individually, a "Sheridan Stockholder", and collectively, the "Sheridan
Stockholders") with respect to all Sheridan Common Shares and/or Sheridan
Preferred Shares owned by such Sheridan Stockholder as of immediately prior to
the Effective Time shall be rounded to the nearest whole number (with any
fractional share greater than or equal to one-half share being rounded up). For
purposes of this Agreement, the Sheridan Series A Preferred Stock and the
Sheridan Series B Preferred Stock shall be referred to herein from time to time
as the "Sheridan Preferred Stock."
(b) If, between the date of this Agreement and the Effective Time, either (i)
the outstanding shares of common stock of Xxxxxx shall have been changed into a
different number of shares or a different class by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, or any similar event, or (ii) the number of outstanding voting shares
or shares of common stock of Xxxxxx changes for any reason, including without
limitation the issuance of additional voting shares or shares of common stock in
a financing or for the acquisition of assets or business (in each case, other
than as a result of the exercise of options or warrants to purchase shares of
common stock of Xxxxxx that are outstanding as of the date hereof), then the
number of Merger Shares shall be appropriately adjusted to the extent necessary,
and in a manner reasonably acceptable to Xxxxxx and Sheridan, to give affect to
the relative values of Xxxxxx and Xxxxxxxx as contemplated by the Parties as of
the date hereof.
(c) If, between the date of this Agreement and the Effective Time, other than in
connection with the Series B Transaction, (i) the outstanding shares of Sheridan
Common Stock or Sheridan Series A Preferred Stock shall have been changed into a
different number of shares or a different class by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, or any similar event, or there is the issuance of additional shares
in a financing, or (ii) the number of shares of Sheridan Common Stock issuable
upon conversion of each share of Sheridan Series A Preferred Stock shall have
been changed pursuant to contract, an anti-dilution adjustment provision
contained in Sheridan's certificate of incorporation or otherwise (other than as
a result of the continuing accrual of dividends on the Sheridan Series A
Preferred Stock), or (iii) the number of outstanding shares of Sheridan Series A
Preferred Stock changes for any reason, including, without limitation, the
issuance of additional shares of Sheridan Series A Preferred Stock (in each
case, other than as a result of the exercise of options or warrants to purchase
shares of Sheridan Common Stock that are outstanding as of the date hereof),
then the number of Merger Shares shall be appropriately adjusted to the extent
necessary, and in a manner reasonably acceptable to Xxxxxx and Xxxxxxxx, to give
affect to the relative values of Xxxxxx and Sheridan as contemplated by the
Parties as of the date hereof.
Section 1.5 Effects of the Merger. The Merger shall have the effects set forth
in this Agreement, the Certificate of Merger and the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all of the properties, rights, privileges,
powers and franchises of Merger Sub shall vest in the Surviving Corporation, and
all debts, liabilities and duties of Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
Section 1.6 Conversion of Securities. In addition to the conversion of the
Sheridan Common Stock and the Sheridan Series A Preferred Stock set forth in
Section 1.4(a), at the Effective Time, each outstanding share of common stock,
par value $0.01 per share, of Merger Sub shall, by virtue of the Merger and
without any action on the part of Sheridan, Xxxxxx or Merger Sub, be converted
into one fully paid and non-assessable share of common stock of the Surviving
Corporation.
Section 1.7 Directors and Officers.
(a) Xxxxxx. As of the Effective Time, the officers of Xxxxxx shall be as set
forth on Schedule 1.7(a) of the Xxxxxx Disclosure Schedule (as defined in
Article II), each of whom shall serve in such capacity until their respective
successors are duly appointed and qualified. The directors of Xxxxxx shall be as
follows: Xxxxx Xxxxxxx, Xxxx Xxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxxxxx and five
(5) other individuals who shall be mutually agreed upon by the parties (the
"Independent Directors") provided that the Independent Directors shall qualify
as "independent" directors under the rules and regulations of the Securities and
Exchange Commission (the "SEC") and, provided that Xxxxxx'x securities are
listed on a national securities exchange or automatic quotation system, the
rules of such national securities exchange or automatic quotation system.
(b) Surviving Corporation. As of the Effective Time, the officers and directors
of the Surviving Corporation shall be as set forth on Schedule 1.7(b) of the
Sheridan Disclosure Schedule, each of whom shall serve in such capacity until
their respective successors are duly elected or appointed and qualified.
Section 1.8 Certificate of Incorporation and Bylaws.
(a) Xxxxxx. Xxxxxx hereby agrees that the certificate of incorporation and
bylaws of Xxxxxx in effect immediately prior to the Effective Time to be
approved at a special meeting of Xxxxxx'x stockholders shall be as set forth on
Exhibit B and Exhibit C, respectively, attached hereto and shall remain in full
force and effect after the Effective Time. Xxxxxx further agrees that pursuant
to the terms of such certificate of incorporation, prior to the Effective Time,
each share of Xxxxxx'x Class A Common Stock and each share of Xxxxxx'x Class B
Common Stock will be converted into one share of Xxxxxx Common Stock.
(b) Surviving Corporation. Effective immediately following the Merger, the
certificate of incorporation and bylaws of Merger Sub as in effect immediately
prior to the Effective Time shall be the certificate of incorporation and bylaws
of the Surviving Corporation, until amended in accordance with applicable law.
Section 1.9 Exchange of Shares. At or following the Closing, each Sheridan
Stockholder shall deliver to Xxxxxx any certificates representing outstanding
shares of Sheridan Common Stock and/or Sheridan Series A Preferred Stock that
they own (collectively, "Sheridan Certificates"), duly endorsed in proper form
for transfer together with a transmittal letter in a customary form that is
mutually agreeable to Xxxxxx and Xxxxxxxx and will be sent by Xxxxxx to the
Sheridan Stockholders in advance of, or promptly after, the Closing, and Xxxxxx
shall issue or cause its transfer agent to issue to each Sheridan Stockholder
immediately upon receipt of such Sheridan Certificates, certificates
representing the applicable Merger Shares into which the shares represented by
the Sheridan Certificates were converted pursuant to Section 1.4 hereof and all
Sheridan Certificates so surrendered shall subsequently be cancelled. Pending
surrender of the Sheridan Certificates, each such certificate shall be deemed
for all corporate purposes to evidence the Merger Shares into which such
certificate shall have been converted in the Merger.
Section 1.10 Lost Certificates. If any Sheridan Certificates shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity by
such Person against any claim that may be made against the Surviving Corporation
with respect to such Certificate, Xxxxxx will deliver in exchange for such lost,
stolen or destroyed Certificate the applicable Merger Shares with respect to the
Sheridan Common Stock formerly represented thereby and any unpaid dividends and
other distributions deliverable in respect thereof, pursuant to this Agreement.
Section 1.11 Options and Warrants.
(a) At or following the Closing, each holder of a Sheridan Stock Option or
Warrant (as such terms are defined below) may deliver the option and/or warrant
agreements of such holder to Xxxxxx for cancellation, in which case, Xxxxxx
shall issue to such option and/or warrant holder a new option or warrant
agreement in accordance with the terms set forth herein.
(b) At the Effective Time, each outstanding employee option to acquire Sheridan
Common Stock ("Sheridan Stock Option") set forth in Schedule 2.2(a) of the
Sheridan Disclosure Schedule shall be adjusted, in accordance with the terms of
this Merger Agreement and without any action on the part of the holders of such
Sheridan Stock Options, to be exercisable to purchase shares of Xxxxxx Common
Stock as provided below. Following the Effective Time, each Sheridan Stock
Option shall continue to have, and shall be subject to, the same terms and
conditions set forth in the agreement pursuant to which such Sheridan Stock
Option was subject immediately prior to the Effective Time, except (i) each
Sheridan Stock Option shall be exercisable for that number of shares of Xxxxxx
Common Stock equal to the product of (x) the aggregate number of shares of
Sheridan Common Stock for which such Sheridan Stock Option was exercisable and
(y) the Exchange Ratio, rounded to the nearest whole number (with any fractional
share greater than or equal to one-half share being rounded up) and (ii) the per
share exercise price of such Sheridan Stock Option shall be the aggregate
exercise price for the shares of Sheridan Common Stock underlying such Sheridan
Stock Option immediately prior to the Effective Time divided by the number of
shares of Xxxxxx Common Stock for which it is then exercisable (rounded up to
the nearest whole cent), subject to further adjustment as set forth therein.
Following the Closing, the Sheridan Stock Options shall become options under the
Xxxxxx 2003 Stock Option Plan, as amended, and Xxxxxx and each holder of
Sheridan Stock Options will enter into an appropriate option agreement to
reflect the foregoing.
(c) At the Effective Time, each outstanding warrant to acquire Sheridan Common
Stock (a "Warrant") shall be adjusted, in accordance with the terms of such
Warrant and this Merger Agreement and without any action on the part of the
holders of such Warrant, to be exercisable to purchase shares of Xxxxxx Common
Stock (the "Warrant Shares") as provided below. Following the Effective Time,
each Warrant shall continue to have, and shall be subject to, the same terms and
conditions set forth in the agreement pursuant to which such Warrant was subject
immediately prior to the Effective Time, except (i) each Warrant shall be
exercisable for that number of shares of Xxxxxx Common Stock equal to the
product of (x) the aggregate number of shares of Sheridan Common Stock for which
such Warrant was exercisable and (y) the Exchange Ratio, rounded down to the
nearest whole number (with any fractional share greater than or equal to
one-half share being rounded up), and (ii) the per share exercise price of such
Warrant shall be the aggregate exercise price for the shares of Sheridan Common
Stock underlying such Warrant immediately prior to the Effective Time divided by
the number of shares of Xxxxxx Common Stock for which it is then exercisable
(rounded up to the nearest whole cent), subject to further adjustment as set
forth therein.
Section 1.12 Tax Consequences. It is intended by the parties hereto that the
Merger shall constitute a reorganization within the meaning of Section 368(a) of
the Code. Each party hereto shall use its commercially reasonable efforts to
cause the Merger to be so qualified, shall report the transactions contemplated
by this Agreement in a manner consistent with such reorganization treatment and
will not take any position inconsistent therewith in any Tax Return (as
hereinafter defined), refund claim, litigation or otherwise, unless required to
do so by applicable law, rule or regulation.
Section 1.13 Sheridan Stock Transfer Books. The stock transfer books of Sheridan
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of shares thereafter on the records of
Sheridan. On or after the Effective Time, any Sheridan Certificates presented to
Xxxxxx for any reason shall be converted into the Merger Shares with respect to
the shares formerly represented by such Certificates and any unpaid dividends or
other distributions to which the holders thereof are entitled.
Section 1.14 No Further Rights. At and after the Effective Time, holders of
Sheridan Certificates shall cease to have any rights as stockholders of the
Surviving Corporation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Except as set forth on the Schedule delivered by Sheridan to Xxxxxx and
Merger Sub in connection with the execution and delivery of this Agreement (the
"Sheridan Disclosure Schedule"), Sheridan hereby represents and warrants to
Xxxxxx and Merger Sub, and except as set forth in the disclosure Schedule
delivered by Xxxxxx and Merger Sub to Sheridan in connection with the execution
and delivery of this Agreement (the "Xxxxxx Disclosure Schedule"), Xxxxxx and
Merger Sub hereby represent and warrant to Sheridan, in each case as set forth
in this Article II, with the party making such representations and warranties
being referred to as the "Representing Party" and such Representing Party's
Disclosure Schedule as the "Representing Party's Disclosure Schedule."
Notwithstanding the foregoing, any representation or warranty which expressly
refers to Xxxxxx or its Subsidiaries is being made solely by Xxxxxx and Merger
Sub and any representation or warranty which expressly refers to Sheridan or its
Subsidiaries is being made solely by Sheridan.
Section 2.1 Organization; Qualification.
(a) The Representing Party is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
the corporate power and authority required for it to own its properties and
assets and to carry on its business as it is now being conducted. The
Representing Party is duly qualified to do business and is in good standing in
each jurisdiction in which the ownership of its properties or the conduct of its
business requires such qualification, except for jurisdictions in which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party or delay consummation of the transactions contemplated by
this Agreement or otherwise prevent the Representing Party from performing its
obligations hereunder. As used in this Agreement, "Material Adverse Effect"
means any change, effect, event, occurrence, state of facts or developments that
materially adversely affects the assets, liabilities, business, results of
operations, condition (financial or otherwise) or prospects of the Representing
Party and its Subsidiaries, taken as a whole. Material Adverse Effect shall not
include any effect arising out of or attributable to (i) general economic
conditions affecting the United States or foreign securities or currency markets
generally, (ii) changes in applicable laws or accounting rules, or (iii) changes
resulting from earthquake, sabotage, war or acts of terrorism. Each Representing
Party has made available to the other party copies of its certificate of
incorporation and bylaws. Such copies of each Representing Party's and its
Subsidiaries certificate of incorporation and bylaws are complete and correct
and in full force and effect, and the Representing Party is not in violation of
any of the provisions of its certificate of incorporation or bylaws.
(b) Each of the Representing Party's Subsidiaries is listed in Schedule 2.1(b)
of the Representing Party's Disclosure Schedule and is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. Each of the Representing Party's
Subsidiaries has the corporate power and authority required for it to own its
properties and assets and to carry on its business as it is now being conducted
and is duly qualified to do business and is in good standing in each
jurisdiction in which the ownership of its properties or the conduct of its
business requires such qualification, except for jurisdictions in which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party. All outstanding shares of capital stock of, or other
ownership interests in, the Representing Party's Subsidiaries are duly
authorized, validly issued, fully paid and non-assessable and, with respect to
such shares or ownership interests that are owned by the Representing Party and
its subsidiaries, are owned free and clear of all liens, claims, mortgages,
encumbrances, pledges and security interests of any kind. Except as set forth on
Schedule 2.1(b) of the Representing Party's Disclosure Schedule, all the
outstanding shares of capital stock of, or other ownership interests in, the
Representing Party's Subsidiaries are wholly-owned by the Representing Party.
Section 2.2 Capital Stock.
(a) Schedule 2.2(a) of the Representing Party's Disclosure Schedule sets forth
as of the date hereof: (i) the number of authorized shares of each class or
series of capital stock of the Representing Party; (ii) the number of shares of
each class or series of capital stock of the Representing Party which are issued
and outstanding (and if convertible into securities of the Representing Party,
into how many of such securities each such share of capital stock is convertible
into); (iii) the number of shares of each class or series of capital stock which
are held in the treasury of such Representing Party; (iv) the number of shares
of each class or series of capital stock of the Representing Party which are
reserved for issuance (except for shares reserved for issuance under stock
option plans or other benefit plans), indicating each specific reservation; and
(v) the number of shares of each class or series of capital stock of such
Representing Party which are subject to stock options or other rights to
purchase or receive capital stock granted under such Representing Party's stock
option plan or other stock based employee or non-employee director benefit
plans, indicating the name of the plan, the date of grant, the number of shares
and the exercise price thereof. Except as set forth on Schedule 2.2(a) of the
Representing Party's Disclosure Schedule, there are no unpaid dividends or
unpaid distributions on any shares of capital stock.
(b) All the outstanding shares of capital stock of the Representing Party are,
and the Merger Shares to be issued in the Merger will be when issued in
accordance with the terms of this Agreement, duly authorized, validly issued,
fully paid and non-assessable and issued in compliance with all applicable U.S.
state and federal securities laws. Except as set forth in Schedule 2.2(b) of the
Representing Party's Disclosure Schedule, as of the date of this Agreement (i)
there are no authorized or outstanding options, warrants, calls, preemptive
rights, subscriptions or other rights, agreements, arrangements or commitments
of any character relating to the issued or unissued capital stock of the
Representing Party or any of its Subsidiaries, obligating the Representing Party
or any of its Subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or other equity interest in the
Representing Party or any of its Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Representing
Party or any of its Subsidiaries to grant, extend or enter into any such option,
warrant, call, subscription or other right, agreement, arrangement or
commitment, (ii) there are no outstanding contractual obligations of the
Representing Party or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Representing Party or any Subsidiary
of the Representing Party or to provide funds to make any investment (in the
form of a loan, capital contribution or otherwise) in any Subsidiary of the
Representing Party or other entity, and (iii) there are no shareholder
agreements, voting trusts or other agreements to which the Representing Party is
a party or to which it is bound relating to the voting or registration of any
shares of the capital stock of the Representing Party.
