AGREEMENT AND
PLAN OF REORGANIZATION
DATED APRIL 28, 1998
BETWEEN
HEALTH EMPORIUM, INC.
AND
PACIFIC ENGINEERING SYSTEMS, INC.
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is entered into this 28th day of April, 1998 by and between HEALTH
EMPORIUM, INC., a Delaware corporation ("HEI" and "Surviving
Corporation") and PACIFIC ENGINEERING SYSTEMS, INC., a California
corporation, ("Pacific").
RECITALS
A. Subject to and in accordance with the terms and
conditions of this Agreement and pursuant to the Certificate of
Merger attached hereto as Exhibit A ("Certificate of Merger"), the
parties intend that Pacific will merge with and into HEI (the
"Merger"), whereby at the Effective Time, all of the Pacific Common
Stock will be converted into ten million nine hundred twenty
thousand (10,920,000) shares of common stock of HEI (the "HEI Common
Stock").
B. For federal income tax purposes, it is intended that
the Merger shall qualify as a tax free reorganization within the
meaning of Section368(a)(1)(A) of the Code.
C. The parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other
as an inducement to the consummation of the Merger.
AGREEMENT
NOW, THEREFORE, in reliance on the foregoing recitals and in
and for the consideration and mutual covenants set forth herein, the
parties agree as follows:
1. CERTAIN DEFINITIONS.
1.1 "AFFILIATE" shall have the meaning set forth in the
rules and regulations promulgated by the Commission pursuant to the
Securities Act.
1.2 "CLOSING" shall mean the closing of the transactions
contemplated by this Agreement.
1.3 "CLOSING DATE" shall mean the date of the Closing.
1.4 "CODE" shall mean the United States Internal Revenue
Code of 1986, as amended.
1.5 "COMMISSION" shall mean the United States Securities
and Exchange Commission.
1.6 "DISSENTING SHARES" shall mean those shares held by
holders who perfect their appraisal rights under the applicable
state laws.
1.7 "EFFECTIVE TIME" shall mean the date and time of the
effectiveness of the Merger under Delaware law.
1.8 "GAAP" shall mean generally accepted accounting
principles.
1.9 "PACIFIC COMMON STOCK" shall mean all of the
outstanding shares of Common Stock of Pacific.
1.10 "MATERIAL ADVERSE EFFECT" shall mean a material
adverse effect on the operations, assets or financial condition
(financial or otherwise) of an entity considered as a whole.
1.11 "SECURITIES ACT" shall mean the Securities Act of
1933, as amended, or any similar federal statute and the rules and
regulations thereunder, all as the same shall be in effect at the time.
1.12 "TRANSACTION DOCUMENTS" shall mean all documents or
agreements attached as an exhibit or schedule hereto, and set forth
on the Table of Contents.
2. PLAN OF REORGANIZATION.
2.1 THE MERGER. Subject to the terms and conditions of
this Agreement and the Certificate of Merger, Pacific shall be
merged with and into HEI in accordance with the applicable
provisions of the laws of the States of Delaware and California, and
with the terms and conditions of this Agreement and the Certificate
of Merger, so that:
(A) At the Effective Time (as defined in Section
2.5 (below)), Pacific shall be merged with and into HEI. As a
result of the Merger, the separate corporate existence of Pacific
shall cease, and HEI shall continue as the surviving corporation,
and shall succeed to and assume all of the rights and obligations of
Pacific in accordance with the laws of Delaware.
(B) The Certificate of Incorporation and Bylaws of
HEI in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation and Bylaws, respectively, of the
Surviving Corporation after the Effective Time unless and until
further amended as provided by law.
(C) Subject to the terms of this Agreement, the
directors and officers of Pacific immediately prior to the Effective
Time shall be the directors and officers of the Surviving
Corporation after the Effective Time. Such directors and officers
shall hold their position until the election and qualification of
their respective successors or until their tenure is otherwise
terminated in accordance with the Bylaws of the Surviving Corporation.
