CONTRIBUTION AND DISTRIBUTION AGREEMENT
CONTRIBUTION AND DISTRIBUTION AGREEMENT, dated as of March [ ], 1999
(this "Agreement") between Besicorp Group Inc., a New York corporation
("Besicorp"), and Besicorp Ltd., a New York corporation and a wholly owned
subsidiary of Besicorp ("Newco").
W I T N E S S E T H
WHEREAS, Besicorp operates various lines of business both directly and
through affiliates and/or subsidiaries (the "Businesses");
WHEREAS, BGI Acquisition LLC, a Wyoming limited liability company
("Parent"), is interested in acquiring Besicorp but is unwilling to engage in a
transaction whereby it would acquire certain assets, liabilities and businesses
of Besicorp;
WHEREAS, Besicorp, Parent, and BGI Acquisition Corp, a New York
corporation and a wholly owned subsidiary of Parent ("Merger Sub"), are parties
to an Agreement and Plan of Merger dated November 23, 1998 (as amended, the
"Plan of Merger") (all capitalized terms defined therein and not defined herein
shall have the meanings provided in the Plan of Merger), providing for the
merger of Merger Sub and Besicorp (the "Merger") with Besicorp being the
Surviving Corporation (the "Surviving Corporation");
WHEREAS, it is a condition precedent to the Merger that (A) Besicorp
contribute (as defined below) to Newco (i) the shares and other ownership
interests relating to Besicorp's ownership of the Newco Affiliates (as defined
below) and (ii) all of the assets and businesses (other than the Retained Assets
(as defined below)) of Besicorp and (B) Newco assume all of the liabilities of
Besicorp and the Retained Subsidiaries (as defined below) (collectively, the
"Retained Company") other than the Retained Liabilities (as defined below)
(collectively such contribution of shares, ownership interests and assets and
assumption of liabilities is referred to as the "Contribution"), all as more
particularly set forth below;
WHEREAS, it is also a condition precedent to the Merger that following
such Contribution and prior to the Effective Time (as defined in the Plan of
Merger), Besicorp distribute on a pro rata basis to the holders of shares of
common stock, par value $.10 per share, of Besicorp (the "Besicorp Common
Stock") all of the outstanding shares of common stock, par value $.01 per share,
of Newco (the "Newco Common Stock"), so that following the distribution of such
shares of Newco Common Stock, Besicorp will own no shares of capital stock of
Newco;
WHEREAS, it is the intention of the parties that in order to effectuate
the foregoing, a distribution shall be effected to each holder of record of
Besicorp Common Stock as of the Distribution Date (as defined below) of one
share of Newco Common Stock for every 25 shares of Besicorp Common Stock held of
record by such holder on such date, provided, however, that in lieu
of fractional shares cash shall be distributed (such distribution is hereinafter
referred to as the "Distribution," and together with the Contribution is
hereinafter referred to as the "Spin-Off");
WHEREAS, it is the intention of the parties that following the
Spin-Off, Newco (i) will operate all of the Businesses other than the Businesses
relating solely to the Retained Assets and the Retained Liabilities (the
Businesses to be operated by Newco and the Newco Affiliates are referred to as
the "Newco Businesses" and the Businesses other than the Newco Businesses are
referred to as the "Retained Businesses") and will have assumed the Assumed
Liabilities (as defined below) and will have acquired the Contributed Assets (as
defined below) and the Newco Affiliates and (ii) Besicorp will retain the
Retained Assets, the Retained Subsidiaries (as defined below), the Retained
Businesses and the Retained Liabilities;
WHEREAS, the Board of Directors of Besicorp has determined that it is
appropriate and desirable that Besicorp effectuate the Spin-Off and that the
Spin-Off will not make Besicorp insolvent; and
WHEREAS, the Board of Directors of Newco has determined that it is
appropriate and desirable that Newco agree to the Contribution;
NOW THEREFORE, in consideration of the mutual agreements contained
herein and in the other agreements and instruments executed in connection with
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. CONTRIBUTION OF ASSETS
1.1 Contribution of Assets. On the Contribution Date (as defined below), subject
