EXHIBIT 2.1
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
DATED AS OF NOVEMBER 24, 1999
BY AND AMONG
BESICORP LTD.,
BESICORP HOLDINGS, LTD.
AND
BESI ACQUISITION CORP.
TABLE OF CONTENTS
RECITALS:.........................................................................................................1
A G R E E M E N T S...............................................................................................1
ARTICLE I.........................................................................................................1
THE MERGER........................................................................................................1
1.1 The Merger......................................................................................1
1.2 Consummation of the Merger......................................................................1
1.3 Effects of the Merger...........................................................................1
1.4 Certificate of Incorporation; Bylaws............................................................1
1.5 Directors and Officers..........................................................................2
1.6 Time and Place of Closing.......................................................................2
1.7 Further Assurances..............................................................................2
ARTICLE II........................................................................................................2
CONVERSION AND EXCHANGE OF SHARES.................................................................................2
2.1 Conversion of Shares............................................................................2
2.2 Exchange Procedures.............................................................................3
2.3 Adjustment of Merger Consideration..............................................................5
2.4 Deferred Payments...............................................................................5
2.5 Management Restricted Shares. .................................................................7
ARTICLE III.......................................................................................................7
REPRESENTATIONS AND WARRANTIES....................................................................................7
3.1 General Statement. ............................................................................7
3.2 Representations and Warranties of the Company. .................................................7
3.3 Representations and Warranties of Parent and Acquisition Corp. .................................9
ARTICLE IV.......................................................................................................11
CONDUCT OF BUSINESS PENDING THE MERGER...........................................................................11
4.1 Obligations of Each of the Parties.............................................................11
4.2 The Company's Obligations......................................................................11
4.3 Meeting; Proxy Statement; Schedule 13E-3; Other Regulatory Matters.............................12
4.4 Indemnification Provisions in Charter and Insurance. .........................................14
4.5 Parent's Funding of the Company. .............................................................15
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4.6 Voting of Shares of Common Stock held by Certain Holders.......................................16
4.7 Certificate and Personal Guarantee.............................................................16
4.8 Board Action...................................................................................17
4.9 Management Restricted Shares...................................................................17
4.10 Notices of Certain Events......................................................................17
4.11 March 1999 Escrow Fund.........................................................................17
ARTICLE V........................................................................................................18
CONDITIONS TO CLOSING; CLOSING DELIVERIES; BASE AMOUNT...........................................................18
5.1 Conditions to Each Party's Obligations.........................................................18
5.2 Conditions to the Company's Obligations........................................................18
5.3 Conditions to Parent's and Acquisition Corp's Obligations......................................19
5.4 Closing Deliveries.............................................................................19
ARTICLE VI.......................................................................................................20
TERMINATION/EFFECT OF TERMINATION................................................................................20
6.1 Right to Terminate.............................................................................20
6.2 Certain Effects of Termination.................................................................21
6.3 Remedies.......................................................................................21
6.4 Right to Damages; Expense Reimbursement. .....................................................21
ARTICLE VII......................................................................................................22
MISCELLANEOUS....................................................................................................22
7.1 Survival of Representations, Warranties and Agreements.........................................22
7.2 Amendment......................................................................................22
7.3 Publicity......................................................................................22
7.4 Notices........................................................................................23
7.5 Expenses; Transfer Taxes.......................................................................24
7.6 Entire Agreement...............................................................................24
7.7 Non-Waiver.....................................................................................24
7.8 Counterparts...................................................................................24
7.9 Severability...................................................................................24
7.10 Applicable Law.................................................................................24
7.11 Binding Effect; Benefit........................................................................24
7.12 Assignability..................................................................................24
7.13 Governmental Reporting.........................................................................24
7.14 Defined Terms. ................................................................................24
7.15 Headings. .....................................................................................28
7.16 Interpretation; Construction...................................................................28
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Exhibit 1.2 - Form of Certificate of Merger
Exhibit 4.5(a) - Form of Secured Promissory Note
Exhibit 4.5(b-1) - Form of Security Agreement
Exhibit 4.5(b-2) - Form of Mortgage and Security Agreement
Exhibit 4.7(a) - Form of Certificate
Exhibit 4.7(b-1) - Form of Guarantee
Exhibit 4.7(b-2) - Form of Escrow Agreement
Exhibit 4.11 - Form of Instructions to Escrow Agent
Exhibit 5.2.3 - Form of Legal Opinion of Parent's Counsel
Exhibit 5.3.3 - Form of Legal Opinion of Company's Counsel
Exhibit 7.14 - D&O Insurance Policy
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This AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this
"Agreement") is dated as of November 24, 1999, by and among Besicorp Holdings,
Ltd., a New York corporation ("Parent"), Besi Acquisition Corp., a New York
corporation ("Acquisition Corp"), and Besicorp Ltd., a New York corporation (the
"Company").
RECITALS:
A. The respective boards of directors of Acquisition Corp, Parent and
the Company each adopted a plan of merger as set forth in an Agreement and Plan
of Merger dated as of October 7, 1999 (the "Initial Agreement") pursuant to
which Acquisition Corp, which is a wholly-owned Subsidiary of Parent that has
been formed for the sole purpose of effectuating a merger with the Company,
would merge with and into the Company on the terms and subject to the conditions
set forth in the Initial Agreement.
B. Parent, Acquisition Corp and the Company desire to make certain
modifications to the Initial Agreement, including requiring the Company to
effectuate the Spin-Off prior to the Effective Date.
C. In order to make such modifications to the Initial Agreement, the
respective boards of directors of Acquisition Corp, Parent and the Company have
each adopted a plan of merger as set forth in this Agreement pursuant to which
Acquisition Corp will merge with and into the Company on the terms and subject
to the conditions set forth in this Agreement (the "Merger") and the New York
Business Corporation Law (the "NYBCL").
D. Parent, Acquisition Corp and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger.
E. Capitalized terms used in this Agreement have the meanings
identified in Section 7.14 of this Agreement.
A G R E E M E N T S
Therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. On the terms and subject to the conditions set forth in
this Agreement, on the Effective Date, in accordance with this Agreement and the
NYBCL, Acquisition Corp shall merge with and into the Company, the separate
existence of Acquisition Corp shall cease and the Company shall continue as the
surviving corporation. The Company, in its capacity as the corporation surviving
the Merger, is sometimes referred to herein as the "Surviving Corporation," and
Acquisition Corp and the Company are sometimes referred to collectively herein
as the "Constituent Corporations."
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1.2 Consummation of the Merger. In order to effectuate the Merger, on
the Closing Date, the parties hereto will cause a certificate of merger (the
"Certificate of Merger") substantially in the Form of Exhibit 1.2 to be filed
with the Secretary of State of the State of New York and such counties within
the state of New York as required by Section 904 of the NYBCL, in such form as
required by, and executed in accordance with the NYBCL . The Merger shall be
effective as of the date of filing of the Certificate of Merger or if later, the
date specified in the Certificate of Merger (the "Effective Date") in accordance
with Section 906 of the NYBCL.
1.3 Effects of the Merger. On and after the Effective Date, the Merger
shall have the effects provided in this Agreement and as set forth in Section
906 of the NYBCL.
1.4 Certificate of Incorporation; Bylaws. On and after the Effective
Date, the Certificate of Incorporation and By-Laws of the Company, as in effect
immediately prior to the Effective Date, shall be adopted as the Certificate of
Incorporation and By-Laws of the Surviving Corporation, and shall thereafter
continue in effect until amended as provided therein and in accordance with the
NYBCL.
1.5 Directors and Officers. On and after the Effective Date, the
directors of Acquisition Corp. shall be the directors of the Surviving
Corporation and the officers of the Company holding office immediately prior to
the Effective Date shall be the officers of the Surviving Corporation, until
their respective successors shall have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and By-Laws.
1.6 Time and Place of Closing. Subject to the provisions of Article V
and Section 6.1 hereof, the transactions contemplated by this Agreement shall be
consummated (the "Closing") at 10:00 a.m., prevailing New York City time, at the
offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.C., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ on the day which is three (3) business days after the
first date on which each of the conditions to Closing set forth in Article V
hereof shall have been satisfied or waived (and continue to be satisfied or
waived), or on such other date, or at such other place, as shall be agreed upon
by the parties hereto. The date on which the Closing shall occur in accordance
with the preceding sentence is referred to in this Agreement as the "Closing
Date."
1.7 Further Assurances. If, at any time after the Effective Date, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (i) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation its right, title and interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either of
the Company or Acquisition Corp, or (ii) otherwise to carry out the purposes of
this Agreement, the Surviving Corporation and its proper officers and directors
or their designees shall be authorized to execute and deliver, in the name and
on behalf of either the Company or Acquisition Corp, all such deeds, bills of
sale, assignments and assurances and do, in the name and on behalf of such
corporations, all such other acts and things as
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may be necessary, desirable or proper to vest, perfect or confirm the Surviving
Corporation's right, title and interest in, to and under any of the rights,
privileges, powers, franchises, properties or assets of such corporations and
otherwise to carry out the purposes of this Agreement.
ARTICLE II
CONVERSION AND EXCHANGE OF SHARES
2.1 Conversion of Shares. On the Effective Date, by virtue of the
Merger, and without any action on the part of the holders thereof:
2.1.1 Each share of common stock, $.01 par value, of the
Company (the "Common Stock") issued and outstanding immediately prior to the
Effective Date (other than shares of Common Stock held as treasury shares by the
Company or its Subsidiaries, shares of Common Stock then owned of record by
Acquisition Corp and Parent (the "Ineligible Holders") and shares held by person
who follow the procedure set forth in Sections 623 and 910 of the NYBCL (the
"Objecting Shareholders") shall, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into the right to receive in
cash (i) the Cash Merger Consideration without interest plus (ii) the right (a
"Deferred Payment Right") to Deferred Payments as set forth in Section 2.4
hereto plus (iii) the right (a "Escrow Fund Payment Right" and together with the
Deferred Payment Right, the "Combined Deferred Payment Right") to Escrow Fund
Payments as set forth in Section 2.4 hereto (collectively, the "Merger
Consideration"). Each share of Common Stock outstanding immediately prior to the
Effective Date (other than shares of Common Stock held as treasury shares by the
Company or its Subsidiaries and shares of Common Stock then owned of record by
Ineligible Holders and the Objecting Shareholders) shall be deemed to be no
longer outstanding and shall represent solely the right to receive the Merger
Consideration upon surrender of the certificate formerly representing such share
of Common Stock in accordance with the provisions of this section. "Cash Merger
Consideration" shall mean the Aggregate Cash Merger Consideration divided by the
sum of (i) the number of shares of Common Stock issued and outstanding
immediately prior to the Effective Date (other than those shares held as
treasury shares by the Company) and (ii) the number of Management Restricted
Shares for which substitute securities have been issued pursuant to Section 4.9
hereof prior thereto. The "Aggregate Cash Merger Consideration" is
$8,000,000.00.
2.1.2 Each share of Common Stock issued and outstanding
immediately prior to the Effective Date which is then held as a treasury share
by the Company or is held by any of the Company's Subsidiaries or by Parent or
Acquisition Corp. shall, by virtue of the Merger and without any action on the
part of the Company, be cancelled and retired and cease to exist, without any
conversion thereof. The Surviving Corporation shall make such payments to the
Objecting Shareholders as are required by Sections 623 and 910 of the NYBCL for
each share of Common Stock issued and outstanding immediately prior to the
Effective Date which is then held by such Objecting Shareholders, and the
Objecting Shareholders shares of Common Stock shall be cancelled and retired and
cease to exist, without any conversion thereof.
2.1.3 Each share of common stock, without par value, of
Acquisition Corp
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outstanding immediately prior to the Effective Date shall be converted into and
exchanged into one validly issued, fully-paid and non-assessable share of common
stock, $.01 par value, of the Surviving Corporation.
2.2 Exchange Procedures.
2.2.1 Immediately prior to the Effective Date, Parent or
Acquisition Corp will deposit or cause to be deposited with Continental Stock
Transfer & Trust Co., or another paying agent mutually acceptable to Parent and
the Company (the "Paying Agent"), in trust for the holders of record of Common
Stock (excluding Management Restricted Shares for which substitute securities
are to be issued pursuant to Section 4.9 hereof) immediately prior to the
Effective Date other than the Ineligible Holders and the Objecting Shareholders
(the "Company Shareholders") cash in an aggregate amount equal to (i) the number
of shares of Common Stock held of record by the Company Shareholders and the
Objecting Shareholders multiplied by (ii) the Cash Merger Consideration (such
deposit with the Paying Agent pursuant to this paragraph is referred to as the
"Payment Fund"). The Payment Fund shall not be used for any purpose except as
provided in this Agreement.
2.2.2 As soon as practicable after the Effective Date, the
Surviving Corporation shall cause the Paying Agent to mail to each Company
Shareholder a letter of transmittal and instructions for use (the "Letter of
Transmittal") in effecting the surrender of certificates representing shares of
Common Stock outstanding immediately prior to the Effective Date
("Certificates"). The Letter of Transmittal shall be in customary form, include
provisions stating that delivery shall be effected, and risk of loss and title
to such Certificates shall pass, only upon delivery of the Certificates to the
Paying Agent, provide instructions for effecting the surrender of such
Certificates in exchange for the Merger Consideration and provide such other
provisions as Parent may reasonably specify (including those provisions
described in this Section 2.2). Upon surrender of a Certificate for cancellation
to the Paying Agent, together with such Letter of Transmittal, duly and properly
executed, the holder of such Certificate shall be entitled to receive in
exchange therefore (A) the amount equal to (i) the number of shares of Common
Stock represented by such Certificate multiplied by (ii) the Cash Merger
Consideration, and (B) one Combined Deferred Payment Right for each share of
Common Stock represented by such Certificate. If the Cash Merger Consideration
(or any portion thereof) is to be delivered to any person other than the person
in whose name the Certificate representing shares of Common Stock surrendered in
exchange therefor is registered on the record books of the Company, it shall be
a condition to such exchange that the Certificate so surrendered shall be
properly endorsed or otherwise be in proper form for transfer and that the
person requesting such exchange shall pay to the Paying Agent any transfer or
other taxes required by reason of the payment of such consideration to a person
other than the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Paying Agent that such tax has been paid or
is not applicable. Combined Deferred Payment Rights shall not be evidenced by
certificates and shall not be transferable, except as required by law. All
payments, if any, with respect to the Combined Deferred Payment Rights shall be
paid to the persons in whose name the Certificates are registered on the books
of the Company immediately prior to the Effective Date. No interest will be paid
or will accrue on the cash payable upon surrender of any Certificate. Until
surrendered as contemplated by this Section 2.2, each Certificate shall, on and
after the Effective Date, be deemed to represent only the
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right to receive, upon surrender of such Certificate, the Merger Consideration
with respect to the shares of Common Stock represented thereby.
2.2.3 On and after the Effective Date, there shall be no
transfers on the stock transfer books of the Company of the shares of Common
Stock which were outstanding immediately prior to the Effective Date. If, after
the Effective Date, Certificates are presented to the Surviving Corporation,
they shall be cancelled and exchanged as provided in this Section 2.2. In the
event of a transfer of ownership of shares of Common Stock which is not
registered in the transfer records of the Company, payment may be made with
respect to such share of Common Stock to such a transferee only if the
Certificate representing such shares of Common Stock is presented to the Paying
Agent, accompanied by all documents required to evidence and effect such
transfer and evidence that any applicable stock transfer taxes have been paid.
2.2.4 In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, upon the posting by such person of a bond in such
amount as the Surviving Corporation may reasonably direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent will issue in respect of such lost, stolen or destroyed
Certificate, the Merger Consideration with respect to the shares of Common Stock
represented thereby.
2.2.5 Upon the determination by the Paying Agent that a
shareholder is an Objecting Shareholder and not a Company Shareholder, the
Paying Agent shall deliver to the Surviving Corporation that amount equal to (i)
the number of shares of Common Stock held by such Shareholder multiplied by (ii)
the Cash Merger Consideration. Any portion of the Payment Fund which remains
unclaimed by any of the Company Shareholders for nine (9) months after the
Effective Date shall be delivered to the Surviving Corporation upon demand of
the Surviving Corporation, and the holders of shares of Common Stock shall
thereafter look only to the Surviving Corporation for payment of their claim for
the Cash Merger Consideration in respect of their shares of Common Stock.
Neither Parent, Acquisition Corp nor the Surviving Corporation shall be liable
to any holder of shares of Common Stock for any Merger Consideration delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
2.2.6 Parent or the Paying Agent shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of a Certificate surrendered for the Merger Consideration such
amount as Parent or the Paying Agent is required to deduct and withhold with
respect to the making of such payment under the Internal Revenue Code as of
1986, as amended (the "Code"), or any provision of any state, local or foreign
tax law. To the extent that amounts are so deducted and withheld, such amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of such Certificate.
2.2.7 In the case of 4,000 shares of Common Stock held of
record by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or his assigns which the Company represents are the
subject of a dispute between Besicorp Group Inc. ("BGI") and ▇▇. ▇▇▇▇▇▇▇, the
Merger Consideration shall be placed in the existing escrow
5
with respect to such 4,000 shares, and appropriate provision will be made in the
Paying Agent agreement for the holding of Combined Deferred Payments, if any,
and the Cash Merger Consideration payable in respect of such shares in such
escrow, pending resolution of the dispute.
2.2.8 The fees and expenses of the Paying Agent will be paid
from earnings on the Payment Fund. To the extent earnings on the Payment Fund
are insufficient to pay such fees and expenses, such fees and expenses shall be
paid by the Surviving Corporation. The Company and Parent and Acquisition Corp
agree that any interest earned on the Payment Fund and not utilized to pay the
fees and expenses of the Paying Agent will be transferred to the Surviving
Corporation.
2.3 Adjustment of Merger Consideration. In the event of any
reclassification, stock split, stock dividend or other general distribution of
securities, cash or other property (other than the Distribution) with respect to
shares of Common Stock (or if a record date with respect to any of the foregoing
should occur) on or after the date of the Initial Agreement and on or prior to
the Effective Date, appropriate and equitable adjustments, if necessary, shall
be made to the calculation of the Merger Consideration and all references herein
shall be deemed to be to the Merger Consideration as so adjusted.
2.4 Combined Deferred Payments.
2.4.1 The parties hereto agree that the Company Shareholders
shall receive from the Surviving Corporation for each share of their Common
Stock, in addition to the Cash Merger Consideration, an additional payment or
payments ("Deferred Payments") on the Deferred Payment Dates equal in the
aggregate to (i) the amount in the Deferred Payment Fund on such date divided by
(ii) the number of shares of Common Stock held of record immediately prior to
the Effective Date by the Company Shareholders. The "Deferred Payment Fund"
consists of the sum of all Adjustments (net of corporate taxes for such
Adjustments) less all amounts previously distributed from the Deferred Payment
Fund to the Company Shareholders. The "Adjustments" equal the Adjustment Amounts
multiplied by a fraction, the numerator of which is the number of shares of
Common Stock held of record by the Company Shareholders immediately prior to the
Effective Date and the denominator of which is the sum of the number of shares
of Common Stock held of record by the Company Shareholders, the Objecting
Shareholders and the Ineligible Shareholders immediately prior to the Effective
Date and the number of Management Restricted Shares which have been cancelled
pursuant to Section 4.9 hereof prior thereto. The "Adjustment Amounts" equals
all proceeds received by the Company, the Surviving Corporation and their
Subsidiaries (provided that in the case of proceeds received by an entity that
is less than wholly owned, directly or indirectly, by the Company (or the
Surviving Corporation), such proceeds shall be multiplied by a percentage equal
to the percentage of the entity owned, directly or indirectly, at the time of
receipt of such proceeds by the Company (or the Surviving Corporation)) on or
after the date of the Initial Agreement and on or before the latest of (i) ▇▇▇▇▇
▇▇, ▇▇▇▇, (▇▇) the date of the release by the escrow agent for the March 1999
Escrow Agreement of all of the March 1999 Escrow Funds and (iii) the
disposition, pursuant to a final and non-appealable judgment of a court of
competent jurisdiction, including the payment of all monies required by such
disposition, of the lawsuit encaptioned "Besicorp, Ltd., plaintiff, against ▇▇▇▇
▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
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▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ Does 1 through 5, defendants" which was
filed on September 24, 1999 in the Supreme Court of the State of New York,
County of Ulster, and any litigation in connection with or relating to such
lawsuit (such latest date, the "Deferred Payment Termination Date") with respect
to the following: (i) amounts, if any, released from the March 1999 Escrow Fund
pursuant to Section 4 of the March 1999 Escrow Agreement (other than amounts
released pursuant to the Instructions, (ii) amounts received with respect to
each of the litigation claims of the Company, the Surviving Corporation and
their Subsidiaries with respect to matters arising before the Effective Date,
less the Company's expenses (including reasonable SG&A but excluding expenses
which are funded with monies in the March 1999 Escrow Fund (the "Excluded
Expenses")) incurred and paid following the date of the Initial Agreement
directly related to any such claim for which amounts have been received, (iii)
amounts received with respect to the sale of the Company's interests, directly
or indirectly, except for debt financing for development capital purposes which
might have an equity carried interest in a Foreign Development Project, in each
of the Foreign Development Projects (unless such Foreign Development Project is
sold along with the Empire Project in which case the proceeds are not an
Adjustment Amount) pursuant to agreements entered into on or before the first
anniversary of the Effective Date, less the Company's expenses (other than SG&A
and Excluded Expenses) incurred and paid following the date of the Initial
Agreement directly related to such Foreign Development Project, (iv) amounts
received by Beta Partnerships, Inc. "Beta") and distributions received from
Kamine Besicorp Natural Dam L.P., ("Natural Dam") (other than an amount
anticipated to be received by Beta from Natural Dam on or before December 31,
1999 and disclosed under "Liquidity and Capital Resources" in Item 2 of the
Company's Form 10QSB for the period ended June 30, 1999) and any other funds
that are distributed as a result of partnership interests in existence as of the
date of the Initial Agreement or the Effective Date and (v) amounts, net of
expenses (other than SG&A and Excluded Expenses) incurred and paid following the
date of the Initial Agreement directly related to distributions as a result of
Hydro-Credits, distributed as a result of Hydro-Credits (other than the
distribution with respect to ▇▇▇▇ Park Associates scheduled for on or about
September 30, 1999); provided however that the Adjustment Amount shall not
include the proceeds of any transfer of assets by the Surviving Corporation or
any wholly owned Subsidiary of the Surviving Corporation to any wholly owned
Subsidiary of the Surviving Corporation or to any entity (a "Related Entity")
consisting solely of shareholders of the Surviving Corporation on the Effective
Date, if, and only if (i) the Related Entity shall consent in writing to its
assumption of the obligation to make Deferred Payments in the manner described
in Section 2.4.4 (without the right to defer payments if the amount accrued on a
Deferred Payment Date is less than $90,000) with respect to such asset and (ii)
the Surviving Corporation will be required to guarantee the Related Entity's
payment of all amounts it is required to pay to the Company Shareholders
pursuant to this assumption. The Surviving Corporation shall segregate the
Deferred Payment Fund and invest its proceeds in a separate interest bearing
money market account at Bankers Trust Company or any other nationally recognized
financial institution, and all interest on the Deferred Payment Fund shall be
added to such Fund.
2.4.2 The Surviving Corporation shall make Deferred
Payments to the Company Shareholders (ii) annually on each June 1st commencing
on June 1, 2000 and ending on the last June 1st, immediately prior to the
Deferred Payment Termination Date (each, a "Deferred Payment Date"), (provided
that if on any Deferred Payment Date the amount in the Deferred Payment
7
Fund is less than $90,000, no Deferred Payment shall be made on such date) and
(ii) on the Deferred Payment Termination Date. All such Payments shall be
accompanied by a notice stating in reasonable detail the proceeds and the
expenses that were deducted.
2.4.3 If the Surviving Corporation or a Related Entity
transfers, sells or otherwise assigns, directly or indirectly, any of the
Underlying Assets, the assignee (the "Assignee") of such Underlying Asset shall
be required to consent in writing to its assumption of the obligation to make
Deferred Payments (without the right to defer payments if the amount accrued on
a Deferred Payment Date is less than $90,000) with respect to such Underlying
Asset other than the obligation to make the Deferred Payment, if any, resulting
from proceeds received by the Surviving Corporation or Related Entity from such
assignment (which Deferred Payment resulting from such Proceeds, shall be the
obligation of the Surviving Corporation or Related Entity, as applicable) in the
manner described in Section 2.4.4.