(c) The Representing Party is not in violation of, nor has it violated, any
federal or state securities laws in connection with any transaction relating to
the Representing Party, including without limitation, the acquisition of any
stock, business or assets of any third party or the issuance of any capital
stock of the Representing Party.
Section 2.3 Corporate Authority Relative to this Agreement; No Violation.
(a) Sheridan has the corporate power and authority to enter into this Agreement
and to carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of Sheridan and the
requisite approval of the stockholders of Sheridan (the "Sheridan Stockholder
Approval") and, except for the filing of the Certificate of Merger, no other
corporate proceedings on the part of Sheridan are necessary to authorize the
consummation of the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Sheridan and, assuming this Agreement
constitutes a valid and binding agreement of Xxxxxx, constitutes a valid and
binding agreement of Sheridan, enforceable against Sheridan in accordance with
its terms, except as enforceability thereof may be limited by (i) bankruptcy
laws and other similar laws affecting creditors' rights generally or (ii)
general principles of equity.
(b) Xxxxxx has the corporate power and authority to enter into this Agreement
and to carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of Xxxxxx, and other than
the obtaining the requisite approval of the stockholders of Xxxxxx (the "Xxxxxx
Stockholder Approval") and the filing of the Certificate of Merger, no other
corporate proceedings on the part of Xxxxxx are necessary to authorize the
consummation of the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Xxxxxx and, assuming this Agreement
constitutes a valid and binding agreement of Sheridan, constitutes a valid and
binding agreement of Xxxxxx, enforceable against Xxxxxx in accordance with its
terms, except as enforceability thereof may be limited by (i) bankruptcy laws
and other similar laws affecting creditors' rights generally or (ii) general
principles of equity.
(c) Except as set forth in Schedule 2.3(c) of the Representing Party's
Disclosure Schedule or as may be required under, and other applicable
requirements of, the Securities Act of 1933, as amended (the "Securities Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations promulgated thereunder, state securities or blue sky laws,
and the rules and regulations of The Nasdaq Stock Market (or such other
securities exchange as Xxxxxx'x securities may be listed), and the filing of the
Certificate of Merger under Delaware Law, none of the execution, delivery or
performance of this Agreement by the Representing Party, the consummation by the
Representing Party of the transactions contemplated hereby or compliance by the
Representing Party with any of the provisions hereof will (i) conflict with or
result in any breach of any provision of the certificate of incorporation,
bylaws or similar organizational documents of the Representing Party or any of
its Subsidiaries, (ii) require any filing with, or permit, authorization,
consent or approval of, any federal, regional, state or local court, arbitrator,
tribunal, administrative agency or commission or other governmental or other
regulatory authority or agency, whether U.S. or foreign (a "Governmental
Entity"), (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which the
Representing Party or any of its Subsidiaries is a party or by which any of them
or any of their properties or assets may be bound, or (iv) violate any order,
writ, injunction, decree, judgment, permit, license, ordinance, law, statute,
rule or regulation ("Law") applicable to the Representing Party, any of its
Subsidiaries or any of their properties or assets, excluding from the foregoing
clauses (ii), (iii) and (iv) such filings, permits, authorizations, consents,
approvals, violations, breaches or defaults which are not, individually or in
the aggregate, reasonably likely to have a Material Adverse Effect on the
Representing Party or prevent or delay the consummation of the transactions
contemplated hereby.
Section 2.4 Reports and Financial Statements.
(a) Xxxxxx has previously furnished or otherwise made available (by electronic
filing or otherwise) to Sheridan true and complete copies of Xxxxxx'x: (i)
Annual Reports on Form 10-K filed with the SEC for each of the fiscal years
ended January 31, 2003, 2004 and January 29, 2005; (ii) Quarterly Reports on
Form 10-Q filed with the SEC for the fiscal quarters occurring since the Form
10-K for the year ended January 31, 2004; (iii) each definitive proxy statement
filed with the SEC since January 31, 2003; and (iv) all Current Reports on Form
8-K filed with the SEC since February 1, 2004.
As of their respective dates, such reports and proxy statements filed with the
SEC by Xxxxxx (collectively with, and giving effect to, all amendments,
supplements and exhibits thereto, the "SEC Reports") (i) complied as to form in
all material respects with the applicable requirements of the Securities Act and
the Exchange Act, and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The audited consolidated financial statements
and unaudited consolidated interim financial statements included in the SEC
Reports (including any related notes and schedules) fairly present in all
material respects the financial position of Xxxxxx and its consolidated
Subsidiaries as of the dates thereof and the results of operations and cash
flows for the periods or as of the dates then ended (subject, in the case of the
unaudited interim financial statements, to normal recurring adjustments), in
each case in accordance with past practice and generally accepted accounting
principles in the United States ("GAAP") consistently applied during the periods
involved (except as otherwise disclosed in the notes thereto). Xxxxx Xxxxxxxx
00, 0000, Xxxxxx has timely filed all reports, registration statements and other
filings required to be filed by it with the SEC under the rules and regulations
of the SEC. The net realizable value of the net assets, as calculated in
accordance with GAAP, is not less than $12 million on the date hereof.
(b) Sheridan has delivered to Xxxxxx copies of its consolidated audited balance
sheets in draft form for the period of July 29, 2003 (inception) to December 31,
2003 and for the twelve months ended December 31, 2004, together with the
related statements of income, stockholders' equity and changes in cash flow for
such period and the three (3) months ended March 31, 2005 (unaudited), and
audited financial statements in draft form of Musicrama, Inc., Sheridan's
predecessor, for the twelve months ended December 31, 2002 and for the period of
January 1, 2003 to July 29, 2003 (such financial statements being hereinafter
referred to as the "Financial Statements"). The Financial Statements, including
the notes thereto, (i) were prepared in accordance with GAAP throughout the
periods covered thereby, and (ii) present fairly in all material respects the
financial position, results of operations and changes in cash flow of Sheridan
and its consolidated Subsidiaries, and its predecessor, as the case may be, as
of such dates and for the periods then ended. All firms providing audit opinions
to Sheridan for the above mentioned Financial Statements are registered with the
Public Company Accounting Oversight Board, and Sheridan shall use its best
efforts to cause such firms to issue unqualified audit opinions as soon as
reasonably practicable with respect to the above-mentioned draft Financial
Statements.
Section 2.5 No Undisclosed Liabilities. Neither the Representing Party nor any
of its Subsidiaries has any liabilities or obligations of any nature required to
be set forth on a balance sheet of the Representing Party under GAAP, whether or
not accrued, contingent or otherwise, and there is no existing condition,
situation or set of circumstances which would be reasonably expected to result
in such a liability or obligation, except (a) liabilities or obligations with
respect to Xxxxxx reflected in the SEC Reports and with respect to Sheridan
reflected in the Financial Statements or (b) liabilities and obligations arising
subsequent to the date of the Financial Statements of such Representing Party in
the ordinary course of business.
Section 2.6 No Default; Compliance with Applicable Laws. Except as set forth in
Schedule 2.6 of the Representing Party's Disclosure Schedule, the ownership and
operation of the businesses of the Representing Party and each of its
Subsidiaries is not in conflict with, or in default or violation of, any term,
condition or provision of (i) its respective certificate of incorporation or
bylaws or similar organizational documents, (ii) any Sheridan Material Contracts
or Xxxxxx Material Contracts (as defined in Section 2.17), as applicable to
Sheridan and its Subsidiaries and Xxxxxx and its Subsidiaries, respectively, or
(iii) any federal, state, local or foreign statute, Law, concession, grant,
franchise, Permit (as defined in Section 2.9) or other governmental
authorization or approval applicable to the Representing Party or any of its
Subsidiaries, excluding from the foregoing clauses (ii) and (iii), defaults or
violations which would not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Representing Party.
Section 2.7 Environmental Matters.
(a) Each of the Representing Party and its Subsidiaries has obtained all
licenses, permits, authorizations, approvals and consents from Governmental
Entities ("Environmental Permits") which are required under any applicable
Environmental Law and necessary for it to carry on its business or operations as
now conducted, except for such failures to have Environmental Permits which,
individually or in the aggregate, do not have a Material Adverse Effect on the
Representing Party. Each of such Environmental Permits is in full force and
effect, and each of the Representing Party and its Subsidiaries is in compliance
in all material respects with the terms and conditions of all such Environmental
Permits and with all applicable Environmental Laws.
(b) There are no Environmental Claims pending, or to the knowledge of the
Representing Party, threatened, against the Representing Party or any of its
Subsidiaries, or, to the knowledge of the Representing Party, any Person whose
liability for any such Environmental Claim the Representing Party or any of its
Subsidiaries has or may have retained or assumed either contractually or by
operation of law.
(c) There are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, threatened
release or presence of any Hazardous Material, that would form the basis of any
Environmental Claim against the Representing Party or any of its Subsidiaries,
or for which the Representing Party or any of its Subsidiaries is liable.
(d) As used in this Agreement: (i) "Environmental Claim" means any claim,
action, lawsuit or proceeding by any Person which seeks to impose liability
(including, without limitation, liability for investigatory costs, cleanup
costs, governmental response costs, natural resources, damages, property
damages, Personal injuries or penalties) arising out of, based on or resulting
from (A) the presence, or release or threatened release, of any Hazardous
Materials at any location, whether or not owned or operated by the Representing
Party or any of its Subsidiaries, or (B) circumstances which would give rise to
any violation, or alleged violation, of any Environmental Law; (ii)
"Environmental Law" means any law or order of any Governmental Entity relating
to (A) the generation, treatment, storage, disposal, use, handling,
manufacturing, transportation or shipment of Hazardous Materials, or (B) the
environment or to emissions, discharges, releases or threatened releases of
Hazardous Materials into the environment; and (iii) "Hazardous Materials" means
(A) any petroleum or petroleum products, radioactive materials or friable
asbestos; (B) any chemicals or other materials or substances which are now
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," or "toxic pollutants" under any
Environmental Law; and (C) pesticides.
Section 2.8 Litigation. Except as set forth in Schedule 2.8 of the Representing
Party's Disclosure Schedule, (i) there is no suit, claim, action, proceeding or
investigation pending or, to the Representing Party's knowledge, threatened
against the Representing Party, its Subsidiaries or any of its assets or
properties, (ii) the Representing Party and its Subsidiaries are not subject to
any outstanding order, writ, injunction or decree, and (iii) there is no action,
suit, proceeding or investigation pending or, to the Representing Party's
knowledge, threatened against any current or former officer, director, employee,
consultant, contractor or agent of the Representing Party (in his or her
capacity as such) which gives rise or could reasonably be expected to give rise
to a claim for contribution or indemnification against the Representing Party,
excluding from the foregoing clauses anything which is not, individually or in
the aggregate, reasonably likely to have a Material Adverse Effect on the
Representing Party or prevent or delay the consummation of the transactions
contemplated hereby.
Section 2.9 Permits. The Representing Party holds, and has at all times held,
all permits, licenses, variances, exemptions, orders, and approvals of all
Governmental Entities necessary for the lawful conduct of its business (the
"Permits"), except for such Permits the absence of which would not reasonably be
expected to have a Material Adverse Effect on the Representing Party. The
Representing Party is in material compliance with the terms of the Representing
Party's Permits. No investigation or review by any Governmental Entity in
respect of the Representing Party is pending or, to the Representing Party's
knowledge, threatened, nor has the Representing Party received notice from any
Governmental Entity of its intention to conduct the same.
Section 2.10 Employee Plans.
(a) Schedule 2.10(a) of the Representing Party's Disclosure Schedule sets
forth a true, correct and complete list of:
(i) all "employee benefit plans," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), which the
Representing Party has any obligation or liability, contingent or otherwise (the
"Benefit Plans");
(ii) all employees, consultants and independent contractors of the Representing
Party; and
(iii) all employment, consulting, termination, profit sharing, severance, change
of control, individual compensation or indemnification agreements, and all bonus
or other incentive compensation, deferred compensation, salary continuation,
disability, severance, stock award, stock option, stock purchase, educational
assistance, legal assistance, club membership, employee discount, employee loan,
credit union or vacation agreements, policies or arrangements under which the
Representing Party has any obligation or liability (contingent or otherwise) in
respect of any current or former officer, director, employee, consultant or
contractor of the Representing Party (the "Employee Arrangements").
Benefit Plans and Employee Arrangements which cover current or former employees,
consultants, contractors, officers, or directors (or their equivalent) of the
Representing Party are separately identified on Schedule 2.10(a) of the
Representing Party's Disclosure Schedule.
(b) In respect of each Benefit Plan and Employee Arrangement of the Representing
Party, a complete and correct copy of each of the following documents (if
applicable) has been delivered to Xxxxxx and Xxxxxxxx (as the case may be): (i)
the most recent plan and related trust documents, and all amendments thereto;
(ii) the most recent summary plan description, and all related summaries of
material modifications thereto; (iii) the most recent Form 5500 (including,
schedules and attachments); (iv) the most recent Internal Revenue Service
("IRS") determination, opinion or notification letter; (v) each of the stock
option grant agreements used to make grants under the Representing Party's
Option Plans, and all amendments thereto; (vi) each written employment,
consulting or individual severance or other compensation agreement, and all
amendments thereto; and (vii) the most recent actuarial reports (including for
purposes of Financial Accounting Standards Board report nos. 87, 106 and 112).
(c) None of the Benefit Plans or Employee Arrangements is subject to Title IV of
ERISA, constitutes a defined benefit retirement plan or is a multi-employer plan
described in Section 3(37) of ERISA, and the Representing Party does not have
any obligation or liability (contingent or otherwise) in respect of any such
plans, including, without limitation, any unfunded or withdrawal liability. The
Representing Party is not a member of a group of trades or businesses under
common control or treated as a single employer pursuant to Section 414 of the
Code.
(d) The Benefit Plans and their related trusts intended to qualify under
Sections 401 and 501(a) of the Code, respectively, have either received a
favorable determination, opinion or notification letter from the IRS with
respect to each such Benefit Plan as to its qualified status under the Code, or
has remaining a period of time under applicable Treasury regulations or IRS
pronouncements in which to apply for such a letter and make any amendments
necessary to obtain a favorable determination as to the qualified status of each
such Benefit Plans. Any voluntary employee benefit association which provides
benefits to current or former employees of the Representing Party, or their
beneficiaries, is and has been qualified under Section 501(c)(9) of the Code.
(e) All contributions or other payments required to have been made by the
Representing Party to or under any Benefit Plan or Employee Arrangement by
applicable Law or the terms of such Benefit Plan or Employee Arrangement (or any
agreement relating thereto) have been timely and properly made.
(f) The Benefit Plans and Employee Arrangements have been maintained and
administered in all material respects in accordance with their terms and
applicable Laws. In particular, no individual who has performed services for the
Representing Party has been improperly excluded from participation in any
Benefit Plan or Employee Arrangement.
(g) There are no pending or, to the Representing Party's knowledge, threatened
actions, claims, or proceedings against or relating to any Benefit Plan or
Employee Arrangement (other than routine benefit claims by Persons entitled to
benefits thereunder), and, to the knowledge of the Representing Party, there are
no facts or circumstances which could form the basis for any of the foregoing.
(h) Except as set forth on Schedule 2.10(h) of the Representing Party's
Disclosure Schedule, the Representing Party does not have any obligation or
liability (contingent or otherwise) to provide post-retirement life insurance or
health benefits coverage for current or former officers, directors, employees,
consultants or contractors of the Representing Party except (i) as may be
required under Part 6 of Title I of ERISA at the sole expense of the participant
or the participant's beneficiary, (ii) a medical expense reimbursement account
plan pursuant to Section 125 of the Code, or (iii) through the last day of the
calendar month in which the participant terminates employment with the
Representing Party.
(i) None of the assets of any Benefit Plan is stock of the Representing Party or
any of its affiliates, or property leased to or jointly owned with the
Representing Party or any of its affiliates.
(j) Neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (i) result in any payment becoming due
to any employee, consultant or contractor (current, former, or retired) of the
Representing Party, (ii) increase any benefits under any Benefit Plan or
Employee Arrangement or trigger any withdrawal liability thereunder or (iii)
result in the acceleration of the time of payment of, vesting of, or other
rights in respect of any such benefits (except as which may be required by the
partial or full termination of any Benefit Plan intended to be qualified under
Section 401 of the Code).