2.2 CONVERSION OF SHARES. Each share of Pacific Common
Stock, issued and outstanding immediately prior to the Effective
Time, will, by virtue of the Merger, and at the Effective Time, and
without further action on the part of any holder thereof, be
converted into 546 shares of fully paid and nonassessable shares of
HEI Common Stock.
2.3 FRACTIONAL SHARES. No fractional shares of HEI
Common Stock will be issued in connection with the Merger.
2.4 THE CLOSING. Subject to termination of this
Agreement as provided in Section 10 (below), the Closing shall take
place at the offices of M. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, as soon as possible upon the
satisfaction or waiver of all conditions set forth in Sections 8 and
9 hereof, or such other time and place as is mutually agreeable to
the parties.
2.5 EFFECTIVE TIME. Simultaneously with the Closing, the
Certificate of Merger shall be filed in the office of the Secretary
of State of the State of Delaware. The Merger shall become
effective immediately upon the filing of the Certificate of Merger
with such office.
2.6 TAX FREE REORGANIZATION. The parties intend to adopt
this Agreement as a tax-free plan of reorganization and to
consummate the Merger in accordance with the provisions of
Section368(a)(1)(A) of the Code. Each party agrees that it will not
take or assert any position on any tax return, report or otherwise
which is inconsistent with the qualification of the Merger as a
reorganization within the meaning of Section368(a) of the Code. HEI
represents now, and as of the Closing Date, that it presently
intends to continue Pacific's historic business or use a significant
portion of Pacific's business assets in a business.
3. REPRESENTATIONS AND WARRANTIES OF PACIFIC. Pacific
represents and warrants to HEI as set forth below. No fact or
circumstance disclosed shall constitute an exception to these
representations and warranties except as may mutually be agreed upon
in writing by the parties hereto.
3.1 ORGANIZATION. Pacific is a corporation duly
organized, validly existing and in good standing under the laws of
the state of California and has the corporate power and authority to
carry on its business as it is now being conducted. Pacific is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or properties makes
such qualification or licensing necessary except where the failure
to be so qualified would not have a Material Adverse Effect on Pacific.
3.2 CAPITALIZATION.
(A) The authorized capital of Pacific consists of
100,000 shares of Common Stock, par value $1.00 per share, of which
20,000 shares are issued and outstanding.
(B) Pacific does not have outstanding any
preemptive rights, subscription rights, options, warrants, rights to
convert or exchange, capital stock equivalents, or other rights to
purchase or otherwise acquire any Pacific capital stock or other
securities.
(C) All of the issued and outstanding shares of
Pacific capital stock have been duly authorized, validly issued, are
fully paid and nonassessable, and such capital stock has been issued
in full compliance with all applicable federal and state securities
laws. None of Pacific's issued and outstanding shares of capital
stock are subject to repurchase or redemption rights.
(D) Except for any restrictions imposed by
applicable state and federal securities laws, there is no right of
first refusal, option, or other restriction on transfer applicable
to any shares of Pacific's capital stock.
(E) Pacific is not a party or subject to any
agreement or understanding (and, to Pacific's actual knowledge,
there is no agreement or understanding between or among any persons)
that affects or relates to the voting or giving of written consent
with respect to any security.
3.3 POWER, AUTHORITY AND VALIDITY. Pacific has the
corporate power to enter into this Agreement and the other
Transaction Documents to which it is a party and to carry out its
obligations hereunder and thereunder. The execution and delivery of
this Agreement and the Transaction Documents and the consummation of
the transactions contemplated hereby and thereby have been duly
authorized by the Board of Directors of Pacific and no other
corporate proceedings on the part of Pacific are necessary to
authorize this Agreement, the other Transaction Documents and the
transactions contemplated herein and therein. Pacific is not
subject to, or obligated under, any charter, bylaw or contract
provision or any license, franchise or permit, or subject to any
order or decree, which would be breached or violated by or in
conflict with its executing and carrying out this Agreement and the
transactions contemplated hereunder and under the Transaction
Documents. Except for (i) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which
Pacific is qualified to do business, and (ii) filings under
applicable securities laws, no consent of any person who is a party
to a contract which is material to Pacific's business, nor consent
of any governmental authority, is required to be obtained on the
part of Pacific to permit the transactions contemplated herein and
to permit Pacific to continue the business activities of Pacific as
previously conducted by Pacific without a Material Adverse Effect.