2.4.4 Payments by a Related Entity or an Assignee
(the "Payor") shall be made on Deferred Payment Dates as follows: such payments
shall be equal to (i) the amount in the Substitute Deferred Payment Fund on such
date divided by (ii) the number of shares of Common Stock held of record
immediately prior to the Effective Date by the Company Shareholders. The
"Substitute Deferred Payment Fund" consists of the sum of all Substitute
Adjustments (net of all corporate taxes for such Adjustment) less all amounts
previously distributed from the Substitute Deferred Payment Fund to the Company
Shareholders. The "Substitute Adjustments" equal the Substitute Adjustment
Amounts multiplied by a fraction, the numerator of which is the number of shares
of Common Stock held of record by the Company Shareholders immediately prior
to the Effective Date and the denominator of which is the sum of the number of
shares of Common Stock held of record by the Company Shareholders, the
Objecting Shareholders and the Ineligible Shareholders immediately prior to
the Effective Date and the number of Management Restricted Shares which have
been cancelled pursuant to Section 4.9 hereof prior thereto. The "Substitute
Adjustment Amounts" equals all proceeds received by the Payor on or after the
date of the Initial Agreement and on or before Deferred Payment Termination Date
with respect to the following: (i) amounts, if any, released from the March 1999
Escrow Fund pursuant to Section 4 of the March 1999 Escrow Agreement, (ii)
amounts received with respect to each of the litigation claims assigned by the
Company with respect to matters arising before the Effective Date, less the
expenses of the Company and Payor (including reasonable SG&A but excluding
Excluded Expenses) incurred and paid following the date of the Initial Agreement
directly related to any such claim with respect to any such claim for which
amounts have been received, (iii) amounts received with respect to the sale of
the Payor's interests, directly or indirectly, except for debt financing for
development capital purposes which might have an equity carried interest in a
Foreign Development Project, in each of the Foreign Development Projects (unless
such Foreign Development Project is sold along with the Empire Project in which
case the proceeds are not a Substitute Adjustment Amount) pursuant to agreements
entered into on or before the first anniversary of the Effective Date, less the
expenses of the Company and Payor (other than SG&A and Excluded Expenses)
incurred and paid following the date of the Initial Agreement directly related
to such Foreign Development Project, (iv) amounts received by Beta and
distributions received from Natural Dam (other than an amount anticipated to be
received by Beta from Natural Dam on or before December 31, 1999 and disclosed
under
8
"Liquidity and Capital Resources" in Item 2 of the Company's Form 10QSB for the
period ended June 30, 1999), and any other funds that are distributed as a
result of partnership interests in existence as of the date of the Initial
Agreement or the Effective Date and (v) amounts, net of the expenses of the
Company and Payor (other than SG&A and Excluded Expenses) incurred and paid
following the date of the Initial Agreement directly related to distributions as
a result of Hydro-Credits, distributed as a result of Hydro-Credits (other than
the distribution with respect to ▇▇▇▇ Park Associates scheduled for on or about
September 30, 1999). If a Payee (or assignee of a Payee) attempts to assign any
Underlying Asset, the assignee of such Underlying Asset shall be required to
consent in writing to its assumption of the obligation to make Deferred Payments
(without the right to defer payments if the amount accrued on a Substitute
Deferred Payment Date is less than $90,000) with respect to such Underlying
Asset other than the obligation to make the Deferred Payment, if any, resulting
from proceeds received by the assignor from such assignment (which Deferred
Payment resulting from such Proceeds, shall be the obligation of the assignor)
in the manner described above.
2.4.5 Escrow Fund Payments. The parties hereto
agree that the Company Shareholders shall receive for each share of their Common
Stock, in addition to the Cash Merger Consideration and the Deferred Payments
pursuant to Deferred Payment Rights, an additional payment or payments ("Escrow
Fund Payments") to be paid by the Paying Agent equal in the aggregate to (i) the
amount in the Escrow Fund Payment Distributions received by the Paying Agent
pursuant to the Instructions, and not yet distributed by the Paying Agent,
divided by (ii) the number of shares of Common Stock held of record immediately
prior to the Effective Date by the Company Shareholders.
2.5 Management Restricted Shares. The Merger Consideration,
including the Cash Merger Consideration and the Combined Deferred Payment
Rights, with respect to all Management Restricted Shares, if any, the vesting of
which has not been accelerated pursuant to the Incentive Plan, and which are not
subject to Substitution Agreements, shall be placed in escrow with the Surviving
Corporation and such Merger Consideration shall be held in accordance with the
terms of the Restricted Stock Grant Agreements with respect to such Management
Restricted Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 General Statement. The parties only make the representations and
warranties to each other which are set forth in this Article III or in Exhibit
4.7(a).
3.2 Representations and Warranties of the Company. The Company
represents and warrants to Parent and Acquisition Corp that as of the date of
the Initial Agreement and, in the case of Section 3.2.2, the date of this
Agreement:
3.2.1 Organization and Authority. Each of the Company and each
of its Subsidiaries: (i) is a corporation or partnership duly organized, validly
existing and in good standing under the laws of the State of its organization;
and (ii) has all necessary corporate or partnership
9
power and authority to conduct its business as now being conducted or as
proposed to be conducted through Closing. Each of the Company and each of its
Subsidiaries is duly qualified as a foreign corporation and is in good standing
in each jurisdiction in which the nature of its business or the nature or
location of its assets require such qualification except where the failure to be
so qualified would not have a Material Adverse Effect.
3.2.2 Authority Relative to this Agreement and Related
Matters. The Board of Directors of the Company (the "Board"), at a meeting duly
called and held has (A) determined that the Agreement and Merger are fair to,
and in the best interests of, the Company and its shareholders, including the
Company Shareholders, (B) adopted and approved this Agreement, the Merger and
the Distribution, and (C) resolved to submit to the shareholders of the Company
and recommend to the shareholders of the Company that they adopt and authorize
the Agreement and the Merger. The Company has full corporate power and
authority, subject to shareholder adoption and authorization with respect to the
Agreement, to enter into and perform this Agreement, and the other agreements
(the "Transaction Agreements") to be entered into in connection with this
Agreement, the Merger and the Distribution to which it is a party. The execution
and delivery of this Agreement and each of the other Transaction Agreements by
the Company and the performance by the Company of its obligations hereunder and
thereunder have been (or, in the case of Transaction Agreements not yet entered
into, will be) duly authorized and approved by all requisite corporate action
other than the approval of the holders of at least one-half of the outstanding
shares of Common Stock voting at the Meeting with respect to the Merger. This
Agreement has been and, when executed, each of the other Transaction Agreements
will have been, duly executed and delivered by duly authorized officers of the
Company and each constitutes, or will constitute when so executed and delivered,
a valid, legal and binding obligation of the Company enforceable against it in
accordance with its terms, except as enforceability may be limited by applicable
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws from time to time in effect affecting the enforcement of
creditors' rights generally. The affirmative vote of the holders of at least
one-half of the outstanding shares of Common Stock voting at the Meeting with
respect to the adoption and authorization of the Agreement and the Merger are
the only votes of the holders of any class or series of the Company's capital
stock necessary to approve the Merger.
3.2.3 Capitalization. The authorized capital stock of the
Company consists solely of 5,000,000 shares of Common Stock, and 1,000,000
shares of preferred stock, par value $0.01 per share ("Preferred Stock"). As of
October 4, 1999, (i) 136,282 shares of Common Stock were outstanding, all of
which are entitled to vote as a class, including (a) 13,850 Management
Restricted Shares which will not vest as a result of the Merger and (b) 5,824
shares of Common Stock reserved for issuance upon the delivery of shares of
common stock of BGI in connection with the March 1999 Merger (the "Reserved
Shares"), (ii) 100 shares of Common Stock were held in the treasury of the
Company, (iii) no options, warrants or similar rights to purchase shares of
Common Stock ("Stock Options") were outstanding and (iv) no shares of Preferred
Stock were outstanding. There are no other shares of capital stock of the
Company authorized, issued or outstanding. All of the outstanding shares of
Common Stock (other than the Reserved Shares which, upon their issuance, will be
fully paid and nonassessable) have been validly issued and are fully paid and
nonassessable subject to the restrictions on the Restricted Shares set forth in
the agreements for such Restricted
10
Shares. There are no subscriptions, options, stock appreciation rights,
warrants, rights (including preemptive rights), calls, convertible securities or
other agreements or commitments of any character relating to the issued or
unissued capital stock or other securities of the Company obligating the Company
to issue, or register the sale of, any securities of any kind.
3.2.4 Brokers. No broker, finder, investment banker or other
Person is entitled to a broker's commission, finder's fee, investment banker's
fee or similar payment from the Company in connection with the Merger other than
amounts payable to Josephthal & Co., Inc. ("Josephthal") pursuant to a letter
agreement dated June 9, 1999 between Josephthal and the Company.
3.2.5 Fairness Opinion. The Company has received the written
opinion of Josephthal (the "Fairness Opinion") dated September 22, 1999 to the
effect that, as of such date, the Merger Consideration to be received by Company
Shareholders for each share of Common Stock is fair from a financial point of
view. The Company has provided a true and correct copy of the Fairness Opinion
to Parent. The Company is authorized by Josephthal to include a copy of such
opinion in the proxy statement relating to the Agreement and the Merger to be
approved at the Meeting (as amended or supplemented, the "Proxy Statement").
3.2.6 Full Disclosure. The representations, warranties and
statements of the Company in this Agreement or contained in any schedule, list
or document delivered pursuant to this Agreement are true, complete and correct.
The copies of all documents furnished by the Company pursuant to or in
connection with this Agreement are true, complete and correct.
3.2.7 SEC Filings. None of the information provided by the
Company and included in the Proxy Statement, the Rule 13e-3 transaction
statement on Schedule 13E-3 to be filed by the Company, Acquisition Corp and
Parent with respect to the transactions to be consummated pursuant to this
Agreement and the other Transaction Agreements (the "Schedule 13E-3") pursuant
to the rules and regulations promulgated pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the Form 10-SB will, at the time
of the filing thereof, the mailing thereof, at the time of the Meeting and at
the Effective Date, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading.
3.2.8 Required Filings. Other than the Proxy Statement, the
Schedule 13E-3 and the Form 10-SB, no consent, approval or authorization of,
expiration or termination of any waiting period requirement of, or filing,
registration, qualification, declaration or designation ("Authorization") is
required by or with respect to the Company in connection with the execution and
delivery of this Agreement or the other Transaction Agreements by the Company or
the consummation by the Company of the transactions contemplated hereby or
thereby.
3.2.9 No Conflicts. Neither the execution and delivery of this
Agreement or any of the other Transaction Agreements by the Company, nor the
consummation by the Company of the transactions contemplated hereby or thereby,
will conflict with or result in a breach of any of the terms or provisions of
the Certificate of Incorporation or By-Laws of the Company or of any statute
11
or administrative regulation, or of any order, writ, injunction, judgment or
decree of any court or governmental authority or of any arbitration award to
which the Company is a party or by which the Company is bound.
3.3 Representations and Warranties of Parent and Acquisition Corp.
Parent and Acquisition Corp jointly and severally represent and warrant to the
Company that as of the date of the Initial Agreement and, in the case of Section
3.3.2, the date of this Agreement:
3.3.1 Organization and Authority. Each of Parent and
Acquisition Corp is a corporation duly organized, validly existing and in good
standing under the laws of the State of New York. Each of Parent and Acquisition
Corp has all necessary corporate power and authority to conduct its business as
now being conducted.
3.3.2 Authority Relative to this Agreement. Each of Parent and
Acquisition Corp has full corporate power and authority to enter into and
perform this Agreement and each of the other Transaction Agreements to which it
is a party. The execution and delivery of this Agreement and each of the other
Transaction Agreements by Acquisition Corp and Parent and the performance by
Acquisition Corp and Parent of their respective obligations hereunder or
thereunder have been duly authorized by all requisite corporate action. This
Agreement has been, and each of the other Transaction Agreements to which it is
a party will be, duly executed and delivered by duly authorized officers of
Acquisition Corp and Parent and each constitutes, or will constitute when so
executed and delivered, a valid, legal and binding obligation of Acquisition
Corp and Parent enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to
time in effect affecting the enforcement of creditors' rights generally.
3.3.3 Required Filings. No Authorization is required by or
with respect to Parent or Acquisition Corp in connection with the execution and
delivery of this Agreement or the other Transaction Agreements by Parent and
Acquisition Corp or the consummation by Parent and Acquisition Corp of the
transactions contemplated hereby or thereby.
3.3.4 No Conflicts. Neither the execution and delivery of this
Agreement or any of the other Transaction Agreements by Parent or Acquisition
Corp, nor the consummation by Parent or Acquisition Corp of the transactions
contemplated hereby or thereby, will (i) conflict with or result in a breach of
any of the terms or provisions of the Certificate of Incorporation or By-Laws of
Acquisition Corp or of Parent or of any statute or administrative regulation, or
of any order, writ, injunction, judgment or decree of any court or governmental
authority or of any arbitration award to which Parent or Acquisition Corp is a
party or by which Acquisition Corp or Parent is bound; or (ii) violate, conflict
with, breach, constitute a default (or give rise to an event which, with notice
or lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in the
creation of any lien or other claim, equity, security interest, preemptive
right, judgment or other encumbrance ("Encumbrance") upon any of the properties
or assets of Parent or Acquisition Corp under, any note, bond, mortgage,
indenture, deed of trust,
12
license, lease, agreement or other instrument or obligation to which Parent or
Acquisition Corp is a party or to which Parent or Acquisition Corp or any of its
properties or assets are subject (the "Parent Obligations"), except for such
violations, conflicts, breaches, defaults, terminations, accelerations or
creations of liens or other Encumbrances that do not and will not, individually
or in the aggregate, (x) have a Material Adverse Effect on Parent or Acquisition
Corp or (y) impair Parent or Acquisition Corp's ability to perform its
obligations under this Agreement or any of the other Transaction Agreements.
Without limiting the generality of the foregoing, neither Parent nor Acquisition
Corp is subject to any Parent Obligation pursuant to which timely performance of
this Agreement or the Merger may be prohibited, prevented or materially delayed.
3.3.5 Capitalization. The authorized capital stock of
Acquisition Corp consists of 200 shares of common stock, without par value, of
which 100 shares are outstanding. All of the outstanding shares of common stock
of Acquisition Corp have been validly issued and are fully paid and
nonassessable, are entitled to vote as a class and are owned of record by
Parent.
3.3.6 SEC Filings. None of the information provided by Parent
or Acquisition Corp and included in the Proxy Statement and the Schedule 13E-3
will, at the time of the filing thereof, the mailing thereof, at the time of the
Meeting and at the Effective Date, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
3.3.7 Brokers. No broker, finder, investment broker or other
person is entitled to a broker's commission, finders fee, investment banker's
fee or similar payment from the Acquisition Corp or Parent in connection with
the Merger.
3.3.8 Full Disclosure. The representations, warranties and
statements of Acquisition Corp and Parent in this Agreement or contained in any
schedule, list or document delivered pursuant to this Agreement are true,
complete and correct. The copies of all documents furnished by Parent and the
Acquisition Corp pursuant to or in connection with this Agreement are true,
complete and correct.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
4.1 Obligations of Each of the Parties. From and after the date of the
Initial Agreement and until and including the Effective Date, the following
shall apply with equal force to the Company, on the one hand, and Parent and
Acquisition Corp, on the other hand:
4.1.1 Each party shall promptly give the other parties written
notice of the existence or occurrence of any event or condition which would make
any representation or warranty herein contained of any party untrue or which
might reasonably be expected to prevent the consummation of the transactions
contemplated hereby.
13
4.1.2 No party shall intentionally perform any act which, if
performed, or omit to perform any act which, if omitted to be performed, would
prevent or excuse the performance of this Agreement by any party or which would
result in any representation or warranty herein of that party being untrue in
any material respect at any time after the date of the Initial Agreement through
and including the Closing Date as if originally made at such time.
4.1.3 Subject to the terms and conditions of this Agreement,
each of the parties agrees to use its best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the Merger and the other
transactions contemplated by this Agreement as expeditiously as reasonably
practicable.
4.2 The Company's Obligations. From and after the date of the Initial
Agreement and until and including the Effective Date, without the prior written
consent of Parent, and without limiting the generality of any other provision of
this Agreement, except for the dissolution of Beta Brasil Inc., Beta BGE Inc.,
Beta International Power Corp. and Besicorp International Power Corp., the
Spin-Off and the SunWize Project, the Company shall not, and shall not permit
any of its Subsidiaries to:
(a) amend its Certificate of Incorporation, By-
Laws or other organizational documents;
(b) make any change in its authorized capital stock;
adjust, split, combine or reclassify any capital stock; or
issue any shares of stock of any class, or issue or become a
party to any subscription, warrant, rights, options,
convertible securities or other agreements or commitments of
any character relating to its issued or unissued capital
stock, or other equity securities, or grant any stock
appreciation or similar rights except for the issuance of
Reserved Shares as contemplated by Section 3.2.3 hereof;
(c) sell, transfer, mortgage, encumber or otherwise
dispose of any of its material properties or assets to any
individual, corporation or other entity other than a
Subsidiary of the Company, except pursuant to contracts or
agreements in force at the date of the Initial Agreement or as
specifically set forth in this Agreement;
(d) make (x) any investments, either by purchase of
stock or securities, in, (y) any contributions to capital of,
or (z) except in the ordinary course of business, any
purchases of any property or assets from, any other
individual, corporation or other entity;
(e) change its method of accounting in effect at
March 31, 1999, except as may be required by changes in
generally accepted accounting principles ("GAAP") upon the
advice of its independent accountants;
(f) increase the compensation payable to any
employee, or enter into any new employment agreements with new
or existing employees which create other than
14
an at will relationship, in each case, except in the ordinary
course of business consistent with past practices other than
bonuses to officers and employees which are paid prior to the
Effective Date;
(g) pay or declare any dividend or make any
distribution on its securities of any class or purchase or
redeem any of its securities of any class;
(h) except with respect to Taxes subject to the New
York State tax appeal, make any Tax election or settle or
compromise any Tax liability;
(i) fail to maintain in full force and effect
insurance coverage substantially similar to that in effect on
the date of the Initial Agreement; or
(j) except with respect to the Empire Project, enter
into any business or contract outside of the ordinary course
of business and not related to the Merger other than contracts
which are not material or which will be fully performed prior
to the Effective Date.
4.3 Meeting; Proxy Statement; Schedule 13E-3; Other Regulatory
Matters.
4.3.1 The Company will (i) call a meeting of its shareholders
(the "Meeting") for the purpose of voting upon adoption and authorization of the
Merger, (ii) hold the Meeting as soon as practicable following the date of the
Initial Agreement, (iii) subject to Section 4.8 hereof, recommend, through its
Board, to its shareholders the approval of the Merger, and (iv) use its best
efforts to obtain the necessary adoption and authorization of this Agreement by
the shareholders of the Company.
4.3.2 The Company will (i) as soon as practicable following
the date of the Initial Agreement, prepare in correct and appropriate form and
file with the Securities and Exchange Commission (the "SEC") a preliminary Proxy
Statement and (ii) use its reasonable best efforts to respond to any comments of
the SEC or its staff and to enable the Proxy Statement to be cleared by the SEC.
The Company will notify Parent of the receipt of any comments from the SEC or
its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and will supply
Parent with copies of all correspondence and summaries of all conversations
between the Company or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, with respect to the Proxy Statement or the
Merger. The Company shall give Parent and its counsel (who shall provide any
comments thereon as soon as practicable) the opportunity to review the Proxy
Statement prior to being filed with the SEC and shall give Parent and its
counsel (who shall provide any comments thereon as soon as practicable) the
opportunity to review all amendments and supplements to the Proxy Statement and
all responses to requests for additional information and replies to comments
prior to their being filed with, or sent to, the SEC. Each of the Company and
Parent agrees to use its reasonable best efforts, after consultation with the
other parties hereto, to respond promptly to all such comments of and requests
by the SEC. The Acquisition Corp and the Parent shall supply to the Company on a
timely basis in connection with the preparation of the Proxy Statement all
information necessary to be included therein.
15
The Company, Acquisition Corp and Parent will (i) as soon as
practicable following the date of the Agreement, prepare in correct and
appropriate form and file with the SEC the Schedule 13E-3 and (ii) use their
reasonable best efforts to respond to any comments of the SEC or its staff and
to enable the Schedule 13E-3 be cleared by the SEC. Each party hereto will
notify the other parties of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff for amendments or supplements
to the Schedule 13E-3 or for additional information and will supply such other
parties with copies of all correspondence and summaries of all conversations
between such party or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, with respect to the Schedule 13E-3 or the
Merger. Each of the Company, Acquisition Corp and Parent agrees to use its
reasonable best efforts, after consultation with the other parties hereto, to
respond promptly to all such comments of and requests by the SEC. The
Acquisition Corp and the Parent shall supply to the Company on a timely basis in
connection with the preparation of the Schedule 13E-3 all information necessary
to be included therein.
As promptly as practicable after the Proxy Statement and the Schedule
13E-3 have been cleared by the SEC, the Company shall mail the Proxy Statement
to the shareholders of the Company.
4.3.3 Each party agrees to notify the other parties of, and to
correct, any information contained in the Proxy Statement and Schedule 13E-3
furnished by such party to any other party for inclusion therein, which
information shall be, at the time of furnishing, or become, prior to the
Meeting, false or misleading in any respect. If at any time prior to the Meeting
or any adjournment thereof there shall occur any event that should be set forth
in an amendment to the Proxy Statement, the Company will prepare and mail to its
shareholders such an amendment. If at any time prior to the Closing Date there
shall occur any event that should be set forth in an amendment to the Schedule
13E-3, the Company, Acquisition Corp and Parent will prepare and file with the
SEC such an amendment.
4.3.4 The Company will file all reports, schedules, definitive
proxy statements (including the Proxy Statement) and information statements
(including the Form 10-SB) (the "Company Filings") required to be filed by the
Company with the SEC (including reports required by Section 13(d) or 13(g) of
the Exchange Act) and will provide copies thereof to the Parent promptly upon
the filing thereof. The Company represents, warrants and covenants that each
Company Filing (except to the extent prepared by Parent or Acquisition Corp or
based upon information supplied by Parent or Acquisition Corp) as of the date of
its filing will comply in all material respects with the requirements of the
Exchange Act and the applicable rules and regulations of the SEC thereunder and
none of the Company Filings (except to the extent prepared by Parent or
Acquisition Corp or based upon information supplied by Parent or Acquisition
Corp) as of the date of its filing will contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading. Upon learning of any such false or
misleading information, the Company will cause all required Company Filings
(including the Proxy Statement) to be corrected,
16
filed with the SEC and disseminated to holders of the shares of Common Stock, in
each case as and to the extent required by applicable law.
4.3.5 Parent and Acquisition Corp will file all reports,
schedules and definitive proxy statements (the "Parent Filings") required to be
filed by the Parent and Acquisition Corp with the SEC (including reports
required by Section 13(d) or 13(g) of the Exchange Act) and will provide copies
thereof to the Company promptly upon the filing thereof. The Parent and the
Acquisition Corp represent, warrant and covenant that each Parent Filing (except
to the extent prepared by the Company or based upon information supplied by the
Company) as of the date of its filing will comply in all material respects with
the requirements of the Exchange Act and the applicable rules and regulations of
the SEC thereunder and none of the Parent Filings (except to the extent prepared
by the Company or based upon information supplied by the Company) will contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading. Upon
learning of any such false or misleading information, the Parent and Acquisition
Corp will cause all required Parent Filings to be corrected, filed with the SEC
and disseminated to holders of the shares of Common Stock, in each case as and
to the extent required by applicable law.
4.3.6 Subject to the terms and conditions herein provided, the
Company and Parent and Acquisition Corp will cooperate and consult with one
another in (a) determining which consents, approvals, permits, licenses,
certifications, authorizations and waivers (collectively, "Consents") are
required to be obtained prior to the Effective Date from federal, state, local
or foreign courts, administrative agencies, commissions and other governmental
authorities and instrumentalities ("Governmental Entities") or other third
parties in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, (b) preparing all Consents
and all other filings, submissions and presentations required or prudent to
obtain all Consents, including by providing to the other parties drafts of such
material reasonably in advance of the anticipated filing or submission dates,
and (c) timely seeking all such Consents (it being understood that the parties
will make or seek Consents, whether mandatory or voluntary, and that the Parent
will be responsible and pay for the costs, penalties and expenses associated
with the Consents).
4.4 Indemnification Provisions in Charter and Insurance.
4.4.1 Acquisition Corp, Parent and the Company agree that
prior to the Effective Date the Company shall have in force officers' and
directors' liability insurance ("D&O Insurance") covering each present and
former director, officer, employee and agent of the Company and each of its
Subsidiaries and each present and former director, officer, employee or agent of
the Company and its Subsidiaries (individually, an "Indemnified Person", and
collectively, the "Indemnified Persons"), with respect to actions and omissions
occurring on or prior to the Effective Date (including, without limitation, any
which arise out of or relate to the transactions contemplated by this
Agreement). The parties hereto agree that the Surviving Corporation (i) (a)
shall maintain D&O Insurance covering each Indemnified Person who is currently
covered by the Company's officers' and directors' liability insurance or will be
so covered on the Effective Date with respect to actions and omissions occurring
on or prior to the Effective Date (including, without limitation, any which
arise
17
out of or relate to the transactions contemplated by this Agreement) for a
period ending no earlier than the sixth anniversary of the Effective Date and
(b) in the event of a liquidation, merger, consolidation, or similar occurrence
procure and pay for "run-off" or "tail" insurance covering each Indemnified
Person who is currently covered by the Company's officers' and directors'
liability insurance or will be so covered on the Effective Date with respect to
actions and omissions occurring on or prior to the Effective Date (including,
without limitation, any which arise out of or relate to the transactions
contemplated by this Agreement) (A)for a period of the lesser of (1) two years
and (2) the period ending on the sixth anniversary of the Effective Date (B) and
thereafter for a period ending no earlier than the sixth anniversary of the
Effective Date and (ii) will reimburse the Indemnified Persons with respect to
any deductibles contained in such D&O Insurance or "run-off" or "tail" insurance
policies.