to Section 1.9 hereto and the satisfaction or waiver of the conditions provided
for pursuant to Article 5 hereto, Besicorp shall contribute, convey, assign,
transfer and deliver (collectively, "contribute") to Newco all of Besicorp's
right, title and interest in and to all of Besicorp's assets, properties, rights
and business of every kind and description, wherever located, other than the
Retained Assets and the Retained Subsidiaries (collectively, the "Contributed
Assets"). Failure to identify specifically on applicable Schedules hereto any
assets, property or rights of Besicorp relating to the Newco Businesses or that
are intended to be contributed to Newco pursuant to this Agreement, or any
asset, property or right of Besicorp not intended to be a Retained Asset or a
Retained Subsidiary, shall not exclude such assets, property or rights from the
Contributed Assets. Without limiting the generality of the definition of the
Contributed Assets, subject to Section 1.9 hereto the Contributed Assets shall
include the following assets of Besicorp:
(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 1.1(a) hereto (collectively, the "Contributed
Realty");
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(b) all machinery, equipment, plant, vehicles, office furniture and
equipment, computer hardware, tools, spare parts, other chattels, fixtures,
leasehold improvements and fixed assets not included in the Retained Assets;
(c) all other contracts, agreements, equipment leases, licenses and
other instruments excluding the Retained Instruments (the "Assigned
Instruments");
(d) all patents, registrations, tradenames, trademarks and other
intellectual property, and pending applications for the same, whether owned or
licensed, of any kind (the "Contributed Intellectual Property");
(e) true and complete copies of all books and records, including
customer and supplier lists, employee records, tax records, credit files,
quotations and bids, all data and all sales literature and specifications;
(f) to the extent transferable, all governmental licenses, permits,
authorizations, consents and approvals;
(g) all prepaid expenses and deferred charges, prepaid insurance
deposits and insurance premiums and pension assets relating to the Newco
Businesses to the extent not reflected on the final Statement delivered pursuant
to the Plan of Merger as part of component "A" of the Base Amount;
(h) all insurance policies, including insurance policies on Besicorp's
executives other than any policy which relates solely to the Retained Businesses
(the "Insurance Policies").
(i) to the extent transferable, all rights to contribution protection
and covenants not to xxx granted to Besicorp by third parties, including,
without limitation, in connection with environmental matters being assumed by
Newco;
(j) all proprietary or confidential business or technical information,
records and policy statements of Besicorp, such as accounting procedures,
instructions, organizational manuals, strategic plans and other documents or
materials of a general nature;
(k) the goodwill;
(l) the rights, privileges and benefits, if any, associated with the
matters set forth on Schedule 1.5;
(m) in accordance with the Order (the "Order") of the United States
District Court for the Xxxxxxxx Xxxxxxxx xx Xxx Xxxx 00 Xxx. 0000 (XXX) dated
March 18, 1999, the rights and liabilities, if any, pursuant to the Order with
respect to the contingent assets and/or liabilities of Besicorp, subject to any
defenses and rights to offset, in the Derivative Actions (as such term is
defined in the
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Order) to the extent, but only to the extent, that such Order is neither amended
nor reversed nor superseded and does not expire;
(n) such amount of cash (the "Cash Contribution") so that Newco and its
subsidiaries shall have $1,750,000 in cash at the Contribution Date, which cash
shall be transferred to an account designated by Newco prior to the Contribution
Date;
(o) all cash in and rights associated with account [ ] (the "Key
Account"), other than $[ ] which Besicorp shall transfer to RaboBank by wire on
March 22, 1999 , which shall consist of an amount of no more than $[ ]
(excluding the amount retained by RaboBank);