This Agreement is, and the other Transaction Documents when executed
and delivered by Pacific shall be, the valid and binding obligations
of Pacific, enforceable in accordance with their respective terms.
3.4 TAX-FREE REORGANIZATION.
(A) Pacific has not taken or agreed to take any
action that would prevent the Merger from constituting a
reorganization qualifying under the provisions of Section368(a) of
the Code.
(B) Pacific is not an investment company as
defined in SectionSection368(a)(2)(F)(iii) and (iv) of the Code.
3.5 EXEMPT REORGANIZATION. For purposes of the
transactions contemplated hereunder and in accordance with Section
25103(h) of the California Corporate Securities Code:
(A) Pacific has 35 or fewer security holders, all
of which are equity security holders.
(B) all equity security holders of Pacific have
either a preexisting personal or business relationship with HEI or
any of its officers, directors, or controlling persons or by reason
of their business or financial experience or the business and
financial experience of their financial advisors could be reasonably
assumed to have the capacity to protect their own interest in
connection with the transaction.
(C) all equity security holders of Pacific have
consented in writing to the transaction.
(D) each equity security holder of Pacific has
represented that the acquisition of the HEI Common Stock in the
transaction is for the equity security holder's own account and not
with a view to or for sale in connection with any distribution of
common stock.
3.6 NO BROKERS. Pacific is not obligated for the payment
of fees or expenses of any broker or finder in connection with the
origin, negotiation or execution of this Agreement or the
Certificate of Merger or in connection with any transaction
contemplated hereby or thereby.
4. REPRESENTATIONS AND WARRANTIES OF HEI. HEI
represents and warrants to Pacific as set forth below. No fact or
circumstance disclosed to Pacific shall constitute an exception to
these representations and warranties except as may mutually be
agreed upon in writing by Pacific and HEI.
4.1 ORGANIZATION. HEI is a corporation duly organized,
validly existing and in good standing under the laws of the state of
Delaware and has the corporate power and authority to carry on its
business as it is now being conducted. HEI is duly qualified or
licensed to do business and is in good standing in each jurisdiction
in which the nature of its businesses or properties makes such
qualification or licensing necessary except where the failure to be
so qualified would not have a Material Adverse Effect on HEI.
4.2 CAPITALIZATION.
(A) The authorized capital of HEI consists of
25,000,000 shares of Common Stock, of which 4,930,388 shares are
issued and outstanding (without giving effect to the shares issued
to Pacific hereunder).
(B) Except with respect to 1,900,000 warrants to
purchase common stock at $.50 per share and 150,000 shares of
Preferred Stock convertible into 450,000 shares of common stock, HEI
has no outstanding preemptive rights, subscription rights, options,
warrants, rights to convert or exchange, capital stock equivalents,
or other rights to purchase or otherwise acquire any HEI capital
stock or other securities.
(C) All of the issued and outstanding shares of
HEI capital stock have been duly authorized, validly issued, are
fully paid and nonassessable, and such capital stock has been issued
in full compliance with all applicable federal and state securities
laws. None of HEI's issued and outstanding shares of capital stock
are subject to repurchase or redemption rights.
(D) Except for any restrictions imposed by
applicable state and federal securities laws, there is no right of
first refusal, option, or other restriction on transfer applicable
to any shares of HEI capital stock.