4.4.2 Acquisition Corp, Parent and the Surviving Corporation
hereby jointly and severally agree that, for the lesser of (a) six (6) years
after the Closing Date, or (b) the period during which the Surviving Corporation
maintains its existence, the provisions of the Certificate of Incorporation and
By-Laws of the Surviving Corporation shall provide indemnification to the
Indemnified Persons on terms, in a manner, and with respect to matters, which
are no less favorable to the Indemnified Persons than the Company's Certificate
of Incorporation and By-Laws, as in effect on the date of the Initial Agreement,
and further agree that such indemnification provisions shall not be modified or
amended except as required by law, unless such modification or amendment expands
the rights of the Indemnified Persons to indemnification.
4.4.3 (a) Subject to the provisions of Sections 4.4.3 (b), (c) and (d)
hereof, the Company shall indemnify, defend, and hold harmless the Indemnified
Persons, promptly upon demand at any time and from time to time, against any and
all losses, liabilities, claims, actions, damages, and expenses, including,
without limitation, reasonable attorneys' fees and disbursements (collectively,
"Losses"), arising out of or in connection with claims that would have been
covered if the Current Insurance Policy had remained in effect until the sixth
anniversary of the Effective Date.
(b) With respect to Section 4.4.3 hereof, if any Indemnified
Person wishes to make a claim for indemnification against the Company with
respect to any matter which may give rise to a claim for indemnification, then
that Indemnified Person shall notify the Company thereof promptly (which notice
shall set forth with reasonable specificity all facts relating to such claim for
indemnification). The Company shall pay to the Indemnified Person any amount
required to be paid pursuant to this Section 4.4.3 within 90 days after receipt
by the Company of such notice and such evidence that the claimed Losses have
been incurred or come due as the Company may reasonably request, unless the
payment of such amount is contested prior to the expiration of such 90 day
period by notice to the Indemnified Person. If such payment is so contested,
then such payment shall be made within 30 days after the first to occur of the
following: (i) the Company and the Indemnified Person agreeing in writing to
make such payment or (ii) such payment has been declared due in a judgment or
award entered against the Company by a court of competent jurisdiction.
(c) If any third person shall notify an Indemnified Person
with respect to any matter which shall give rise to a claim for indemnification
against a party to this Agreement pursuant
18
to this Section 4.4.3, then the Indemnified Person shall notify the Company
thereof promptly (which notice shall set forth with reasonable specificity all
facts relating to such claim for indemnification). Within thirty (30) days after
receipt of written notice of a particular matter, the Company may assume the
defense of such matter; provided however, that: (i) the Company shall retain
counsel reasonably acceptable to the Indemnified Person, and (ii) the Company
shall not, without the prior written consent of the Indemnified Person (which
shall not be unreasonably withheld), enter into any settlement of a claim,
consent to the entry of any judgment with respect to a claim, or cease to defend
such claim, if pursuant to or as a result of such settlement, consent or
cessation, injunctive or other equitable relief shall be imposed against the
Indemnified Person or if such settlement does not expressly unconditionally
release the Indemnified Person from all liabilities and obligations with respect
to such claim, with prejudice. If, within the thirty (30) day period, the
Company does not assume the defense of such matter which the Company is
obligated to defend, the Indemnified Person may defend against the matter in any
manner that it reasonably may deem appropriate. The Company shall bear all the
reasonable fees and expenses of defending any such matter. The Indemnified
Person may participate in the defense of such claim with co-counsel of its
choice, provided, however, that the fees and expense of the Indemnified Person's
counsel shall be at the expense of the Indemnified Person unless the Company is
liable for the Losses forming the basis of such claim pursuant to Section 4.4.3
and the Company has failed to assume the defense and employ counsel as provided
herein.
(d) No amount shall be payable by the Company with respect to
claims for indemnification asserted pursuant to this Section 4.4.3 in excess of
(i) the limitations of the Current Insurance Policy and (ii) the deductibles
contained in such Policy.
4.5 Parent's Funding of the Company.
4.5.1 So long as (i) no Governmental Entity or court of
competent jurisdiction shall have issued an injunction (which is still in
effect) prohibiting the Merger, no litigation shall have been commenced and be
pending in a court of competent jurisdiction seeking to enjoin the Merger and no
request for such an injunction is pending in a court of competent jurisdiction,
(ii) a proxy for the Merger has been filed with the SEC, (iii) all
representations and warranties made by the Company in this Agreement shall be
materially accurate at the time of the Loan Funding Date; (iv) the Company shall
not have (A) commenced any case, proceeding or other action under any existing
or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition, or other relief with respect to its
debts; (B) commenced any case, proceeding or other action seeking appointment of
a receiver, trustee, custodian, or other similar official for it or for all or
any substantial part of its assets; or (C) made a general assignment for the
benefit of its creditors; (v) there shall not have been commenced against the
Company any case, proceeding or other action of a nature referred to in clause
(iv) above that (A) results in the entry of an order for relief or any such
adjudication or appointment, or (B) remains undismissed, undischarged, or
unbonded for a period of thirty (30) days; and (vi) there shall have not been
commenced against the Company any case, proceeding, or other action seeking
issuance of a warrant
19
of attachment, execution, distraint, or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within thirty (30) days from the entry thereof, Parent will lend
("Parent Loans") to the Company, subject to the conditions set forth in Section
4.5.2, such amounts as the Company reasonably requests in order to satisfy its
obligations with respect to normal operating expenses of the Company and its
subsidiaries to the extent payable on or prior to the Termination Date.
4.5.2 The obligations of Parent to make the Parent Loans are
subject to the following prerequisites:
A. Parent shall not be required to make (i)
Parent Loans within a thirty day period in excess of $350,000, or (ii) with a
cumulative amount in excess of $1,050,000;
B. The Parent Loans shall be evidenced by
promissory notes (substantially in the form of Exhibit 4.5 (a)); and
C. The Parent Loan shall be secured pursuant
to a Security Agreement (substantially in the form of Exhibit 4.5 (b-1)) and a
Mortgage and Security Agreement (substantially in the form of Exhibit 4.5 (b-2))
and such security shall have a value in an amount to be approved by Parent,
which approval shall not be unreasonably withheld and which security shall
include, but not be limited to, the unencumbered real property owned by Reina
Distributing, Inc.
4.6 Voting of Shares of Common Stock held by Certain Holders. Subject
to the requirements of the Exchange Act and the rules promulgated thereunder,
the Parent, Acquisition Corp and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ shall vote all of their shares,
if any, of Common Stock in favor of the Agreement and the Merger.
4.7 Certificate and Personal Guarantee..
4.7.1 Each of the Executives shall execute a Certificate
(substantially in the form of Exhibit 4.7(a)).
4.7.2 ▇▇▇▇▇▇▇ ▇▇▇▇ shall execute a Guarantee (substantially in
the form of Exhibit 4.7(b-1)) and an Escrow Agreement (substantially in the form
of Exhibit 4.7 (b-2)).
4.8 Board Action
.
4.8.1 Neither the Special Committee nor the Board shall (i)
withdraw or modify its approval, adoption or recommendation of this Agreement,
the Merger or any of the transactions contemplated hereby, (ii) approve, adopt
or recommend or publicly propose to approve, adopt or recommend an Acquisition
Proposal (as defined below), (iii) cause the Company to enter into any letter
agreement, agreement in principle or definitive agreement with respect to an
Acquisition Proposal, or (iv) resolve to do any of the foregoing unless the
Special Committee or the Board
20
determines reasonably and in good faith, after due investigation that either the
Merger Consideration is not fair to the Company Shareholders or a pending
Acquisition Proposal is more favorable to the Company Shareholders, taking into
account the Distribution. In such case, the Special Committee or the Board may
withdraw or modify its recommendation, and, in the case of an Acquisition
Proposal, approve and recommend such Acquisition Proposal, provided in the case
of a withdrawal or modification of a recommendation or an Acquisition Proposal,
the Special Committee or the Board, as applicable, provides to Parent and
Acquisition Corp written notice of the Company's intention to do so at least two
business days prior to taking such action and, at the end of such two business
day period (y) simultaneously terminates this Agreement, and (z) concurrently
pays to Parent the Covered Expenses pursuant to Section 6.4.2 hereof. Nothing
contained in this Section 4.8 shall prohibit or restrict the Company from taking
and disclosing to its shareholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act so long as the Company does not withdraw or
modify its position with respect to the Merger or approve or recommend an
Acquisition Proposal (except as described in the immediately preceding
sentence).
4.8.2 For purposes of this Agreement, "Acquisition Proposal"
means any bona fide offer or proposal with respect to a merger, consolidation,
share exchange or similar transaction involving the Company or any purchase of
all or any significant portion of the assets or capital stock of the Company or
any significant Subsidiary of the Company or any other business combination
(including the acquisition of any equity interest therein) involving the
Company.
4.9 Management Restricted Shares.. Parent shall use its best efforts to
enter into agreements (the "Substitution Agreements"), in form reasonably
satisfactory to the Company, with the holders of the Management Restricted
Shares whereby the holders shall receive from Parent in substitution for their
Management Restricted Shares (which shares shall be cancelled prior to the
Effective Date), shares of restricted securities of Parent.
4.10 Notices of Certain Events. From the date of the Initial Agreement
until the Closing Date, the Parties hereto shall notify the Special Committee of
the receipt of (i) any proceeds which would constitute Adjustment Amounts if
such proceeds had been received on or after the Effective Date and on or before
the Deferred Payment Termination Date and (ii) any proceeds received with
respect to the sale of interests in foreign development projects. .
4.11 March 1999 Escrow Fund. The parties hereto acknowledge and agree
that the Surviving Corporation shall be subject to and bound by the terms of the
March 1999 Escrow Agreement and the Surviving Corporation shall send
instructions (the "Instructions") substantially in the form of Exhibit 4.11
hereto to the Escrow Agent for such Escrow Agreement whereby such Escrow Agent
shall be irrevocably instructed to distribute the Escrow Fund Payment
Distributions to the Paying Agent.
4.12 Spin-Off.
21
Promptly following the execution of this Agreement, the Company will
cause the following actions to be taken in accordance with the requirements of
applicable law, including the NYBCL, and the Company's certificate of
incorporation and bylaws with the objective of effecting the Spin-Off (as
defined below) on the date that all conditions to the consummation of the
Merger, including the shareholders' adopting of the Plan of Merger by the
Requisite Vote at the Special Meeting and have been or will be waived or
satisfied, (the "Spin-Off Date"):
(a) the due and valid formation of WOM;
(b) the execution and delivery by the Company and WOM of a
contribution and distribution agreement (the "Contribution Agreement") to
effectuate the Contribution (as defined below) and the Distribution (as defined
below) and such other agreements and arrangements which are customary in
connection with all on terms reasonably acceptable to Buyer;
(c) the filing and effectiveness of Registration Statement on
Form 10-SB (the "Form 10-SB") and the preparation and distribution to the
Company's shareholders of record on the Spin-Off Date of an information
statement, all in accordance with applicable law, including the Exchange Act;
(d) the transfer to, and assumption by, WOM on the Spin-Off
Date of the contingent assets and/or liabilities of Besicorp comprised of
Besicorp's interests in the ▇▇▇▇▇▇▇▇ Litigation pursuant to an assignment of the
▇▇▇▇▇▇▇▇ Litigation (the "Contribution");
(e) the distribution of the outstanding capital stock of WOM
to the Company's shareholders of record on the Spin-Off Date (the "Distribution"
and together with the Contribution, the "Spin-Off;") in the escrow described in
Section 2.2.7 and
(f) all other actions necessary or appropriate to effect the
Spin-Off.
4.13 Compliance with requirements regarding appraisal Rights. The
parties agree to comply with the requirements of Sections 623 and 910 of the
NYBCL applicable to them and to notify, or to instruct the Paying Agent in a
timely basis to notify, all Objecting Shareholders and other shareholders
required to be notified, of the adoption of the Plan of Merger within ten days
of the date of such adoption.
4.14 Paying Agent. The parties agree to instruct the Paying Agent, and
use their best efforts to cause the Paying Agent, promptly to distribute the
Merger Consideration in accordance with this Agreement and to maintain such
records of the holders of shares of Besicorp Common Stock as may be necessary to
make such distributions through the Deferred Payment Termination Date.
ARTICLE V
CONDITIONS TO CLOSING; CLOSING DELIVERIES; BASE AMOUNT
22
5.1 Conditions to Each Party's Obligations. The respective obligations
of each party to effect the transactions contemplated hereby shall be subject to
the fulfillment at or prior to the Effective Date of the following conditions:
5.1.1 The Agreement shall have been adopted and authorized by
the Requisite Vote of the shareholders of the Company.
5.1.2 This Agreement and the Merger shall have been approved
by each Governmental Entity whose approval is required for the consummation of
the Merger, such approvals shall remain in full force and effect and all waiting
periods relating to such approvals shall have expired.
5.1.3 No Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, judgment, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in effect and
has the effect of making the Merger illegal.
5.1.4 No suit, proceeding or investigation shall have been
commenced by any Governmental Entity on any grounds to restrain, enjoin or
hinder, or seek material damages on account of, the consummation of the Merger
or the other transactions contemplated hereby.
5.2 Conditions to the Company's Obligations. The obligation of the
Company to consummate the transactions contemplated hereby is subject to the
fulfillment (or waiver) of all of the conditions set forth in Sections 5.2.1
through 5.2.5 prior to the Effective Date. Upon the non- fulfillment (and
non-waiver) of any of the conditions set forth in Sections 5.2.1 through 5.2.5
this Agreement may, at the Company's option, be terminated pursuant to and with
the effect set forth in Article VI:
5.2.1 Each and every representation and warranty made by
Parent and Acquisition Corp shall be true and correct when made in the Initial
Agreement and as if originally made on and as of the Closing Date.
5.2.2 All obligations of Parent and Acquisition Corp to be
performed hereunder through, and including on, the Closing Date shall have been
fully performed.
5.2.3 Parent and Acquisition Corp shall have delivered to the
Company the written opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for Parent,
dated as of the Closing Date, in substantially the form of Exhibit 5.2.3
attached hereto (the "Parent's Opinion").
5.2.4 Immediately prior to the Merger the Acquisition Corp is,
and assuming that the condition set forth in Section 5.3.1 hereof is satisfied
immediately following the effectiveness of the Merger, the Surviving Corporation
shall be, solvent.
23
5.2.5 The Special Committee (the "Special Committee") of the
Board that was formed by the Board on May 10, 1999 or the Board shall not have
withdrawn its approval, adoption or recommendation of the Agreement and the
Merger.
5.3 Conditions to Parent's and Acquisition Corp's Obligations. The
obligations of Parent and Acquisition Corp to consummate the transactions
contemplated hereby are subject to the fulfillment (or waiver) of all of the
conditions set forth in Sections 5.3.1 through 5.3.3 on or prior to the Closing
Date. Upon the non-fulfillment (and non-waiver) of any of conditions set forth
in Sections 5.3.1 through 5.3.3 this Agreement may, at Parent's option, be
terminated pursuant to and with the effect set forth in Article VI:
5.3.1 The representations and warranties made by the Company
shall be true and correct when made in the Initial Agreement and as if
originally made on and as of the Closing Date.
5.3.2 All obligations of the Company to be performed hereunder
through, and including on, the Closing Date shall have been fully performed.
5.3.3 The Company shall have delivered to Parent the written
opinion of ▇▇▇▇▇▇▇▇ Brog Leinwand ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.C., counsel to the
Company, dated as of the Closing Date, in substantially the form of Exhibit
5.3.3 attached hereto (the "Company's Opinion").
5.4 Closing Deliveries.
5.4.1 At the Closing, the Company shall cause to be executed
and delivered to Parent and Acquisition Corp all of the following:
(a) a closing certificate dated the Closing Date
and executed on behalf of the Company by a duly authorized officer of the
Company to the effect set forth in Sections 5.1.1, 5.2.5, 5.3.1 and 5.3.2
hereof;
(b) certified copies of such corporate records
of the Company and its Subsidiaries and copies of such other documents as Parent
or its counsel may reasonably have requested in connection with the consummation
of the transactions contemplated hereby;
(c) the Company's Opinion; and
(d) the minute books and corporate records of
the Company and its Subsidiaries and originals of the stock certificates
evidencing all of the outstanding capital stock of each of its Subsidiaries
free of all Encumbrances.
24
5.4.2 At the Closing, Parent and Acquisition Corp shall cause
to be delivered to the Company all of the following:
(a) a closing certificate dated the Closing Date
and executed on behalf of Parent and Acquisition Corp by a duly authorized
officer of Parent and Acquisition Corp to the effect set forth in Sections
5.1.2, 5.1.3, 5.1.4, 5.2.1,
5.2.2 and 5.2.4 hereof;
(b) certified copies of such corporate records of
Parent and Acquisition Corp and copies of such other documents as the Company
or its counsel may reasonably have requested in connection with the consummation
of the transactions contemplated hereby;
(c) the Parent's Opinion;
(d) the certificates, guarantee and escrow
agreement referred to in Section 4.7 hereof;
(e) evidence of delivery to the Paying Agent of
the Cash Merger Consideration for each of the shares of Common Stock (excluding
Management Restricted Shares for which substitute securities have been issued
pursuant to Section 4.9 hereof prior thereto) held of record on the Effective
Date by the Company Shareholders and the Objecting Shareholders;
(f) the instructions referred to in Section 4.11
hereof; and
(g) evidence of the execution of the Substitution
Agreements.
ARTICLE VI
TERMINATION/EFFECT OF TERMINATION
6.1 Right to Terminate. Anything to the contrary herein
notwithstanding, this Agreement and the transactions contemplated hereby may be
terminated at any time prior to the Effective Date by prompt notice given in
accordance with Section 7.4 hereof:
6.1.1 by the mutual written consent of Parent and Acquisition
Corp and the Company (with the approval of their respective Boards of Directors
or, in the case of the Company, the Special Committee);
6.1.2 by Acquisition Corp and Parent or by the Company (by
action of their Board of Directors or, in the case of the Company, the Special
Committee) if:
(a) the Effective Date shall not have occurred
at or before the Termination Date; provided, however, that the right to
terminate this Agreement under this Section 6.1.2 (a) shall
25
not be available to any party whose failure to fulfill any of its obligations
under this Agreement has been the cause of the failure of the Effective Date to
have occurred as of such time;
(b) upon a vote at the Meeting, either this
Agreement or the Merger shall fail to be adopted and authorize by the
Requisite Vote; or
(c) either the Board or the Special Committee
shall have taken any action contemplated by clause (i), (ii), (iii) or (iv) of
the first sentence of Section 4.8.1;
6.1.3 by Parent and Acquisition Corp, by giving written notice
of such termination to the Company, if:
(a) there has been a material breach of any
representation or warranty of the Company which could reasonably by expected
to prevent the Company from fulfilling its obligations hereunder or of any
material agreement or covenant hereunder on the part of the Company which has
not been cured or adequate assurance of cure given, in either case within ten
(10) business days following notice of such breach from Parent; or
(b) a tender offer or exchange offer for 40% or
more of the shares of Common Stock of the Company is commenced by a person who
is not affiliated with any Executive, any shareholder of Parent, or Parent
and the Board fails to recommend against acceptance of such tender offer or
exchange offer by its shareholders within the time period required by Section
14e-2 of the Exchange Act (the taking of no position before the expiration of
such period with respect to the acceptance of such tender offer or exchange
offer by the Company's shareholders constituting such a failure) or any Person
other than an Executive, any shareholder of Parent or Parent acquires (other
than from Executives, shareholders of Parent and Parent) by any means 40% or
more of the outstanding shares of Common Stock; or
6.1.4 by the Company (by action of the Board or the Special
Committee), by giving written notice of such termination to Parent and
Acquisition Corp, if:
(a) there has been a material breach of any
agreement herein on the part of Acquisition Corp or Parent which has not been
cured or adequate assurance of cure given, in either case within ten (10)
business days following notice of such breach from the Company;
(b) there has been a breach of a representation
or warranty of Parent or Acquisition Corp herein which could reasonably be
expected to prevent Parent or Acquisition Corp from fulfilling their obligations
under this Agreement and which, in the reasonable opinion of the Company, by its
nature cannot be cured within ten (10) days (or, if sooner, the Closing Date);
(c) there has been a material breach of any
representation or warranty of any of the Executives in any of the Certificates.
26
6.2 Certain Effects of Termination. In the event of the termination of
this Agreement as provided in Section 6.1 hereof, each party, if so requested by
any other party, will return promptly every document furnished to it by or on
behalf of such other party in connection with the transactions contemplated
hereby, whether so obtained before or after the execution of this Agreement, and
any copies thereof (except for copies of documents publicly available) which may
have been made, and will use reasonable efforts to cause its representatives and
any representatives of financial institutions and investors and others to whom
such documents were furnished promptly to return such documents and any copies
thereof any of them may have made. This Section 6.2 shall survive any
termination of this Agreement.
6.3 Remedies. Notwithstanding any termination right granted in Section
6.1 hereof, in the event of the nonfulfillment of any condition to a party's
closing obligations, such party may elect to proceed to close despite the
nonfulfillment of any closing condition without waiving any claim for any
breach.
6.4 Right to Damages; Expense Reimbursement.
6.4.1 If this Agreement is terminated in accordance with
Section 6.1 hereof, no party will have any claim against the others, subject to
the following sentence and, if applicable, the remaining provisions of this
Section 6.4. A party terminating this Agreement in accordance with Section 6.1
hereof (other than Section 6.1.1) will retain any and all of such party's legal
and equitable rights and remedies if, but only if, the circumstances giving rise
to such termination were (i) caused by another party's willful failure to comply
with a material covenant set forth herein or (ii) that a material representation
or warranty of such other party was materially false when made and that party
knew or should have reasonably known such representation or warranty was
materially false when made. In either of such events, termination shall not be
deemed or construed as limiting or denying any legal or equitable right or
remedy of said party, and said party shall also be entitled to recover its costs
and expenses which are incurred in pursuing its rights and remedies (including
reasonable attorneys' fees).
6.4.2 If (x) this Agreement is terminated pursuant to Section
6.1.2(b), 6.1.2 (c) hereof or (y) Acquisition Corp and Parent terminate this
Agreement pursuant to 6.1.3, the Company will reimburse Parent and Acquisition
Corp for their out-of-pocket costs and expenses reasonably incurred and due to
third parties in connection with this Agreement (including fees and
disbursements of counsel, accountants, financial advisors and consultants,
commitment fees, due diligence expenses, travel costs, filing fees, and similar
fees and expenses, all of which shall be conclusively established by a good
faith statement therefor) (collectively, "Covered Expenses"), up to a maximum of
$150,000, by wire transfer of same-day funds to an account designated by Parent,
immediately following receipt of Parent's statement evidencing the Covered
Expenses.
6.4.3 If (x) the Agreement is terminated pursuant to Section
6.1.2(a) hereof or (y) the Company terminates this Agreement pursuant to Section
6.1.4 hereof, Parent will pay to the Company immediately upon such termination
the Company's Covered Expenses up to a maximum of $500,000 by wire transfer of
same day funds to an account designated by the Company.
27
6.4.4 If the Company or Parent and Acquisition Corp fail to
promptly pay any amounts owing pursuant to this Section 6.4. when due, the
Company or Parent and Acquisition Corp, as the case may be, shall in addition to
paying such amounts pay all costs and expenses (including, fees and
disbursements of counsel) incurred in collecting such amounts, together with
interest on such amounts (or any unpaid portion thereof) from the date such
payment was required to be made until the date such payment is received by the
Company or Parent and Acquisition Corp, as the case may be, at the rate of 15%
per annum during such period. This Section 6.4 shall survive the termination of
this Agreement.
ARTICLE VII
MISCELLANEOUS
7.1 Survival of Representations, Warranties and Agreements. All of the
representations and warranties contained in this Agreement or in any certificate
or other document delivered pursuant to this Agreement shall survive the Merger
for a period of five years (the "Survival Period") following the Effective Date.
7.2 Amendment. This Agreement may be amended by the parties hereto,
with the approval of their respective Boards of Directors, at any time prior to
the Effective Date, whether before or after approval hereof by the shareholders
of the Company, but, after such approval by the shareholders of the Company, no
amendment shall be made without the further approval of such shareholders if
such amendment would violate Section 903 of the NYBCL. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
7.3 Publicity. Except as otherwise required by law, press releases and
other publicity concerning the transactions contemplated by this Agreement shall
be made only with the prior agreement of the Company and Parent.
7.4 Notices. All notices required or otherwise given hereunder shall be
in writing and may be delivered by hand, by facsimile, by nationally recognized
private courier, or by United States mail. Notices delivered by mail shall be
deemed given three (3) business days after being deposited in the United States
mail, postage prepaid, registered or certified mail, return receipt requested.
Notices delivered by hand, by facsimile, or by nationally recognized private
courier shall be deemed given on the day of receipt (if such day is a business
day or, if such day is not a business day, the next succeeding business day);
provided, however, that a notice delivered by facsimile shall only be effective
if and when confirmation is received of receipt of the facsimile at the number
provided in this Section 7.4. All notices shall be addressed as follows:
28
If to the Company:
Besicorp Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President - Administration
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ Brog Leinwand ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: A. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Parent, Acquisition Corp or the Surviving Corporation:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
c/o Besicorp Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ , ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and/or to such other respective addresses and/or addressees as may be designated
by notice given in accordance with the provisions of this Section 7.4.