(p) all rights associated with the claims listed on Schedule
1.1(o) hereof; and
(q) any other tangible or intangible personal property not
included in the Retained Assets;
all as the same shall exist on the Contribution Date, subject only to the
disposition of any assets by Besicorp prior to the Contribution Date, provided
that if any Contributed Asset is also material to the Retained Businesses, the
parties shall, on the Contribution Date, enter into such reasonable
arrangements, including licensing, sublicensing, leasing or subleasing, as shall
enable Besicorp to continue to use such Contributed Asset in the Retained
Businesses. If the consent or waiver of any party required to assign a contract
or agreement (because of an assignment pursuant to this Agreement or resulting
from the transfers set forth in Section 1.2 herein) is not obtained before the
Contribution Date and the Contribution is nevertheless effectuated, Besicorp
agrees to continue to use its commercially reasonable efforts to obtain all such
consents or waivers as have not been obtained prior to such date and Besicorp
further agrees to cooperate with Newco after such date in any reasonable
arrangement (such as subcontracting, sublicensing or subleasing) designed to
provide for Newco and the Newco Affiliates, on terms at least as favorable as
those to which Besicorp and the Retained Subsidiaries are entitled, the benefits
under the applicable contract or agreement, including, without limitation,
enforcement, at the cost and for the benefit of Newco and the Newco Affiliates,
of any and all rights of Besicorp against any other party thereto arising out of
the breach or cancellation thereof by such party; provided that Newco will hold
Besicorp harmless with respect to such contracts or arrangements relating
thereto.
1.2 Contributed Subsidiaries, etc. On the Contribution Date, subject to the
satisfaction or waiver of the conditions provided for pursuant to Article 5
hereto, Besicorp shall also contribute to Newco all of Besicorp's right, title
and interest in and to:
(a) all shares and other ownership interests relating to Besicorp's
ownership of the entities listed on Schedule 1.2(a) (the "Contributed
Subsidiaries");
(b) the shares of all of the capital stock of the subsidiaries and
affiliates and the interests in any partnership, limited partnership, limited
liability company, joint ventures owned by Besicorp (the "Section 1.2(b)
Affiliates") and
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(c) the shares and other ownership interests relating to corporations,
partnerships, limited partnerships, limited liability companies, joint ventures
or other legal entities (collectively, "Enterprises") (other than the Retained
Subsidiaries and the Section 1.3(b) Securities) owned by Besicorp (the
"Additional Affiliates" and together with the Contributed Subsidiaries and the
Section 1.2(b) Affiliates, the "Newco Affiliates").
1.3 The Retained Assets. Subject to Section 1.9 hereto, the "Retained
Assets" shall consist of the following:
(a) the shares of all of the capital stock of the corporations and the
interests in any Enterprise listed on Schedule 1.3(a) hereto owned by Besicorp
(the "Section 1.3(a) Securities");
(b) all other contracts, agreements, equipment leases, licenses and
other instruments related to the Retained Businesses (the "Retained
Instruments"), set forth on Schedule 1.3(b) hereto;
(c) all cash and cash equivalents being held in the accounts of
Besicorp as of the Contribution Date (which shall not include any lockbox
arrangements), except for an amount of no more than $[ ] deposited in the Key
Account (other than $[ ] which Besicorp shall transfer to RaboBank by wire on
March 22, 1999);
(d) the books, records and data related to the Retained Businesses;
(e) the rights, if any, relating to 100,000 shares of Besicorp Common
Stock held of record by Xxxxxx Xxxxxxx or his assigns which are the subject of a
dispute between Besicorp and Xx. Xxxxxxx (the "Disputed Shares"), the Merger
Consideration payable in respect of such Disputed Shares and any shares of Newco
Common Stock distributable with respect to such Disputed Shares;
(f) the equipment and other assets listed on Schedule 1.3(f) (the
"Retained Equipment"); and
(g) the rights to the claims listed on items 10-13 to Schedule 3.2.2 of
the Plan of Merger.