(E) HEI is not a party or subject to any agreement
or understanding (and, to HEI's actual knowledge, there is no
agreement or understanding between or among any persons) that
affects or relates to the voting or giving of written consent with
respect to any security.
4.3 POWER, AUTHORITY AND VALIDITY. HEI has the corporate
power to enter into this Agreement and the other Transaction
Documents to which they are parties and to carry out their
obligations hereunder and thereunder. The execution and delivery of
this Agreement and the Transaction Documents and the consummation of
the transactions contemplated hereby and thereby have been duly
authorized by the Board of Directors of HEI and no other corporate
proceedings on the part of HEI are necessary to authorize this
Agreement, the other Transaction Documents and the transactions
contemplated herein and therein. HEI is not subject to, or
obligated under, any charter, bylaw or contract provision or any
license, franchise or permit, or subject to any order or decree,
which would be breached or violated by or in conflict with its
executing and carrying out this Agreement and the transactions
contemplated hereunder and under the Transaction Documents. Except
for (i) the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware and appropriate documents with the
relevant authorities of other states in which HEI is qualified to do
business, and (ii) filings under applicable securities laws, no
consent of any person who is a party to a contract which is material
to HEI's business, nor consent of any governmental authority, is
required to be obtained on the part of HEI to permit the
transactions contemplated herein and to permit HEI to continue the
business activities of HEI as previously conducted by HEI without a
Material Adverse Effect. This Agreement is, and the other
Transaction Documents when executed and delivered by HEI shall be,
the valid and binding obligations of HEI, enforceable in accordance
with their respective terms.
4.4 TAX-FREE REORGANIZATION.
(A) HEI has not taken or agreed to take any action
that would prevent the Merger from constituting a reorganization
qualifying under the provisions of Section368(a) of the Code.
(B) HEI is not an investment company as defined in
SectionSection368(a)(2)(F)(iii) and (iv) of the Code.
4.5 EXEMPT REORGANIZATION. For purposes of the
transactions contemplated hereunder and in accordance with Section
25103(h) of the California Corporate Securities Code:
(A) HEI has not earned a majority of its revenue
from investments in the last four years.
(B) The transactions contemplated hereunder have
not been accomplished by the publication of any advertisement.
4.6 NO BROKERS. HEI is not obligated for the payment of
fees or expenses of any broker or finder in connection with the
origin, negotiation or execution of this Agreement or the
Certificate of Merger or in connection with any transaction
contemplated hereby or thereby.
5. PRECLOSING COVENANTS OF PACIFIC.
5.1 NOTICES AND APPROVALS. Pacific agrees: (a) to give
all notices to third parties which may be necessary or deemed
desirable by HEI in connection with this Agreement and the
consummation of the transactions contemplated hereby; (b) to use its
best efforts to obtain all federal and state governmental regulatory
agency approvals, consents, permit, authorizations, and orders
necessary or deemed desirable by HEI in connection with this
Agreement and the consummation of the transaction contemplated
hereby; and (c) to use its best efforts to obtain, and to cause
Pacific to obtain, all consents and authorizations of any other
third parties necessary or deemed desirable by HEI in connection
with this Agreement and the consummation of the transactions
contemplated hereby.
5.2 INFORMATION FOR HEI S STATEMENTS AND APPLICATIONS.
Pacific and its employees, accountants and attorneys shall cooperate
fully with HEI in the preparation of any statements or applications
made by HEI to any federal or state governmental regulatory agency
in connection with this Agreement and the transactions contemplated
hereby and to furnish HEI with all information concerning Pacific
necessary or deemed desirable by HEI for inclusion in such
statements and applications, including, without limitation, all
requisite financial statements and schedules.