7.5 Expenses; Transfer Taxes. Except as set forth in Section 6.4
herein, each party shall bear all of its fees and expenses incurred in
connection with, relating to or arising out of the negotiation, preparation,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, including, without limitation, financial
advisors', attorneys', accountants' and other professional fees and expenses.
7.6 Entire Agreement. This Agreement and the instruments to be
delivered by the parties pursuant to the provisions hereof constitute the entire
agreement between the parties with respect to
29
their subject matter and supersedes any and all prior understandings and
agreements. This Agreement and the instruments to be delivered by the parties
pursuant to the provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective legal representatives, successors and
permitted assigns. Each Exhibit and schedule hereto shall be considered
incorporated into this Agreement.
7.7 Non-Waiver. The failure in any one or more instances of a party to
insist upon performance of any of the terms, covenants or conditions of this
Agreement, to exercise any right or privilege in this Agreement conferred, or
the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as a subsequent waiver of
any such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party.
7.8 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall constitute but one instrument.
7.9 Severability. The invalidity of any provision of this Agreement or
portion of a provision shall not affect the validity of any other provision of
this Agreement or the remaining portion of the applicable provision.
7.10 Applicable Law. This Agreement shall be governed and controlled as
to validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of New York applicable to contracts
made in that State.
7.11 Binding Effect; Benefit. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, and their successors and permitted
assigns. Except as expressly provided herein, nothing in this Agreement, express
or implied, shall confer on any person other than the parties hereto, and their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, including, without
limitation, third party beneficiary rights.
7.12 Assignability. This Agreement shall not be assignable by any party
without the prior written consent of the other parties.
7.13 Governmental Reporting. Anything to the contrary in this Agreement
notwithstanding, nothing in this Agreement shall be construed to mean that a
party hereto or other person must make or file, or cooperate in the making or
filing of, any return or report to any Governmental Entity in any manner that
such person or such party reasonably believes or reasonably is advised is not in
accordance with law.
7.14 Defined Terms. (a) As used in this Agreement:
▇▇▇▇▇▇▇▇ Litigation means an action commenced in August 1997
in the New York
30
Supreme Court, Ulster County, entitled ▇▇▇▇ ▇▇▇▇▇▇▇▇ v.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and Besicorp Group Inc., Index No.
97-2573.
"Current Insurance Policy" means the Company's directors and
officers' insurance policy in effect on the date of the
Initial Agreement (a copy of which policy is attached hereto
as Exhibit 7.14).
"Empire Project" means the projects being developed with
Empire State Newsprint.
"Escrow Fund Payment Distribution" means an amount equal to
the monies released pursuant to Section 4 of the March 1999
Escrow Agreement multiplied by a fraction, the numerator of
which is the number of shares of Common Stock held of record
by the Company Shareholders immediately prior to the Effective
Date and the denominator of which is the sum of the number of
shares of Common Stock held of record by the Company
Shareholders, the Objecting Shareholders and the Ineligible
Shareholders immediately prior to the Effective Date and the
number of Management Restricted Shares which have been
cancelled pursuant to Section 4.9 hereof prior thereto.
"Executives" means ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and ▇▇▇▇▇▇▇ ▇▇▇▇.
"Foreign Development Projects" mean the projects being
developed in Brazil, Gabon, India and Mexico by the Company
(directly or indirectly), either by itself or with a partner,
on the Effective Date.
"Hydro-Credits" mean payments by Niagara Mohawk Power
Corporation as contemplated by its letter dated July 9, 1997.
"Incentive Plan" means the Company's 1999 Incentive Plan.
"Loan Funding Date" means the date the Company makes a request
for a Parent Loan.
"Management Restricted Shares" mean the 13,850 Restricted
Shares (as of October 7, 1999) which will not vest as a result
of the Merger).
"Material Adverse Effect" means an effect which involves
$50,000 or more on the business, operations (or results of
operations), condition (financial or otherwise), properties,
assets, liabilities, or prospects of such Person or its
Subsidiaries.
"March 1999 Escrow Agreement" means that certain Escrow
Agreement dated as of March 22, 1999 by and among the Company,
BGI, BGI Acquisition Corp. and BGI Acquisition LLC.
31
"March 1999 Escrow Fund" means the fund created pursuant to
the March 1999 Escrow Agreement.
"March 1999 Merger" means the merger that was consummated on
March 22, 1999 between BGI and BGI Acquisition Corp.
"Person" means an individual, partnership, corporation,
limited liability company, business, business trust, joint
stock company, trust, unincorporated association, joint
venture, Governmental Entity or other entity of whatever
nature or a group, including any pension, profit sharing or
other benefit plan or trust.
"Requisite Vote" means the affirmative vote of the holders of
at least one-half of the outstanding shares of Besicorp Common
Stock and in tabulating such vote the Management Restricted
Shares shall be tabulated in the manner contemplated by
Section 4.6 hereof regardless of the manner in which they were
voted; provided however, that nothing herein shall lessen the
requirements of Section 9.03 of the NYBCL.
"Restricted Shares" means the 14,900 shares of Common Stock
(as of October 7, 1999) issued pursuant to the Incentive Plan
and subject to restrictions on transferability prior to
vesting.
"SG&A" means expenses of the type that were classified as
selling, general and administrative expenses for the year
ended March 31, 1999 in the Company's financial statements
included in the Company's Form 10-KSB for the year ended March
31, 1999.
"Subsidiary" means any corporation, partnership, joint venture
or other legal entity of which a Person (either alone or
through or together with any other Subsidiary or
Subsidiaries), either (A) owns, directly or indirectly, 25% or
more of the capital stock or other equity interests, the
holders of which are generally entitled to vote with respect
to matters to be voted on in such corporation, partnership,
joint venture or other legal entity or a 25% or more of the
interest in the assets of the corporation, partnership, joint
venture or other legal entity upon its liquidation or (B) is
otherwise a Significant Subsidiary (as such term is defined in
Section 1-02(w) of Regulation S-X promulgated in connection
with the Securities Act of 1933, as amended).
"SunWize Project" means the financing and construction of a
facility for SunWize in Kingston, New York, and all matters
related thereto.
"Taxes" means all federal, state, local, foreign and other net
income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, lease,
32
service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property,
windfall profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatever, together with any
interest and any penalties, additions to tax or additional
amounts with respect thereto, and the term "Tax" means any one
of the foregoing Taxes.
"Termination Date" means 11:59 p.m. New York City time on
December 15, 1999; provided however, that each party has the
right in its sole discretion, exercisable at any time prior to
11:59 p.m. New York City time on December 15, 1999, by written
\notice to the other parties, to extend the Termination Date
to 11:59 p.m. New York City time on March 1, 2000 in which
case for all purposes pursuant to this Agreement, the
Termination Date shall be deemed to mean 11:59 p.m. New York
City time on March 1, 2000.
"Underlying Assets" means any asset which is capable of
generating proceeds that would constitute an Adjustment Amount
or Substitute Adjustment Amount.
(b) In addition to the terms defined in Section 7.4(a), the
following terms are defined in the following sections of this Agreement:
Defined Term Where Found
------------ -----------
Acquisition Corp. Preamble
Acquisition Proposal 4.8.2
Adjustment Amounts 2.4.1
Adjustment 2.4.1
Aggregate Cash Merger Consideration 2.1.1
Agreement Preamble
Assignee 2.4.3
Authorization 3.2.8
Beta 2.4.1
BGI 2.2.7
Board 3.2.2
Cash Merger Consideration 2.1.1
33
Defined Term Where Found
------------ -----------
Certificate of Merger 1.2
Certificates 2.2.2
Closing 1.6
Closing Date 1.6
Code 2.2.6
Combined Deferred Payment Right 2.1.1
Common Stock 2.1.1
Company Preamble
Company Filings 4.3.4
Company Shareholders 2.2.1
Company's Opinion 5.3.3
Consents 4.3.6
Constituent Corporation 1.1
Contribution 4.12
Covered Expenses 6.4.2
D&O Insurance 4.4.1
Deferred Payment Date 2.4.2
Deferred Payment Fund 2.4.1
Deferred Payment Right 2.1.1
Deferred Payment Termination Date 2.4.1
Deferred Payments 2.4.1
Distribution 4.12
Effective Date 1..2
Encumbrance 3.3.4
34
Defined Term Where Found
------------
Escrow Fund Payment Right 2.1.1
Escrow Fund Payments 2.4.5
Exchange Act 3.2.7
Excluded Expenses 2.4.1
Fairness Opinion 3.2.5
Form 10-SB 4.12
GAAP 4.2
Government Entity 4.3.6
Indemnified Person 4.4.1
Indemnified Persons 4.4.1
Ineligible Holders 2.1.1
Initial Agreement Preamble
Instructions 4.11
Josephthal 3.2.4
Letter of Transmittal 2.2.2
Losses 4.4.3
Meeting 4.3.1
Merger Preamble
Merger Consideration 2.1.1
Natural Dam 2.4.1
NYBCL Preamble
Objecting Shareholders 2.1.1
Parent Preamble
Parent Filings 4.3.5
35
Defined Term Where Found
------------
Parent Loan 4.5.1
Parent Obligations 3.3.4
Parent's Opinion 5.2.3
Paying Agent 2.2
Payor 2.4.4
Proxy Statement 3.2.5
Related Entity 2.4.1
Reserved Shares 2.1.1
Schedule 13E-3 3.2.7
SEC 4.3.2
Special Committee 5.2.5
Spin-Off 4.12
Spin-Off Date 4.12
Stock Option 3.2.3
Substitute Adjustment Amounts 2.4.4
Substitute Adjustments 2.4.4
Substitute Deferred Payment Fund 2.4.4
Substitution Agreement 4.9
Survival Period 7.1
Surviving Corporation 1.1
Transaction Agreements 3.2.2
7.15 Headings. The headings contained in this Agreement and this
Agreement's Table of Contents are for convenience of reference only and shall
not affect the meaning or interpretation of this Agreement.
36
7.16 Interpretation; Construction. Whenever the term "including" is
used in this Agreement it shall mean "including, without limitation," (whether
or not such language is specifically set forth) and shall not be deemed to limit
the range of possibilities to those items specifically enumerated. All joint
obligations herein shall be deemed to be joint and several whether or not
specifically so specified. The Exhibits referred to herein shall be construed as
an integral part of this Agreement to the same extent as if they were set forth
verbatim herein. Disclosure of any fact or item in any Article or Section of
this Agreement or any Exhibit hereto shall, should the existence of the fact or
item be relevant to any other Section of this Agreement or any Exhibit hereto,
be deemed disclosed with respect to such other Article or Section of this
Agreement or such other Exhibit.
37
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Agreement and Plan of Merger on the date first above written.
PARENT:
BESICORP HOLDINGS, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
ACQUISITION CORP:
BESI ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
THE COMPANY:
BESICORP LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
AGREED TO AND ACCEPTED
WITH RESPECT TO SECTION
4.6 BY ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Exhibit 1.2
CERTIFICATE OF MERGER
OF
BESI ACQUISITION CORP.
and
BESICORP LTD.
Into
BESICORP LTD.
(Under Section 904 of the Business Corporation Law)
Filer: Besicorp Ltd.
Name: Besicorp Ltd.
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CERTIFICATE OF MERGER
OF
BESI ACQUISITION CORP.
and
BESICORP LTD.
into
BESICORP LTD.
(Under Section 904 of the Business Corporation Law)
It is hereby certified upon behalf of each of the constituent
corporations herein named, as follows:
FIRST: The Board of Directors of each of the constituent corporations
has duly adopted a plan of merger setting forth the terms and conditions of the
merger of said corporations.
SECOND: The name of the constituent corporation which is to be the
surviving corporation, and which is hereinafter sometimes referred to as the
"surviving constituent corporation," is Besicorp Ltd. The date upon which its
certificate of incorporation was filed by the Department of State is November
20, 1998.
THIRD: The name of the other constituent corporation, which is being
merged into the surviving constituent corporation, and which is hereinafter
sometimes referred to as the "merged constituent corporation," is Besi
Acquisition Corp. The date upon which its certificate of incorporation was filed
by the Department of State is September 16, 1999.
FOURTH: As to each constituent corporation, the plan of merger sets
forth the designation and number of outstanding shares of each class and series,
all of which are entitled to vote on the plan of merger, as follows:
BESICORP LTD.
Designation of each
outstanding class and Number of outstanding
series of shares shares of each class
Common Stock 136,282
Besicorp Ltd. has no outstanding options or warrants to purchase shares of its
Common Stock.
BESI ACQUISITION CORP.
Designation of each
outstanding class and Number of outstanding
series of shares shares of each class
Common Stock 100
Besi Acquisition Corp. has no outstanding options or warrants to purchase shares
of its Common Stock.
FIFTH: The merger herein certified was authorized in respect of the
surviving constituent corporation by the vote of the holders of at least
one-half of all outstanding shares of such corporation entitled to vote on the
plan of merger.
SIXTH: The merger herein certified was authorized in respect of the
merged constituent corporation by the written consent of the holders of all
outstanding shares of such corporation entitled to vote on the plan of merger.
IN WITNESS WHEREOF, we have subscribed this document on the date set
forth below and do hereby affirm, under the penalties of perjury, that the
statements contained therein have been examined by us and are true and correct.
Executed on this [ ] day of [ ] [ ] .
BESI ACQUISITION CORP.
Name:
Title: President
and
Name:
Title: Secretary
BESICORP LTD.
Name:
Title: President
and
Name:
Title: Secretary
Exhibit 4.5(a)
SECURED PROMISSORY NOTE
[ ] [ ], [ ]
$1,050,000.00 Kingston, New York
FOR VALUE RECEIVED, Besicorp Ltd., a New York Corporation having its offices at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Maker"), promises to pay to
the order of Besicorp Holdings, Ltd., (the "Payee"), a New York corporation
having its offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or any
subsequent holder of this Note, on the day which is six months after the
Termination Date at its offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, or at such other location as Payee may designate from time to time
(the "Office"), the principal sum of One Million Fifty Thousand ($1,050,000.00),
or the outstanding amount of all loans made hereunder, together with interest
from the date hereof, payable at the rate of (i) nine percent (9%) per annum
(based on a 365 day and on the number of days actually elapsed) and compounded
annually through that day which is four months after the Termination Date and
(ii) thereafter fifteen percent (15%) per annum (based on a 365 day and on the
number of days actually elapsed) and compounded annually (the "Agreed Rate");
provided, however, that upon maturity, whether by acceleration, demand or
otherwise, this Note shall bear interest at the rate which shall be fifteen
percent (15%) per annum (based on a 365 day year and on the number of days
actually elapsed) and compounded annually, but not more than the maximum rate
allowed by law. Payments of principal and interest shall be made in lawful money
of the United States of America in immediately available funds (the "Currency")
or as otherwise provided for herein. The unpaid principal balance hereon at any
time shall not exceed One Million Fifty Thousand (1,050,000.00) Dollars and
shall be equal to the aggregate amount of all loans then made less the aggregate
amount of all payments then made thereon. The holder hereof is authorized to set
forth in writing from time to time on the reverse hereof the date and amount of
each loan and any payment of principal and the principal balance then unpaid
hereon. The obligations evidenced by this Note are secured by the Security
Agreement and the Mortgage and Security Agreement, each dated as of the date
hereof, between Maker and the Payee (the "Security Agreement" and the
"Mortgage", respectively). This Note is issued in connection with the loan (the
"Loan") by Payee to Maker contemplated by and pursuant to Section 4.5 of the
Amended and Restated Agreement and Plan of Merger dated as of November 24, 1999
by and between Besi Acquisition Corp., a New York corporation ("Acquisition
Corp."), Payee and the Maker (the "Agreement"). The Maker shall be entitled to
off-set amounts owed to it by Payee and Acquisition Corp. pursuant to the
Agreement against payments to be paid under this Note. Capitalized terms used
without being defined herein shall have the meanings ascribed to them by the
Security Agreement.
1
1. EVENTS OF DEFAULT. The occurrence of any of the following
events will be deemed to be an Event of Default under this Note: (a) Maker shall
fail to make any payment of principal or of interest on this Note when due; (b)
Maker shall fail, beyond any applicable notice, grace or cure period, to make
any payment or shall fail to keep, observe, comply with or perform any term,
provision, covenant, warranty, agreement, condition or undertaking on its part
required to be paid, complied with or performed or observed, by the provisions
of this Note, the Security Agreement, the Mortgage or any of the other
agreements, documents or instruments executed and/or delivered by the Maker to
the Payee in connection with the execution of this Note, the Mortgage and the
Security Agreement; (c) Maker shall (i) commence any case, proceeding or other
action under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition, or
other relief with respect to its debts; (ii) commence any case, proceeding or
other action seeking appointment of a receiver, trustee, custodian, or other
similar official for it or for all or any substantial part of its assets; or
(iii) make a general assignment for the benefit of its creditors (provided,
however, that Payee shall not have taken any action to cause Maker to take any
of the actions set forth in this clause); (d) there shall be commenced against
Maker by any person (other than Payee or an affiliate of Payee) any case,
proceeding or other action of a nature referred to in clause (c) above that (i)
results in the entry of an order for relief or any such adjudication or
appointment, or (ii) remains undismissed, undischarged, or unbonded for a period
of thirty (30) days; or (e) there shall be commenced against Maker by any person
(other than Payee or an affiliate of Payee) any case, proceeding, or other
action seeking issuance of a warrant of attachment, execution, distraint, or
similar process against all or any substantial part of its assets that results
in the entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within thirty (30) days from the
entry thereof; (f) Maker shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clauses (a), (b), (c), (d) and (e) above (provided, however, that Payee shall
not have taken any action to cause Maker to take any of the actions set forth in
this clause); or (g) Maker shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due (provided,
however, that Payee acknowledges that neither Maker's seeking and obtaining the
Loan nor any statements contained in Company Filings (as defined in the
Agreement) shall constitute an admission that Maker is unable to pay its debts
as they become due.
If an Event of Default shall have occurred and be continuing, Payee may
declare this Note immediately due and payable in full, both as to principal and
accrued interest without any further notice to Maker, and Payee may proceed to
exercise and enforce any and all of the rights and remedies available to it
hereunder and at law or in equity. Payee shall not be required to look to any
security given for the payment of the sums payable under this Note, but may
proceed against the Maker immediately upon the maturity or acceleration of this
Note or the occurrence of an Event of Default hereunder.
2
No remedy conferred upon or reserved or available to Payee shall be
exclusive of any other remedy or remedies available to it, but each and every
remedy shall be cumulative and shall be in addition to every such remedy now or
hereafter existing at law or in equity. No delay or omission on the part of
Payee to exercise any right or power arising upon the occurrence and
continuation of any Event of Default shall impair any right or power of Payee or
be construed to be a waiver by Payee of such Event of Default. Any right or
power of Payee may be exercised from time to time and as often as may be deemed
expedient by it. Maker shall pay Payee's costs of collection and enforcement
(including reasonable attorney's fees) in connection with each Event of Default
under this Note. If any Event of Default shall have occurred and for as long as
any Event of Default shall be continuing, all amounts due pursuant to this Note
shall bear interest at the rate of fifteen (15%) percent per annum (the "Default
Rate") and not the Agreed Rate.
2. OPTIONAL PREPAYMENTS. Maker shall have the right to prepay
all or any part of this Note at any time or from time to time without penalty.
3. MANDATORY PREPAYMENT. In the event Maker sells its business
or substantially all of its assets (other than in a reorganization in which
Maker only receives stock of a company that is required to file reports pursuant
to the Securities Exchange Act of 1934, as amended, or as a result of the
consummation of the transactions contemplated by the Agreement), or issues its
securities in a public offering, the unpaid principal balance of the Note and
any interest due thereon shall be paid, to the extent of the cash received by
Maker, in full simultaneously with the closing of the sale or public offering.
In the event that Maker in a reorganization receives stock and cash the
prepayment shall apply only to the extent of cash received.
4. WAIVER OF JURY TRIAL. THE MAKER IRREVOCABLY WAIVES ANY AND
ALL RIGHTS THE MAKER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
CLAIM OF ANY NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION
WITH THIS NOTE, THIS MORTGAGE OR THE SECURITY AGREEMENT. THE MAKER ACKNOWLEDGES
THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. THE MAKER ACKNOWLEDGES THAT
IT HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE WAIVER
OF JURY TRIAL, AND HAS BEEN ADVISED BY COUNSEL AS NECESSARY OR APPROPRIATE.
5. MAXIMUM RATE OF INTEREST. NOTHING CONTAINED HEREIN OR IN
ANY INSTRUMENT OR TRANSACTION RELATED HERETO, SHALL BE CONSTRUED OR OPERATE AS
TO REQUIRE THE MAKER OR ANY PERSON LIABLE FOR THE PAYMENT OF THE LOAN MADE
PURSUANT HERETO, TO PAY INTEREST, OR ANY CHARGE IN THE NATURE OF INTEREST, IN AN
AMOUNT OR AT A RATE WHICH EXCEEDS THE MAXIMUM RATE OF INTEREST ALLOWED BY
APPLICABLE LAW RELATING TO USURY. IN THE EVENT THAT PAYEE DETERMINES THAT
CHARGES AND FEES INCURRED IN CONNECTION
3
WITH THIS NOTE MAY UNDER SUCH APPLICABLE LAWS CAUSE THE INTEREST RATE HEREON TO
EXCEED THE MAXIMUM RATE ALLOWED BY LAW, THEN SUCH INTEREST SHALL BE RECALCULATED
AND ANY AMOUNT IN EXCESS OF THE MAXIMUM INTEREST PERMITTED BY LAW SHALL BE
APPLIED TO REDUCE THE PRINCIPAL AMOUNT OF THE NOTE. IT IS THE INTENT OF THE
PARTIES HERETO THAT UNDER NO CIRCUMSTANCES SHALL MAKER OR ANY OTHER PERSON
LIABLE FOR THE PAYMENT OF THIS NOTE BE REQUIRED TO PAY, NOR SHALL PAYEE BE
ENTITLED TO COLLECT, ANY INTEREST WHICH IS IN EXCESS OF THE MAXIMUM LEGAL RATE
PERMITTED UNDER SUCH APPLICABLE LAW. PAYEE MAY, IN DETERMINING THE MAXIMUM RATE
OF INTEREST ALLOWED UNDER APPLICABLE LAW, AS AMENDED FROM TIME TO TIME, TAKE
ADVANTAGE OF ANY STATE OR FEDERAL LAW, RULE OR REGULATION IN EFFECT FROM TIME TO
TIME WHICH MAY GOVERN THE MAXIMUM RATE OF INTEREST WHICH MAY BE RESERVED,
CHARGED OR TAKEN. MAKER AND PAYEE HAVE AGREED THAT NEW YORK LAW SHALL GOVERN ALL
CONSIDERATIONS AND DETERMINATIONS WITH REGARD TO USURY.
6. MISCELLANEOUS.
(a) No delay or omission of Payee to exercise any right or
power arising hereunder or by law shall impair any such right or power or be
considered to be a waiver of any such right or power, nor shall Payee's action
or inaction impair any such right or power. The Maker agrees to pay on demand,
to the extent permitted by law, all costs and expenses incurred by Payee in the
enforcement of its rights with respect to this Note and any security therefor
(including pursuant to the Security Agreement and the Mortgage), including
without limitation, reasonable fees and expenses of Payee's counsel. If any
provision of this Note is found to be invalid by a court, all the other
provisions of this Note will remain in full force and effect.
(b) The Maker and all other parties who at any time may be
liable hereon in any capacity, jointly or severally, waive presentment, demand
for payment, protest and notice of dishonor of this Note and authorize the
holder hereof, without notice, to grant extensions in the time of payment of and
changes in the rate of interest pursuant to Section 5 hereof on any moneys owing
on this Note. The Maker also waives all defenses based on suretyship or
impairment of collateral.
(c) This Agreement shall be binding upon Maker and its
successors and assigns.
(d) Any notice or request hereunder shall be given by (a) hand
delivery, (b) overnight courier, or (c) registered or certified mail, return
receipt requested. Any notice or other communication required or permitted
pursuant to this Note shall be deemed given (i) when personally delivered to any
party or any officer of the party to whom it is addressed, (ii) on the earlier
of actual receipt thereof or three (3) days following posting thereof by
certified or registered mail, postage prepaid, or (iii) upon actual receipt
thereof when sent by a recognized overnight delivery service.
4
(e) Caption headings in this Note are for convenience only and
are not to be used to interpret or define the provisions of this Note.
(f) This Note has been delivered to and accepted by Payee and
will be deemed to be made in the State where Payee's office indicated above is
located. THIS NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF PAYEE
AND THE MAKER SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE NEW YORK,
EXCLUDING ITS CONFLICT OF LAWS RULES. The Maker hereby irrevocably consents to
the exclusive jurisdiction of the Supreme Court of the State of New York located
in the County of New York or in the United States District Court for the
Southern District of New York, and consents that all service directed to the
Maker at the Maker's address set forth herein and service so made will be deemed
to be completed on the business day after deposit with such courier; provided
that nothing contained in this Note will prevent Payee from bringing any action,
enforcing any award or judgment or exercising any rights against the Maker
individually, or against any security or foreign or domestic jurisdiction. The
Maker acknowledges and agrees that the venue provided above is the most
convenient forum for both Payee and the Maker. The Maker waives any objection to
venue and any objection based on a more convenient forum in any action
instituted under this Note.