The items listed on any schedules referred to above are subject to change in
accordance with Section 1.9 hereto, provided such change occurs in compliance
with the Plan of Merger. For purposes hereof, "related to the Retained
Businesses" shall mean (x) with respect to tangible personal property, any such
property that is located on the premises of the Retained Facility if it is
primarily related to the Retained Businesses, any such property located on the
premises of vendors, customers or distributors if it is exclusively related to
the Retained Businesses and any other such property if it is used exclusively in
the Retained Businesses; and (y) with respect to property that is neither real
property nor tangible personal property, any such property, wherever located, if
it is used exclusively by, arises exclusively from, or related exclusively to,
the Retained Businesses; provided, further, that (i) if any asset included under
clause (x) above is also material to any of the Newco Businesses, the parties
shall, on the Contribution Date, enter into such reasonable arrangements,
including licensing,
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sublicensing, leasing or subleasing, as shall enable Newco to continue to use
such asset in the relevant Newco Business perpetually and at no cost and (ii) if
any asset is excluded under clause (x) or (y) above because even though it
relates primarily to the Retained Businesses it does not relate exclusively to
the Retained Businesses, the parties shall, on the Contribution Date, enter into
such reasonable arrangements, including licensing, sublicensing, leasing or
subleasing, as shall enable Besicorp to continue to use such asset in the
relevant Retained Business perpetually and at no cost.
1.4 The Retained Subsidiaries, etc. The "Retained Subsidiaries" shall consist of
all shares and other ownership interests relating to Besicorp's ownership of the
entities listed on Schedule 1.4.
1.5 Assumption of Liabilities. On the Contribution Date, subject to the
conditions of this Agreement, Newco shall assume and agree to pay and discharge
when due all of the obligations and liabilities of any kind or nature whatsoever
(direct or indirect, matured or unmatured, absolute, accrued, contingent, known
or unknown or otherwise), whether or not required by GAAP to be provided or
reserved against on a balance sheet (all the foregoing herein collectively being
referred to as the "Liabilities") of Besicorp and the Retained Subsidiaries,
other than the Retained Liabilities (collectively, the "Assumed Liabilities").
1.6 The Retained Liabilities. Besicorp and the Retained Subsidiaries shall
retain, and be responsible for the performance of all of the Liabilities (and
only the Liabilities) in connection with or pursuant to the Liabilities set
forth on Schedule 1.6 hereto (the "Retained Liabilities").
1.7 Employees and Employee Benefit Plans.
(a) Employment. Besicorp will terminate the employment of all of its
employees as of the Contribution Date. Newco will, as of the Contribution Date,
offer employment to all employees of Besicorp who are employed on that date;
provided, however, that an employee's ceasing to be an employee of Besicorp and
being offered employment by Newco shall not constitute a termination or
qualifying event under any severance policy of Besicorp and its subsidiaries
other than Newco (collectively such subsidiaries other than Newco are referred
to as the "Subsidiaries" and together with Besicorp as the "Company") or
otherwise (and, if applicable, the Company will amend any such severance policy
to so provide).
(b) Employee Benefit Plans. All Employee Benefit Plans of Besicorp or
relating to the employees of Besicorp, including the plans set forth on Schedule
1.7(b) hereto (the "Employee Plans,") will be transferred to Newco as of the
Contribution Date.
(c) Form W-2s. Besicorp and Newco agree to comply with the alternate
procedure as set forth in Section 5 of Revenue Procedure 96-60, 1996-53 IRB 24
(12/30/96) regarding the preparing and filing of Forms W-2 and related forms as
therein prescribed, thereby relieving Besicorp from furnishing Forms W-2 to any
employee employed in the current calendar year by Newco.