(k) The Representing Party has delivered to the other a true and correct list of
the following for each employee, consultant and contractor of the Representing
Party as of the date hereof: base salary, any bonus obligations, immigration
status, hire date, time-off balance, an indication of the existence of a signed
assignment of invention agreement for each employee and including effective date
and term for the contract, pay rate, termination provisions, indication that
they have not received W-2 statements from the Representing Party, indication
that they have not received Representing Party employee benefits and indication
of a signed assignment of invention agreement for each consultant and
contractor.
(l) The Representing Party and its Subsidiaries have complied with all
applicable immigration Laws and similar Laws of the United States and any other
country in which its employees work.
Section 2.11 Labor Matters.
(a) Except as set forth on Schedule 2.11(a) of the Representing Party's
Disclosure Schedule, the Representing Party is not a party to any labor or
collective bargaining agreement, and no employees of the Representing Party are
represented by any labor organization. Within the preceding three years, there
have been no representation or certification proceedings, or petitions seeking a
representation proceeding, pending or, to the Representing Party's knowledge,
threatened in writing to be brought or filed with the National Labor Relations
Board or any other labor relations tribunal or authority. Within the preceding
three years, to the Representing Party's knowledge, there have been no
organizing activities involving the Representing Party in respect of any group
of employees of the Representing Party.
(b) There are no strikes, work stoppages, slowdowns, lockouts, material
arbitrations or material grievances or other material labor disputes pending or,
to the knowledge of the Representing Party, threatened against or involving the
Representing Party. There are no unfair labor practice charges, grievances or
complaints pending or, to the Representing Party's knowledge, threatened by or
on behalf of any employee or group of employees of the Representing Party and,
to the knowledge of the Representing Party, there are no facts or circumstances
which could form the basis for any of the foregoing.
(c) Except as set forth on Schedule 2.11(c) of the Representing Party's
Disclosure Schedule, there are no complaints, charges or claims against the
Representing Party pending or, to the Representing Party's knowledge, threatened
to be brought or filed with any Governmental Entity or arbitrator based on,
arising out of, in connection with, or otherwise relating to the employment or
termination of employment of any individual by the Representing Party, and, to
the knowledge of the Representing Party, there are no facts or circumstances
which could form the basis for any of the foregoing.
(d) The Representing Party is in material compliance with all Laws relating to
the employment of labor, including all such Laws relating to wages, hours, the
Worker Adjustment and Retraining Notification Act, as amended ("WARN Act"),
collective bargaining, discrimination, civil rights, safety and health, workers'
compensation and the collection and payment of withholding and/or Social
Security Taxes and any similar Tax.
(e) There has been no "mass layoff" or "plant closing" as defined by WARN Act in
respect of the Representing Party within the six months prior to the date
hereof.
(f) As used in this Section 2.11, "Representing Party" shall mean the
Representing Party and its Subsidiaries.
Section 2.12 Absence of Certain Changes or Events. Except as set forth in
Schedule 2.12 of the Representing Party's Disclosure Schedule, since April 30,
2005 (i) the businesses of the Representing Party and its Subsidiaries have been
conducted in all material respects in the ordinary course consistent with past
practice and (ii) there has not been:
(a) a material adverse change in the assets, liabilities, business, results of
operations, condition (financial or otherwise) or prospects of the Representing
Party and its Subsidiaries, taken as a whole, or any event, occurrence or
development which has had or could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Representing Party;
(b) any declaration, setting aside or payment of any dividend or other
distribution in respect of any shares of capital stock of the Representing
Party, or any repurchase, redemption or other acquisition by the Representing
Party of any Representing Party securities;
(c) any incurrence or assumption by the Representing Party of any indebtedness
for borrowed money (or any renewals, replacements, or extensions that increase
the aggregate commitments thereunder) except (i) in the ordinary and usual
course of business consistent with past practice, or (ii) in connection with any
capital expenditure permitted by Section 3.1, or (iii) any guarantee,
endorsement, or other incurrence or assumption of liability (whether directly,
contingently or otherwise) by the Representing Party for the obligations of any
other Person;
(d) any creation or assumption by the Representing Party of any Lien on any
material asset of the Representing Party other than Permitted Liens (as defined
in Section 8.11);
(e) any making of any loan, advance or capital contribution to or investment in
any Person by the Representing Party other than loans or advances to employees,
contractors or consultants of the Representing Party made in the ordinary and
usual course of business consistent with past practice;
(f) (i) any contract or agreement entered into by the Representing Party on or
prior to the date hereof relating to any material acquisition or disposition of
any assets or business or (ii) any modification, amendment, assignment,
termination or relinquishment by the Representing Party of any contract, license
or other right (including any insurance policy naming it as a beneficiary or a
loss payable payee) other than those contemplated by this Agreement;
(g) any (i) grant of any severance or termination pay to any director, officer,
employee, consultant or contractor of the Representing Party; (ii) entering into
of any employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer, employee,
consultant or contractor of the Representing Party; (iii) increase in benefits
payable under any existing severance or termination pay policies or employment
agreements; or (iv) increase in compensation, bonus or other benefits payable to
directors, officers, employees, consultants or contractors of the Representing
Party other than, in the case of clause (iv) only, increases prior to the date
hereof in compensation, bonus or other benefits payable to employees,
consultants or contractors of the Representing Party in the ordinary and usual
course of business consistent with past practice or merit increases in salaries
of employees, consultants or contractors at regularly scheduled times in
customary amounts consistent with past practices;
(h) any adoption, entering into, amendment, alteration or termination of
(partially or completely) any Benefit Plan or Employee Arrangement except as
contemplated by this Agreement or to the extent required by applicable Law;
(i) any (i) making or revoking of any election relating to Taxes (as hereinafter
defined), (ii) settlement or compromise of any material claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or controversy
relating to Taxes, or (iii) change to any material methods of reporting income
or deductions for federal income tax purposes;
(j) any capital expenditures in excess of $500,000 in the aggregate;
(k) any lease, license or grant to any Person of any rights in any of the
Representing Party's assets or properties;
(l) any amendment of the certificate of incorporation or bylaws of the
Representing Party;
(m) any sufferance of any damage, destruction or loss (whether or not covered by
insurance) to any material assets of the Representing Party;
(n) any strike, slowdown or demand for recognition by a labor organization by or
with respect to any of the employees of the Representing Party;
(o) any issuance, or authorization for issuance, of any equity securities of the
Representing Party, except for stock options issued to the Representing Party's
officers, directors and employees pursuant to the Representing Party's existing
stock option plans or agreements or as otherwise provided in the Agreement; and
(p) any resignation or termination of employment of any officer, key consultant
or employee of a Representing Party.
Section 2.13 Proxy Statement. The information concerning each respective
Representing Party which is included in the proxy statement (the "Proxy
Statement") to be sent to the stockholders of Xxxxxx in connection with the
special meeting of Xxxxxx'x stockholders to consider this Agreement and the
Merger (the "Xxxxxx Stockholders Meeting"), as such information relates to the
Representing Party providing such information, shall not, on the date the Proxy
Statement is first mailed to stockholders of Xxxxxx and at the time of the
Xxxxxx Stockholders Meeting, contain any statement which, at such time and in
light of the circumstances under which it was made, is false or misleading with
respect to any matter or omit to state any material fact necessary in order to
make the statements contained in the Proxy Statement not false or misleading or
omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the Xxxxxx
Stockholders Meeting which has become false or misleading.
Section 2.14 Tax Matters.
(a) For purposes of this Agreement: (i) "Taxes" means any and all federal,
state, local, foreign or other taxes of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including, without limitation,
taxes or other charges on or with respect to income, franchises, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation or
net worth, and taxes or other charges in the nature of excise, withholding, ad
valorem or value added, and (ii) "Tax Return" means any return, report or
similar statement (including attached schedules) required to be filed with
respect to any Tax, including, without limitation, any information return, claim
for refund, amended return or declaration of estimated Tax.
(b) All federal, state, local and foreign Tax Returns required to be filed by or
on behalf of the Representing Party, or each affiliated, combined, consolidated
or unitary group of which the Representing Party is a member (an "Affiliated
Group") have been timely filed or requests for extensions have been timely filed
and any such extension has been granted and has not expired, and all such filed
Tax Returns are complete and accurate. All Taxes due and owing by the
Representing Party or any Representing Party's Affiliated Group, including
estimates and withheld Taxes, have been paid, or adequately reserved in
accordance with GAAP. There is no audit or examination in process or pending and
there has been no notification of any request for such audit or other
examination and there is no deficiency, refund litigation, proposed adjustment
or matter in controversy with respect to any Taxes due and owing by the
Representing Party or any Representing Party's Affiliated Group. All assessments
for Taxes due and owing by the Representing Party or any Representing Party's
Affiliated Group with respect to completed and settled examinations or concluded
litigation have been paid.
(c) The Representing Party has not (i) entered into a closing agreement or other
similar agreement with a taxing authority relating to Taxes of the Representing
Party or any Representing Party's Affiliated Group with respect to a taxable
period for which the statute of limitations is still open, or (ii) with respect
to U.S. federal income Taxes, granted any waiver of any statute of limitations
with respect to, or any extension of a period for the assessment of, any income
Tax, in either case, that is still outstanding. There are no Liens relating to
Taxes upon the assets of the Representing Party or any Representing Party's
Affiliated Group. Neither the Representing Party nor any Representing Party's
Affiliated Group is a party to or is bound by any Tax sharing agreement, Tax
indemnity obligation or similar agreement in respect of Taxes.
(d) Neither the Representing Party nor any Representing Party's Affiliated Group
has taken any action or knows of any fact, agreement, plan or other circumstance
that is reasonably likely to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
(e) Schedule 2.14 of the Representing Party's Disclosure Schedule lists each Tax
Return of the Representing Party or any Affiliated Group for which an accurate
copy of the actual Tax Return as filed with the relevant taxing authority has
been made available by the Representing Party to the other on or before the date
hereof.
(f) Neither the Representing Party nor any Affiliated Group has requested or
received any private letter ruling from the Internal Revenue Service or
comparable rulings from other taxing authorities.
(g) Neither the Representing Party nor any member of any Affiliated Group has
constituted either a "distributing corporation" or a "controlled corporation"
(within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of
stock (to any Person or entity that is not a member of any Affiliated Group)
qualifying for tax-free treatment under Section 355 of the Code (i) within the
two-year period ending on the date hereof or (ii) in a distribution which could
otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) in conjunction with the
Merger.
(h) Neither the Representing Party nor any member of any Affiliated Group has
any employment, severance or termination agreements, other compensation
arrangements, or Benefit Plans currently in effect which provide for the payment
of any amount (whether in cash or property or the vesting of property) as a
result of any of the transactions contemplated by this Agreement that
individually or collectively (either alone or upon the occurrence of any
additional or subsequent event), could give rise to a payment which is
nondeductible by reason of Section 280G of the Code.
(i) Neither the Representing Party nor any member of any Affiliated Group has
filed any consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(4) applied to any disposition of assets owned by the Representing
Party or any Affiliated Group.
(j) Neither the Representing Party nor any member of any Affiliated Group has
been at any time a United States Real Property Holding Corporation within the
meaning of Section 897(c)(2) of the Code.
Section 2.15 Absence of Questionable Payments. Neither the Representing Party
nor, to the Representing Party's knowledge, any director, officer, agent,
employee, consultant, contractor or other Person acting on behalf of the
Representing Party or its Subsidiaries, has used any corporate or other funds
for unlawful contributions, payments, gifts, or entertainment, or made any
unlawful expenditures relating to political activity to government officials or
others or established or maintained any unlawful or unrecorded funds in
violation of the Foreign Corrupt Practices Act of 1977, as amended, or any other
domestic or foreign Law. Neither the Representing Party nor its Subsidiaries, or
to the Representing Party's knowledge, any director, officer, agent, employee,
consultant, contractor or other Person acting on behalf of the Representing
Party or its Subsidiaries, has accepted or received any unlawful contributions,
payments, gifts or expenditures.
Section 2.16 Title and Related Matters. Except as set forth on Schedule 2.16 of
the Representing Party's Disclosure Schedule, the Representing Party or one of
its Subsidiaries has good and valid title to, or a valid and enforceable
leasehold or contractual interest in, all of the properties and assets reflected
in the latest balance sheet included, in the case of Sheridan in the Financial
Statements and in the case of Xxxxxx in the SEC Reports, or acquired after the
date thereof (except for properties or assets sold or otherwise disposed of
since the date thereof in the ordinary course of business), free and clear of
all Liens, other than statutory Liens securing payments not yet due or
delinquent or the validity of which is being contested in good faith by
appropriate proceedings, and such imperfections or irregularities in title that
do not materially and adversely affect the current use of the properties or
assets subject thereto or affected thereby, affect the ability to convey title
thereto or otherwise materially impair the business operations currently
conducted at such properties. As of the date hereof, Schedule 2.16 of the
Representing Party's Disclosure Schedule contains a complete and correct list of
all real property owned or leased by the Representing Party or any of its
Subsidiaries, of which copies of leases have been delivered or made available to
the other party, and a complete and correct list of each title insurance policy
insuring title to any of such real properties owned. All rents and mortgages due
have been paid.
Section 2.17 Material Contracts.
(a) Sheridan Contracts.
(i) Schedule 2.17(a)(i)(a) of the Sheridan Disclosure Schedule sets forth a list
of all agreements Sheridan or its Subsidiaries would be required to file as
material contracts under Item 601 of Regulation S-K were Sheridan subject to the
Exchange Act and the disclosure requirements of Regulation S-K (the "Sheridan
Material Contracts") to which Sheridan or its Subsidiaries are a party. Sheridan
has heretofore delivered to Xxxxxx true, correct and complete copies of all
Sheridan Material Contracts except as the parties may have otherwise agreed.
Except as set forth on Schedule 2.17(a)(i)(b) of the Sheridan Disclosure
Schedule, Sheridan is not a party to nor bound by any severance or other
agreement with any employee, consultant or contractor pursuant to which such
Person would be entitled to receive any additional compensation or an
accelerated payment of compensation as a result of the consummation of the
transactions contemplated hereby.
(ii) Each of the Sheridan Material Contracts constitutes the valid and legally
binding obligation of Sheridan, enforceable in accordance with its terms, and is
in full force and effect, except as may be limited by (A) bankruptcy laws and
other similar laws affecting creditors' rights generally and (B) general
principles of equity. Sheridan is not in breach or default in any material
respect of any provisions of any Sheridan Material Contract and, to Sheridan's
knowledge, no event has occurred which with notice or lapse of time would
constitute a material breach or default by Sheridan or permit termination,
modification or acceleration thereunder, and which with respect to each of the
foregoing, could not be timely cured by Sheridan. Sheridan does not have any
knowledge of any termination or breach or anticipated termination or breach by
the other parties to any Sheridan Material Contract or commitment to which it is
a party or to which any of its assets are subject. There exists no breach or
default in any material respects of any provisions of any other contract,
arrangement, agreement or understanding to which Sheridan or its Subsidiaries is
a party which, either individually or in the aggregate would have a Material
Adverse Effect.
(iii) No party to any such Sheridan Material Contract has given notice to
Sheridan of or made a claim against Sheridan in respect of any breach or default
thereunder.
(iv) No terms and conditions of any contract, agreement or other arrangement or
understanding between Sheridan and any other Person in effect on the date of
this Agreement prevent, delay or materially restrict Sheridan's or any
Subsidiary of Sheridan's ability to deploy any material portion of its assets or
resources as it deems appropriate, and after the Closing shall prevent, delay or
materially restrict Sheridan's or any Subsidiary of Sheridan's ability to deploy
any material portion of its assets or resources as it deems appropriate.
(b) Xxxxxx Contracts.
(i) Schedule 2.17(b) of the Xxxxxx Disclosure Schedule and the SEC Reports
contain true and accurate copies of all of the agreements to which Xxxxxx or its
Subsidiaries are required to file as material contracts under Item 601 of
Regulations S-K (the "Xxxxxx Material Contracts"), including a brief summary
including the parties, subject matter, terms and payments thereunder. Xxxxxx has
heretofore delivered to Sheridan true, correct and complete copies of all Xxxxxx
Material Contracts except as the parties may have otherwise agreed. Except as
set forth on Schedule 2.17(b) of the Xxxxxx Disclosure Schedule, Xxxxxx is not a
party to nor bound by any severance or other agreement with any employee,
consultant or contractor pursuant to which such Person would be entitled to
receive any additional compensation or an accelerated payment of compensation as
a result of the consummation of the transactions contemplated hereby.