WITNESS the due execution hereof as a document under seal, as
of the date first written above, with the intent to be legally bound hereby.
ATTEST/WITNESS:
BESICORP LTD.
----------------------------- -----------------------------------
Name:
Title:
5
EXHIBIT 4.5(b-1)
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of the [ ] day of [ ], 1999,
between BESICORP LTD, a New York corporation with offices located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Debtor"), and BESICORP HOLDINGS,
LTD., (the "Secured Party").
W I T N E S S E T H:
WHEREAS, Debtor has entered into Amended and Restated
Agreement and Plan of Merger, dated as of November 24, 1999, with Secured Party
and Besi Acquisition Corp. (the "Acquisition Corp."), a wholly owned subsidiary
of the Secured Party formed to effectuate the merger (the "Merger") of Debtor
and Acquisition Corp. (the "Agreement), pursuant to the terms of which Debtor
has borrowed $ [ ] from the Secured Party, and may borrow additional monies (the
"Loan"); and
WHEREAS, pursuant to the terms of the Agreement, Debtor has
simultaneously herewith delivered to the Secured Party a Promissory Note, dated
this date in the original principal amount of $[ ], made by Debtor to the order
of the Secured Party (the "Note"); and
WHEREAS, in order to secure the obligations of Debtor under
the terms of the Note, and as a condition to the Loan and the acceptance by
Secured Party of the Note, Secured Party has requested that Debtor enter into
this Agreement and a Mortgage and Security Agreement (the ("Mortgage") and grant
to Secured Party the security interests provided for herein and therein;
NOW, THEREFORE, FOR VALUE RECEIVED, THE RECEIPT AND
SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED BY DEBTOR, IT IS AGREED:
1. Terms. As used herein, the following terms shall have the
meanings specified and shall include in the singular number the plural and in
the plural number the singular:
(a) "Collateral" means all of Debtor's right,
title and interest in and under or arising out of each and all of the following:
All existing and after acquired tangible and intangible
personal property of Debtor, inclusive of, without limitation, all equipment,
fixtures, accounts, contract rights, instruments, documents, notes, chattel
paper, general intangibles, and inventory, including, but not limited to, all
additions , accessions, replacements, substitutions or improvements and all
proceeds including, without limitation, proceeds of insurance, of any and all of
the collateral described herein. Collateral does not include the Collateral as
such term is defined in the Mortgage.
(b) "Event of Default" shall mean (i) an Event
of Default, as such term is defined in the Note, or (ii) the breach or violation
by Debtor of any representation, covenant or other agreement contained herein or
in the Mortgage.
(c) "Permitted Liens" shall mean (i) statutory
liens and like Encumbrances (as such term is defined in the Agreement) for Taxes
(as such term is defined in the Agreement) not yet due or being contested in
good faith and by appropriate proceedings, (ii) liens of carriers, warehousemen,
mechanics and materialmen and other like Encumbrances incurred in the ordinary
course of business for sums not yet due or being contested in good faith and by
appropriate proceedings ; (iii) liens incurred or deposits made in the ordinary
course of business in connection
-2-
with workers' compensation and unemployment insurance; (iv) minor imperfections
of title which do not in the aggregate materially detract from the value or use
of the asset in question, (v) any and all Encumbrances set forth on title
reports and/or lien searches, (vi) easements, rights of way, reservations,
servitudes and other restrictions upon any assets of the Debtor that are
immaterial in character and amount and do not detract from the value or
interfere with the use of the assets they affect, (vii) Encumbrances in effect
on the date hereof or granted pursuant to the Mortgage or in connection with the
financing and construction of a facility for SunWize Technologies, Inc. in
Kingston, New York, and all matters related thereto, (viii) Encumbrances
resulting from the rights and interests of Secured Party and (ix) Encumbrances
that do not and will not, individually or in the aggregate, (A) have a Material
Adverse Effect (as such term is defined in the Agreement) on Debtor or (B)
materially impair Debtor's ability to perform its obligations under this
Agreement or the Agreement.
(d) "Secured Obligations" means the prompt
payment by Debtor to Secured Party of the principal, interest, and all other
payments and obligations now existing or from time to time hereafter arising
under the terms of the Note or this Agreement.
(e) "Secured Party Event of Default" means the
Secured Party shall fail, beyond any applicable notice, grace or cure period, to
make any payment or shall fail to keep, observe, comply with or perform any
term, provision, covenant, warranty, agreement, condition or undertaking on its
part required to be paid, complied with or performed or observed, by the
provisions of the Agreement or any of the Transaction Agreements, documents or
instruments
-3-
executed and/or delivered by the Secured Party in connection with the Merger and
the transactions contemplated by the Agreement.
(f) "UCC" shall mean the Uniform Commercial
Code, as in effect in any applicable jurisdiction.
(g) Incorporation by Reference: All other
terms used in this Agreement are defined in the Agreement or in Article 9 of the
UCC currently in effect in New York.
2. Security Interests. As security for the payment and
performance of all Secured Obligations, Debtor does hereby grant and assign to
Secured Party a continuing security interest in each and every item comprising
the Collateral.
3. Representations and Warranties. Debtor represents and
warrants, which representations and warranties shall survive execution and
delivery of this Agreement, as follows:
(a) Debtor (i) is a corporation duly organized,
validly existing and in good standing under the laws of the state of New York,
and (ii) has all requisite power and authority to execute, deliver and perform
this Agreement.
(b) The execution, delivery and performance by
Debtor of this Agreement (i) have been duly authorized by all necessary company
action, and (ii) do not and will not contravene its charter or by-laws, or any
other applicable law.
(c) This Agreement is a legal, valid and binding
obligation of Debtor, enforceable against Debtor in accordance with its terms.
-4-
(d) This Agreement is made with full recourse to
Debtor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of Debtor contained herein.
(e) Debtor is and will be at all times the owner
of the Collateral free and clear of any lien, security interest or other charge
or encumbrance, except for (i) the security interest created by this Agreement,
and (ii) the Permitted Liens.
(f) The exercise by the Secured Party of any of
its rights and remedies hereunder will not contravene any law binding on or
affecting Debtor or any of its properties.
(g) No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or other
regulatory body is required for (i) the due execution, delivery and performance
by Debtor of this Agreement, (ii) the grant by Debtor, or the perfection, of
the security interest purported to be created hereby in the Collateral, or (iii)
the exercise by the Secured Party of any of its rights and remedies hereunder,
except for the filing of the financing statement(s) required to be filed to
perfect the security interest created by this Agreement.
(h) This Agreement creates a valid security
interest in favor of Secured Party in the Collateral, as security for the
Obligations. Secured Party's filing of the financing statements required to
perfect the security interest created by this Agreement will result in the
perfection of such security interests.
4. Covenants as to the Collateral. So long as any of the
Obligations shall remain outstanding, unless Secured Party shall otherwise
consent in writing:
-5-
(a) Further Assurances. Debtor shall at its
expense, at any time and from time to time, promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary or desirable or that Secured Party may request in order (i) to perfect
and protect the security interest purported to be created hereby; (ii) to enable
Secured Party to exercise and enforce its rights and remedies hereunder in
respect of the Collateral; or (iii) to effect otherwise the purposes of this
Agreement, including, without limitation, (A) marking conspicuously each chattel
paper included in the Collateral and, at the request of Secured Party, each of
its records pertaining to the Collateral with a legend, in form and substance
satisfactory to Secured Party, indicating that such chattel paper or other
Collateral is subject to the security interest created hereby, (B) executing
and filing such financing or continuation statements, or amendments thereto, as
may be necessary or desirable or that Secured Party may request in order to
perfect and preserve the security interest purported to be created hereby, and
(C) furnishing to Secured Party from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as Secured Party may reasonably request, all in
reasonable detail.
(b) Location of Equipment and Inventory. Debtor
shall notify the Secured Party if it moves any of the Collateral out of the
State of New York.
(c) Taxes. Debtor shall pay promptly when due
all property and other taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for labor, materials and
supplies) against any Collateral, except to the extent the validity thereof is
being contested in good faith by proper proceedings which stay the imposition of
any penalty, fine
-6-
or lien resulting from the non-payment thereof and with the respect to which
adequate reserves have been set aside for the payment thereof.
(d) Insurance. Debtor shall, at the request
of Secured Party, arrange to have the Secured Party added as an insured party
for all insurance policies with respect to the Collateral.
(e) Transfers and Other Liens. Except, (A) as
contemplated by the Agreement, (B) in the ordinary course of business or (C) to
the extent Secured Party consents in writing, Debtor shall not (i) sell, assign
(by operation of law or otherwise), exchange or otherwise dispose of any of the
Collateral, or (ii) create or suffer to exist any lien, security interest or
other charge or encumbrance upon or with respect to any Collateral, except for
(A) the security interest created hereby and (B) Permitted Liens.
5. Financing Statements. Debtor shall, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to Secured Party from
time to time such lists, descriptions, vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, continuation
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the security interest hereby
granted, which Secured Party deems appropriate or advisable to perfect, preserve
or protect its security interest in the Collateral. Debtor hereby irrevocably
appoints the Secured Party as Debtor's attorney-in-fact and proxy (which
appointment is coupled with an interest) to execute all of said documents which
are deemed appropriate or advisable to perfect, preserve or protect Secured
Party's security interest in the Collateral, to obtain
-7-
and adjust insurance required to be paid to Secured Party or to otherwise more
effectively carry out Secured Party's rights and remedies and to file said
documentation for recordation under the UCC or any other applicable law,
statute, rule or regulation and with any appropriate governmental authority, and
otherwise to act in Debtor's name and place with respect to the Collateral, all
with the same legal force and effect as if such acts were performed by Debtor.
Debtor authorizes Secured Party to file any such financing statements,
continuation statements and amendments thereto without the signature of Debtor
and, upon receipt of notice of filing, Debtor shall reimburse Secured Party for
all applicable filing fees and related expenses. Secured Party shall deliver to
Debtor a copy of any statement filed pursuant to this paragraph promptly upon
filing.
6. Remedies and Sale.
(a) In addition to any rights and remedies now
or hereafter granted under applicable law, and not by way of limitation of any
such rights and remedies, upon the occurrence of an Event of Default but only
so long as an Event of Default is continued, Secured Party shall have all of the
rights and remedies of a secured party under the Uniform Commercial Code as
enacted in any applicable jurisdiction in addition to the rights and remedies
provided herein. Secured Party shall have the right, without further notice to,
or assent by, Debtor, in the name of Debtor or in the name of Secured Party or
otherwise:
(i) to ask for, demand, collect, receive, compound and
give acquittance for the Collateral or any part
thereof;
(ii) to file any claim, commence, maintain or discontinue
any actions, suits or other proceedings deemed by
Secured Party necessary or advisable for the
-8-
purpose of collecting or enforcing payment or
performance of the Secured Obligations;
(iii) to take possession of any or all of the Collateral
and, for that purpose, to enter, with the aid and
assistance of any person or persons, subject to
proper legal process, any premises where the
Collateral, or any part thereof, is, or may be,
placed or assembled, and to remove any of such
Collateral;
(iv) to execute any instrument and do all other things
necessary and proper to protect and preserve and
realize upon the Collateral and the other rights
contemplated hereby; and
(v) upon notice to such effect, to require Debtor to
deliver, at Debtor's expense, any or all Collateral
to Secured Party at a place designated by Secured
Party.
(b) Secured Party may take legal proceedings
for the appointment of a receiver or receivers (to
which Secured Party shall be entitled as a matter of right) to take possession
of the Collateral pending the sale thereof pursuant either to the powers of sale
granted by this Agreement or to a judgment, order or decree made in any judicial
proceeding for the foreclosure or involving the enforcement of this Agreement.
If, after the exercise of any or all of the rights and remedies of Secured
Party hereunder, any of the Secured Obligations shall remain unpaid, Debtor
shall remain liable for any deficiency. After the payment in full of the
Secured Obligations, any proceeds of the Collateral received or held by Secured
Party shall be delivered to Debtor, and the Collateral shall be reassigned
to Debtor by Secured Party without recourse to Secured Party (other
-9-
than for their gross negligence or willful misconduct) and without any
representations, warranties or agreements of any kind.
(c) If Debtor fails to perform any agreement
contained herein, Secured Party may itself perform, or cause performance of,
such agreement or obligation, and the expenses of Secured Party incurred in
connection therewith shall be payable by Debtor pursuant to Section 8 hereof.
(d) The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, Secured Party shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against prior
Party or any other rights pertaining to any Collateral.
7. Application of Moneys. Except as otherwise may be provided
herein or in the Note, all moneys which Secured Party shall receive in
accordance with the provisions hereof shall be applied (to the extent thereof)
in the following manner: First, to the payment of all costs and expenses
incurred in connection with the administration and enforcement of, or the
preservation of any rights under, this Agreement or any of the reasonable
expenses and disbursements of Secured Party (including, without limitation, the
reasonable fees and disbursements of its counsel and agents); and Second, to the
payment of all Secured Obligations arising out of the Note or this Agreement in
accordance with the terms thereof or hereof and, if not therein or herein
provided, in such order as Secured Party may determine or herein.
-10-
8. Fees and Expenses, etc.; Indemnification. Any and all fees,
costs and expenses, of whatever kind or nature, including the reasonable
attorney's fees and legal expenses incurred by Secured Party in connection with
the enforcement of this Agreement, the filing or recording of any documents
(including all taxes in connection therewith) in public offices, the payment or
discharge of any taxes, counsel fees incurred in the enforcement of this
Agreement, and for maintenance fees, encumbrances or otherwise protecting,
maintaining, preserving the Collateral, or in defending or prosecuting any
actions or proceedings arising out of or related to the Collateral, shall be
borne and paid by Debtor on demand by Secured Party and until so paid, shall be
added to the principal amount of the Secured Obligations and shall bear interest
at the rate then prevailing under the terms of the Note with respect to the
outstanding principal thereof. In addition, Debtor shall pay, and indemnify and
hold Secured Party harmless from and against, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
Collateral and the exercise by Secured Party of any of its rights hereunder. The
provisions of this paragraph 8 shall survive the payment of all other Secured
Obligations and the termination of this Agreement.
9. Miscellaneous.
(a) Any notice or request hereunder shall be given
by (a) hand delivery, (b) overnight courier, (c) registered or certified mail,
return receipt requested, (d) telex or telegram, subsequently confirmed by
registered or certified mail, or (e) telecopy with electronic confirmation of
its receipt. Any notice or other communication required or permitted pursuant to
this Agreement shall be deemed given (i) when personally delivered to any party
or any officer of the party to whom
-11-
it is addressed, (ii) on the earlier of actual receipt thereof or three (3) days
following posting thereof by certified or registered mail, postage prepaid,
(iii) upon actual receipt thereof when sent by a recognized overnight delivery
service or (iv) upon actual receipt thereof when sent by telecopier with
electronic confirmation of its receipt. All notices, requests, and demands are
to be given or made to the party at the addresses set forth at the head of this
Agreement (or to such other addresses as any party may designate by notice in
accordance with the provisions of this paragraph).
(b) No delay on the part of Secured Party in
exercising any of its rights, remedies, powers and privileges hereunder or
partial or single exercise thereof shall constitute a waiver thereof. None of
the terms and conditions of this Agreement may be changed, waived, modified or
varied in any manner whatsoever unless in writing duly signed by Debtor and
Secured Party. No notice to or demand on Debtor in any case shall entitle
Debtor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of Secured Party to
any other or further action in any circumstances without notice or demand.
(c) The rights of Secured Party and the
obligations of Debtor hereunder shall remain in full force and effect without
regard to, and shall not be impaired by (i) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or the like
of Debtor; (ii) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Agreement, the Note, the
Secured Obligations or any security for any of the Secured Obligations; or
(iii) any amendment to or modification of the Note, Agreement, or any security
for any of the Secured Obligations. The rights and remedies of Secured Party
herein provided are cumulative and not exclusive of any rights or remedies
which Secured Party would otherwise have.
-12-
(d) This Agreement shall be binding upon, and
shall inure to the benefit of, Debtor and Secured Party and their respective
successors and assigns. All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement.
(e) The descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
(f) Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision of any other jurisdiction.
(g) This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York, without giving
effect to the principles of conflicts of law. Any judicial proceeding brought
by or against either party with respect to this Agreement or any related
agreement may be brought in the Supreme Court of the State of New York located
in the County of New York or in the United States District Court for the
Southern District of New York and, by execution and delivery of this Agreement,
the parties accept for themselves and in connection with their properties,
generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Theparties hereby
-13-
waive personal service of any and all process upon them and consent that all
such service of process may be made by registered mail (return receipt
requested) directed to such party at its address set forth under its signature
below and service so made shall be deemed completed five (5) days after the same
shall have been so deposited in the mails of the United States of America.
Nothing herein shall affect the right to serve process in any manner permitted
by law or shall limit the right of any party to bring proceedings againstany
other party in the courts of any other jurisdiction. The parties waive any
objection to jurisdiction and venue of any action instituted hereunder in any
court referred to above and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens.
(h) All of the rights and remedies of Secured
Party set forth herein shall be cumulative and concurrent and may be pursued
singly, successively, or together and in such order as Secured Party may decide
in its sole discretion, and may be exercised as often as occasion therefor shall
occur and are not exclusive remedies upon an Event of Default, but are in
addition to any other rights or remedies that at any time may be available
elsewhere under this Agreement, in the Note or under applicable law; and the
failure to exercise any such right or remedy shall in no event be construed a
waiver or release thereof. Nothing contained herein or in the Note shall in any
way restrict, limit or modify any rights of Secured Party under the terms of
any guaranty securing the Secured Obligations, whether executed and delivered
heretofore or hereafter, or the payment by Debtor of any Secured Obligations nor
shall anything contained herein or in the Note be understood to require Secured
Party to resort first to Debtor or to any assets of Debtor in which Secured
Party may have a security interest prior to enforcing the rights of Secured
Party under any such guaranty.
-14-
(i) This Agreement shall terminate upon the
earlier of (i) the payment in full of all amounts under the Note and (ii) the
occurrence of a Secured Party Event of Default.
IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
BESICORP LTD
---------------------------------------
Name:
Title:
BESICORP HOLDINGS, LTD.
----------------------------------------
Name:
Title:
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
COUNTY OF NEW YORK ) ss.:
On the day of [ ] in the year 1999 before me, the undersigned,
a notary public in and for said state, personally appeared [ ], personally known
to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity of an officer of Besicorp Ltd., and that by
his signature on the instrument, the individual, or the person upon behalf of
which the individual acted, executed the instrument.
------------------------
Notary Public
STATE OF NEW YORK )
COUNTY OF NEW YORK ) ss.:
On the day of [ ] in the year 1999 before me, the undersigned,
a notary public in and for said state, personally appeared [ ], personally known
to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity of an officer of Besicorp Holdings, Ltd., and
that by his signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.
--------------------------
Notary Public
EXHIBIT 4.5(b-2)
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT, dated as of [ ], 1999
(the "Mortgage"), is given by BESICORP LTD, a corporation duly organized and
existing under the laws of the State of New York, having an office at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Company") to BESICORP HOLDINGS,
LTD, a corporation duly organized and existing under the laws of the State of
New York, having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Lender").
R E C I T A L S:
WHEREAS, the Company has entered into an Amended and Restated
Agreement and Plan of Merger, dated as of November 24, 1999, with Lender and
Besi Acquisition Corp. (the "Acquisition Corp."), a wholly owned subsidiary of
Lender formed to effectuate the merger (the "Merger") of the Company and
Acquisition Corp. (the "Agreement"), pursuant to the terms of which Lender has
borrowed $ [ ] from the Lender, and may borrow additional monies (the "Loan");
and
WHEREAS, pursuant to the terms of the Agreement, the Company
has simultaneously herewith delivered to the Lender a Promissory Note, dated
this date in the original principal amount of $[ ], made by the Company to the
order of the Lender (the "Note") to evidence the amounts owed by the Company
pursuant to the Loan (the "Indebtedness"); and
WHEREAS, in order to secure the obligations of the Company
under the terms of the Note, and as a condition to the Loan and the acceptance
by Lender of the Note, Lender has requested that the Company enter into this
Mortgage and a Security Agreement (the "Security Agreement") and grant to Lender
the security interests provided for herein and therein;
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and in order to secure payment of the principal of
and interest pursuant to the Note, and the payment of all other indebtedness
which this Mortgage by its terms secures, and compliance with all the terms
hereof and of the Note, Company does hereby give, grant, bargain, sell, confirm,
mortgage, warrant, pledge, hypothecate, alien, remise, release, deposit, set
over, assign, transfer and convey to Lender, and to its successors and assigns,
all of the Company's estate right, title and interest in, to and under, or
derived from, the following (collectively hereinafter referred to as the
"Mortgaged Property"):
(a) all real property owned in fee, and all
leases, easements and other rights and interests in the real property including,
without limitation, the properties listed on Schedule A hereto (collectively,
the "Realty");
(b) all improvements, structures and buildings
and any alterations thereto or replacements thereof, now or hereafter attached
to or located upon the Realty, all fixtures, fittings, appliances, apparatus,
equipment, machinery, material and replacements thereof, now or at any time
hereafter affixed to, attached to, placed upon or used in any way in connection
with the complete and comfortable use, enjoyment, occupancy or operation of
the Realty or such improvements, structures or buildings, including but not
limited to furnaces, boilers, oil burners, radiators and piping, coal stokers,
plumbing and bathroom fixtures, refrigeration, air conditioning and sprinkler
systems, wash-tubs, sinks, gas and electric fixtures, stoves, ranges, ovens,
disposals, dishwashers, hood and fan combinations, awnings, screens, window
shades, elevators, motors, dynamos, refrigerators, kitchen cabinets,
incinerators, kitchen equipment, laundry equipment, plants and shrubbery and
all other equipment and machinery, snow removal equipment, appliances, fitting
and fixtures of every nature whatsoever now or hereafter owned or acquired by
the Company and located in or on, or attached to, and used or intended to be
used in connection with or with the operation of, the Realty, buildings,
structures or other improvements, or in connection with any construction being
conducted or which may be conducted thereon, and owned by Company, and all
extensions, additions, improvements, betterments, renewals, substitutions and
replacements to any of the foregoing, and all of the right, title and interest
of the Company in and to any such property or fixtures subject to any lien,
security interest or claim, which, to the fullest extent permitted by law, shall
be conclusively deemed fixtures and a part of the real property encumbered
hereby (collectively, the "Improvements");
(c) The Company's interest in all agreements,
contracts, certificates, instruments and other documents, now or hereafter
entered into, pertaining to the construction, operation or management of any
structure or building now or hereafter part of the Realty or to the sale of any
direct or indirect interest in the Realty; and
(d) The Company's interest in all proceeds,
products, replacements, additions, substitutions, renewals and accessions of and
to the Realty described in the preceding sections (a) through (c).
AND, without limiting any of the other provisions of this Mortgage,
Company expressly grants to the Lender, as secured party, a security interest in
all of those portions of the Realty which are or may be subject to the
provisions of the Uniform Commercial Code of the State in which the Realty is
located and of the State of New York, applicable to secured transactions.
TO HAVE AND TO HOLD the Mortgaged Property unto the Lender and
its successors and assigns until the Indebtedness secured by this Mortgage is
paid in full.
AND WHEREAS, the Company, in consideration of the making of
this mortgage loan, has covenanted and agreed and does hereby covenant and
agrees as follows:
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ARTICLE I.
COVENANTS AS TO THE MORTGAGED PROPERTY
1.01 Recordation. Company will at all times cause this
Mortgage and any instruments amending or supplementing this Mortgage and any
instruments of assignment hereof or thereof (and any appropriate financing
statements or other instruments and continuations thereof with respect to any
thereof) to be recorded, registered and filed in such manner and in such places,
and will comply with all such statutes and regulations as may be required by law
in order to establish, preserve, perfect and protect the lien of this Mortgage
as a valid, direct mortgage lien and priority perfected security interest in the
Mortgaged Property, subject only to the Permitted Encumbrances. "Permitted
Encumbrances" means (i) statutory liens and like Encumbrances (as such term is
defined in the Agreement) for Taxes (as such term is defined in the Agreement)
not yet due or being contested in good faith and by appropriate proceedings,
(ii) liens of carriers, warehousemen, mechanics and materialmen and other like
Encumbrances incurred in the ordinary course of business for sums not yet due or
being contested in good faith and by appropriate proceedings ; (iii) liens
incurred or deposits made in the ordinary course of business in connection with
workers' compensation and unemployment insurance; (iv) minor imperfections of
title which do not in the aggregate materially detract from the value or use of
the asset in question, (v) any and all Encumbrances set forth on title reports
and/or lien searches, (vi) easements, rights of way, reservations, servitudes
and other restrictions upon any assets of the Company that are immaterial in
character and amount and do not detract from the value or interfere with the use
of the assets they affect, (vii) Encumbrances in effect on the date hereof or
granted to the Lender or in connection with the financing and construction of a
facility for SunWize Technologies, Inc. in Kingston, New York, and all matters
related thereto, (viii) Encumbrances resulting from the rights and interests of
the Lender and (ix) Encumbrances that do not and will not, individually or in
the aggregate, (A) have a Material Adverse Effect (as such term is defined in
the Agreement) on the Company or (B) materially impair the Company's ability to
perform its obligations under this Agreement or the Agreement.