6. MUTUAL COVENANTS.
6.1 REGULATORY FILINGS; CONSENTS; REASONABLE EFFORTS.
Subject to the terms and conditions of this Agreement, Pacific and
HEI shall use their respective best efforts to (i) make all
necessary filings with respect to the Merger and this Agreement
under the Securities Act, and applicable blue sky or similar
securities laws and shall use all reasonable efforts to obtain
required approvals and clearances with respect thereto and shall
supply all additional information requested
in connection therewith;
(ii) make merger notification or other appropriate filings with
federal, state or local governmental bodies or applicable foreign
governmental agencies and shall use all reasonable efforts to obtain
required approvals and clearances with respect thereto and shall
supply all additional information requested in connection therewith;
(iii) obtain all consents, waivers, approvals, authorizations and
orders required in connection with the authorization, execution and
delivery of this Agreement and the consummation of the Merger; and
(iv) take, or cause to be taken, all appropriate action, and do, or
cause to be done, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement.
6.2 FURTHER ASSURANCES. Prior to and following the
Closing, each party agrees to cooperate fully with the other parties
and to execute such further instruments, documents and agreements
and to give such further written assurances, as may be reasonably
requested by any other party to better evidence and reflect the
transactions described herein and contemplated hereby and to carry
into effect the intents and purposes of this Agreement.
7. CLOSING MATTERS.
7.1 FILING OF CERTIFICATE OF MERGER. On the date of the
Closing, but not prior to the Closing, the Certificate of Merger
shall be filed with the offices of the Secretary of State of the
State of Delaware and the merger of Pacific with and into HEI shall
be consummated.
7.2 EXCHANGE OF CERTIFICATES. At or within 30 days of
the Closing, HEI shall deliver and issue to each shareholder of
Pacific a certificate or certificates representing the HEI Common
Stock issuable to such shareholder as consideration in this Merger.
7.3 DELIVERY OF DOCUMENTS. On or before the Closing, the
parties shall deliver the documents, and shall perform the acts,
which are set forth in Sections 8 and 9, as specified in such
Sections, including delivery of the counterpart signature pages of
the Transaction Documents executed by Pacific and/or HEI, as the
case may be. All documents which Pacific shall deliver or cause to
be delivered shall be in form and substance reasonably satisfactory
to HEI. All documents which HEI shall deliver or cause to be
delivered shall be in form and substance reasonably satisfactory to
Pacific.
8. TERMINATION OF AGREEMENT.
8.1 TERMINATION. This Agreement may be terminated at any
time prior to the Closing by the mutual written consent of each of
the parties hereto. This Agreement may also be terminated and
abandoned by either Pacific or HEI, if the Merger is not effected by
June 30, 1998. Any termination of this Agreement under this Section
8.1 shall be effected by the delivery of written notice of the
terminating party to the other parties hereto.
8.2 LIABILITY FOR TERMINATION. Any termination of this
Agreement pursuant to this Section 8 shall be without further
obligation or liability upon any party in favor of any other party
hereto; provided, that if such termination shall result from the
willful failure of a party to carry out its obligations under this
Agreement, then such party shall be liable for losses incurred by
the other parties as set forth in Section 8.5. The provisions of
this Section 8.2 shall survive termination.
8.3 CERTAIN EFFECTS OF TERMINATION. In the event of the
termination of this Agreement as provided in Section herein, each
party, if so requested by the other party, will (i) return promptly
every document (other than documents publicly available) furnished
to it by the other party (or any subsidiary, division, associate or
affiliate 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 which may have
been made, and will 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; or (ii)
destroy such documents and cause its representatives and such other
representatives to destroy such documents, and such party shall
deliver a certificate executed by its president or vice president
stating to such effect; and
8.4 REMEDIES. No party shall be limited to the
termination right granted in Section 8.1 hereto by reason of the
nonfulfillment of any condition to such party's closing obligations
but may, in the alternative, elect to do one of the following:
(A) proceed to close despite the nonfulfillment of
any closing condition, it being understood that consummation of the
transactions contemplated hereby shall be deemed a waiver of any
misrepresentation or breach of warranty or covenant and of any
party's rights and remedies with respect thereto to the extent that
the other party shall have actual knowledge of such
misrepresentation or breach and the Closing shall nonetheless take
place; or
(B) decline to close, terminate this Agreement as
provided in Section 8.1 hereof, and thereafter seek damages to the
extent permitted in Section 8.5 hereof.