(ii) Each Xxxxxx Material Contract constitutes the valid and legally binding
obligation of Xxxxxx, enforceable in accordance with its terms, and is in full
force and effect, except as may be limited by (A) bankruptcy laws and other
similar laws affecting creditors' rights generally and (B) general principles of
equity. Xxxxxx is not in breach or default in any material respects of any
provisions of any Xxxxxx Material Contract and, to Hirsch's knowledge, no event
has occurred which with notice or lapse of time would constitute a material
breach or default by Xxxxxx or permit termination, modification or acceleration
thereunder, and which with respect to each of the foregoing, could not be timely
cured by Xxxxxx. Xxxxxx does not have any knowledge of any termination or
material breach or anticipated termination or material breach by the other
parties to any Xxxxxx Material Contract or commitment to which it is a party or
to which any of its assets are subject. There exists no breach or default in any
material respect of any provisions of any contract, arrangement, agreement or
understanding to which Xxxxxx or its Subsidiaries are a party which either
individually or in the aggregate would have a Material Adverse Effect.
(iii) No party to any Xxxxxx Material Contract has given notice to Xxxxxx of or
made a claim against Xxxxxx in respect of any breach or default thereunder.
(iv) No terms and conditions of any contract, agreement or other arrangement or
understanding between Xxxxxx and any other Person in effect on the date of this
Agreement prevent, delay or materially restrict Hirsch's or any Subsidiary of
Hirsch's ability to deploy any material portion of its assets or resources as it
deems appropriate, and after the Closing shall prevent, delay or materially
restrict Hirsch's or any Subsidiary of Hirsch's ability to deploy any material
portion of its assets or resources as it deems appropriate.
Section 2.18 Insurance. Schedule 2.18 of the Representing Party's Disclosure
Schedule sets forth a true and complete list and brief summary description
(including information on the premiums payable in connection therewith, the
scope and amount of the coverage provided thereunder, and the expiration dates)
of directors and officers liability and general liability insurance policies
maintained by the Representing Party. Such policies have been issued by insurers
which, have an A.M. Best rating of "A" or better, and provide coverage for the
operations conducted by the Representing Party of a scope and coverage
consistent with customary industry practice. Complete and correct copies of each
such policy have been delivered by Sheridan to Xxxxxx and by Xxxxxx to Sheridan.
All such policies are in full force and effect and no notice of cancellation has
been given with respect to any such policy. All premiums due thereon have been
paid in a timely manner. There are no pending claims or, to the knowledge of the
Representing Party, threatened claims, under any of the Representing Party's
insurance policies.
Section 2.19 Subsidies. No grants, subsidies or similar arrangements exist
directly or indirectly between or among the Representing Party, on the one hand,
and any domestic or foreign Governmental Entity or any other Person, on the
other hand. The Representing Party has not requested, sought, applied for or
entered into any grant, subsidy or similar arrangement directly or indirectly
from or with any domestic or foreign Governmental Entity or any other Person.
Section 2.20 Intellectual Property.
(a) For purposes of this Agreement, "Intellectual Property" means:
(i) 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 (collectively, "Issued
Patents");
(ii) all published or unpublished nonprovisional and provisional patent
applications, reexamination proceedings, invention disclosures and records of
invention (collectively "Patent Applications" and, with the Issued Patents, the
"Patents");
(iii) all copyrights, copyrightable works, semiconductor topography and mask
work rights, 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 (collectively, "Copyrights");
(iv) common law trademarks, registered trademarks, applications for registration
of trademarks, common law service marks, registered service marks, applications
for registration of service marks, trade names, registered trade names and
applications for registrations of trade names and trade dress (collectively,
"Trademarks");
(v) all technology, ideas, inventions, designs, proprietary information,
manufacturing and operating specifications, know-how, formulae, trade secrets,
technical data, computer programs, hardware, software and processes related to
the business of the Representing Party as such business is currently conducted
and as its business is proposed to be conducted;
(vi) all domain names registered by the Representing Party; and
(vii) all other intangible intellectual property assets, properties and rights
(whether or not appropriate steps have been taken to protect, under applicable
law, such other intangible assets, properties or rights).
(b) Hirsch's Intellectual Property, as listed on Schedule 2.20(b) of Hirsch's
Disclosure Schedule, constitutes all of the Intellectual Property necessary to
enable Xxxxxx to conduct its business as such business is currently being
conducted and as its business is proposed to be conducted. Xxxxxx owns and has
good and marketable title to, or possesses legally enforceable rights to use,
all Intellectual Property used or currently proposed to be used in the business
of Xxxxxx as currently conducted or as proposed to be conducted by Xxxxxx, free
and clear of all liens, claims or encumbrances. No current or former officer,
director, stockholder, employee, consultant, independent contractor or third
party has asserted any right, claim or interest in or with respect to any
Intellectual Property of Xxxxxx and, to the knowledge of Xxxxxx, there is no
reasonable basis for any such claim. There is no unauthorized use, disclosure or
misappropriation of any Xxxxxx Intellectual Property by any employee or, to
Hirsch's knowledge, former employee of Xxxxxx or, to Hirsch's knowledge, by any
other third party. Except as set forth on Schedule 2.20(b) of the Xxxxxx
Disclosure Schedule, there are no royalties, fees or other payments payable by
Xxxxxx to any third Person under any written or oral contract or understanding
by reason of the ownership, use, sale or disposition of Xxxxxx Intellectual
Property.
(c) With respect to each item of Xxxxxx Intellectual Property incorporated into
any product of Xxxxxx or otherwise used in the business of Xxxxxx (except "off
the shelf" or other software widely available through regular commercial
distribution channels at a cost not exceeding $10,000 on standard terms and
conditions, as modified for Hirsch's operations), Schedule 2.20(c) of the Xxxxxx
Disclosure Schedule lists:
(i) all Patents and Patent Applications, Trademarks, and Copyrights, including
the jurisdictions in which each such Intellectual Property has been issued or
registered or in which any such application for such issuance and registration
has been filed; and
(ii) the following agreements and documents relating to each of the products of
Xxxxxx (the "Xxxxxx Products") or other Xxxxxx Intellectual Property: all (A)
agreements granting any right to distribute or sublicense a Xxxxxx Product on
any exclusive or non-exclusive basis, (B) any exclusive or non-exclusive
licenses of Intellectual Property to or from Xxxxxx, (C) agreements pursuant to
which the amounts actually paid or payable under firm commitments to Xxxxxx are
$10,000 or more, (D) joint development agreements, (E) any agreement by which
Xxxxxx grants any ownership right to any Xxxxxx Intellectual Property owned by
Xxxxxx, (F) any judicial, administrative, regulatory or other governmental order
relating to Intellectual Property, (G) any option relating to any Xxxxxx
Intellectual Property, and (H) agreements pursuant to which any party is granted
any rights to access source code or to use source code, including without
limitation any rights to create derivative works of Xxxxxx Products.
(d) Schedule 2.20(d) of the Xxxxxx Disclosure Schedule contains an accurate list
as of the date of this Agreement of all licenses, sublicenses and other
agreements to which Xxxxxx is a party and pursuant to which Xxxxxx is authorized
to use any Intellectual Property owned by any third party, excluding "off the
shelf" or other software at a cost not exceeding $10,000 and widely available
through regular commercial distribution channels on standard terms and
conditions and third-party software distributed by Xxxxxx in the ordinary course
of business ("Third Party Intellectual Property").
(e) Except as set forth on Schedule 2.20(e) of the Xxxxxx Disclosure Schedule,
to the knowledge of Xxxxxx, there is no unauthorized use, disclosure,
infringement or misappropriation of any Xxxxxx Intellectual Property, including
any Third Party Intellectual Property by any third party, including any employee
or former employee of Xxxxxx. Other than in respect of agreements with Hirsch's
officers and directors, Xxxxxx has not entered into any agreement to indemnify
any other Person against any charge of infringement of any Intellectual
Property, other than indemnification provisions contained in standard sales or
agreements to end users arising in the ordinary course of business. There are no
royalties, fees or other payments payable by Xxxxxx to any Person by reason of
the ownership, use, sale or disposition of Intellectual Property.
(f) Except as set forth on Schedule 2.20(f) of the Xxxxxx Disclosure Schedule,
Xxxxxx is not in breach of any license, sublicense or other agreement relating
to Xxxxxx Intellectual Property or Third Party Intellectual Property rights
beyond any applicable cure periods. Neither the execution, delivery or
performance of this Agreement or any ancillary agreement contemplated hereby nor
the consummation of the Merger or any of the transactions contemplated by this
Agreement will contravene, conflict with or result in an infringement or
termination of any Xxxxxx Intellectual Property, including any Third Party
Intellectual Property.
(g) Except as set forth on Schedule 2.8 of the Sheridan Disclosure Schedule, all
Patents, registered Trademarks, registered service marks, registered Copyrights
and registered domain names held by the Representing Party are valid and
subsisting. All maintenance and annual fees have been fully paid and all fees
paid during prosecution and after issuance of any patent comprising or relating
to such item have been paid in the correct entity status amounts. The
Representing Party is not infringing, misappropriating or making unlawful use
of, or received any notice or other communication (in writing or otherwise) of
any actual, alleged, possible or potential infringement, misappropriation or
unlawful use of any proprietary asset owned or used by any third party, which
would have a Material Adverse Effect on the Representing Party. There is no
proceeding pending or, to the Representing Party's knowledge, threatened nor has
any claim or demand been made, which challenges the legality, validity,
enforceability or ownership of any item of the Representing Party's Intellectual
Property or Third Party Intellectual Property or alleges a claim of infringement
of any Patents, Trademarks, service marks, Copyrights or violation of any trade
secret or other proprietary right of any third party, which if adversely
determined would have a Material Adverse Effect on the Representing Party. The
Representing Party has not brought a proceeding alleging infringement of the
Representing Party's Intellectual Property or breach of any license or agreement
involving Intellectual Property against any third party.
(h) The Representing Party has taken all commercially reasonable and customary
measures and precautions necessary to protect and maintain the confidentiality
of all the Representing Party Intellectual Property (except such Representing
Party Intellectual Property whose value would be unimpaired by public
disclosure) and otherwise to maintain and protect the full value of all
Intellectual Property it owns or uses. All Intellectual Property not otherwise
protected by Patents or Copyrights ("Confidential Information") owned by the
Representing Party used by or disclosed to a third party has been pursuant to
the terms of a written or oral agreement between the Representing Party and such
third party.
(i) No product liability claims have been communicated in writing to or, to the
Representing Party's knowledge, threatened against the Representing Party.
(j) A complete list of each of the Xxxxxx Products and Hirsch's proprietary
software ("Xxxxxx Software"), together with a brief description of each, is set
forth in Schedule 2.20(j) of Hirsch's Disclosure Schedule. The Xxxxxx Software
and Xxxxxx Products conform in all material respects with any specification,
documentation, performance standard, representation or statement provided with
respect thereto by or on behalf of Xxxxxx.
(k) The Representing Party is not subject to any proceeding or outstanding
decree, order, judgment, or stipulation restricting in any manner the use,
transfer, or licensing thereof by the Representing Party, or which may affect
the validity, use or enforceability of such Representing Party Intellectual
Property. Xxxxxx is not subject to any agreement which restricts in any material
respect the use, transfer, or licensing by Xxxxxx of the Xxxxxx Intellectual
Property or Xxxxxx Products.
(l) Schedule 2.20(l) of the Sheridan Disclosure Schedule contains a list of (i)
all of Sheridan's Trademarks, (ii) substantially all of Sheridan's Copyrights,
which include all Copyrights material to Sheridan's business, and (iii) all
software licenses (except for "off the shelf" or other software widely available
through regular commercial distribution channels at a cost not exceeding $10,000
on standard terms and conditions), and constitutes substantially all of the
Intellectual Property necessary for Sheridan to conduct its business as of the
date hereof. Sheridan possesses legally enforceable rights to use all
Intellectual Property used or currently proposed to be used in its business as
currently conducted, except where the failure to have such rights would not
individually or in the aggregate have a Material Adverse Effect on Sheridan.
(m) For purposes of this Section 2.20, the terms "Representing Party," "Xxxxxx"
and "Xxxxxxxx" shall include their respective Subsidiaries.
Section 2.21 Minute Books; Stock Record Books. True and correct copies of the
Representing Party's and its Subsidiaries minute books and, in the case of
Sheridan and its Subsidiaries, stock record books have been made available to
the other. The minute books of the Representing Party and its Subsidiaries
contain true and complete originals or copies of all minutes of meetings of and
actions by the stockholders, Board of Directors and all committees of the Board
of Directors of the Representing Party and its Subsidiaries, and accurately
reflect in all material respects all corporate actions of the Representing Party
and its Subsidiaries which are required by law to be passed upon by the Board of
Directors or stockholders of the Representing Party and its Subsidiaries.
Section 2.22 Bank Accounts; Powers of Attorney. Schedule 2.22 of the
Representing Party's Disclosure Schedule hereto sets forth a complete and
correct list showing: (a) all banks in which the Representing Party maintains a
bank account or safe deposit box (collectively, "Bank Accounts"); and (b) the
names of all Persons holding powers of attorney from the Representing Party,
true and correct copies thereof which have been delivered to the other.
Section 2.23 Disclosure. The representations and warranties by the Representing
Party in this Agreement and the statements contained in the schedules,
certificates and other writings furnished and to be furnished by the
Representing Party to the other party pursuant to this Agreement, when
considered as a whole and giving effect to any supplements or amendments thereof
prior to the time of signing on the date hereof, do not and will not contain any
untrue statement of a material fact and do not and will not omit to state any
material fact necessary to make the statements herein, in light of the
circumstances under which they were or shall be made, not misleading; it being
understood that as used in this Section 2.23 "material" means material to the
Representing Party and its Subsidiaries, taken as a whole. The term "material"
as used above does not apply to any representation or covenant herein which is
already qualified as to materiality.
Section 2.24 Disputes with Customers. Except as set forth on Schedule 2.24 of
the Representing Party's Disclosure Schedule, there are no pending or, to the
best of the Representing Party's knowledge and belief, threatened disputes
between the Representing Party and any of its material locations, vendors,
suppliers, customers or other parties outside of the ordinary course of business
or that in any way relate to the operation of the business of the Representing
Party and which cannot reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Representing Party.
Section 2.25 Accounts Receivable. All accounts receivables of the Representing
Party have arisen from bona fide transactions by the Representing Party in the
ordinary course of business and are, to the best of the Representing Party's
knowledge and belief, deemed collectible by the Representing Party in the
ordinary course of business (without, however, the Representing Party giving any
warranty as to any extent of collectability whatsoever), except to the extent
reserved for in the Representing Party's Financial Statements. Except as set
forth on Schedule 2.25 of the Representing Party's Disclosure Schedule, there
are no defenses, claims of disabilities, offsets, refusals to pay or other
rights of offset against any such accounts receivable. Any allowances that the
Representing Party has established specifically for doubtful accounts have been
established on a basis consistent with the Representing Party's prior practice,
credit experience and GAAP consistently applied. Sheridan and Xxxxxx have each
delivered to each other a complete and accurate aging list of all of their
accounts receivables as of April 30, 2005.
Section 2.26 Certain Transactions. Except as set forth on Schedule 2.26 of the
Representing Party's Disclosure Schedule, none of the stockholders, officers,
directors or employees of the Representing Party, nor any member of any such
Person's or stockholder's family is presently a party to any transaction with
the Representing Party relating to the business of the Representing Party,
including without limitation, any contract, agreement or other arrangement (i)
providing for the furnishing of services by, (ii) providing for the rental of
real or Personal property from, or (iii) otherwise requiring payments (other
than for services as officers, directors or employees of the Representing
Party), to any such Person or any corporation, partnership, trust or other
entity in which any such Person has a substantial interest as a stockholder,
officer, director, trustee or partner.
Section 2.27 Brokers or Finders.