1.02 Liens. Company will not directly or indirectly create or
permit or suffer to be created or to remain, and will promptly discharge or
cause to be discharged, any mortgage, lien, encumbrance or charge on, pledge of,
security interest in or conditional sale or other title retention agreement with
respect to the Mortgaged Property or any part thereof or the interest of Company
or Lender therein or any rents or other sums arising therefrom, other than the
Permitted Encumbrances.
1.03 Further Assignments. Company shall assign to Lender, upon
request, as further security for the Loan secured hereby, Company's interests in
all agreements, contracts, licenses and permits affecting the Mortgaged
Property, such assignments to be made by instruments in form satisfactory to
Lender; but no such assignment shall be construed as a consent by Lender to any
agreement, contract, license or permit so assigned, or to impose upon Lender any
obligations with respect thereto.
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1.04 Acquired Property Subject to Lien. All property at any
time acquired by Company and required by this Mortgage to become subject to the
lien and security interest hereof, whether such property is acquired by
exchange, purchase, construction or otherwise, shall forthwith become subject to
the lien and security interest of this Mortgage without further action on the
part of Company or Lender. Company will execute and deliver to Lender (and will
record and file as provided in Section 1.01) an instrument supplemental to this
Mortgage, satisfactory in substance and form to Lender, whenever such an
instrument is necessary under applicable law to subject to the lien and security
interest of this Mortgage all right, title and interest of Company in and to all
property required by this Mortgage to be subject to the lien and security
interest hereof and acquired by Company since the date of this Mortgage or the
date of the most recent supplemental instrument so subjecting property to the
lien hereof, whichever is later.
1.05 No Claims Against Lender. Nothing contained in this
Mortgage shall constitute any consent or request by Lender, express or implied,
for the performance of any labor or services or the furnishing of any materials
or other property in respect of the Mortgaged Property or any part thereof, or
shall be construed to permit the making of any claim against Lender in respect
of labor or services or the furnishing of any materials or other property or any
claim that any lien based on the performance of such labor or services or the
furnishing of any such materials or other property is prior to the lien of this
Mortgage.
1.06 Indemnification Against Liabilities. Company will
protect, indemnify, save harmless and defend Lender from and against any and all
liabilities, obligations, claims, damages, penalties, causes of action,
judgments, costs and expenses (including reasonable attorneys' fees and
expenses) imposed upon or incurred by or asserted against Lender by reason of
(a) any accident, injury to or death of persons or loss of or damage to or loss
of the use of property occurring on or about the Mortgaged Property or any part
thereof or the adjoining sidewalks, curbs, vaults and vault spaces, if any,
streets, alleys or ways, (b) any use, non-use or condition of the Mortgaged
Property or any part thereof or the adjoining sidewalks, curbs, vaults and vault
spaces, if any, streets, alleys or ways, (c) any failure on the part of Company
to perform or comply with any of the terms of this Mortgage, (d) performance of
any labor or services or the furnishing of any materials or other property in
respect of the Mortgaged Property or any part thereof made or suffered to be
made by or on behalf of Company, (e) any gross negligence or tortious act on the
part of Company or any of its agents, contractors, lessees, sublessee, licensees
or invitees, (f) any work in connection with any permitted alterations, changes,
new construction or demolition of or additions to the Realty, or (g) any
agreement between Company and the Lender originally named herein in connection
with the closing of the Loan evidenced by the Note. If any action or proceeding
be commenced, including an action to foreclose this Mortgage or to collect the
Indebtedness secured hereby, to which action or proceeding the Lender is made a
party by reason of this Mortgage or the Note, or in which it becomes necessary
to defend or uphold the lien of this Mortgage, all reasonable sums paid by
Lender for the expense of any litigation to prosecute or defend the rights and
lien created hereby, shall be paid by Company to Lender as hereinafter provided.
Company will pay and save Lender harmless against any and all liability with
respect to any intangible personal property tax or similar imposition of the
State in which the Mortgaged Property is located or any subdivision or authority
thereof now or hereafter in effect, to the extent that the same may be payable
by Lender in respect of this Mortgage or the Note. All
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amounts payable to Lender under this Section 1.06 shall be deemed Indebtedness
secured by this Mortgage and any such amounts that are not paid within ten (10)
days after written demand therefor by Lender shall bear interest at the Default
Rate (as defined in the Note) from the date of such demand. In case any action,
suit or proceeding is brought against Lender by reason of any such occurrence,
Company, upon request of Lender, will, at Company's reasonable expense, resist
and defend such action, suit or proceeding or cause the same to be resisted or
defended, by counsel designated by Company and reasonably approved by Lender.
The obligations of Company under this Section 1.06 shall survive any discharge
of this Mortgage and payment in full of the Indebtedness.
1.07 Further Assurances. Company will execute, acknowledge and
deliver all such instruments and take all such actions as Lender from time to
time may request (a) to subject to the lien and security interest of this
Mortgage all or any portion of the Mortgaged Property, (b) to perfect, publish
notice or protect the validity of the lien and security interest of this
Mortgage, (c) to preserve and defend the title to the Mortgaged Property and the
rights of Lender therein against the claims of all persons and parties so long
as this Mortgage shall remain undischarged, (d) to subject to the lien and
security interest of this Mortgage with respect to any replacement or
substitution for any Improvements or any other after-acquired property, or (e)
in order to further effectuate the purpose of this Mortgage and to carry out the
terms hereof and better to assure and confirm to Lender its rights, powers and
remedies hereunder.
ARTICLE II.
COVENANTS AS TO INSURANCE, DAMAGE,
DESTRUCTION AND TAKING
2.01 Insurance. Company shall, at its reasonable expense, keep
the Mortgaged Property insured for the benefit of the Lender (a) against loss by
fire and other hazards covered by an all-risk coverage insurance policy for the
full insurable value thereof with reductions for depreciation or co-insurance,
with deductible from the loss payable for any casualty and (b) comprehensive
General Liability Insurance in respect of the operation of the Mortgaged
Property with limits of liability for property damage and bodily injury per
occurrence.
2.02 Damage, Destruction or Taking; Company to Give Notice;
Assignment of Awards. In case of (a) any damage to or destruction of the
Mortgaged Property or any part thereof, or (b) any taking (whether for permanent
or temporary use) of all or any part of the Mortgaged Property or any interest
therein or right accruing thereto, as the result of or in lieu or in
anticipation of the exercise of the right of condemnation or eminent domain, or
a change of grade affecting the Mortgaged Property or any part thereof (a
"Taking"), or the commencement of any proceedings or negotiations which might
result in any such Taking, Company will promptly give written notice thereof to
Lender, generally describing the nature and extent of such damage or destruction
or of such Taking or the nature of such proceedings or negotiations and the
nature and extent of the Taking which might result therefrom, as the case
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may be. Lender shall be entitled to all insurance proceeds payable on account of
such damage or destruction and to all awards or payments allocable to the
Mortgaged Property on account of such Taking, up to the amount of the
Indebtedness (including the accrued and unpaid interest) and Company hereby
irrevocably assigns to Lender all rights of Company to any such proceeds, award
or payment and irrevocably authorizes and empowers Lender, at its option, in the
name of Company, or otherwise, to file and prosecute what would otherwise be
Company's claim for any such proceeds, award or payment and to collect, receipt
for and retain the same for disposition, in accordance with Section 2.03.
Company will pay all reasonable costs and expenses incurred by Lender in
connection with any such damage, destruction or Taking and the seeking and
obtaining of any insurance proceeds, award or payment in respect thereof.
2.03 Application of Proceeds. Lender may, at its option and in
its discretion, apply all amounts recovered under any insurance policy required
to be maintained by Company hereunder and all net awards received by it on
account of any Taking in any one or more of the following ways: (a) as provided
in Section 3.09, regardless of whether part or all of the Indebtedness secured
hereby shall then be matured or unmatured, or (b) to fulfill any of the
covenants contained herein as Lender may determine, or (c) released to Company
for application to the cost of restoration and repair of the Mortgaged Property,
or (d) released to Company.
ARTICLE III.
EVENTS OF DEFAULT
3.01 "Event of Default" means (i) an Event of Default, as such
term is defined in the Note, or (ii) the breach or violation by the Company of
any representation, covenant or other agreement contained herein or in the
Security Agreement.
3.02 Acceleration of Maturity. If an Event of Default shall
have occurred and remain uncured, Lender may declare the entire unpaid
Indebtedness and all other sums secured hereby to be immediately due and
payable.
3.03 Lender's Power of Enforcement. If an Event of Default
shall have occurred and remain uncured, Lender may, either with or without entry
or taking possession as hereinabove provided or otherwise, and without regard to
whether or not the Indebtedness and other sums secured hereby shall be due and
without prejudice to the right of the Lender thereafter to bring an action of
foreclosure or any other action for any default existing at the time such
earlier action was commenced, bring any appropriate action or proceeding: (a) to
enforce payment of the Note or the Indebtedness or the performance of any term
thereof or hereof or any other right of the Lender under this Mortgage or any
other agreements securing the Note and/or the Indebtedness; (b) to foreclose
this Mortgage and any other documents securing the Note and the Indebtedness and
to sell, as an entirety or in separate lots or parcels, the Mortgaged Property
under the power of sale hereinafter provided or the judgment or decree of a
court or courts of
6
competent jurisdiction; and (c) to pursue any other remedy available to it. The
Lender shall take action either by such proceedings or by the exercise of its
power with respect to entry and/or taking possession, or both, as the Lender
may, in its reasonable discretion, determine.
3.04 Lender's Rights to Enter and
Take Possession, Operate and Apply Income.
(a) If an Event of Default shall have occurred
(and remain uncured), (i) upon demand of the Lender, the Company shall forthwith
surrender to the Lender the actual possession of the Mortgaged Property and
if and to the extent permitted by law, the Lender itself, or by such officers
or agents as it may appoint, may enter and take possession of all or a portion
of the Mortgaged Property and may exclude the Company and its agents and
employees wholly therefrom and may have joint access with the Company to the
books, papers and accounts of the Company; and (ii) the Company will pay monthly
in advance to the Lender, on Lender's entry into possession, or to any receiver
appointed to collect the rents, income and other benefits of the Mortgaged
Property, the fair and reasonable rental value for the use and occupation of
such part of the Mortgaged Property as may remain in possession of the Company,
and upon default in any such payment will vacate and surrender possession of
such part of the Mortgaged Property to the Lender or to such receiver and, in
default thereof, the Company may be evicted by summary proceedings or otherwise.
(b) If the Company shall for any reason fail to
surrender or deliver the Mortgaged Property or any part thereof after the
Lender's demand, the Lender may obtain a judgment or decree conferring on the
Lender the right to immediate possession or requiring the Company to deliver
immediate possession of all or part of the Mortgaged Property to the Lender.
The Company shall pay the Lender, upon demand, all reasonable costs and expenses
of obtaining such judgment or decree and reasonable compensation to the Lender,
its attorneys and agents, and all such reasonable costs, expenses and
compensation shall, until paid, be secured by the lien of this Mortgage.
(c) Upon every such entering upon or taking of
possession, the Lender may hold, store, use, operate, manage and control the
Mortgaged Property and conduct the business thereof, and, from time to time:
(i) make and conduct all necessary and proper
maintenance, repairs, renewals, replacements, additions, betterments and
improvements thereto and thereon and purchase or otherwise acquire fixtures,
personal and other property;
(ii) insure and keep the Mortgaged Property
insured;
(iii) manage and operate the Mortgaged Property and
exercise all the rights and powers of the Company in its name or otherwise with
respect to the same;
(iv) enter into agreements with others to exercise
the powers herein granted the Lender, all as the Lender from time to time may
determine; and the Lender may
7
collect and receive all the rents, income and other benefits thereof, including
those past due as well as those thereafter; and shall apply the monies so
received by the Lender to pay all reasonable costs and expenses of so entering
upon, taking possession of, holding, operating, maintaining, repairing,
preserving, and managing the Mortgaged Property or any part thereof, and any
taxes, assessments or other charges prior to the lien and security interest of
this Mortgage which Lender may consider necessary or desirable to pay, and any
balance of such amount shall be applied as provided in Section 3.09.
The Lender shall surrender possession of the Mortgaged Property to the
Company at such time that all amounts due under any of the terms of the Note and
this Mortgage shall have been fully paid and all Events of Defaults cured. The
same right of taking possession, however, shall exist if any subsequent Event of
Default shall occur and be continuing.
3.05 Purchase by Lender; Application of Indebtedness Toward
Purchase Price. Lender may be a purchaser of the Mortgaged Property or of any
part thereof or of any interest therein at any sale thereof, whether pursuant to
foreclosure or otherwise, and may apply toward the purchase price thereof the
Indebtedness secured hereby owing to Lender. Lender shall, upon any such
purchase, acquire good title to the properties so purchased, free of the lien of
this Mortgage and free of all rights of redemption in Company.
3.06 Waiver of Appraisement, Valuation, Stay, Execution and
Redemption Laws. The Company agrees to the full extent permitted by law that in
case of an Event of Default on its part hereunder which shall be continuing,
neither the Company nor anyone claiming through or under it shall or will set
up, claim or seek to take advantage of any appraisement, valuation, stay,
extension or redemption laws now or hereafter in force, in order to prevent or
hinder the enforcement or foreclosure of this Mortgage or the absolute sale of
the Mortgaged Property or the final and absolute putting into possession
thereof, immediately after such sale, of the purchasers thereat, and the Company
for itself and all who may at any time claim through or under it, hereby waives,
to the full extent that may be lawfully so done, the benefit of all such laws,
and any and all right to have the assets comprising the Mortgaged Property
marshaled upon any foreclosure of the lien hereof and agrees that the Lender or
any court having jurisdiction to foreclose such lien may sell the Mortgaged
Property in part or as an entirety. Company agrees that it will not assert a
defense in any action to recover a deficiency judgment following a foreclosure
that the sales price realized at the sale was less than the fair market value.
3.07 Sale a Bar; Note Due on Sale.
(a) Any sale of the Mortgaged Property or any
part thereof or any interest therein under or by virtue of this Mortgage,
whether pursuant to foreclosure or otherwise, shall forever be a bar against
Company.
(b) Upon any sale by Lender under or by virtue
of this Mortgage, whether pursuant to foreclosure or power of sale or otherwise,
the entire unpaid principal amount of the Note at the time outstanding shall,
if not previously declared due and payable, immediately
8
become due and payable, together with interest accrued thereon and all other
Indebtedness which this Mortgage by its terms secures.
3.08 Lender Authorized to Execute Deeds. Company irrevocably
appoints Lender its true and lawful attorney in fact coupled with an interest,
in its name and stead and on its behalf, for the purpose of effectuating any
sale, assignment, transfer or delivery for the enforcement hereof, pursuant to
foreclosure or otherwise, to execute and deliver all such deeds, Leases, bills
of sale, assignments, releases and other instruments as may be necessary.
3.09 Application of Proceeds of Sale and Other Moneys. The
proceeds of any sale of the Mortgaged Property or any part thereof or any
interest therein under or by virtue of this Mortgage, whether pursuant to
foreclosure or otherwise, and all other moneys at any time held by Lender as
part of the Mortgaged Property, shall be applied as follows:
First: to the payment of the reasonable costs and expenses of such
sale (including, without limitation, reasonable attorneys' fees and expenses,
the cost of evidence of title and the costs and expenses, if any, of taking
possession of, retaining custody over, repairing, managing, operating,
maintaining and preserving the Mortgaged Property or any part thereof prior to
such sale and the costs, taxes, fees and expenses of transferring the Mortgaged
Property pursuant to such sale), all reasonable costs and expenses of any
receiver of the Mortgaged Property or any part thereof, and any taxes,
assessments or charges prior to the lien of this Mortgage, which Lender may
consider necessary or desirable to pay (in no event shall the Company be
entitled to receive any payment for any services rendered in connection with any
such sale);
Second: to the payment of any Indebtedness secured by this Mortgage,
other than indebtedness with respect to the Note at the time outstanding, which
Lender may consider necessary or desirable to pay in its discretion;
Third: to the payment of all amounts of principal of, premium, if any,
and interest at the time due and payable on the Note at the time outstanding
(whether due by reason of maturity or as an installment of interest or by reason
of any prepayment requirement or by declaration of acceleration or otherwise),
including interest at the Default Rate on any overdue principal and premium, if
any, and (to the extent permitted under applicable law) on any overdue interest;
and in case such moneys shall be insufficient to pay in full the amounts so due
and unpaid upon the Note at the time outstanding, then, first, to the payment of
all amounts of interest at the time due and payable on the Note, and second to
the payment of all amounts of principal at the time due and payable on the Note;
and
Fourth: the balance, if any, held by Lender after payment in full of
all amounts referred to in subdivisions First, Second and Third above, shall,
unless a court of competent jurisdiction may otherwise direct by final order not
subject to appeal, be paid to or upon the direction of Company.
3.10 Appointment of Receiver. If an Event of Default shall
have occurred and be continuing, the Lender, to the extent permitted by law and
without regard to the value, adequacy or sufficiency of the security for the
Indebtedness and other sums secured hereby, shall
9
be entitled as a matter of right, if it so elects, to the appointment of a
receiver to enter upon and take possession of the Mortgaged Property and to
collect all rents, income and other benefits thereof and apply the same as the
court may direct. The reasonable expenses, including receiver's fees, reasonable
attorneys' fees, costs and reasonable agent's compensation, incurred pursuant to
the powers herein contained shall be secured by this Mortgage. The right to
enter and take possession of and to manage and operate the Mortgaged Property
and to collect all rents, income and other benefits thereof, whether by a
receiver or otherwise, shall be cumulative to any other right or remedy
hereunder (or afforded by law or in equity) and may be exercised concurrently
therewith or independently therewith or independently thereof. The Lender shall
be liable to account only for such rents, income and other benefits actually
received by the Lender, whether received pursuant to this Section or Section
3.04.
3.11 Right of Lender to Perform Company's Covenants. If
Company shall fail to make any payment or perform any act required to be made or
performed hereunder, Lender, without notice to or demand upon Company, and
without waiving or releasing any obligation or default, may (but shall be under
no obligation to) make such payment or perform such act for the account and at
the reasonable expense of Company. No such action shall be deemed an eviction of
any tenant of the Mortgaged Property or any part thereof. All sums so reasonably
paid by Lender and all reasonable costs and expenses (including, without
limitation, attorneys' fees and reasonable expenses) so incurred, together with
interest thereon at the Default Rate from the date of payment or incurring,
shall constitute additional Indebtedness secured by this Mortgage and shall be
paid by Company to Lender on demand.
3.12 Suits to Protect the Mortgaged Property. The Lender shall
have the power and authority to institute and maintain any suits and proceedings
as the Lender may deem advisable in its reasonable judgment (a) to prevent any
impairment of the Mortgaged Property by any acts which may be unlawful or any
violation of this Mortgage, (b) to preserve or protect its interest in the
Mortgaged Property, and (c) to restrain the enforcement of or compliance with
any legislation or other governmental enactment, rule or order which might
reasonably be expected to impair the security hereunder or be prejudicial to the
Lender's interest.
3.13 Company to Pay the Note on Any Default in Payment.
(a) If default shall be made in the payment of
any amount due under the Note, this Mortgage or any other instrument securing
the Note or evidencing the Indebtedness, then, the Lender shall be entitled to
seek a judgment against the Company for the whole amount so due and unpaid,
together with reasonable costs and expenses, including, without limitation,
the reasonable compensation, expenses and disbursements of the Lender's agents,
attorneys and other representatives, either before, after or during the
pendency of any proceedings for the enforcement of this Mortgage; and the right
of the Lender to recover such judgment shall not be affected by any taking of
possession or foreclosure sale hereunder, or by the exercise of any other
right, power or remedy for the enforcement of the terms of this Mortgage,
or the foreclosure of the lien hereof.
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(b) In case of a foreclosure sale of all or any
part of the Mortgaged Property and of the application of the proceeds of sale
to the payment of the sums secured hereby, the Lender shall be entitled to
enforce payment from the Company of all amounts then remaining due and unpaid
and to recover judgment against the Company for any portion thereof remaining
unpaid, with interest at the Default Rate.
(c) The Company hereby agrees, to the extent
permitted by law, that no recovery of any such judgment by the Lender and no
attachment or levy of any execution upon any of the Mortgaged Property or any
other property shall in any way affect the lien of this Mortgage upon the
Mortgaged Property or any part thereof or of any lien, rights, powers or
remedies of the Lender hereunder, but such lien, rights, powers and remedies
shall continue unimpaired as before.
(d) Any monies collected or received by the
Lender under this Section 3.13 shall be applied as provided in Section 3.09.
(e) The provisions of this Section shall not be
deemed to limit or otherwise modify the provisions of any guaranty of the
Indebtedness evidenced by the Note or secured by this Mortgage.
3.14 Delay or Omission No Waiver. No delay or omission of
Lender or of any holder of the Note to exercise any right, power or remedy
accruing upon any Event of Default shall exhaust or impair any such right, power
or remedy or shall be construed to waive any such Event of Default or to
constitute acquiescence therein. Every right, power and remedy given to the
Lender may be exercised from time to time and as often as may be deemed
expedient by the Lender.
3.15 No Waiver of One Default to Affect Another. No waiver of
any Event of Default hereunder shall extend to or affect any subsequent or any
other Event of Default then existing, or impair any rights, powers or remedies
consequent thereon. If the Lender (a) grants forbearance or an extension of time
for the payment of any sums secured hereby; (b) takes other or additional
security for the payment of the Indebtedness; (c) waives or does not exercise
any right granted in the Note, this Mortgage or any instrument securing the Note
or evidencing the Indebtedness; (d) releases any part of the Mortgaged Property
from the lien of this Mortgage or any other instrument securing the Note or
evidencing the Indebtedness; (e) consents to the filing of any map, plat or
replat of the Realty; (f) consents to the granting of any easement on the
Realty; or (g) makes or consents to any agreement changing the terms of this
Mortgage or subordinating the lien or any charge hereof, then, except as
otherwise provided by an instrument executed by the Lender, no such act or
omission shall release, discharge, modify, change or affect the original
liability under the Note, this Mortgage or otherwise of the Company or any
subsequent purchaser of the Mortgaged Property or any part thereof or any
Guarantor. No such act or omission shall preclude the Lender from exercising any
right, power or privilege herein granted or intended to be granted in case of
any Event of Default then existing or of any subsequent Event of Default nor,
except as otherwise expressly provided in an instrument executed by the Lender,
shall the lien of this Mortgage be altered thereby, except to the extent of
11
releases as described in clause (d) of the second sentence of this Section 3.15.
In the event of the sale or transfer by operation of law or otherwise of all or
any part of the Mortgaged Property, the Lender, without notice to any person,
firm or corporation, is hereby authorized and empowered to deal with any such
vendee or transferee with reference to the Mortgaged Property or the
Indebtedness secured hereby, or with reference to any of the terms or conditions
hereof, as fully and to the same extent as it might deal with the original
parties hereto and without in any way releasing or discharging any of the
liabilities or undertakings hereunder.
3.16 Compromise of Actions. Any action, suit or proceeding
brought by Lender pursuant to any of the terms of this Mortgage or otherwise,
and any claim made by Lender hereunder may be compromised, withdrawn or
otherwise dealt with by Lender without any notice to or approval of Company,
except as shall be required by law and may not be waived.
3.17 Discontinuance of Proceedings; Position of Parties
Restored. If the Lender shall have proceeded to enforce any right or remedy
under this Mortgage by foreclosure, entry or otherwise and such proceedings
shall have resulted in a final determination adverse to the Lender, then, and in
every such case, the Company and the Lender shall be restored to their former
positions and rights hereunder, and all rights, powers and remedies of the
Lender shall continue as if no such proceedings had occurred or had been taken.
3.18 Remedies Cumulative. Each right, power and remedy of
Lender provided for in this Mortgage or now or hereafter existing at law or in
equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy provided for in this
Mortgage or now or hereafter existing at law or in equity or by statute or
otherwise, and the exercise or beginning of the exercise by Lender of any one or
more of the rights, powers or remedies provided for in this Mortgage or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by Lender of any or all such other
rights, powers or remedies. If the Mortgaged Property is located within the
State of New York, the Lender shall have, in addition to any other rights it
might have, all the rights granted to Lenders pursuant to Section 254 of the
Real Property Law.
3.19 Right of Set-Off. Upon the occurrence and during the
continuance of any Event of Default, the Lender or any affiliate of Lender is
hereby authorized at any time and from time to time, without notice to the
Company (any such notice being expressly waived by the Company), to set off and
apply any and all deposits (general or special, time or demand) at any time held
and other indebtedness at any time owing by the Lender to or for the credit or
the account of the Company against any and all of the obligations of the Company
now or hereafter existing under this Mortgage, the Note or any other agreement
between the Company and/or any of the individuals collectively referred to as
the Company and although such obligations may be unmatured. The rights of the
Lender under this subsection are in addition to all other rights and remedies
(including, without limitation, other rights of set-off) which the Lender may
have. The parties specifically agree that any set-off shall not impede or
interfere with Lender's right to continue any legal action or proceeding to
enforce the Note and this Mortgage, including an action to foreclose this
Mortgage.