8.5 ARBITRATION. Any dispute arising out of this
Agreement, or its performance or breach, shall be resolved by
binding arbitration conducted by JAMS/Endispute under the
JAMS/Endispute Rules for Complex Arbitration (the "JAMS Rules").
This arbitration provision is expressly made pursuant to and shall
be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-14.
The parties hereto agree that pursuant to Section 9 of the Federal
Arbitration Act, a judgment of the United States District Courts for
the Southern District of California shall be entered upon the award
made pursuant to the arbitration. A single arbitrator, who shall
have the authority to allocate the costs of any arbitration
initiated under this paragraph, shall be selected according to the
JAMS Rules within ten (10) days of the submission to JAMS/Endispute
of the response to the statement of claim or the date on which any
such response is due, whichever is earlier. The arbitrator shall
conduct the arbitration in accordance with the Federal Rules of
Evidence. The arbitrator shall decide the amount and extent of
pre-hearing discovery which is appropriate. The arbitrator shall
have the power to enter any award of monetary and/or injunctive
relief (including the power issue permanent injunctive relief and
also the power to reconsider any prior request for immediate
injunctive relief by either of the parties and any order as to
immediate injunctive relief previously granted or denied by a court
in response to a request therefor by either of the parties),
including the power to render an award as provided in Rule 43 of the
JAMS Rules; provided, however, that the arbitrator shall not have
the power to award punitive damages under any circumstances (whether
styled as punitive, exemplary, or treble damages, or any penalty or
punitive type of damages) regardless of whether such damages may be
available under applicable law, the parties hereby waiving their
rights to recover any such damages. The arbitrator shall award the
prevailing party its costs and reasonable attorneys' fees, and the
losing party shall bear the entire cost of the arbitration,
including the arbitrator's fees. All arbitration shall be held in
Orange County, California. In addition to the above court, the
arbitration award may be enforced in any court having jurisdiction
over the parties and the subject matter of the arbitration.
Notwithstanding the foregoing, the parties irrevocably submit to the
nonexclusive jurisdiction of the state and federal courts situated
where the respondent is domiciled or resides as of the Effective
Date in any action to enforce an arbitration award. With respect to
any request for immediate injunctive relief, that state and federal
courts in Orange County, California shall have exclusive
jurisdiction and venue over any such disputes.
9. MISCELLANEOUS.
9.1 GOVERNING LAWS. It is the intention of the parties
hereto that the internal laws of the State of California
(irrespective of its choice of law principles) shall govern the
validity of this Agreement, the construction of its terms, and the
interpretation and enforcement of the rights and duties of the
parties hereto.
9.2 BINDING UPON SUCCESSORS AND ASSIGNS. Subject to, and
unless otherwise provided in, this Agreement, each and all of the
covenants, terms, provisions, and agreements contained herein shall
be binding upon, and inure to the benefit of, the permitted
successors, executors, heirs, representatives, administrators and
assigns of the parties hereto.
9.3 SEVERABILITY. If any provision of this Agreement, or
the application thereof, shall for any reason and to any extent be
invalid or unenforceable, the remainder of this Agreement and
application of such provision to other persons or circumstances
shall be interpreted so as best to reasonably effect the intent of
the parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and
enforceable provision which will achieve, to the extent possible,
the economic, business and other purposes of the void or
unenforceable provision.
9.4 ENTIRE AGREEMENT. This Agreement, the exhibits
hereto, the documents referenced herein, and the exhibits thereto,
constitute the entire understanding and agreement of the parties
hereto with respect to the subject matter hereof and thereof and
supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied,
written or oral, between the parties with respect hereto and
thereto. The express terms hereof control
and supersede any course
of performance or usage of the trade inconsistent with any of the
terms hereof.