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1.8 Insurance. It is the intent of the parties that if any Insurance Policy by
its terms may not be assigned, Newco shall receive the benefit of any coverage
under such Insurance Policy. Besicorp agrees to keep such policy in effect
during the remaining term of such Insurance Policy and to refrain from taking
any actions (other than making a claim) which may adversely affect Newco's
entitlement to the benefits of, or coverage under, such Insurance Policy.
1.9 Substitution of Assets. If, at any time prior to the Contribution, Parent or
Besicorp shall consider or be advised that the composition of the Retained
Assets would be unduly expensive or impractical to, the Surviving Corporation,
assets of equal value that were to be distributed to Newco pursuant to the
Contribution may be substituted for such of the Retained Assets as may be
necessary in order to prevent the composition of the Retained Assets from having
such an effect on the Surviving Corporation, subject to the approval of Parent
and Besicorp, which approval will not be reasonably refused, in which case the
Retained Assets shall be deemed to include the assets so excluded from the
Contribution and the Retained Assets shall be deemed to exclude the assets so
substituted and the parties hereto shall execute any agreements, instruments,
waivers or assurances or any take any other actions as are necessary, desirable
or proper in connection with such substitution. Any expenses incurred by the
Surviving Corporation under this Section 1.9 shall be paid by Newco.
1.10 Issuance of Additional Shares of Newco Common Stock. Newco shall issue to
Besicorp such number of shares of Newco Common Stock as shall be required in
order that Besicorp shall be able to effect the Distribution on the Distribution
Date and after such Distribution no longer own any shares of Newco Common Stock.
1.11 Assets Being Contributed "AS IS WHERE IS". The Contributed Assets are being
transferred AS IS, WHERE IS, WITH ALL FAULTS. Besicorp makes no express or
implied warranty of any kind whatsoever to Newco or any other party, including,
without limitation, any representation as to physical condition or value of any
of the Contributed Assets or the future profitability or future earnings
performance of the Newco Businesses. ALL IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED. The parties hereto
agree that with respect to the Contributed Assets, including, without limitation
the Contributed Subsidiaries and the Newco Affiliates, the exclusive remedy of
the parties for any claim regarding the Contributed Assets shall be made under
the terms of this Agreement, the Indemnification Agreement or the Escrow
Agreement. Without limiting the generality of the preceding sentence, no legal
action sounding in tort, strict liability or under securities laws may be
maintained by Newco against the Retained Company with respect to any of the
Contributed Assets.
1.12 Release. In consideration of the Contributed Assets, Newco hereby
irrevocably releases, remises and forever discharges Besicorp, its successors
and assigns, and their respective parents, subsidiaries, officers, directors,
partners, members, managers, shareholders, representatives and employees
(collectively, the "Released Parties"), of and from any and all manner of rights
to indemnification or contribution, claims, actions, debts, liens, contracts,
agreements, obligations,
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promises, liabilities, accounts, rights, demands, damages, controversies,
losses, costs and expenses (including attorneys' fees and costs) ("Claims") of
any nature whatsoever, whether known or unknown, in law or in equity, in
contract or in tort, known or unknown, fixed or contingent, or otherwise,
including under the New York Business Corporation Law, which Newco or any of its
subsidiaries following the Spin-Off, now has or ever had or hereafter can, shall
or may have against the Released Parties for, upon, or by reason of any matter,
cause or thing whatsoever from the beginning of time to and including the date
of the Spin-Off, other than Claims made under the terms of (i) this Agreement,
(ii) the Indemnification Agreement, or (iii) the Escrow Agreement.
2. DISTRIBUTION
2.1 Cooperation Prior to the Distribution. As promptly as practicable after the
date hereof and prior to the commencement of business on the Distribution Date,
the Company and Newco shall take all such action as may be necessary or
appropriate to effect the Distribution, including without limitation the
specific actions set forth in Section 2.2 or Section 2.3 as applicable, so that
the Distribution shall be effective as of the Distribution Date.