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3.20 Interest After Event of Default. If an Event of Default
shall have occurred and be continuing, all sums outstanding and unpaid under the
Note and this Mortgage shall, at the Lender's option, bear interest at the
Default Rate.
3.21 Provisions Subject To Applicable Law. All rights, powers
and remedies provided in this Mortgage may be exercised only to the extent that
the exercise thereof does not violate any applicable provisions of law and are
intended to be limited to the extent necessary so that they will not render this
Mortgage invalid, unenforceable or not entitled to be recorded, registered or
filed under the provisions of any applicable law. If any term of this Mortgage
or any application thereof shall be invalid or unenforceable, the remainder of
this Mortgage and any other application of such term shall not be affected
thereby.
3.22 Prepayment After Default. If following the occurrence of
any Event of Default under this Mortgage and an exercise by the Lender of its
option to declare the whole of the Indebtedness due and payable, the Company
shall tender payment of an amount sufficient to satisfy the entire Indebtedness
secured hereby at any time prior to a foreclosure sale of the Mortgaged
Property, and if at the time of such tender prepayment of the principal balance
of the Note is prohibited, the Company shall, in addition to the said entire
principal, also pay to the Lender a sum equal to the interest which would have
accrued on the principal balance of the Note at the Default Rate from the date
of such tender to the end of the period during which prepaying is prohibited. If
at the time of such tender, prepayment of the Note is permitted, such tender by
Company shall be deemed to be a voluntary prepayment of the said principal
balance of the Note, and the Company shall, in addition to the said entire
principal, also pay to the Lender the applicable prepayment premium, if any,
specified in the Note. All such payments shall also be accompanied by payment of
all accrued interest under the Note.
3.23 Defeasance. If Company shall pay or cause to be paid the
principal of and premium, if any, and interest on the Note, in accordance with
the terms thereof, and if the Company shall pay or cause to be paid all
Indebtedness and other sums payable or secured hereunder by the Company and
shall comply with all terms, conditions and requirements hereof, then this
Mortgage shall be null and void and of no further force and effect and shall be
released by the Lender upon the written request and at the reasonable expense of
the Company.
ARTICLE IV.
SECURITY AGREEMENT
4.01 Security Agreement. The Company expressly agrees,
intending that the Lender rely thereon, that this Mortgage also shall constitute
a "security agreement", as such term is defined in the Uniform Commercial Code
in the jurisdiction wherein the Mortgaged Property is situated (the "Code"). The
Mortgaged Property includes, and shall be deemed to include, inter alia, the
Improvements, the Realty and all fixtures and other property described in the
Granting
13
Clause of the Mortgage, (hereinafter collectively referred to as the "Chattels
and Intangibles") regardless of whether they are held or hereafter acquired, of
the Company in, to, under and above the Mortgaged Property. By executing and
delivering this Mortgage, the Company has granted, in the same manner and with
the same effect described in the Granting Clause hereof, to the Lender, as
additional security, a security interest in the Chattels and Intangibles which
are subject to the Code. If any Event of Default shall occur, the Lender shall
have, in addition to any and all other rights and remedies set forth in this
Mortgage, and may exercise without demand, any and all rights and remedies
granted to a secured party under the Code, including, but not limited to, the
right to take possession of the Chattels and the Intangibles, or any part
thereof, and the right to advertise and sell the Chattels and the Intangibles,
or any part thereof, pursuant to and in accordance with the power of sale
provided for in this Mortgage and Section 3.09 hereof. The Company agrees that
any notice of sale or other action intended by the Lender with respect to the
Chattels and the Intangibles, or any part thereof, shall constitute reasonable
notice if it is sent to the Company not less than ten (10) days prior to any
such sale or intended action.
4.02 Financing Statements. The Company shall execute any and
all such documents (including, without limitation, Financing Statements)
pursuant to the Code, as the Lender may request, to preserve and maintain the
priority of the lien and security interest created hereby on property which may
be deemed personal property or fixtures, and the Company shall pay to the Lender
on demand any reasonable expenses incurred by the Lender in connection with the
preparation, execution and filing of any such documents. The Company hereby
authorizes and empowers the Lender to execute and file, on its behalf, all
Financing Statements and refilings and continuations thereof as the Lender deems
necessary or advisable to create, preserve and protect said lien and security
interest. When and if the Company and the Lender shall respectively become the
Debtor and Secured Party in any Uniform Commercial Code Financing Statement
affecting the Mortgaged Property or any part thereof, this Mortgage shall be
deemed a security agreement as defined in the Code and the remedies for any
violation of the covenants, terms and conditions of the agreements herein
contained shall be (i) as prescribed herein, (ii) by general law, or (iii) as to
such part of the security which is also reflected in said Financing Statement by
the specific statutory consequences now or hereafter enacted and specified in
the Code, all at the Lender's sole election.
4.03 No Impairment. The Company, and the Lender agree that the
filing of a Financing Statement in the records normally having to do with
personal property shall never be construed as in any way derogating from or
impairing the express declaration and intention of the parties hereto, that
everything used in connection with the production of income from the Mortgaged
Property and/or adapted for use therein and/or which is described or reflected
in this Mortgage is, and at all times and for all purposes and all proceedings
both legal or equitable, shall be regarded as part of the real estate encumbered
by this Mortgage irrespective of whether (i) any such property is physically
attached to the Realty, (ii) serial numbers are used for the better
identification of certain equipment items capable of being thus identified in a
recital contained herein or in any list filed with the Lender, or (iii) any such
item is referred to or reflected in any such Financing Statement so filed at any
time. Similarly, the mention in any such Financing Statement of (1) rights in or
to the proceeds of any fire and/or hazard insurance policy or any other
insurance policy, or (2) any award in eminent domain proceedings for a Taking or
for loss
14
of value, or (3) the Company's interest as lessor in any present or future lease
or rights to income growing out of the use and/or occupancy of the property
mortgaged hereby, whether pursuant to lease or otherwise, shall never be
construed as in any way altering any of the rights of the Lender as determined
by this instrument or impugning the priority of the Lender's lien granted hereby
or by any other recorded document, but such mention in the Financing Statement
is declared to be for the protection of the Lender in the event any court or
judge shall at any time hold with respect to clauses (1) , (2) and (3) hereof
that notice of the Lender's priority of interest to be effective against a
particular class of persons (including, but not limited to, a trustee or the
federal government and any subdivisions or entity of the federal government)
must be filed in the Code records.
ARTICLE V.
MISCELLANEOUS PROVISIONS
5.01 Construction of Lender's Rights. All covenants hereof
shall be construed as affording to the Lender rights additional to and not
exclusive of the rights conferred under the provisions of Section 254 and 273 of
the Real Property Law of the State of New York.
5.02 Limitation on Interest. Nothing in this Mortgage, the
Note or in any other agreement between the Company and the Lender shall require
the Company to pay, or the Lender to accept, interest in an amount which would
subject the Lender to any penalty or forfeiture under applicable law. In the
event that the payment of any charges, fees or other sums due hereunder or under
the Note or any such other agreement, which are or could be held to be in the
nature of interest and which would subject the Lender to any penalty or
forfeiture under applicable law, then, ipso facto, the obligations of the
Company to make such payment shall be reduced to the highest rate authorized
under applicable law. Should the Lender receive any payment which is or would be
in excess of the highest rate authorized under law, such payment shall have
been, and shall be deemed to have been, made in error, and shall automatically
be applied to reduce the outstanding principal balance of the Indebtedness.
5.03 Successors in Interest; Definitions. All of the grants,
terms, conditions, provisions and covenants of this Mortgage shall run with the
land, shall be binding upon the Company and shall inure to the benefit of the
Lender, subsequent holders of this Mortgage and their respective successors and
assigns. For the purpose of this Mortgage, the term "Company" shall include and
refer to the Company named herein, any subsequent owner of the Mortgaged
Property, or any part thereof, and their respective heirs, executors, legal
representatives, successors and assigns. If there is more than one Company, all
their undertakings hereunder shall be deemed joint and several. Whenever the
context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural and vice versa.
15
5.04 Jurisdiction. This Agreement shall be governed and
controlled as to validity, enforcement, interpretation, construction, effect and
in all other respects by the internal laws of the State of New York applicable
to contracts made in that State.
5.05 Receipt of Copy of Mortgage; Counterparts. The Company
acknowledges that it has received a true copy of this Mortgage. This Mortgage
may be executed in any number of counterparts, and each of such counterparts
shall for all purposes be deemed to be an original; and all such counterparts
shall together constitute but one and the same mortgage.
5.06 Cover Page. The information set forth on the cover
page hereof is hereby incorporated herein.
5.07 Consent of Lender. Whenever the consent or approval of
the Lender is required herein, the decision whether to consent or approve shall
be in the discretion of the Lender.
5.08 Construction. This Mortgage, the Note and all other
documents executed and delivered in connection herewith or therewith shall be
given a fair and reasonable construction in accordance with the intention of the
parties as expressed herein and therein and without regard to any rule of law
requiring construction against the party who prepares such instruments.
5.9. Addresses for Notices, Etc.
All notices shall be addressed as follows:
If to the Company:
Besicorp Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President - Administration
with a copy to:
▇▇▇▇▇▇▇▇ Brog Leinwand ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: A. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
16
If to Lender:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
c/o Besicorp Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ , ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Poltarek, Esq.
and/or to such other respective addresses and/or addressees as may be designated
by notice given in accordance with the provisions of this Section 5.09.
(a) Any notice, report, demand or other instrument hereunder
shall be given by (a) hand delivery, (b) overnight courier, (c) registered or
certified mail, return receipt requested or, (d) telex or telegram, subsequently
confirmed by registered or certified mail. Any notice, report, demand or other
instrument required or permitted pursuant to this Agreement shall be deemed
given (i) when personally delivered to any party or any officer of the party to
whom it is addressed, (ii) on the earlier of actual receipt thereof or three (3)
days following posting thereof by certified or registered mail, postage prepaid,
or (iii) upon actual receipt thereof when sent by a recognized overnight
delivery service
(b) Any party may change the address to which any such notice,
report, demand or other instrument is to be delivered or mailed, by furnishing
written notice of such change to the other parties, but no such notice of change
shall be effective unless and until received by such other parties.
5.10. Headings. The headings of the articles, sections,
paragraphs and subdivisions of this Mortgage are for convenience of reference
only, are not to be considered a part hereof, and shall not limit or expand or
otherwise affect any of the terms hereof.
5.11. Required Notices. The Company shall notify the Lender
promptly of the occurrence of any of the following: (i) receipt of notice from
any governmental authority relating to the Mortgaged Property; (ii) receipt of
any notice from any tenant leasing all or any portion of the Mortgaged Property
(other than a tenant only renting a storage Unit or units); (iii) any change in
the occupancy of the Mortgaged Property (other than a tenant only renting a
storage Unit or units); (iv) receipt of any notice from the holder of any other
lien or security interest in the Mortgaged Property; or (v) commencement of any
judicial or administrative proceedings by or against or otherwise affecting the
Company, the Mortgaged Property or any entity controlled by
17
or under common control with the Company, or any other action by any creditor
thereof as a result of any default under the terms of any loan.
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
18
5.12. Entire Agreement. This Mortgage embodies the entire
agreement and understanding between the parties and supersedes any prior
agreements and understandings relating to the subject matter of this Mortgage.
IN WITNESS WHEREOF, this Mortgage has been duly executed by the
Company as of the day and year first above written.
In the Presence of:
BESICORP LTD.
----------------------------
By:________________________________
Name:
Title:
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
)ss.:
COUNTY OF NEW YORK )
On the ______ day of [ ] 1999, before me, the undersigned, a notary
public in and for said state, personally appeared ____________________
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
--------------------------------
Notary Public
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the ______ day of [ ] 1999, before me, the undersigned, a notary
public in and for said state, personally appeared ____________________
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
--------------------------------
Notary Public
20
SCHEDULE A
(Description of Realty)
21
STATEMENT ATTACHED TO MORTGAGE
Company(s): Besicorp Ltd.
Lender(s): Besicorp Holdings, Ltd.
Premises: [ ]
Check The Appropriate Box
|_| 1. The attached mortgage covers real property principally improved or to be
improved by one or more structures containing in the aggregate not more than six
(6) residential dwelling units, each dwelling Unit having its own separate
cooking facility.
|X| 2. The attached mortgage does not cover real property improved
as described above.
Dated: [ ], 1999 BESICORP LTD.
By:___________________________
Name:
Title:
having personal knowledge
of the nature of the improvements.
22
Exhibit 4.7(a)
CERTIFICATE
This Certificate is furnished by [ ], [ ] of Besicorp Ltd., a New York
corporation (the "Company") pursuant to Section 4.7 of that certain Amended and
Restated Agreement and Plan of Merger dated November 24, 1999 (the "Agreement")
by and among Besicorp Holdings, Ltd., Besi Acquisition Corp. and Company.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Agreement.
In connection therewith, the undersigned does hereby represent that to
the best of his knowledge and belief:
(a) the representations and warranties made by the Company1 in the
Agreement, and in any certificate or other writing delivered
by the Company pursuant to the Agreement were true and correct
when made and are true and correct as if originally made on
and as of the Closing Date;
(b) all information2 (the "Information") requested by the advisors
(the "Advisors") of the Special Committee) (the "Committee")
of the Board of Directors of the Company, including without
limitation, by ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
P.C. and Josephthal & Co., Inc., has been furnished to such
Advisors and no information useful to the understanding of the
Information has not been furnished to such Advisors; and
(c) other than in the ordinary course of business or the Merger,
the Company is not negotiating, and has no prospects of
negotiating, any arrangements or agreements (i) requiring the
payment of more than $250,000, and (ii) the receipt of more
than $250,000.
---------------------------------------------
1This paragraph will be modified in the case of ▇▇▇▇▇
so that the two references to the Company shall become
references to SunWize Industries, Inc.
2The Information will be modified by the following
phrase: in the case of ▇▇▇▇▇, "with respect toSunWize
Industries, Inc.", in the case of ▇▇▇▇▇, "with respect to
development projects, Inc." and in the case of ▇▇▇▇▇▇,"with
respect to financial matters of the Company and its
subsidiaries."
IN WITNESS WHEREOF, the undersigned has executed this Certificate and
caused this Certificate to be delivered this [ ] day of [ ], [ ].
------------------------------------
Name:
Exhibit 4.7(b-1)
GUARANTY
GUARANTY dated as of [ ], 1999 (as amended, supplemented or modified
from time to time, this "Guaranty") made by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (the "Guarantor") in
favor of (i) ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C., as Agent (in
such capacity, together with any successor agent, the "Agent") for the Holders
(as defined in Section 1 hereof) and for the Individuals (as defined in Section
1 hereof), and (ii) the Holders and Individuals (collectively the Holders and
Individuals, are referred to as the "Beneficiaries").
W I T N E S E T H:
WHEREAS, Guarantor is the sole member of member of Avalon Ventures LLC
which is the principal shareholder of Besicorp Holdings, Ltd. ("Parent");
WHEREAS, Parent is the sole shareholder of Besi Acquisition Corp.
("Acquisition Corp.");
WHEREAS, Parent, Acquisition Corp. and Besicorp Ltd. (the "Company")
have entered into an Amended and Restated Agreement and Plan of Merger dated as
of November 24, 1999 (as amended, supplemented or modified from time to time,
the "Agreement"), providing for the merger of Acquisition Corp. and the Company
as contemplated therein;
WHEREAS, pursuant to the Agreement, each share of common stock of the
Company shall be converted upon the effectiveness of the Merger into the right
to receive the Merger Consideration (as defined in the Agreement);
WHEREAS, the Guarantor's executing this Guaranty is a condition to the
Company's entering into the Agreement and the Company's obligation to consummate
the transactions contemplated by the Agreement;
NOW, THEREFORE, in consideration of the benefits accruing to the
Guarantor, the receipt and sufficiency of which are hereby acknowledged, the
Guarantor hereby makes the following representations and warranties to the Agent
and hereby covenants and agrees with the Agent as follows:
1. As used in this Guaranty, terms defined in the Agreement are used
herein as therein defined, and the following terms shall have the following
meanings:
"Bankruptcy Code" shall mean the United States Bankruptcy
Code, being Title 11 of the United States Code, as the same exists or
may from time to time hereafter be amended, modified, recodified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
"Event of Default" shall mean the occurrence of any of the
following events: (a) any Obligor shall fail to make any Deferred
Payment when due; (b) any Obligor shall fail, beyond any applicable
notice, grace or cure period, to make any payment or shall fail to
keep, observe, comply with or perform any term, provision, covenant,
warranty, agreement, condition or undertaking on its part required to
be paid, complied with or performed or observed, by the provisions of
the Agreement, or any of the other agreements, documents or instruments
executed and/or delivered by the Obligors in connection with the
Agreement (other than the Secured Promissory Note (the "Note") of the
Company executed by the Company pursuant to the Agreement and payable
to Parent and the Security Agreement (the "Security Agreement") and the
Mortgage and Security Agreement (the "Mortgage") executed in connection
with the Note); (c) any Obligor shall (i) commence any case, proceeding
or other action under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency,
reorganization, or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition, or other
relief with respect to its debts; (ii) commence any case, proceeding or
other action seeking appointment of a receiver, trustee, custodian, or
other similar official for it or for all or any substantial part of its
assets; or (iii) make a general assignment for the benefit of its
creditors; (d) there shall be commenced against any Obligor any case,
proceeding or other action of a nature referred to in clause (c) above
that (i) results in the entry of an order for relief or any such
adjudication or appointment, or (ii) remains undismissed, undischarged,
or unbonded for a period of thirty (30) days; or (e) there shall be
commenced against any Obligor any case, proceeding, or other action
seeking issuance of a warrant of attachment, execution, distraint, or
similar process against all or any substantial part of its assets that
results in the entry of an order for any such relief that shall not
have been vacated, discharged, or stayed or bonded pending appeal
within thirty (30) days from the entry thereof; (f) any Obligor shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clauses
(a), (b), (c), (d) and (e) above; or (g) any Obligor shall generally
not, or shall be unable to, or shall admit in writing its inability to,
pay its debts as they become due.
"Holders" shall mean the Company Shareholders as defined in
the Agreement.
"Individuals" shall mean the Indemnified Persons as defined in
the Agreement.
-2
"Obligations" shall mean the obligations (i) to pay the
Deferred Payment Right, (ii) to pay the D&O Insurance premiums, (iii)
to reimburse the Individuals pursuant clause (ii) of Section 4.4.1 to
the Agreement and (iv) indemnify the Individuals pursuant to Section
4.4.3 of the Agreement.
"Obligors" shall mean Parent, Acquisition Corp., Surviving
Corporation and the Company.
2. (a) Except to the extent that assets of the Deferred Payment Fund
(as defined in the Agreement) are subject to liens, judgments or acts by
Governmental Entities(as defined in the Agreement), other than liens, judgments
or acts which are the result of voluntary acts of the Company, that prohibit the
payment by the Company of its obligations to the Company Shareholders pursuant
to Section 2.4, the Guarantor hereby unconditionally and irrevocably guarantees
to the Agent, the Holders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment by the Parent,
Acquisition Corp. and the Surviving Corporation when due (whether at the stated
maturity, by acceleration or otherwise) of the Deferred Payment Rights (other
than the Escrow Fund Distributions (as such term is defined in the Agreement)
released by the Escrow Agent for the March 1999 Escrow Fund pursuant to Exhibit
4.11 to the Agreement) and all payments pursuant to Section 2.4 of the Agreement
as well as the Deferred Payment Rights and all payments pursuant to Section 2.4
of the Agreement which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due, and the Guarantor further agrees to pay any
and all reasonable expenses (including, without limitation, all reasonable fees
and disbursements of counsel) which may be paid or incurred by the Agent or any
Holder in enforcing, or obtaining advice of counsel in respect of, any rights
with respect to, or collecting, any or all of the Deferred Payment Rights and
all payments pursuant to Section 2.4 of the Agreement and/or enforcing any
rights with respect to, or collecting against, the Guarantor under this
Guaranty.
(b) Additionally, the Guarantor hereby unconditionally and
irrevocably guarantees to the Agent, the Individuals and their respective
successors, indorsees, transferees and assigns on demand (i) the prompt and
complete payment by the Parent, Acquisition Corp. and Surviving Corporation of
any and all insurance premiums required in connection with D&O Insurance
contemplated by Section 4.4.1 of the Agreement, (ii) the prompt and complete
reimbursement by the Parent, Acquisition Corp. and Surviving Corporation of the
Individuals as required by such Section 4.4.1 and(ii) the obligations of the
Obligors pursuant to Section 4.4.3 of the Agreement.
3. The liability of the Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Obligations whether
executed by the Guarantor, any other guarantor or by any other party, and the
liability of the Guarantor hereunder shall not be affected or impaired by (a)
any direction as to application of payment by any Obligor or by any other party,
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of
-3-
any other party as to the Obligations, (c) any payment on or in reduction of any
such other guaranty or undertaking, (d) any dissolution, termination or
increase, decrease or change in personnel by any Obligor or (e) any payment made
to the Agent or any Beneficiary on the Obligations which any such Person repays
to any Obligor pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and the Guarantor
waives any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding. This is a guaranty of payment and not of
collection.
4. The obligations of the Guarantor hereunder are independent of the
obligations of any other guarantor of any of the Obligations, or the Obligors
and a separate action or actions may be brought and prosecuted against the
Guarantor whether or not action is brought against any other guarantor of any of
the Obligations or any Obligor and whether or not any other guarantor of any of
the Obligations or any Obligor be joined in any such action or actions. The
Guarantor waives, to the fullest extent permitted by law, the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by the Obligor or other circumstance which operates to toll
any statute of limitations as to the Obligors shall operate to toll the statute
of limitations as to the Guarantor.
5. The Guarantor hereby waives (to the fullest extent permitted by
applicable law) notice of acceptance of this Guaranty and notice of any
liability which may apply (including notice of the existence, creation or
incurrence of new or additional indebtedness), and waives promptness, diligence,
presentment, demand of payment, protest, notice of dishonor or nonpayment of any
such liabilities, suit or taking of other action by the Agent or any Beneficiary
against, and any other notice to, any party liable thereon (including the
Guarantor or any other guarantor of any of the Obligations).
6. The Agent or any Beneficiary may (except as shall be required by
applicable statute and cannot be waived) at any time and from time to time
without the consent of, or notice to, the Guarantor, without incurring
responsibility to the Guarantor, without impairing or releasing the obligations
of the Guarantor hereunder, upon any terms or conditions and in whole or in
part:
(a) exercise or refrain from exercising any rights
against any Obligor or otherwise act or refrain from acting;
(b) settle or compromise any of the Obligations, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
any Obligor to creditors of such Obligor;
-4-
(c) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Obligors to the Agent or any Beneficiary
regardless of what liabilities of the Obligors remain unpaid;
(d) consent to or waive any breach of, or any act, omission or
default under, the Agreement, any Transaction Agreement or any of the
instruments or agreements referred to therein, or otherwise amend, modify or
supplement the Agreement, any Transaction Agreement or any of such other
instruments or agreements; and/or
(e) act or fail to act in any manner referred to in this
Guaranty which may deprive the Guarantor of its right to subrogation against any
Obligor to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any part
of the Obligations or of any security therefor shall affect, impair or be a
defense to this Guaranty, and (except to the extent, if any, as shall be
required by applicable statute and cannot be waived) this Guaranty shall be
primary, absolute and unconditional notwithstanding the occurrence of any event
or the existence of any other circumstances which might constitute a legal or
equitable discharge of a surety or guarantor, except payment in full of the
Obligations. No provision of this Guaranty shall be deemed to be a waiver by the
Guarantor of its right to assert that the Obligations have been paid in full.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of the
Agent or any Beneficiary in exercising any right, power or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which the Agent and the Beneficiaries would otherwise have.
No notice to or demand on the Guarantor in any case shall entitle the Guarantor
to any other further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or any Beneficiary to any other
or further action in any circumstances without notice or demand. It is not
necessary for the Agent or any Beneficiary to inquire into the capacity or
powers of any Obligor or the officers, directors, partners or companies acting
or purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
9. Any indebtedness of any Obligor now or hereafter held by the
Guarantor is hereby subordinated to the indebtedness of such Obligor to the
Agent and the Beneficiaries; and such indebtedness of such Obligor to the
Guarantor, if the Agent, after an Event of Default has occurred and is
continuing, so requests, shall be collected, enforced and received by the
Guarantor as trustee for the Agent and the Beneficiaries and be paid over to the
Agent, for the
-5-
benefit of the Beneficiaries, on account of the indebtedness of such Obligor to
the Agent and the Beneficiaries, but without affecting or impairing in any
manner the liability of the Guarantor under the other provisions of this
Guaranty. Prior to the transfer by the Guarantor of any note or negotiable
instrument evidencing any indebtedness of any Obligor to the Guarantor, the
Guarantor shall ▇▇▇▇ such note or negotiable instrument with a legend that the
same is subject to this subordination. Without limiting the generality of the
foregoing, the Guarantor hereby agrees with the Agent and the Beneficiaries that
he will not exercise any right of subrogation which he may at any time otherwise
have as a result of this Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code or otherwise) until all Obligations have been irrevocably paid
in full in cash.