(a) Sheridan represents, as to itself, its Subsidiaries and its affiliates, that
no agent, broker, investment banker, financial advisor or other firm or Person
is or will be entitled to any brokers' or finder's fee or any other commission
or similar fee in connection with any of the transactions contemplated by this
Agreement. Sheridan agrees to indemnify and hold Xxxxxx, including its officers,
directors, agents or representatives, harmless from and against any and all
claims, liabilities or obligations with respect to any other fees, commissions
or expenses asserted by any Person on the basis of any act or statement alleged
to have made by such parties or their affiliates.
(b) Except as set forth on Schedule 2.27(b) of the Xxxxxx Disclosure Schedule,
Xxxxxx represents, as to itself, its Subsidiaries and its affiliates, that no
agent, broker, investment banker, financial advisor or other firm or Person is
or will be entitled to any brokers' or finder's fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement. Xxxxxx agrees to indemnify and hold Sheridan, including its officers,
directors, agents or representatives, harmless from and against any and all
claims, liabilities or obligations with respect to any other fees, commissions
or expenses asserted by any Person on the basis of any act or statement alleged
to have been made by such party or its affiliates.
Section 2.28 No Prior Activities. Except for obligations incurred in connection
with its incorporation or organization or the negotiation and consummation of
this Agreement and the transactions contemplated hereby, Xxxxxx represents and
warrants that Merger Sub has neither incurred any obligation or liability nor
engaged in any business or activity of any type or kind whatsoever or entered
into any agreement or arrangement with any Person.
Section 2.29 Music Library and Music Products. The representation and
warranty made by Sheridan in Section 7.20 of that certain Credit Agreement,
dated as of December 10, 2004, by and among Sheridan, Fortress Credit Corp., as
agent for the lenders, and the other signatories thereto, relating to the Music
Library and Music Products of Sheridan, was true in all material respects as of
the date of such agreement.
ARTICLE III
COVENANTS RELATED TO CONDUCT OF BUSINESS
Section 3.1 Conduct of Business of Sheridan and Xxxxxx. Except as contemplated
by this Agreement or in connection with the Series B Transaction, during the
period from the date hereof to the Effective Time (or the termination of this
Agreement pursuant to Article VI), Sheridan on the one hand, and Xxxxxx on the
other hand, will each conduct its operations in the ordinary and usual course of
business consistent with past practice and, to the extent consistent therewith,
with no less diligence and effort than would be applied in the absence of this
Agreement, use commercially reasonable efforts to preserve intact its current
business organizations, keep available the service of its current officers and
employees, preserve its relationships with customers, suppliers and others
having business dealings with it and preserve its goodwill through the Effective
Time. Without limiting the generality of the foregoing, and except as otherwise
expressly provided in this Agreement or in Schedule 3.1 of the Disclosure
Schedule of Sheridan or Xxxxxx, as the case may be, prior to the Effective Time,
Sheridan and Xxxxxx, and each of their Subsidiaries, will not, without the prior
written consent of the other party:
(a) amend its certificate of incorporation or bylaws (or other similar
organizational or governing instruments), as each such document is in effect on
the date hereof;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue,
sell or deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class or any other securities convertible into or exchangeable for any stock or
any equity equivalents (including, any stock options or stock appreciation
rights), except for the issuance or sale of shares pursuant to outstanding
Xxxxxx or Sheridan stock options and warrants;
(c) (i) split, combine or reclassify any shares of its capital stock; (ii)
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock;
(iii) make any other actual, constructive or deemed distribution in respect of
any shares of its capital stock or otherwise make any payments to stockholders
in their capacity as such; or (iv) redeem, repurchase or otherwise acquire,
directly or indirectly, any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization (other
than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue any debt
securities; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person; (iii) make any loans, advances or capital contributions to, or
investments in, any other Person (other than customary loans or advances to
employees, consultants or contractors (including recording artists, distributed
labels or other licensees) in the ordinary and usual course of business
consistent with past practice and in amounts not material to the maker of such
loan or advance); (iv) pledge or otherwise encumber shares of its capital stock;
or (v) mortgage or pledge any of its material assets, tangible or intangible, or
create or suffer to exist any Lien thereupon, other than as disclosed in the
schedules hereto and Permitted Liens;
(f) enter into any lease for new office space;
(g) (i) except as may be required by Law or as contemplated by this Agreement,
enter into, adopt or amend or terminate (partially or completely) any Benefit
Plan, Employee Arrangement (including, the repricing of any stock options or the
acceleration or vesting of any stock options), stock appreciation right,
restricted stock, performance unit, stock equivalent or stock purchase agreement
for the benefit or welfare of any director, officer, employee, consultant or
contractor in any manner, (ii) except as required under existing agreements,
increase in any manner the compensation or fringe benefits of any director,
officer, employee, consultant or contractor or pay any benefit not required by
any plan and arrangement as in effect as of the date hereof (including, the
granting of stock appreciation rights or performance units) or grant any
completion bonuses or change of control payments in respect of the Merger or
that will be affected thereby; or (iii) hire, promote or change the
classification or status in respect of any employee or individual; provided,
however, that Xxxxxx or Xxxxxxxx, as the case may be, shall not unreasonably
withhold or delay any consent sought to hire, promote or change the
classification or status of any employee or individual;
(h) acquire, sell, lease or dispose of any assets outside the ordinary course of
business, consistent with past practice or any assets which in the aggregate are
material to Sheridan or Xxxxxx, as the case may be, enter into any commitment or
transaction outside the ordinary and usual course of business consistent with
past practice or grant any exclusive distribution rights or enter into or amend,
in any material respect, any material contract, commitment, agreement or
understanding;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof or
any equity interest therein;
(j) settle or compromise any pending or threatened suit, action or claim
relating to the transactions contemplated hereby;
(k) take any action (including, any action otherwise permitted by this Section
3.1) that would prevent or impede the Merger from qualifying as a
"reorganization" under Section 368(a) of the Code;
(l) fail to comply in any material respect with any Law applicable to it or its
assets which would reasonably be expected to, individually or in the aggregate,
have a Material Adverse Effect on its business and operations;
(m) effect a "mass layoff" or "plant closing" as defined in WARN Act;
(n) dispose of or permit to lapse any rights to the use of any Intellectual
Property that is material to Sheridan or Xxxxxx, as the case may be, or dispose
of or disclose to any Person any trade secret, formula, process or know-how not
theretofore a matter of public knowledge unless, in respect of disclosure, such
Person has executed a confidentiality agreement in form acceptable to Sheridan
or Xxxxxx, as the case may be;
(o) sell or dispose of any Intellectual Property outside of the ordinary course
of its business;
(p) change any of the banking or safe deposit arrangements described in Section
2.22 hereto, except in the ordinary course of business;
(q) fail to maintain its books, accounts and records in the usual, regular and
ordinary manner on a basis consistent with prior years; or
(r) take, propose to take, or agree in writing or otherwise to take, any of the
actions described in this Section 3.1 or any action which would make any of the
representations or warranties of Sheridan, Xxxxxx or Merger Sub, as the case may
be, contained in this Agreement untrue, incomplete or incorrect.
Section 3.2 Access to Information.
(a) Between the date hereof and the Effective Time (or termination of this
Agreement pursuant to Article VI), Sheridan, Xxxxxx and Merger Sub will each
give the authorized representatives (including counsel, financial advisors and
auditors) of the other reasonable access to all its employees, consultants,
contractors, plants, offices, warehouses and other facilities and to all its
books and records, and will permit the other to make such inspections and
investigations as each may require. Each of Sheridan, Xxxxxx and Merger Sub will
cause its officers to furnish the other with such financial and operating data
and other information in respect of its business, properties and personnel as
each may from time to time reasonably request, provided that no investigation
pursuant to this Section 3.2(a) shall affect or be deemed to modify any of the
representations or warranties made by each of Sheridan, Xxxxxx and Merger Sub
pursuant to this Agreement.
(b) Between the date hereof and the Effective Time, Sheridan, Xxxxxx and Merger
Sub shall each furnish to the other (i) within five business days after the
delivery thereof to management, such monthly financial statements and data as
are regularly prepared for distribution to Sheridan management and Xxxxxx
management, respectively, and (ii) at the earliest time they are available, such
quarterly and annual financial statements as are regularly prepared for Sheridan
Board of Directors and Xxxxxx Board of Directors, respectively.
(c) Each of Xxxxxx, Merger Sub and Sheridan will hold and will cause its
authorized representatives to hold in confidence all documents and information
concerning the other furnished in connection with the transactions contemplated
by this Agreement.
Section 3.3 Continuation of Insurance Coverage. From the date hereof to the
Closing, each of Sheridan and Xxxxxx shall keep in full force and effect
insurance coverage for its assets and operations comparable in amount and scope
to the coverage now maintained covering its assets and operations.
ARTICLE IV
ADDITIONAL AGREEMENTS
Section 4.1 Proxy Statement.
(a) As promptly as practicable after the date of this Agreement, Xxxxxx shall
file with the SEC a Proxy Statement with respect to, among other things, seeking
Xxxxxx Stockholder Approval for the Merger, the approval of the amended and
restated certificate of incorporation of Xxxxxx attached hereto as Exhibit B,
the appointment of the individuals described in Section 1.7(a) hereof as
directors of Xxxxxx (with such appointment to be effective as of the Effective
Time) and the related transactions contemplated by this Agreement. Sheridan
shall furnish all information concerning it and the holders of its capital stock
as Xxxxxx may reasonably request in connection with the preparation of the Proxy
Statement. Xxxxxx shall use all reasonable efforts to cause the Proxy Statement
to comply with the rules and regulations promulgated by the SEC, to respond
promptly to any comments of the SEC or its staff and to have the Proxy Statement
mailed to Xxxxxx'x stockholders as promptly as practicable. Xxxxxx shall also
promptly file, use all reasonable efforts to cause to become effective as
promptly as possible and, if required, mail to its stockholders any amendment to
the Proxy Statement that becomes necessary after mailing, the Proxy Statement.
(b) If at any time prior to the Effective Time any event or circumstance
relating to Xxxxxx, or its respective directors or officers, is discovered by
Xxxxxx which is required to be set forth in an amendment or supplement to the
Proxy Statement, Xxxxxx shall promptly inform Sheridan. All documents that
Xxxxxx is responsible for filing with the SEC in connection with the
transactions contemplated hereby will comply as to form and substance in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act.
(c) If at any time prior to the Effective Time any event or circumstance
relating to Sheridan, or its respective directors or officers, is discovered by
Sheridan which is required to be set forth in an amendment or supplement to the
Proxy Statement, Sheridan shall promptly inform Xxxxxx. All documents provided
by Sheridan to Xxxxxx for filing with the SEC in connection with the transaction
contemplated herein will comply as to form and substance in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act.
(d) Xxxxxx will advise Sheridan, promptly after it receives notice thereof, of
the issuance of any stop order, or any request by the SEC for an amendment of
the Proxy Statement or comments thereon or responses thereto.
(e) Sheridan hereby covenants and agrees to cooperate with Xxxxxx in the
preparation and filing of the Proxy Statement and will promptly provide all
available financial and other information reasonably requested by Xxxxxx for
inclusion in the Proxy Statement and that such information shall be complete and
accurate in all material respects.
Section 4.2 Xxxxxx Voting Agreement and Stockholders' Meeting.
(a) As an inducement to Sheridan to enter into this Agreement, certain
stockholders of Xxxxxx have concurrently entered into a voting agreement in the
form attached hereto as Exhibit D (the "Xxxxxx Voting Agreement").
(b) Xxxxxx shall take all action necessary under all applicable Laws to call,
give notice of and hold the Xxxxxx Stockholders Meeting as soon as reasonably
practical after the date of this Agreement. Xxxxxx shall ensure that all proxies
solicited in connection with the Xxxxxx Stockholders Meeting are solicited in
compliance with all applicable Laws.
(c) The Proxy Statement shall include a statement to the effect that the Board
of Directors of Xxxxxx recommends that Xxxxxx'x stockholders vote to approve the
issuance of the Merger Shares in the Merger (the recommendation of Xxxxxx'x
board of directors that Xxxxxx'x stockholders vote to approve the issuance of
the Merger Shares in the Merger being referred to as the "Xxxxxx Board
Recommendation"). Except as provided for in Section 4.14 below, The Xxxxxx Board
Recommendation shall not be withdrawn or modified in a manner adverse to
Sheridan, and no resolution by the board of directors of Xxxxxx or any committee
thereof to withdraw or modify the Xxxxxx Board Recommendation in a manner
adverse to Sheridan shall be adopted or proposed.
Section 4.3 Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement, each party will use
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable under
applicable Laws to consummate the Merger and the other transactions contemplated
by this Agreement. Neither Sheridan, Xxxxxx nor Merger Sub will take, agree to
take or knowingly permit to be taken any action or do or knowingly permit to be
done anything in the conduct of the business of the companies, or otherwise,
which would be contrary to or in breach of any of the terms or provisions of
this Agreement.
(b) Each of Xxxxxx, Merger Sub and Sheridan shall use commercially reasonable
efforts to resolve such objections if any, as may be asserted by a Governmental
Entity or other Person in respect of the transactions contemplated hereby,
including, without limitation, under any antitrust or other Law. In connection
with the foregoing, if any administrative or judicial action or proceeding,
including any proceeding by a private party, is instituted (or threatened to be
instituted) challenging any transaction contemplated by this Agreement, each of
Xxxxxx, Merger Sub and Sheridan shall cooperate in all respects with each other
and use its respective commercially reasonable efforts to contest and resist any
such action or proceeding and to have vacated, lifted, reversed or overturned
any decree, judgment, injunction, or other order, whether temporary, preliminary
or permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement. Notwithstanding
the foregoing or any other provision of this Agreement, nothing in this Section
4.3(b) shall limit a party's right to terminate this Agreement pursuant to
Section 6.2 so long as such party has up to then complied in all material
respects with its obligations under this Section 4.3(b).
Section 4.4 Exclusivity. Subject to Section 4.14 below, unless Sheridan, Xxxxxx
or Merger Sub are in breach of this Agreement prior to the Closing, and such
breach has not been cured within 20 days written notice of such breach, neither
Sheridan, Xxxxxx nor Merger Sub and any of their respective directors, officers,
employees, representatives or agents shall directly or indirectly, (i) discuss,
negotiate, undertake, authorize, recommend, propose or enter into, either as the
proposed surviving, merged, acquiring or acquired corporation, any transaction
involving a merger, consolidation, business combination, purchase or disposition
of any amount of assets or capital stock or other equity interest of Sheridan,
Xxxxxx or the Merger Sub, as the case may be, other than the transactions
contemplated by this Agreement (an "Acquisition Transaction"), (ii) facilitate,
encourage, solicit or initiate discussions, negotiations or submissions of
proposals or offers in respect of an Acquisition Transaction, (iii) furnish or
cause to be furnished to any Person any information concerning the business
operations, properties or assets of Sheridan, Xxxxxx or the Merger Sub, as the
case may be, in connection with an Acquisition Transaction, or (iv) otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other Person to do or seek any of the foregoing.
Sheridan, on the one hand, and Xxxxxx on the other hand, will inform each other
in writing immediately following the receipt by such party or a representative
of any proposal or inquiry with respect to any Acquisition Transaction.
Section 4.5 Public Announcements. Each of Xxxxxx, Merger Sub and Sheridan will
consult with one another before issuing any press release or otherwise making
any public statements in respect of the transactions contemplated by this
Agreement, including the Merger, and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable Law or by obligations pursuant to any listing agreement
with Nasdaq, as determined by Xxxxxx, Merger Sub or Sheridan, as the case may
be, a copy of which shall be sent simultaneously to the other parties upon such
release.
Section 4.6 Private Placement. Sheridan acknowledges that the issuance of the
Merger Shares pursuant to Section 1.4 is intended to be exempt from registration
under the Securities Act, by virtue of Regulation D of the Securities Act and/or
Section 4(2) of the Securities Act, and that its stockholders, upon receipt of
such Merger shares, may not sell such shares, unless such shares subsequently
are registered under the Securities Act or an exemption from such registration
is available. Sheridan understands that the Merger Shares must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. Sheridan understands and
agrees that, in order to ensure compliance with the restrictions referred to
herein, Xxxxxx may issue appropriate "stop transfer" instructions to its
transfer agent. Sheridan understands that the following legend (and such other
legends as Xxxxxx deems appropriate) shall be placed on such shares:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT."
Xxxxxx shall use commercially reasonable efforts to meet the
requirements of Rule 144(c) of the Securities Act and, if an opinion is required
by Xxxxxx for transfer of such shares, Xxxxxx shall retain counsel to determine
whether such an opinion may be rendered.