9.5 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original as
against any party whose signature appears thereon and all of which
together shall constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of
the parties reflected hereon as signatories.
9.6 EXPENSES. Except as provided to the contrary herein,
each party shall pay all of its own costs and expenses incurred with
respect to the negotiation, execution and delivery of this
Agreement, the exhibits hereto, and the other Transaction Documents.
9.7 AMENDMENT AND WAIVERS. Any term or provision of this
Agreement may be amended, and the observance of any term of this
Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a
writing signed by the party to be bound thereby. The waiver by a
party of any breach hereof for default in payment of any amount due
hereunder or default in the performance hereof shall not be deemed
to constitute a waiver of any other default or any succeeding breach
or default.
9.8 SURVIVAL OF AGREEMENTS. All covenants, agreements,
representations and warranties made herein shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby notwithstanding any investigation
of the parties hereto and shall terminate on the date one year after
the Closing Date.
9.9 NO WAIVER. The failure of any party to enforce any
of the provisions hereof shall not be construed to be a waiver of
the right of such party thereafter to enforce such provisions.
9.10 ATTORNEYS' FEES. Should suit be brought to enforce
or interpret any part of this Agreement, the prevailing party shall
be entitled to recover, as an element of the costs of suit and not
as damages, reasonable attorneys' fees to be fixed by the court
(including without limitation, costs, expenses and fees on any
appeal). The prevailing party shall be the party entitled to
recover its costs of suit, regardless of whether such suit proceeds
to final judgment. A party not entitled to recover its costs shall
not be entitled to recover attorneys' fees. No sum for attorneys'
fees shall be counted in calculating the amount of a judgment for
purposes of determining if a party is entitled to recover costs or
attorneys' fees.
9.11 NOTICES. Any notice provided for or permitted under
this Agreement will be treated as having been given when (a)
delivered personally, (b) sent by confirmed telex or telecopy, (c)
sent by commercial overnight courier with written verification of
receipt, or (d) mailed postage prepaid by certified or registered
mail, return receipt requested, to the party to be notified, at the
address set forth below, or at such other place of which the other
party has been notified in accordance with the provisions of this
Section 9.11.
Pacific:
Pacific Engineering Systems, Inc.
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Attn. Art ▇▇▇▇▇▇▇
HEI:
Health Emporium, Inc.
c/o The Law Offices of M. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
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Such notice will be treated as having been received upon actual
receipt.
9.12 TIME. Time is of the essence of this Agreement.
9.13 CONSTRUCTION OF AGREEMENT. This Agreement has been
negotiated by the respective parties hereto and their attorneys and
the language hereof shall not be construed for or against any party.
The titles and headings herein are for reference purposes only and
shall not in any manner limit the construction of this Agreement
which shall be considered as a whole.
9.14 NO JOINT VENTURE. Nothing contained in this
Agreement shall be deemed or construed as creating a joint venture
or partnership between any of the parties hereto. No party is by
virtue of this Agreement authorized as an agent, employee or legal
representative of any other party. No party shall have the power to
control the activities and operations of any other and their status
is, and at all times, will continue to be, that of independent
contractors with respect to each other. No party shall have any
power or authority to bind or commit any other. No party shall hold
itself out as having any authority or relationship in contravention
of this Section 9.14.
9.15 PRONOUNS. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter,
singular or plural, as the identity of the person, persons, entity
or entities may require.
9.16 FURTHER ASSURANCES. Each party agrees to cooperate
fully with the other parties and to execute such further
instruments, documents and agreements and to give such further
written assurances, as may be reasonably requested by any other
party to better evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents
and purposes of this Agreement.