10. (a) The Guarantor waives any right (except as shall be required by
applicable statute or law and cannot be waived) to require the Agent and the
Beneficiaries to: (i) proceed against any Obligor, any other guarantor of any of
the Obligations or any other party; (ii) proceed against or exhaust any security
held from any Obligor, any other guarantor of any of the Obligations or any
other party; or (iii) pursue any other remedy in the Company's or any
Beneficiary's power whatsoever. The Guarantor waives (to the fullest extent
permitted by applicable law) any defense based on or arising out of any defense
of the Obligors, any other guarantor of any of the Obligations or any other
party other than payment in full of the Obligations, including, without
limitation, any defense based on or arising out of the disability of any
Obligor, any other guarantor of any of the Obligations or any other party, or
the unenforceability of the Obligations or any part thereof from any cause, or
the cessation from any cause of the liability of any Obligor other than payment
in full of the Obligations. The Agent and the Beneficiaries may, at their
election, foreclose on any security held by the Agent or any Beneficiary by one
or more judicial or nonjudicial sales, or exercise any other right or remedy the
Agent or any Beneficiary may have against the Obligors or any other party, or
any security, without affecting or impairing in any way the liability of the
Guarantor hereunder except to the extent the Obligations have been paid in full.
The Guarantor waives any defense arising out of any such election by the Agent
and the Beneficiaries, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
the Guarantor against the Obligors or any other party or any security.
(b) The Guarantor assumes all responsibility for being and
keeping himself informed of each Obligor's financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks which the Guarantor
assumes and incurs hereunder, and agrees that the Agent and the Beneficiaries
shall have no duty to advise the Guarantor of information known to them
regarding such circumstances or risks.
11. The Agent and the Beneficiaries agree that no Beneficiary shall
have any right individually to seek to enforce or to enforce this Guaranty, it
being understood and agreed that
-6-
such rights may be exercised solely by the Agent for the benefit of the
Beneficiaries upon the terms of this Guaranty.
12. In order to induce the Company to enter into and consummate the
transactions contemplated by the Agreement, the Guarantor represents, warrants
and covenants that:
(a) the Guarantor (i) is not in violation of any applicable
law, statute, rule, regulation or ordinance in any respect which could
reasonably be expected to have a Material Adverse Effect, and (ii) is not in
violation of any order of any court, governmental authority or arbitration board
or tribunal;
(b) the Guarantor has the power and authority to execute,
deliver and perform each of the Transaction Agreements to which he is a party
(including, without limitation, this Guaranty);
(c) no consent of any other Person and no consent or
authorization of, filing with or other act by or in respect of, any Governmental
Entity or any other Person is required in connection with the execution,
delivery or performance by the Guarantor, or the validity or enforceability of,
the Transaction Agreements to which the Guarantor is a party (including, without
limitation, this Guaranty), except for consents, authorizations, filings or acts
which have been made or obtained, as the case may be, and are in full force and
effect;
(d) the Transaction Agreements to which the Guarantor is a
party (including, without limitation, this Guaranty) have been duly executed and
delivered by the Guarantor and constitute the legal, valid and binding
obligations of the Guarantor enforceable against the Guarantor in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law);
(e) the execution, delivery and performance by the Guarantor
of the Transaction Agreements to which the Guarantor is a party (including,
without limitation, this Guaranty) will not (i) violate any law, statute, rule,
regulation or ordinance or any order, writ, junction or decree of any court,
Governmental Entity or arbitration board or tribunal, or (ii) conflict or be
inconsistent with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or (other than
pursuant to the Agreement or the Transaction Agreements) result in the creation
or imposition of (or the obligation to create or impose) any lien upon any of
the property or assets of the Guarantor pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, credit agreement or other material
agreement or other instrument to which the Guarantor is a party or by which he
or any of its property or assets is bound or to which he may be subject; and
-7-
(f) except as disclosed in the Agreement, there are no pending
or threatened litigations, arbitrations, actions or proceedings relating to of
affecting the Guarantor which could reasonably be expected to have a Material
Adverse Effect.
13. The Guarantor covenants and agrees that on and after the date
hereof and until the Obligations (other than indemnities in the Agreement and
analogous provisions in the Transaction Agreements which are not then due and
payable) have been paid in full, and the Agreement has been terminated, the
Guarantor shall take, or will refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any
provision, covenant or agreement contained in the Agreement, and so that no
Event of Default, is caused by the actions of the Guarantor or any of its
Obligors.
14. The Guarantor hereby agrees to pay all costs and expenses of the
Agent and each Beneficiary in connection with the enforcement of this Guaranty
and any amendment, waiver or consent relating hereto (including, without
limitation, the reasonable fees and disbursements of counsel employed by the
Agent or any Beneficiary).
15. This Guaranty shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the Agent and the
Beneficiaries and their respective successors and assigns.
16. None of the terms or provisions of this Guaranty may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Guarantor and the Agent, provided that any provision of this Guaranty may be
waived by the Agent in a letter or agreement executed by the Agent or by telex
or facsimile transmission from the Agent.
17. The Guarantor acknowledges that an executed (or conformed) copy of
the Agreement and each Transaction Agreement has been made available to him and
he is familiar with the contents thereof.
18. In addition to any rights now or hereafter granted under applicable
law (including, without limitation, Section 151 of the New York Debtor and
Creditor Law) and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default, the Agent and the
Beneficiaries are hereby authorized at any time or from time to time, without
notice to the Guarantor or to any other Person, any such notice being expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by the Agent or
such Beneficiary, as the case may be, to or for the credit or the account of the
Guarantor, against and on account of the obligations and liabilities of the
Guarantor to the Agent or such Beneficiary, as the case may be, under any
Transaction Agreement (including, without limitation, under this Guaranty),
irrespective of whether or not the Agent or such Beneficiary shall have made any
demand hereunder and
-8-
although said obligations, liabilities, deposits or claims, or any of them,
shall be contingent or unmatured.
19. Any notice or request hereunder may be given to the Guarantor at
its address (including telecopy number) set forth under its signature below or
to the Agent or any Beneficiary at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: A. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., fax: (▇▇▇) ▇▇▇-▇▇▇▇ or, at such
other address as may hereafter be specified in a notice designated as a notice
of change of address under this Section. Any notice or request hereunder shall
be given by (a) hand delivery, (b) overnight courier, (c) registered or
certified mail, return receipt requested, (d) telex or telegram, subsequently
confirmed by registered or certified mail, or (e) telecopy with electronic
confirmation of its receipt. Any notice or other communication required or
permitted pursuant to this Guaranty shall be deemed given (i) when personally
delivered to any party or any officer of the party to whom it is addressed, (ii)
on the earlier of actual receipt thereof or three (3) days following posting
thereof by certified or registered mail, postage prepaid, (iii) upon actual
receipt thereof when sent by a recognized overnight delivery service or (iv)
upon actual receipt thereof when sent by telecopier with electronic confirmation
of its receipt.
20. If claim is ever made upon the Agent or any Beneficiary for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including any Obligor), then and in such event the
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon the Guarantor, notwithstanding any revocation hereof or
other instrument evidencing any liability of any Obligor, and the Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
21. This Guaranty shall be governed by and construed in accordance with
the laws of the State of New York applied to contracts to be performed wholly
within the State of New York, without giving effect to the principles of
conflicts of law. Any judicial proceeding brought by or against the Guarantor
with respect to this Guaranty or any related agreement may be brought in the
Supreme Court of the State of New York located in the County of New York or in
the United States District Court for the Southern District of New York and, by
execution and delivery of this Guaranty, the Guarantor accepts for himself and
in connection with his properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Guaranty. The
Guarantor hereby waives personal service of any and all process upon him and
consents that all such service of process may be made by registered mail (return
receipt requested) directed to the Guarantor at his address set forth under his
signature below and service so made
-9-
shall be deemed completed five (5) days after the same shall have been so
deposited in the mails of the United States of America. Nothing herein shall
affect the right to serve process in any manner permitted by law or shall limit
the right of Agent or any Beneficiary to bring proceedings against the Guarantor
in the courts of any other jurisdiction. The Guarantor waives any objection to
jurisdiction and venue of any action instituted hereunder in any court referred
to above and shall not assert any defense based on lack of jurisdiction or venue
or based upon forum non conveniens. Any judicial proceeding by the Guarantor
against Agent or any Beneficiary involving, directly or indirectly, any matter
or claim in any way arising out of, related to or connected with this Guaranty
or any related agreement, shall be brought only in the Supreme Court of the
State of New York located in the County of New York or in the United States
District Court for the Southern District of New York.
22. GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS GUARANTY OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE GUARANTOR, THE AGENT AND THE BENEFICIARIES OR ANY OF THEM WITH
RESPECT TO THIS GUARANTY OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED
OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR
THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENT THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY OF GUARANTOR, THE AGENT AND THE BENEFICIARIES MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE GUARANTOR HERETO TO THE WAIVER OF HIS RIGHT TO
TRIAL BY JURY.
23. All payments made by the Guarantor hereunder will be made without
set off, counterclaim or other defense.
24. If any part of this Guaranty is contrary to, prohibited by, or
deemed invalid under applicable laws or regulations, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
25. The Guarantor acknowledges that the rights and responsibilities of
the Agent under this Guaranty with respect to any action taken by the Agent or
the exercise or non-exercise by the Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Guaranty shall, as among the Agent and the Beneficiaries, be
governed by the Guaranty and such other agreements with respect thereto as may
exist from time
-10-
to time among them but, as between the Agent and the Guarantor, the Agent shall
be conclusively presumed to be acting as Agent for the Beneficiaries with full
and valid authority so to act or refrain from acting, and neither the Guarantor
nor the Obligors shall not be under any obligation or entitlement to make any
inquiry respecting such authority.
IN WITNESS WHEREOF, the Guarantor has executed and delivered this
Guaranty as of the day and year first above written.
ATTEST: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------- ---------------------------
Name:
Title:
Address for Notices to the Guarantor:
c/o Besicorp Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-11-
Exhibit 4.7(b-2)
ESCROW AGREEMENT
ESCROW AGREEMENT dated as of the [ ] day of [ ], 1999, by
and between
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Guarantor");
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.C.,
having its office at 1345 Avenue of the Americas, New York,
New York 10105 (the "Agent") and
[ ] (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, Besicorp Holdings, Ltd., Besi Acquisition Corp.
(together, "Purchaser") and Besicorp Ltd. (the "Buyer") are parties to an
amended and restated agreement and plan of merger dated November 24, 1999, (the
"Agreement"); and
WHEREAS, the Agreement contemplates the execution and delivery
of a Guaranty by the Guarantor for the benefit of the Agent; and
WHEREAS, the Guaranty contemplates the execution and delivery
of an Escrow Agreement by the parties hereof.
NOW, THEREFORE, the parties hereto agree as follows:
1. Capitalized terms used herein without definition shall have
the same meaning as ascribed to them in the Agreement.
2. Escrow Agent acknowledges the receipt from Guarantor of
$100,000 (the "Escrow Funds") and agrees to hold and disburse the Escrow Funds
pursuant to the terms hereof. The Escrow Funds shall be deposited and maintained
by Escrow Agent in an interest-bearing bank account at Bankers Trust Company or
another nationally recognized financial institution. Escrow Agent shall not be
responsible for any interest earned on the Escrow Funds, except for such
interest
as is actually received, nor for the loss of any interest arising from the
withdrawal of the Escrow Funds prior to the date of maturity of any deposit.
3. (a) The parties acknowledge that the Escrow Funds shall
serve as a source of funding for amounts owing by the Guarantor to the
Beneficiaries (as such term is defined in the Guaranty) pursuant to Section 2(b)
of the Guaranty ("Claims"). If the Agent shall request a disbursement from the
Escrow Fund associated with any Claim, it shall give notice of such request
executed by Agent, to the Escrow Agent and Guarantor, which notice shall set
forth the amount requested, the basis for such request, and reasonable
documentation to support such request (such notice being substantially in the
form of Exhibit A hereto).The Escrow Agent shall disburse the amount requested
within 10 days of its receipt of the notice in the event the Escrow Agent shall
not have received a notice of objection from Guarantor within such period. In
the event the Escrow Agent shall receive a timely notice of objection from the
Guarantor, it shall not disburse the amount requested until it shall have
received (i) the joint written notice of the Guarantor and Agent setting forth
the joint direction of such parties (such notice being substantially in the form
of Exhibit B hereto), (ii) a written instrument representing a final and
non-appealable order or similar direction with respect to the disposition of
such amount issued by the arbitrator or arbitration forum, or (iii) a certified
copy of a final and non-appealable judgment of a court of competent jurisdiction
directing the disbursement of such funds; the Escrow Agent shall also be
entitled to deposit such Escrow Funds with the clerk of the court in which any
litigation between the parties is pending, or with the clerk of an appropriate
court in New York, New York). Notwithstanding the foregoing, the Guarantor shall
not unreasonably withhold its consent to a request by the Agent for payment of
Claims.
(b) At any time following the sixth anniversary of the date hereof that
all Claims that have been set forth in notices provided under Sections 3(a) of
this Agreement have been settled and paid in accordance with the provisions of
Section 3(a), no such claims remain outstanding, and that, in the reasonable
judgement of Buyer, no future Claims are foreseeable, Guarantor may, at its
option, notify the Escrow Agent and the Agent that all of such conditions have
been fulfilled. In the event the Escrow Agent shall not have received a notice
of objection from the Agent with 30 days after delivery of such notice, it shall
be required to disburse all amounts then remaining in the Escrow Fund to
Guarantor and this Agreement shall terminate. In the event that the Escrow Agent
shall receive a timely notice of objection from the Agent, it shall not disburse
any portion of the Escrow Fund and shall disburse the Escrow Fund only in
accordance with the provisions of the fourth sentence of Section 3(a) hereof.
4. Escrow Agent shall not be liable in any way or to any
person for its refusal to comply with adverse claims and demands being made upon
it, and shall not be responsible for any act or failure to act on its part, nor
shall it have any liability under this Escrow Agreement, except in the case of
willful default or gross negligence. This Escrow Agreement shall terminate and
Escrow Agent shall be automatically released from all responsibility and
liability upon Escrow Agent's delivery or deposit of the Escrow Funds in
accordance with the provisions of this Escrow Agreement.
-2-
5. Escrow Agent or any member of its firm shall be permitted
to act as counsel for Purchaser in any dispute or question as to any matter
arising out of the Agreement or this Escrow Agreement.
6. Escrow Agent may resign or be discharged at any time and,
in such event, shall deliver the Escrow Funds pursuant to the joint written
instructions of Guarantor and Agent or, in the absence of such instructions, may
deposit the Escrow Funds with the clerk of an appropriate court in New York, New
York.
7. Escrow Agent shall be indemnified by Guarantor against any
liabilities, damages, losses, costs or expenses incurred by, or claims or
charges made against, Escrow Agent (including reasonable counsel fees,
disbursements and court costs) by reason of its acting or failing to act in
connection with any of the matters contemplated by, or in carrying out the terms
of, this Escrow Agreement, except as a result of its willful malfeasance or
gross negligence.
8. Any notice or communication pursuant to this Escrow
Agreement shall be delivered in accordance with the provisions of the Guaranty,
addressed to Guarantor, and Agent and the Escrow Agent at the addresses set
forth above.
Notice shall be deemed effective as provided in the Guaranty.
9. This Escrow Agreement, the Guaranty and the Agreement set
forth the entire understanding of the parties hereto and may not be changed
orally.
-3-
IN WITNESS WHEREOF, the parties hereto have executed this
Escrow Agreement as of the date and year first above written.
GUARANTOR:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
AGENT:
▇▇▇▇▇▇▇▇ BROG LEINWAND ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.C.
By:
------------------------------
A Member of the Firm
ESCROW AGENT:
[ ]
By:
------------------------------
A Member of the Firm
-4-
Exhibit A
FORM OF DISBURSEMENT NOTICE
CERTIFICATE
This certificate is being issued pursuant to Section 3(a) of that
certain Escrow Agreement dated as of [ ], 1999 by and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (the
"Guarantor"), ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.C.("Agent") and [
], as Escrow Agent (the "Escrow Agreement"). Terms not defined in this
certificate shall have the meanings set forth in the Escrow Agreement. The
undersigned, a member of the Agent, hereby
certifies that:
1. Agent is requesting the Escrow Agent release the amount of
$_______ of the Escrow Fund.
2. Agent is requesting the amount in Paragraph 1 above on account of
[brief description of the claim] (the "Claim");
3. Attached hereto is documentation which supports the amount of
the Claim; and
4. A copy of this Certificate, including all attachments, has been sent
to the Guarantor in the manner set forth in the Escrow Agreement.
IN WITNESS WHEREOF, Agent has executed and delivered this Certificate
as of the ________day of ___________ ________.
▇▇▇▇▇▇▇▇ BROG LEINWAND ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.C.
By:
-----------------------------
A Member of the Firm
-5-
Exhibit B
FORM OF JOINT DISBURSEMENT NOTICE
CERTIFICATE
This certificate is being issued pursuant to Section 3(a) of
that certain Escrow Agreement dated as of [ ], 1999 by and
among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (the "Guarantor"), ▇▇▇▇▇▇▇▇ Brog Leinwand ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇ P.C.("Agent") and [ ], as Escrow Agent (the "Escrow Agreement").
Terms not defined in this certificate shall have the meanings set forth in
the Escrow Agreement. The undersigned, a member of the Agent and the Guarantor,
each hereby certify that:
1. On __________, ___ Agent filed a certificate (a copy of which was
attached to this certificate with the Escrow Agent) (the "Disputed Certificate")
with the Escrow Agent and the other parties required under Section 3 of the
Escrow Agreement.
2. The other party receiving the Disputed Certificate disputed an
element of the Disputed Certificate in accordance with the above provision of
the Escrow Agreement.
3. The parties hereto are now jointly requesting the Escrow Agent
release the amount of $_______ of the Escrow Fund to Agent as the agreed-to
payment with respect to the Disputed Certificate.
IN WITNESS WHEREOF, Guarantor and Agent have executed and delivered
this Certificate as of the ________day of ___________ ________.
GUARANTOR:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
AGENT:
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.C.
By:
-------------------------------
A Member of the Firm
-6-
Exhibit 4.11
FORM OF BESICORP LTD.'S IRREVOCABLE INSTRUCTION NOTICE
INSTRUCTIONS
These Instructions are being issued in connection with Section 4 of
that certain Escrow Agreement dated as of March 22, 1999 by and among Besicorp
Group Inc., a New York corporation; Besicorp Ltd., a New York corporation; BGI
Acquisition Corporation, a New York corporation; BGI Acquisition LLC, a Wyoming
limited liability company; and ▇▇▇▇▇▇▇▇ Brog Leinwand ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
P.C. (the "Escrow Agreement"). The undersigned, a duly authorized officer of BL,
hereby irrevocably informs and instructs the Escrow Agent that:
1. BL is a party to an amended and restated agreement and plan of
merger (the "Merger Agreement") dated as of November 24, 1999 which provides for
the distribution of monies received by BL pursuant to Section 4 of the Escrow
Agreement. Terms not defined in this certificate shall have the meanings set
forth in the Merger Agreement.
2. BL hereby instructs the Escrow Agent to distribute all monies to be
released pursuant to Section 4 of the Escrow Agreement to the entities listed
below as follows:
Name proportion to be released
---- -------------------------
Continental Stock Transfer & the number of shares of Common Stock held of record by
Trust Co., or the successor the Company Shareholders immediately prior to the
thereto under the Paying Effective Date
Agent Agreement attached hereto as --------------------------------------------------------
Exhibit A the sum of the number of shares of Common Stock held of
record by the Company Shareholders, the Objecting
Shareholders and the Ineligible Shareholders immediately
prior to the Effective Date and the number of Management
Restricted Shares which have been cancelled pursuant to
Section 4.9 of the Merger Agreement prior thereto.
BL the sum of the number of shares of Common Stock held of
record by the Objecting Shareholders and the Ineligible
Shareholders immediately prior to the Effective Date and
the number of Management Restricted Shares which have
been cancelled pursuant to Section 4.9 prior to the
Effective Date
--------------------------------------------------------
the sum of the number of shares of Common Stock held of
record by the Company Shareholders, the Objecting
Shareholders and the Ineligible Shareholders immediately
prior to the Effective Date and the number of Management
Restricted Shares which have been cancelled pursuant to
Section 4.9 prior thereto.
These instructions are intended to be irrevocable and the
other parties to the Merger Agreement would not have entered into the Merger
Agreement but for the delivery of these instructions.
3. A copy of this Certificate, including all attachments, has been sent
to Buyer in the manner set forth in the Indemnification Agreement.
IN WITNESS WHEREOF, BL has executed and delivered this Instruction as
of the ________day of ___________ ________.
BESICORP LTD.
By:
-------------------------------
By:
Its:
Exhibit A
EXHIBIT 5.2.3
FORM OF OPINION OF ZEICHNER, ELLMAN, & ▇▇▇▇▇▇
[Subject to Counsel's standard assumptions and qualifications]
1. Parent is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York. Acquisition Corp is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York. Each of Parent and Acquisition Corp has all necessary corporate power
and authority to conduct its business as now being conducted.
2. Each of Parent and Acquisition Corp has full corporate power and authority to
enter into and perform the Agreement and each of the other Transaction
Agreements to which it is a party. The execution and delivery of the Agreement
and each of the other Transaction Agreements by Acquisition Corp and Parent and
the performance by Acquisition Corp and Parent of their respective obligations
thereunder have been duly authorized by all requisite corporate action. The
Agreement and each of the other Transaction Agreements to which it is a party
have been duly executed and delivered by duly authorized officers of Acquisition
Corp and Parent and each constitutes a valid, legal and binding obligation of
Acquisition Corp and Parent enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to
time in effect affecting the enforcement of creditors' rights generally.
3. No Authorization from any Governmental Entity is required by or with respect
to Parent or Acquisition Corp in connection with the execution and delivery of
the Agreement or the other Transaction Agreements by Acquisition Corp and Parent
or the consummation by Parent and Acquisition Corp of the transactions
contemplated thereby.
4. Neither the execution and delivery of the Agreement or any of the other
Transaction Agreements by Parent or Acquisition Corp, nor the consummation by
Parent or Acquisition Corp of the transactions contemplated hereby or thereby,
will (i) conflict with or result in a breach of any of the terms or provisions
of the Certificate of Incorporation or By-Laws of Acquisition Corp, or of Parent
or of any statute or administrative regulation, or, to our Actual Knowledge, of
any order, writ, injunction, judgment or decree of any court or governmental
authority or of any arbitration award to which Acquisition Corp or Parent is a
party or by which Parent or Acquisition Corp is bound; or (ii) to our Actual
Knowledge, violate, conflict with, breach, constitute a default (or give rise to
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or result in the creation of any Encumbrance upon any of the
properties or assets of Parent or Acquisition Corp under, any Parent Obligation,
except for such violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens or other Encumbrances that do not and will
not, individually or in the aggregate, (x) have a Material Adverse Effect on
Parent or Acquisition Corp or (y) impair Parent or Acquisition Corp's ability to
perform its obligations under the Agreement or any of the other Transaction
Agreements. Without limiting the generality of the foregoing, to our Actual
Knowledge, neither Parent nor Acquisition Corp is subject to any Parent
Obligation pursuant to which timely performance of the Agreement or the Merger
may be prohibited, prevented or materially delayed.
EXHIBIT 5.3.3
FORM OF OPINION OF ▇▇▇▇▇▇▇▇ BROG LEINWAND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ P.C.
[Subject to Counsel's standard assumptions and qualifications]
1. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of its incorporation; and has all necessary
corporate power and authority to conduct its business as now being conducted.
2. The Company has full corporate power and authority to enter into and perform
the Transaction Agreements to be entered into in connection with the Agreement
and the Merger to which it is a party. The execution and delivery of this
Agreement and each of the other Transaction Agreements by the Company and the
performance by the Company of its obligations thereunder have been duly
authorized and approved by all requisite corporate action. The Agreement and
each of the other Transaction Agreements have been duly executed and delivered
by duly authorized officers of the Company and each constitutes a valid, legal
and binding obligation of the Company enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws from time to time in effect affecting the enforcement of creditors' rights
generally.
3. To our Actual Knowledge there are no subscriptions, options, stock
appreciation rights, warrants, rights (including preemptive rights), calls,
convertible securities or other agreements or commitments of any character
relating to the issued or unissued capital stock or other securities of the
Company obligating the Company to issue, or register the sale of, any securities
of any kind.
4. Other than Proxy Statement and the Schedule 13E-3, no Authorization from any
Governmental Entity is required by or with respect to the Company in connection
with the execution and delivery of the Agreement or the other Transaction
Agreements by the Company or the consummation by the Company of the transactions
contemplated thereby.
5. Neither the execution and delivery of the Agreement or any of the other
Transaction Agreements by the Company, nor the consummation by the Company of
the transactions contemplated hereby or thereby, will conflict with or result in
a breach of any of the terms or provisions of the Certificate of Incorporation
or By-Laws of the Company or of any statute or administrative regulation, or, to
our Actual Knowledge, of any order, writ, injunction, judgment or decree of any
court or governmental authority or of any arbitration award to which the Company
is a party or by which the Company is bound.