Section 4.7 Confidentiality. In the course of their business operations, all
parties shall have received, and will continue to receive, information that
gives the other parties an advantage over its competitors, and which is
confidential and proprietary, including, without limitation, each party's
respective names and preferences of customers, products and markets,
technological data, computer programs, know-how, potential acquisitions, sources
of financing, corporate operating and financing strategies, operating plans and
similar related information (collectively, the "Confidential Material"). At no
time during the period commencing on the date hereof shall any party to this
Agreement, whether individually, or jointly with others, for the benefit of
itself, himself, or any third party, publish, disclose, use, or authorize anyone
else to publish, disclose, or use any Confidential Material of the other
parties; provided, however, that any such Confidential Material may be disclosed
only as required by Law or the rules and regulations of the NASDAQ Stock Market,
Inc.. In the event that any party is requested pursuant to, or is required by,
applicable law or regulation or by legal process to disclose any Confidential
Material, such party shall promptly notify the other parties of any anticipated
disclosure obligation and cooperate with the other parties at such other
parties' expense, in any efforts to seek an appropriate protective order or
other reliable assurance that confidential treatment will be accorded to that
portion of the Confidential Material that is required to be disclosed. The
parties acknowledge that any disclosure of any Confidential Material would cause
material and irrevocable harm to the other parties and their respective
business.
Section 4.8 Additional Documents and Further Assurances. At, and from time to
time after, the date of this Agreement, at the request of Xxxxxx but without
further consideration, Sheridan shall execute and deliver such other instruments
of conveyance, assignment, transfer, and delivery and take such other action as
Xxxxxx reasonably may request in order to more effectively convey, transfer,
assign and deliver to the Surviving Corporation, and to place the Surviving
Corporation in possession and control of, any of the rights, properties, assets
and business intended to be sold, conveyed, transferred, assigned and delivered
hereunder, or to assist in the collection or reduction to possession of any and
all of such rights, properties, and assets or to enable the Surviving
Corporation to exercise and enjoy all rights and benefits of Sheridan with
respect thereto.
Section 4.9 Notification of Certain Matters. Sheridan shall give prompt notice
to Xxxxxx and Merger Sub, and Xxxxxx and Merger Sub shall give prompt notice to
Sheridan, of (a) the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time, (b) any material failure of Sheridan, Xxxxxx
or Merger Sub, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder, (c) any
notice or other communication from any third party alleging that the consent of
such third party is or may be required in connection with the transactions
contemplated by this Agreement, or (d) any facts or circumstances that could
reasonably be expected to result in a Material Adverse Effect; provided,
however, that the delivery of any notice pursuant to this Section 4.9 shall not
cure such breach or non-compliance or limit or otherwise affect the rights,
obligations or remedies available hereunder to the party receiving such notice.
Section 4.10 Employee Matters. Xxxxxx will cause the Surviving Corporation to
honor the obligations of Sheridan under the provisions of all Benefit Plans and
Employee Arrangements set forth in Sheridan's Disclosure Schedule, subject to
Xxxxxx'x right to amend or terminate any such Benefit Plan or Employee
Arrangement in accordance with its terms. After the Effective Time, the
employees of Sheridan will be eligible to participate in Sheridan's Benefit
Plans or, if so determined by Xxxxxx, Xxxxxx'x applicable Benefit Plans, as such
plans may be in effect from time to time, and, at Xxxxxx'x sole discretion, will
become employees of Xxxxxx. With respect to each such employee of Sheridan,
service with Sheridan may be counted for purposes of determining periods of
eligibility to participate or to vest in benefits under any applicable Benefit
Plan of Xxxxxx. Xxxxxx will xxxxx options to certain Sheridan employees who
continue to be employed following the Closing in the amounts set forth in
Schedule 4.10 of the Xxxxxx Disclosure Schedule.
Section 4.11 Third Party Consents.
(a) Each of Xxxxxx, Merger Sub and Sheridan shall use its commercially
reasonable efforts to obtain at the earliest practicable date all consents of
third parties and Governmental Entities necessary to the consummation of the
transactions contemplated hereby (the "Third Party Consents") and will provide
to the other parties hereto copies of each such Third Party Consent promptly
after it is obtained. Each of Xxxxxx, Merger Sub and Sheridan agrees to
cooperate fully with the other parties hereto in connection with the obtaining
of the Third Party Consents; provided, however, that no party shall be required
to pay any additional sums to secure such Third Party Consents of the other
parties hereto.
(b) In furtherance and not in limitation of the covenants of the parties
contained in Section 4.11(a), if any administrative or judicial action or
proceeding, including any proceeding by a private party, is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement, each of Xxxxxx, Merger Sub and Sheridan shall cooperate in all
respects with each other and use its respective commercially reasonable efforts
to contest and resist any such action or proceeding and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the transactions contemplated by this
Agreement.
(c) If any objections are asserted with respect to the transactions contemplated
hereby or if any suit is instituted by any Governmental Entity or any private
party challenging any of the transactions contemplated hereby as violative of
any regulatory Law, each of Xxxxxx, Merger Sub and Sheridan shall use its
commercially reasonable efforts to resolve any such objections or challenge as
such Governmental Entity or private party may have to such transactions under
such regulatory Law so as to permit consummation of the transactions
contemplated by this Agreement.
Section 4.12 Legal Opinion Certificates. Sheridan, Xxxxxx and Merger Sub shall
execute and deliver to Ruskin Moscou Faltischek, P.C. counsel to Xxxxxx, and
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, counsel to Sheridan,
certificates at such time or times as are reasonably requested by such law firms
in connection with their respective deliveries of opinions in respect of the
transactions contemplated hereby. Prior to the Effective Time, none of Sheridan,
Xxxxxx or Merger Sub shall take or cause to be taken any action which would
cause to be untrue (or fail to take or cause not to be taken any action which
would cause to be untrue) any of the representations in such previously-agreed
certificates.
Section 4.13 Blue Sky Laws. Xxxxxx, Merger Sub and Sheridan shall take such
steps as may be necessary to comply with the securities and blue sky laws of all
jurisdictions which are applicable to the issuance of the Merger Shares. The
parties hereto shall use all reasonable efforts to assist each other in
complying with all applicable securities and blue sky laws.
Section 4.14 Other Potential Acquirors of Xxxxxx.
(a) Prior to the Effective Time or earlier termination of this Agreement in
accordance with the terms hereof, neither Xxxxxx nor Sheridan shall permit any
of its respective Subsidiaries to, nor authorize nor permit any officer,
director or employee of, or any investment banker, attorney or other advisor or
representative of it or any of its Subsidiaries ("Representatives") to, directly
or indirectly: (i) solicit, initiate, or encourage the submission of, any
Takeover Proposal (as defined below), or take any other action to facilitate any
inquiries or make any proposal that constitutes, or may reasonably be expected
to lead to, any Takeover Proposal, (ii) engage in negotiations or discussions
with, or furnish any information or data, or afford access to the properties,
books or records of Xxxxxx or Xxxxxxxx or their Subsidiaries to any third party
relating to a Takeover Proposal, or (iii) enter into any agreement with respect
to any Takeover Proposal or recommend any Takeover Proposal. For purposes of
this Agreement, "Takeover Proposal" means any written proposal or offer (whether
or not delivered to a party's stockholders generally) for a merger,
consolidation, recapitalization, liquidation, dissolution or similar
transaction, purchase of substantial assets, tender offer or other business
combination involving the party or any of its Subsidiaries or any proposal or
offer to acquire in any manner, directly or indirectly, a substantial equity
interest in, or a substantial portion of the assets or business of, the party or
any of its Subsidiaries, other than the transactions contemplated by this
Agreement.
(b) Notwithstanding anything to the contrary contained in this Agreement or any
other agreement between the parties and so long as Xxxxxx is in compliance with
the provisions of Section 4.14(a), if Xxxxxx and its Board of Directors prior to
the Xxxxxx Stockholders Meeting determine in good faith after discussion with
its counsel that an unsolicited Takeover Proposal would likely result in a
Superior Proposal (as defined below) and the Board of Directors determines in
good faith that the failure to participate in discussions or negotiations with
or to furnish information to the Potential Acquiror (as hereinafter defined),
would violate the Board of Directors' fiduciary duties under applicable law,
then Xxxxxx and its Board of Directors: (i) may participate in discussions or
negotiations (including, as a part thereof, make any counterproposal) with or
furnish information to any third party making such Takeover Proposal (a
"Potential Acquiror"), and (ii) shall take and disclose to Xxxxxx'x stockholders
a position with respect to any tender or exchange offer by a third party, or
amend or withdraw such position, pursuant to Rules 14d-9 and 14e-2 of the
Exchange Act.
(c) Any non-public information furnished to a Potential Acquiror shall be
pursuant to a confidentiality agreement in form and substance reasonably
acceptable to Xxxxxx.
(d) The Board of Directors of Xxxxxx shall not approve or recommend, as the case
may be, or propose to approve or recommend, as the case may be, or enter into
any agreement with respect to, any Takeover Proposal, unless the Board
determines in good faith, after receiving advice from their financial advisor,
that such Takeover Proposal would, if so completed, result in a Superior
Proposal. For purposes of this Section 4.14, "Superior Proposal" means a written
Takeover Proposal made by a third party with respect to which: (i) the Board of
Directors of Xxxxxx determines, based on such matters that they reasonably deem
relevant, including, without limitation, the likelihood of consummation, the
trading market, and the liquidity of any securities offered in connection with
the Takeover Proposal, that the Takeover Proposal is superior as compared with
the Merger from a financial point of view, and (ii) if the Takeover Proposal (x)
is subject to a financing condition or (y) involves consideration that is not
entirely cash or does not permit stockholders to receive the payment of the
offered consideration in respect of all shares at the same time (unless there is
a cash payment at closing of at least $3.00 per share), Xxxxxx'x Board of
Directors have been furnished with the written opinion of the financial advisor
to the Board (in the case of clause (x)), the Takeover Proposal is readily
financeable and (in the case of clause (y)) that the Takeover Proposal provides
a higher value per share, from a financial point of view, than would be realized
by Xxxxxx'x stockholders pursuant to the Merger.
(e) Except as set forth in Section 4.14(d), the Board of Directors of Xxxxxx
shall not (x) withdraw or modify, or propose to withdraw or modify, in a manner
adverse to Sheridan, the Board of Directors' approval or recommendation of the
Merger or this Agreement, (y) approve any letter of intent, agreement in
principle, acquisition agreement or similar agreement (other than a
confidentiality agreement in connection with a Superior Proposal which is
entered into by Xxxxxx in accordance with Section 4.14(b)) relating to any
Takeover Proposal (each, a "Proposal Agreement"), or (z) approve or recommend,
or propose to approve or recommend, any Takeover Proposal. Notwithstanding the
foregoing or anything else to the contrary contained in this Agreement, in
response to a Superior Proposal which was not solicited by Xxxxxx, and which did
not otherwise result from a breach of Section 4.14(a), the Board of Directors of
Xxxxxx may, subject to the immediately following sentence, terminate this
Agreement pursuant to and subject to the terms of Section 6.4(c) and,
concurrently with such termination, cause Xxxxxx to enter into an agreement with
respect to a Superior Proposal, but only if Xxxxxx'x Board of Directors
determines, after consultation with its Superior Proposal counsel, that failure
to terminate this Agreement and accept the Superior Proposal would be
inconsistent with Xxxxxx'x Board of Directors' fiduciary duties to stockholders.
Such actions may be taken by Xxxxxx'x Board of Directors only if it has
delivered to Sheridan prior to or on the date of Xxxxxx'x Stockholders' Meeting,
written notice of the intent of Xxxxxx'x Board of Directors to take the actions
referred to in the preceding sentence, together with a copy of the related
Proposal Agreement and a description of any terms of the Takeover Proposal not
contained therein. The Board of Directors shall not terminate this Agreement and
enter into an Agreement with respect to a Superior Proposal pursuant to this
Section 4.14(e) until the end of the second business day following delivery of
such notice to Sheridan, after which the Board of Directors, taking into account
such matters that they deem relevant (including, without limitation, the
likelihood of consummation, the trading market, and the liquidity of any
securities offered in connection with the Takeover Proposal, as well as any
indications from Sheridan that it will make an alternative proposal), may
proceed with such Superior Proposal and enter into a Proposal Agreement in
connection with the Superior Proposal.
(f) Xxxxxx promptly, and in any event within 48 hours of receipt of a Takeover
Proposal, shall advise Sheridan orally and in writing of the submission of such
Takeover Proposal, the identity of the person making such Takeover Proposal and
the material terms of such Takeover Proposal; provided, however, that Sheridan
shall not interfere with Xxxxxx or Hirsch's Board of Directors with respect to
any such Takeover Proposal (including any deliberations related to such Takeover
Proposal or any matter related thereto). Xxxxxx shall keep Sheridan fully
informed of the status and material terms of any Takeover Proposal.
Section 4.15 Registration Rights. Xxxxxx hereby agrees that at the Closing,
Xxxxxx will grant to each Person that holds in excess of 5% of the outstanding
Sheridan Common Stock on a fully diluted basis (assuming the conversion in full
of all Sheridan Series A Preferred Stock but excluding any outstanding options
or warrants) as of immediately prior to the Effective Time, registration rights
pursuant to the terms of a Registration Rights Agreement substantially in the
form attached hereto as Exhibit E, provided that such Person executes such
agreement at or prior to the Closing.
Section 4.16 Kinderhook Management Agreements. Reference is hereby made to (i)
that certain Management Services Agreement, dated as of July 31, 2003 (the
"Kinderhook-Musicrama MSA"), by and between Kinderhook Industries, LLC
("Kinderhook Industries") and Musicrama, Inc., a subsidiary of Sheridan
("Musicrama") and (ii) that certain Management Services Agreement, dated as of
April 1, 2005 (the "Kinderhook-Sheridan MSA"), by and between Kinderhook
Industries and Sheridan. Xxxxxx and Xxxxxxxx hereby acknowledge and agree (A)
that pursuant to the terms of the Kinderhook-Sheridan MSA, $50,000 in fees will
be payable to Kinderhook Industries as a result of the consummation of the
Merger, (B) that such $50,000 payment will be made by Sheridan or Xxxxxx (on
behalf of Sheridan) to Kinderhook Industries on the Closing Date, (C) that
pursuant to the terms of the Kinderhook-Musicrama MSA, Musicrama is currently
obligated to pay $50,000 in fees to Kinderhook Industries and, on October 1,
2005, Musicrama will be obligated to pay an additional $25,000 in fees to
Kinderhook Industries, (D) that, to the extent Musicrama has not previously paid
such $50,000 and/or such $25,000 to Kinderhook Industries as of the Closing
Date, such amounts will be paid by Sheridan or Xxxxxx (on behalf of Musicrama)
to Kinderhook Industries on the Closing Date and (E) that all such fees when
paid to Kinderhook Industries will be deemed fully earned by Kinderhook
Industries for services previously rendered. Notwithstanding anything contained
herein to the contrary, Kinderhook Industries is an express third party
beneficiary of this Section 4.16 and Section 5.1(c) and the provisions of this
Section 4.16 and Section 5.1(c) may not be amended or waived without the prior
written consent of Kinderhook Industries.
ARTICLE V
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 5.1 Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party to consummate the transactions contemplated
by this Agreement are subject to the fulfillment at or prior to the Effective
Time of each of the following conditions, any or all of which may be waived in
whole or in part by the party being benefited thereby, to the extent permitted
by applicable Law:
(a) Stockholder Approval. This Agreement, the Merger and related transactions
shall have been approved and adopted by the Xxxxxx Stockholder Approval.
(b) Injunction, etc. As of the Effective Time, there shall not be in effect any
Law of any Governmental Entity of competent jurisdiction restraining, enjoining
or otherwise preventing consummation of the transactions contemplated by this
Agreement and no Governmental Entity shall have instituted any proceeding which
continues to be pending seeking any such Law.