9.17 ABSENCE OF THIRD-PARTY BENEFICIARY RIGHTS. No
provisions of this Agreement are intended, nor shall be interpreted,
to provide or create any third-party beneficiary rights or any other
rights of any kind in any client, customer, affiliate, stockholder,
partner of any party hereto or any other person or entity except
employees and stockholders of Pacific specifically
referred to
herein, and, except as so provided, all provisions hereof shall be
personal solely between the parties to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
PACIFIC ENGINEERING SYSTEMS, INC. HEALTH EMPORIUM, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President President
ATTEST: ATTEST:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
Pacific Engineering Systems, Inc.
Secretary's Certificate
The undersigned, ▇▇▇▇▇ ▇▇▇▇▇▇, Secretary of Pacific
Engineering Systems, Inc., a California corporation and one of the
merging corporations mentioned in the foregoing Agreement and Plan
of Reorganization (the "Agreement"), certifies that the Agreement
has been adopted by the written consent of the shareholders of all
of the outstanding stock of Pacific Engineering Systems, Inc.
entitled to vote thereon in accordance with the provisions of the
General Corporation Law of the State of California.
Dated: April 28, 1998
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Secretary of Pacific Engineering Systems, Inc.
Health Emporium, Inc.
Secretary's Certificate
The undersigned, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary of Health
Emporium, Inc., a Delaware corporation and one of the merging
corporations mentioned in the foregoing Agreement and Plan of
Reorganization (the "Agreement"), certifies that the Agreement has
been adopted by the affirmative vote of the holders of a majority of
the outstanding Common Stock of Health Emporium, Inc. entitled to
vote thereon at a meeting held pursuant to notice in accordance with
the provisions of the Delaware General Corporation Law.
Dated: April 28, 1998
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary of Health Emporium, Inc.
EXHIBIT A
CERTIFICATE OF MERGER
OF
PACIFIC ENGINEERING SYSTEMS, INC.
(A CALIFORNIA CORPORATION)
INTO
HEALTH EMPORIUM, INC.
(A DELAWARE CORPORATION)
PURSUANT TO SECTION 252(C) OF THE GENERAL CORPORATION LAW OF THE
STATE OF DELAWARE
It is hereby certified, on behalf of each of the constituent
corporations named below, as follows:
1. The names of the constituent corporations are Health
Emporium, Inc., a Delaware corporation ("HEI") and Pacific
Engineering Systems, Inc., a California corporation ("Pacific").
The Certificate of Incorporation of HEI was filed with the Secretary
of State of the State of Delaware on August 8, 1985. The
Certificate of Incorporation of Pacific was filed with the Secretary
of State of the State of California on March 23, 1995.
2. An Agreement and Plan of Reorganization between HEI
and Pacific has been approved, adopted, certified, executed and
acknowledged by HEI and Pacific in accordance with Section 252(c) of
the General Corporation Law of the State of Delaware.
3. HEI is the surviving corporation.
4. The Certificate of Incorporation of HEI, the
surviving corporation, shall be amended to change the name of the
surviving corporation to "Pacific Engineering Systems, Inc.", and
shall constitute the Certificate of Incorporation of the surviving
corporation.
5. The executed Agreement and Plan of Reorganization is
on file at the principal place of business of HEI, the surviving
corporation, at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. A copy
of the Agreement and Plan of Reorganization will be furnished by
HEI, the surviving corporation, without cost, to any stockholder of
Pacific or HEI who sends a written request therefor to HEI at its
principal place of business indicated above.
6. The authorized capital stock of Pacific preceding the
merger is 100,000 shares of common stock, par value $1.00 per share.
The authorized capital stock of HEI is 25,000,000 shares
of common
stock, par value $.0001 per share and 5,000,000 shares of preferred
stock, par value $.0001 per share.
PACIFIC ENGINEERING SYSTEMS, INC. HEALTH EMPORIUM, INC.
By: By:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President President
ATTEST: ATTEST:
____________________________ ____________________________________
▇▇▇▇▇ ▇▇▇▇▇▇, Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