2.2 Actions by Newco Prior to the Distribution. As promptly as practicable after
the date hereof and prior to the commencement of business on the Distribution
Date:
(a) Newco shall promptly prepare and file with the Securities and
Exchange Commission (the "SEC") a Registration Statement on Form 10-SB, or such
other form as may be appropriate (the "Form 10"), pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
regulations thereunder, to register the Newco Common Stock, and shall take all
reasonable action to cause the Form 10 to become effective as promptly as
possible. The Form 10 shall contain, or otherwise provide the basis for, an
information statement (the "Information Statement"), to be delivered to holders
of record of Besicorp Common Stock on the Distribution Date (the "Eligible
Holders").
(b) Newco shall amend its certificate of incorporation, if necessary,
and take all other corporate action, including without limitation, the obtaining
of all necessary authorizations, so that Newco will have authorized and issued
and outstanding a sufficient number of shares of Newco Common Stock to
effectuate the Distribution.
(c) Newco shall make all necessary arrangements to obtain a transfer
agent (the "Transfer Agent") for the Newco Common Stock.
2.3 Actions by Besicorp Prior to the Distribution. As promptly as practicable
after the date hereof and prior to the commencement of business on the
Distribution Date:
(a) Besicorp shall take all necessary corporate action, including,
without limitation, the obtaining of all necessary authorizations and the
declaring of the Distribution with a record date to
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be the Distribution Date (the "Record Date"), in order to distribute the Newco
Common Stock pursuant to the Distribution, and shall have available sufficient
cash in order to provide cash in lieu of fractional shares of Newco Common Stock
(the "Cash Distribution") to each Eligible Holder entitled to receive the Cash
Distribution in the Distribution.
(b) Besicorp shall take all reasonable actions as the Transfer Agent
may request in order that the Transfer Agent shall serve as the distribution
agent (the "Distribution Agent") for the Distribution and shall instruct the
Distribution Agent in a timely manner (the "Instruction") to, and use its best
reasonable efforts to cause the Distribution Agent to, (1) distribute the
Information Statement to the Eligible Holders prior to the Distribution, (2)
inform the Eligible Holders promptly after the Distribution Date about the
occurrence of the Distribution and the procedure for receiving shares of Newco
Common Stock and cash in lieu of fractional shares (collectively the shares of
Newco Common Stock and cash in lieu of fractional shares are referred to as the
"Entitlement") and (3) distribute to the Eligible Holders share certificates of
Newco Common Stock (and the Cash Distribution) upon the Distribution Agent's
receipt of the Eligible Holders' share certificates of Besicorp Common Stock.
(c) Besicorp shall deliver as many copies of the Information Statement
to the Distribution Agent as the Distribution Agent reasonably requests, which
delivery shall occur in a timely manner so that the Distribution Agent can
distribute the Information Statement to the Eligible Holders prior to the
Distribution.
(d) Besicorp shall deliver prior to the Distribution (1) sufficient
number of shares of Newco Common Stock in order to effect the Distribution and
(2) sufficient cash in order to provide the Cash Distribution to each Eligible
Holder entitled to receive the Cash Distribution.
(e) Besicorp shall cause Newco to take all necessary action in order to
comply with the Distribution, including but not limited to the actions
contemplated by Section 2.2.
3. COVENANTS
3.1 Cooperation Prior to the Spin-Off. As promptly as practicable after the date
hereof, the Company and Newco shall take all such action as may be necessary or
appropriate to effect the Spin- Off.
3.2 Employee Plans. The parties hereto shall take all reasonable action
necessary in order for Besicorp to assign to Newco all of the rights and in
order for Newco to assume all of the obligations under the Employee Plans.
3.3 Lease. On or before the Distribution Date, Besicorp shall enter into a lease
(the "Lease"), substantially in the form of Exhibit 3.3, with Newco, whereby
Newco shall lease the Retained Equipment from Besicorp for a term commencing on
the Contribution Date.