(c) Kinderhook-Musicrama MSA. The Kinderhook-Musicrama MSA shall be amended to
provide that (i) the Kinderhook-Musicrama MSA will have a remaining term of
twenty months commencing on the Closing Date, (ii) that the management fees
payable to Kinderhook Industries for such twenty month period commencing on the
Closing Date will be an aggregate of $500,000, and that such management fees
will be payable to Kinderhook Industries, in advance, in twenty monthly
installments of $25,000 beginning on the Closing Date, (iii) that upon a change
of control of Xxxxxx, all then remaining unpaid management fees for the
remaining term of the Kinderhook-Musicrama MSA shall immediately be due and
payable to Kinderhook Industries and (iv) the amendments provided in clauses
(i), (ii) and (iii) above shall be expressly conditioned on (A) the consummation
of the Merger, (B) all payments required to be made to Kinderhook Industries
pursuant to Section 4.16 hereof having been made on or prior to the Closing Date
and (C) each of Xxxxxx and Sheridan guaranteeing the payment of the management
fees payable to Kinderhook Industries pursuant to the Kinderhook-Musicrama MSA,
as amended as provided herein; provided that, notwithstanding anything contained
herein to the contrary, neither Xxxxxx, Merger Sub nor Sheridan will have the
benefit of the conditions set forth in this Section 5.1(c) unless all payments
required to be made to Kinderhook Industries pursuant to Section 4.16 hereof
have been made on or prior to the Closing Date.
Section 5.2 Conditions to the Obligations of Xxxxxx and Merger Sub. The
respective obligations of Xxxxxx and Merger Sub to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following additional conditions, any or all of
which may be waived in whole or part by Xxxxxx and Merger Sub to the extent
permitted by applicable Law:
(a) Representations and Warranties. The representations and warranties of
Sheridan contained herein shall be true and correct in each case in all material
respects (other than representations and warranties that contain materiality
qualifications which shall be true and correct in all respects) on and as of the
date when made and as of the Closing (except for representations and warranties
made as of a specified date, which shall speak only as of the specified date),
provided that it shall not be a breach of this condition if such breach of any
representation or warranty does not have a Material Adverse Effect on Sheridan
and its subsidiaries, taken as a whole.
(b) Performance of Agreement. Sheridan shall have performed or complied in all
material respects with all covenants, conditions and other obligations contained
herein required to be performed or complied with by it prior to or at the time
of the Closing.
(c) No Material Adverse Effect. From the date hereof through the Closing Date,
there shall not have occurred any Material Adverse Effect on Sheridan and its
subsidiaries, taken as a whole.
(d) Certificate. Sheridan shall have delivered to Xxxxxx a certificate, dated
the Closing Date, signed by the Chief Executive Officer or President of
Sheridan, certifying as to the fulfillment of the conditions specified in
Section 5.2(a), Section 5.2(b) and Section 5.2(c).
(e) Opinion of Counsel to Sheridan. Xxxxxx shall have received an opinion of
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, counsel to Sheridan, dated the
Closing Date, in form and substance reasonably satisfactory to Xxxxxx and Merger
Sub and substantially in the form attached hereto as Exhibit F.
(f) No Court Order. Immediately prior to the Effective Time, no temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction shall be in effect which prevent Sheridan,
Xxxxxx and/or Merger Sub from consummating the Merger; provided, however, that
each of Xxxxxx and Merger Sub shall have used reasonable efforts to prevent the
entry of any such injunction and to appeal as promptly as possible any such
injunction or other order that may be entered.
(g) Approvals. Sheridan shall have timely obtained from each Governmental Entity
any and all Third Party Consents, if any, necessary for consummation of or in
connection with the transactions contemplated hereby, including such approvals,
waivers and consents as may be required under the blue sky laws, if any, and
such approvals, waivers and consents are still in full force and effect, except
for such authorizations, consents or approvals, the failure of which to have
been made or obtained does not and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. For purposes of
this Section 5.2(g), Material Adverse Effect will include without limitation the
loss of contracts and agreements which in the aggregate represent more than 3%
of its consolidated revenues.
Section 5.3 Conditions to the Obligations of Sheridan. The obligations of
Sheridan to consummate the transactions contemplated by this Agreement are
subject to the fulfillment at or prior to the Effective Time of each of the
following conditions, any or all of which may be waived in whole or in part by
Sheridan to the extent permitted by applicable Law:
(a) Representations and Warranties. The representations and warranties of Xxxxxx
and Merger Sub contained herein shall be true and correct in each case in all
material respects (other than the representations and warranties that contain
materiality qualifications which shall be true and correct in all respects) on
and as of the date when made and as of the Closing (except for representations
and warranties made as of a specified date, which shall speak only as of the
specified date), provided that it shall not be a breach of this condition if
such breach of any representation or warranty does not have a Material Adverse
Effect on Xxxxxx and its subsidiaries, taken as a whole.
(b) Performance of Agreement. Xxxxxx shall have performed or complied in all
material respects with all covenants, conditions and other obligations contained
herein required to be performed or complied with by it prior to or at the time
of the Closing.
(c) No Material Adverse Change. Prior to the Closing, there shall not have
occurred any Material Adverse Effect on Xxxxxx and its subsidiaries, taken as a
whole.
(d) Certificate. Each of Xxxxxx and Merger Sub shall have delivered to Sheridan
a certificate, dated the Closing Date, signed by its Chief Executive Officer or
President, certifying as to the fulfillment of the conditions specified in
Section 5.3(a), Section 5.3(b) and Section 5.3(c).
(e) Directors and Officers of Xxxxxx. Xxxxxx shall have taken, or caused to have
been taken, all necessary corporate action, so that at or immediately after the
Effective Time the directors and officers of Xxxxxx shall be as set forth on
Schedule 1.7(a) of the Sheridan Disclosure Schedule.
(f) Opinion of Counsel to Xxxxxx. Xxxxxxxx shall have received an opinion of
Ruskin Moscou Faltischek, P.C. counsel to Xxxxxx, dated the Closing Date, in the
form and substance reasonably satisfactory to Sheridan and substantially in the
form attached hereto as Exhibit G.
(g) No Court Order. Immediately prior to the Effective Time, no temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction shall be in effect which prevent Sheridan,
Xxxxxx and/or Merger Sub from consummating the Merger; provided, however, that
Sheridan shall have used reasonable efforts to prevent the entry of any such
injunction and to appeal as promptly as possible any such injunction or other
order that may be entered.
(h) Employment Agreements. Each of Xxxxxx Xxxxxx, Xxxx Xxxxxxxxx, Xxxxxxx Xxxxxx
and Xxxx Xxxxxx shall have entered into an Employment Agreement with Xxxxxx
containing the material terms set forth on Exhibit H attached hereto and
containing such other customary terms mutually agreed to by the parties.
(i) Approvals. Xxxxxx and Merger Sub shall have timely obtained from each
Governmental Entity any and all Third Party Consents, if any, necessary for
consummation of or in connection with the transactions contemplated hereby,
including such approvals, waivers and consents as may be required under the blue
sky laws, if any, and such approvals, waivers and consents are still in full
force and effect, except for such authorizations, consents or approvals, the
failure of which to have been made or obtained does not and could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect. For purposes of this Section 5.3(i), Material Adverse Effect will
include without limitation the loss of contracts and agreements which in the
aggregate represent more than 3% of its consolidated revenues.
ARTICLE VI
TERMINATION; AMENDMENT; WAIVER
Section 6.1 Termination by Mutual Agreement. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval of the Merger by Xxxxxx Stockholder Approval
referred to in Section 5.1(a), by mutual written consent of Sheridan and Xxxxxx
by action of their respective boards of directors.
Section 6.2 Termination by either Xxxxxx or Sheridan. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the board of directors of either Xxxxxx or Xxxxxxxx if:
(a) the Merger shall not have been consummated by December 31, 2005 (the
"Termination Date"); provided, however, that if the Xxxxxx Stockholders Meeting
has not taken place by such date, Xxxxxx may not terminate this Agreement if
Sheridan chooses to extend the Termination Date;
(b) if the Xxxxxx Stockholder Approval shall not have been obtained after Xxxxxx
convenes and holds the Xxxxxx Stockholders Meeting and certifies the vote with
respect to the Merger; or
(c) any Law permanently restraining, enjoining or otherwise prohibiting
consummation of the Merger shall become final and non-appealable (whether before
or after the approval of the Merger by Xxxxxx Stockholder Approval);
provided, however, that the right to terminate this Agreement pursuant to this
Section 6.2 shall not be available to any party that has breached in any
material respect its obligations under this Agreement in any manner that shall
have proximately contributed to the occurrence of the failure of the Merger to
be consummated; and provided further, that the right to terminate this Agreement
pursuant to this Section 6.2 shall not be available to Xxxxxx in the event that
any of its stockholders who are party to the Xxxxxx Voting Agreement have
breached their obligations thereunder.
Section 6.3 Termination by Sheridan. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after the approval of the Merger by the Xxxxxx Stockholder Approval referred
to in Section 5.1(a), by action of the Sheridan Board of Directors, if:
(a) (i) any of Hirsch's representations and warranties shall have been
inaccurate in any material respect as of the date of this Agreement, such that
the conditions set forth in Section 5.3(a) would not be satisfied, or (ii) if
(A) any of Hirsch's representations and warranties become inaccurate in any
material respect as of a date subsequent to the date of this Agreement (as if
made on such subsequent date), such that the conditions set forth in Section
5.3(a) would not be satisfied and (B) such inaccuracy has not been cured by
Xxxxxx within twenty (20) business days after its receipt of written notice
thereof and remains uncured at the time notice of termination is given, or (iii)
any of Hirsch's covenants contained in this Agreement shall have been breached
in any material respect, such that the conditions set forth in Section 5.3(b)
would not be satisfied; or
(b) the Board of Directors of Xxxxxx (i) withdraws or modifies adversely its
recommendation of the Merger, or (ii) recommends a Takeover Proposal to Hirsch's
stockholders; or
(c) if, since the date of this Agreement, there shall have occurred any Material
Adverse Effect on Xxxxxx.
Section 6.4 Termination by Xxxxxx. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after the approval of the Merger by the Xxxxxx Stockholder Approval referred
to in Section 5.1(a), by action of the Board of Directors of Xxxxxx, if:
(a) (i) any of Sheridan's representations and warranties shall have been
inaccurate in any material respect as of the date of this Agreement, such that
the conditions set forth in Section 5.2(a) would not be satisfied, or (ii) if
(A) any of Sheridan's representations and warranties become inaccurate in any
material respect as of a date subsequent to the date of this Agreement (as if
made on such subsequent date), such that the conditions set forth in Section
5.2(a) would not be satisfied and (B) such inaccuracy has not been cured by
Sheridan within twenty (20) business days after its receipt of written notice
thereof and remains uncured at the time notice of termination is given, or (iii)
any of Sheridan's covenants contained in this Agreement shall have been breached
in any material respect, such that the conditions set forth in Section 5.2(b)
would not be satisfied; or
(b) if, since the date of this Agreement, there shall have occurred any Material
Adverse Effect on Sheridan; or
(c) if, as a result of a Superior Proposal, the Board of Directors of Xxxxxx
determines, in its good faith judgment and in the exercise of its fiduciary
duties, that the failure to terminate this Agreement and accept such Superior
Proposal is a violation of such fiduciary duties and Xxxxxx has otherwise
complied in all material respects with Section 4.14.
Section 6.5 Effect of Termination and Abandonment. In the event of termination
of this Agreement and the abandonment of the Merger pursuant to this Article VI,
this Agreement (other than this Section 6.5, Section 4.7 and Section 8.4) shall
become void and of no effect with no liability on the part of any party hereto
(or of any of its directors, officers, employees, consultants, contractors,
agents, legal and financial advisors, or other representatives); provided,
however, that except as otherwise provided herein, no such termination shall
relieve any party hereto of any liability or damages resulting from any willful
breach of this Agreement.
Section 6.6 Amendment. This Agreement may be amended by action taken by
Sheridan, Xxxxxx and Merger Sub at any time before or after approval of the
Merger by Xxxxxx Stockholder Approval but, after any such approval, no amendment
shall be made which changes the amount or form of the Merger consideration. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
Section 6.7 Extension; Waiver. At any time prior to the Effective Time, each
party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document, certificate or writing delivered pursuant hereto, or (c) waive
compliance by the other party with any of the agreements or conditions contained
herein. Any agreement on the part of either party hereto to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party hereto to assert any of its
rights hereunder shall not constitute a waiver of such rights.
ARTICLE VII
SURVIVAL; ADJUSTMENT
Section 7.1 Survival. The representations and warranties of the parties hereto
contained in this Agreement and in any certificate or other writing delivered
pursuant hereto or in connection herewith shall survive for a period of 180 days
following the Effective Time. The covenants and agreements of the parties set
forth herein shall survive in accordance with their terms. Notwithstanding the
foregoing, if written notice (a "Claims Notice") of any claim for an adjustment
to the relative holdings of the shares of Xxxxxx Common Stock held by the
Sheridan Stockholders and the Xxxxxx Stockholders on the Effective Date (an
"Adjustment"), setting forth such claim in reasonable detail and the amount or
estimated amount of such Damages, is given by Xxxxxx or Sheridan, as the case
may be, in accordance with Section 7.3 of this Agreement prior to the end of the
applicable survival period, any claim specified therein shall be deemed to
survive until such claim is finally resolved.
Section 7.2 Adjustment.
(a) With respect to any breach of any representation or warranty or any covenant
or agreement by either Xxxxxx, on the one hand, or Sheridan, on the other hand
(a "Breaching Party"), Xxxxxx shall issue to the Persons who were stockholders
of Xxxxxx or Sheridan Stockholders, as the case may be, at the Effective Time
(the "Indemnified Parties"), additional shares of Xxxxxx Common Stock (the
"Adjustment Shares"), subject to the limitations contained in this Article VII,
in an aggregate amount sufficient to compensate the Indemnified Parties for any
damage, cost, liability, fines, penalties and expenses (including reasonable
attorneys' fees and expenses in connection with any action, suit or proceeding,
whether involving a claim by a third party or a claim solely between the parties
hereto) ("Damages"), incurred or suffered by an Indemnified Party arising out of
any such breach. The number of Adjustment Shares shall be based on the fair
market value of such shares as of the close of business on the date of issuance.
The Adjustment Shares shall be issued to the Indemnified Parties pro rata in
proportion to their shareholdings at the Effective Time.
(b) Notwithstanding anything in this Agreement to the contrary, no claims for an
Adjustment shall be asserted by the Indemnified Parties under this Article VII,
unless and until the aggregate amount of Damages that would otherwise be subject
to the Adjustment hereunder exceeds $150,000, whereupon the Indemnified Parties
shall be entitled to receive the full amount of such Damages; provided, that the
maximum number of Adjustment Shares permitted hereunder shall not exceed, in the
aggregate 1,000,000 shares of Xxxxxx Common Stock.
Section 7.3 Procedures. If a party intends to seek an Adjustment pursuant to
this Article VII, the party seeking the Adjustment shall promptly, after
becoming aware of such claim, deliver a Claims Notice to the other party;
provided, that the failure to provide such notice shall not affect the rights of
the party seeking the Adjustment under this Article VII unless such party is
actually prejudiced thereby.
Section 7.4 Exclusive Remedy. In the event that the Closing occurs, the parties
agree that their sole and exclusive remedy with respect to a breach of a
representation or warranty in this Agreement shall be pursuant to the provisions
of this Article VII; provided, however, that the obligations of the parties
under this Agreement shall be enforceable by decree of specific performance
issued by any court of competent jurisdiction, and appropriate injunctive relief
may be applied for and granted in connection therewith.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Entire Agreement; Assignment.
(a) This Agreement (including exhibits and schedules attached hereto)
constitutes the entire agreement between the parties hereto in respect of the
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties in respect of the
subject matter hereof.
(b) Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by operation of Law (including by merger or
consolidation) or otherwise. Any assignment in violation of the preceding
sentence shall be void. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and permitted assigns and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 8.2 Notices. All notices, requests, instructions or other documents to
be given under this Agreement shall be in writing and shall be deemed given, (a)
five business days following sending by registered or certified mail, postage
prepaid, (b) when sent if sent by facsimile; provided, however, that the
facsimile is promptly confirmed by telephone confirmation thereof by the
intended recipient, (c) when delivered, if delivered personally to the intended
recipient, and (d) one business day following sending by overnight delivery via
a national courier service, and in each case, addressed to a party at the
following address for such party:
if to Xxxxxx or Merger Sub, to:
Xxxxxx International Corp.
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx
Facsimile: (000) 000-0000
with copies to: Xxxxxx Xxxxxx Xxxxxxxxxx, X.X.
Xxxx Xxxxx, 00 Floor
000 XXX Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
if to Sheridan: Sheridan Square Entertainment, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
with copies to: Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or facsimile number as the Person to
whom notice is given may have previously furnished to the other in writing in
the manner set forth above.
Section 8.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
choice of law principles thereof; provided, however, that the corporate laws of
the state of a party's incorporation and/or organization shall govern for
purposes of corporate governance and matters of corporate law.
Section 8.4 Expenses. Sheridan shall be solely responsible for the legal,
accounting and other fees and expenses incurred by Sheridan in connection with
the execution of this Agreement and the consummation of the transactions
contemplated hereby. Xxxxxx and Merger Sub shall be solely responsible for the
legal, accounting and other fees and expenses incurred by Xxxxxx and Merger Sub
in connection with execution of this Agreement and the consummation of the
transactions contemplated hereby.
Section 8.5 Descriptive Headings. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
Section 8.6 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
Section 8.7 Specific Performance. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which they are entitled at Law or in equity.
Section 8.8 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 8.9 Further Assurances. Each party to this Agreement agrees (a) to
furnish upon request to the other party such further information, (b) to execute
and deliver to the other party such other documents and (c) to do such other
acts and things as the other party reasonably requests for the purpose of
carrying out the intent of this Agreement and the documents and instruments
referred to herein.
Section 8.10 Interpretation.
(a) The words "hereof," "herein," "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole and
not to any particular provision of this Agreement, and article, section,
paragraph, exhibit, and schedule references are to the articles, sections,
paragraphs, exhibits, and schedules of this Agreement, unless otherwise
specified. Whenever the words "include," "includes," or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." All terms defined in this Agreement shall have the defined meanings
contained herein when used in any certificate or other document made or
delivered pursuant hereto, unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any agreement, instrument, or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument, or statute as from time to time, amended, qualified
or supplemented, including (in the case of agreements and instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns.
(b) The phrases "the date of this Agreement," "the date hereof," and terms of
similar import, unless the context otherwise requires, shall be deemed to refer
to the date set forth in the opening paragraph of this Agreement.
(c) The parties have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
Section 8.11 Definitions. As used herein,
(a) "Know" or "knowledge" means, (i) in respect of Xxxxxx, the knowledge of the
executive officers of Xxxxxx and its Subsidiaries, and (ii) in respect of
Sheridan, the knowledge of the executive officers of Sheridan and its
Subsidiaries.
(b) "Lien" means, in respect of any asset (including any security) any mortgage,
lien, pledge, charge, security interest, or encumbrance of any kind in respect
of such asset.
(c) "Permitted Lien" means a statutory Lien not yet delinquent; a purchase money
Lien arising in the ordinary course of business consistent with past practices;
a Lien reflected in the financial statements of the applicable party; or a Lien
which does not materially detract from the value or impair the use of the asset
or property in question.
(d) "Person" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group (as defined in the Exchange Act).
(e) "Subsidiary" means, in respect of any party, any corporation, partnership or
other entity or organization, whether incorporated or unincorporated, of which
(i) such other party or any other subsidiary of such party is a general partner
(excluding such partnerships where such party or any subsidiary of such party
does not have a majority of the voting interest in such partnership) or (ii) at
least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or others
performing similar functions in respect of such corporation or other
organization is directly or indirectly owned or controlled by such party or by
any one or more of its subsidiaries, or by such party and one or more of its
subsidiaries.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the date first above written.
SHERIDAN SQUARE ENTERTAINMENT, INC.
By:/s/ Xxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxx
Title: Co-Chief Executive Officer
XXXXXX INTERNATIONAL CORP.
By:/s/ Xxxx Xxxxxxxxx
---------------------
Name: Xxxx Xxxxxxxxx
Title: President and Chief Executive Officer
SSE ACQUISITION, CORP.
By: /s/ Xxxx Xxxxxxxxx
----------------------
Name: Xxxx Xxxxxxxxx
Title: President and Chief Executive Officer
================================================================================
AGREEMENT AND PLAN OF MERGER
dated as of July 20, 2005
among
XXXXXX INTERNATIONAL CORP.,
SSE ACQUISITION CORP.
and
SHERIDAN SQUARE ENTERTAINMENT, INC.
================================================================================
EXHIBITS
Certificate of Merger A
Xxxxxx Certificate of Incorporation B
Xxxxxx Bylaws C
Xxxxxx Voting Agreement D
Registration Rights Agreement E
Opinion of Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP F
Opinion of Ruskin Moscou Faltischek, P.C. G
Terms of Xxxxxx Officers Employment H
INDEX OF SCHEDULES
XXXXXX DISCLOSURE SCHEDULE
1.7(a) List of Directors and Officers of Xxxxxx
1.8(a) Amendment to Certificate of Incorporation
2.1(b) List of Subsidiaries
2.2(a) Capitalization
2.2(b) Encumbrances
2.3(c) No Violations
2.6 Compliance with Applicable Laws
2.8 Litigation
2.10(a) Benefit Plans, List of Employees and Employee Arrangements
2.10(h) Post-retirement Life Insurance or Health Benefits Coverage
2.11(a) Labor Agreements
2.11(c) Labor Complaints 2.12 Absence of Certain Changes or Events
2.14 Tax Returns
2.16 Title and Related Matters
2.17(b) Material Contracts; Severance or Other Employment Contracts
2.18 Insurance
2.20(b) Necessary Intellectual Property
2.20(c) List of Intellectual Property
2.20(d) License Agreements
2.20(e) Unauthorized Use of Intellectual Property
2.20(f) Breaches of Intellectual Property Rights
2.20(j) Products and Software
2.22 Bank Accounts
2.24 Customer Disputes
2.25 Offsets to Accounts Receivable
2.26 Related Party Transactions
2.27(b) Brokers or Finders
3.1 Deviation from Ordinary Course of Business
4.10 Xxxxxx Option Grants
SHERIDAN DISCLOSURE SCHEDULE
1.7(b) List of Officers and Directors of Surviving Corporation
2.1(b) List of Subsidiaries
2.2(a) Capitalization
2.2(b) Encumbrances
2.3(c) No Violations
2.6 Compliance with Applicable Laws
2.8 Litigation
2.10(a) Benefit Plans, List of Employees and Employee Arrangements
2.10(h) Post-retirement Life Insurance or Health Benefits Coverage
2.11(a) Labor Agreements
2.11(c) Labor Complaints
2.12 Absence of Certain Changes or Events
2.14 Tax Returns
2.16 Title and Related Matters
2.17(a)(i)(a) Material Contracts
2.17(a)(i)(b)Severance Agreements
2.18 Insurance
2.20(b) Necessary Intellectual Property
2.20(l) Intellectual Property
2.22 Bank Accounts
2.24 Customer Disputes
2.25 Offsets to Accounts Receivable
2.26 Related Party Transactions
3.1 Deviation from Ordinary Course of Business
GLOSSARY OF DEFINED TERMS
-------------------------
Defined Terms Defined in Section
------------- ------------------
Acquisition Transaction Section 4.4
Adjustment Section 7.1
Adjustment Shares Section 7.2(a)
Affiliated Group Section 2.14(b)
Agreement Preamble
Bank Accounts Section 2.22
Benefit Plans Section 2.10(a)(i)
Breaching Party Section 7.2(a)
Certificate of Merger Section 1.2
Claims Notice Section 7.1
Closing Section 1.3
Closing Date Section 1.3
Code Recitals
Confidential Information Section 2.20(h)
Confidential Material Section 4.7
Copyrights Section 2.20(a)(iii)
Damages Section 7.2(a)
Delaware Law Section 1.1
Effective Time Section 1.2
Effective Time Sheridan Share Number Section 1.4(a)
Employee Arrangements Section 2.10(a)(iii)
Environmental Claim Section 2.7(d)
Environmental Law Section 2.7(d)
Environmental Permits Section 2.7(a)
ERISA Section 2.10(a)(i)
Exchange Act Section 2.3(c)
Exchange Ratio Section 1.4(a)
Financial Statements Section 2.4(b)
GAAP Section 2.4(a)
Governmental Entity Section 2.3(c)
Hazardous Materials Section 2.7(d)
Xxxxxx Preamble
Xxxxxx Board Recommendation Section 4.2(c)
Xxxxxx Common Stock Recitals
Xxxxxx Disclosure Schedule Article II
Xxxxxx Material Contracts Section 2.17(b)(i)
Xxxxx Products Section 2.20(c)(ii)
Xxxxxx Software Section 2.20(j)
Xxxxxx Stockholder Approval Section 2.3(b)
Xxxxxx Stockholders Meeting Section 2.13
Xxxxxx Voting Agreement Section 4.2(a)
Indemnified Parties Section 7.2(a)
Independent Directors Section 1.7(a)
Intellectual Property Section 2.20(a)
IRS Section 2.10(b)
Issued Patents Section 2.20(a)(i)
Kinderhook Industries Section 4.16
Kinderhook-Musicrama MSA Section 4.16
Kinderhook-Sheridan MSA Section 4.16
Know Section 8.11(a)
Knowledge Section 8.11(a)
Law Section 2.3(c)
Lien Section 8.11(b)
Material Adverse Effect Section 2.1(a)
Merger Section 1.1
Merger Shares Section 1.4(a)
Merger Sub Preamble
Musicrama Section 4.16
Patent Applications Section 2.20(a)(ii)
Patents Section 2.20(a)(ii)
Permits Section 2.9
Permitted Lien Section 8.11(c)
Person Section 8.11(d)
Potential Acquiror Section 4.14(b)
Proposal Agreement Section 4.14(e)
Proxy Statement Section 2.13
Representatives Section 4.14(a)
Representing Party Article II
Representing Party's Disclosure Schedule Article II
SEC Section 1.7(a)
SEC Reports Section 2.4(a)
Securities Act Section 2.3(c)
Series B Transaction Recitals
Sheridan Preamble
Sheridan Certificate of Incorporation Section 1.4(a)
Sheridan Certificates Section 1.9
Sheridan Class A Stock Section 1.4(a)
Sheridan Class B Stock Section 1.4(a)
Sheridan Common Share Equivalents Section 1.4(a)
Sheridan Common Shares Section 1.4(a)
Sheridan Common Stock Section 1.4(a)
Sheridan Disclosure Schedule Article II
Sheridan Material Contracts Section 2.17(a)(i)
Sheridan Preferred Shares Section 1.4(a)
Sheridan Preferred Stock Section 1.4(a)
Sheridan Series A Preferred Stock Section 1.4(a)
Sheridan Series B Preferred Stock Recitals
Sheridan Stockholders Section 1.4(a)
Sheridan Stockholder Approval Section 2.3(a)
Sheridan Stock Option Section 1.11(b)
Subsidiary Section 8.11(e)
Superior Proposal Section 4.14(d)
Surviving Corporation Section 1.1
Takeover Proposal Section 4.14(a)
Tax Return Section 2.14(a)
Taxes Section 2.14(a)
Termination Date Section 6.2(a)
Third Party Consents Section 4.11(a)
Third Party Intellectual Property Section 2.20(d)
Trademarks Section 2.20(a)(iv)
Warrant Section 1.11(c)
Warrant Shares Section 1.11(c)
WARN Act Section 2.11(d)
TABLE OF CONTENTS
ARTICLE I THE MERGER........................................................2
Section 1.1 The Merger................................................2
Section 1.2 Effective Time............................................2
Section 1.3 The Closing...............................................2
Section 1.4 Merger Consideration......................................2
Section 1.5 Effects of the Merger.....................................4
Section 1.6 Conversion of Securities..................................5
Section 1.7 Directors and Officers....................................5
Section 1.8 Certificate of Incorporation and Bylaws...................5
Section 1.9 Exchange of Shares........................................5
Section 1.10 Lost Certificates........................................6
Section 1.11 Options and Warrants.....................................6
Section 1.12 Tax Consequences.........................................7
Section 1.13 Sheridan Stock Transfer Books............................7
Section 1.14 No Further Rights........................................7
ARTICLE II REPRESENTATIONS AND WARRANTIES...................................7
Section 2.1 Organization; Qualification...............................8
Section 2.2 Capital Stock.............................................8
Section 2.3 Corporate Authority Relative to this Agreement;
No Violation.........................................9
Section 2.4 Reports and Financial Statements.........................11
Section 2.5 No Undisclosed Liabilities...............................11
Section 2.6 No Default; Compliance with Applicable Laws..............12
Section 2.7 Environmental Matters....................................12
Section 2.8 Litigation...............................................13
Section 2.9 Permits..................................................13
Section 2.10 Employee Plans..........................................13
Section 2.11 Labor Matters...........................................16
Section 2.12 Absence of Certain Changes or Events....................17
Section 2.13 Proxy Statement.........................................18
Section 2.14 Tax Matters.............................................19
Section 2.15 Absence of Questionable Payments........................20
Section 2.16 Title and Related Matters...............................20
Section 2.17 Material Contracts......................................21
Section 2.18 Insurance...............................................23
Section 2.19 Subsidies...............................................23
Section 2.20 Intellectual Property...................................23
Section 2.21 Minute Books; Stock Record Books........................26
Section 2.22 Bank Accounts; Powers of Attorney.......................27
Section 2.23 Disclosure..............................................27
Section 2.24 Disputes with Customers.................................27
Section 2.25 Accounts Receivable.....................................27
Section 2.26 Certain Transactions....................................27
Section 2.27 Brokers or Finders......................................28
Section 2.28 No Prior Activities.....................................28
ARTICLE III COVENANTS RELATED TO CONDUCT OF BUSINESS.......................28
Section 3.1 Conduct of Business of Sheridan and Xxxxxx...............28
Section 3.2 Access to Information....................................31
Section 3.3 Continuation of Insurance Coverage.......................31
ARTICLE IV ADDITIONAL AGREEMENTS...........................................31
Section 4.1 Proxy Statement..........................................31
Section 4.2 Xxxxxx Voting Agreement and Stockholders' Meeting........32
Section 4.3 Commercially Reasonable Efforts..........................33
Section 4.4 Exclusivity..............................................33
Section 4.5 Public Announcements.....................................34
Section 4.6 Private Placement........................................34
Section 4.7 Confidentiality..........................................34
Section 4.8 Additional Documents and Further Assurances..............35
Section 4.9 Notification of Certain Matters..........................35
Section 4.10 Employee Matters........................................35
Section 4.11 Third Party Consents....................................36
Section 4.12 Legal Opinion Certificates..............................36
Section 4.13 Blue Sky Laws...........................................36
Section 4.14 Other Potential Acquirors of Xxxxxx.....................37
Section 4.15 Registration Rights.....................................39
Section 4.16 Kinderhook Management Agreements........................39
ARTICLE V CONDITIONS TO CONSUMMATION OF THE MERGER.........................39
Section 5.1 Conditions to Each Party's Obligations to Effect the Merg39
Section 5.2 Conditions to the Obligations of Xxxxxx and Merger Sub...40
Section 5.3 Conditions to the Obligations of Sheridan................41
ARTICLE VI TERMINATION; AMENDMENT; WAIVER..................................42
Section 6.1 Termination by Mutual Agreement..........................42
Section 6.2 Termination by either Xxxxxx or Xxxxxxxx.................42
Section 6.3 Termination by Sheridan..................................43
Section 6.4 Termination by Xxxxxx....................................43
Section 6.5 Effect of Termination and Abandonment....................44
Section 6.6 Amendment................................................44
Section 6.7 Extension; Waiver........................................44
ARTICLE VII SURVIVAL; ADJUSTMENT...........................................44
Section 7.1 Survival.................................................44
Section 7.2 Adjustment...............................................45
Section 7.3 Procedures...............................................45
Section 7.4 Exclusive Remedy.........................................45
ARTICLE VIII MISCELLANEOUS.................................................46
Section 8.1 Entire Agreement; Assignment.............................46
Section 8.2 Notices..................................................46
Section 8.3 Governing Law............................................47
Section 8.4 Expenses.................................................47
Section 8.5 Descriptive Headings.....................................47
Section 8.6 Severability.............................................47
Section 8.7 Specific Performance.....................................47
Section 8.8 Counterparts.............................................48
Section 8.9 Further Assurances.......................................48
Section 8.10 Interpretation..........................................48
Section 8.11 Definitions.............................................48