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3.4 Indemnification and Escrow Agreements and Related Matters. Prior to the
effectuation of the Distribution, Besicorp and Newco shall execute and deliver
the Indemnification Agreement in the form of Exhibit 3.4-A hereto (the
"Indemnification Agreement") and the Escrow Agreement in the form of Exhibit
3.4-B hereto (the "Escrow Agreement") and in connection therewith Besicorp shall
deliver the Escrow Fund consisting of $6,500,000 to the escrow agent as
contemplated by the Escrow Agreement. In addition, Newco agrees to, and shall
cause the Contributed Subsidiaries to agree to, indemnify Besicorp for any
failure of Newco to discharge and pay in full all of the Assumed Liabilities
when due and the failure of any Contributed Subsidiary to discharge and pay in
full its liabilities hereunder when due, including by means of the
Indemnification Agreement and Escrow Agreement, and the parties agree to execute
and deliver such agreements, on terms reasonably acceptable to Parent and Merger
Sub, which are customary in connection therewith.
3.5 Merger Costs. Besicorp shall pay all of the fees and expenses incurred by
the Company in connection with, relating to or arising out of the negotiation,
preparation, execution, delivery and performance of the Plan of Merger, and the
effectuation of the transactions contemplated thereby, including, without
limitation, financial advisors', attorneys', accountants' and other professional
fees and expenses (the "Merger Costs") prior to the Effective Time.
3.6 Further Assurances. The parties hereto shall execute and deliver such
agreements and arrangements which are customary in connection with spinoffs and
which provide for, among other matters, the provision of transition, support and
administrative services (including, without limitation, access to, and
cooperation regarding historical financial and tax information and knowledgeable
personnel) to Besicorp by Newco without cost to Besicorp and indemnification of
Besicorp by Newco and its subsidiaries for any failure of Newco to discharge and
pay in full all of the Assumed Liabilities or the failure of any Contributed
Subsidiaries to discharge and pay in full its Liabilities when due including by
means of the Indemnification Agreement and Escrow Agreement, all on terms
reasonably acceptable to Merger Sub and Parent. In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto shall use its best efforts to take, or cause to be taken , all actions,
and to do, or cause to be done, all things, reasonably necessary, proper or
advisable under applicable laws, regulations and agreements to effectuate and
make effective the transactions contemplated by this Agreement, including,
without limitation, using its best efforts to obtain the consents and approvals,
to enter into any amendatory agreements and to make the filings and applications
necessary or desirable in order to effectuate the transactions contemplated by
this Agreement. If Newco shall consider or be advised that any deeds, bills of
sale, assignments, confirmations, consents, other instruments and documents, or
assurances or any other acts or things are necessary, desirable or proper (i) to
vest, perfect or confirm, of record or otherwise, in Newco or its Subsidiaries
its right, title and interest in, to or under the Contributed Assets, the Newco
Affiliates, any of the rights, privileges, powers, franchises, properties or
assets contributed to any of the Contributed Subsidiaries in connection with the
Spin-Off or (ii) otherwise carry out the Spin-Off, Besicorp (prior to the
Effective Time) and the Surviving Corporation (at any time after the Effective
Time) will upon reasonable request of Newco execute and deliver all such deeds,
bills of sale, assignments and assurances and do all such other acts and things
as may be necessary, desirable or proper to carry out the Spin-Off, and any
expenses incurred by Besicorp (prior to the Effective Time)
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and the Surviving Corporation (at any time after the Effective Time) pursuant to
this sentence shall be paid by Newco.
4. POST CLOSING AGREEMENTS AND ACTIONS
4.1 Authorizations. Without limiting in any respect the right, title and
interest in and to the Contributed Assets to be acquired by Newco hereunder,
effective upon the Contribution Closing, Besicorp hereby irrevocably authorizes
Newco, the Contributed Subsidiaries and their successors and assigns: to demand
and receive, from time to time, any and all of the Contributed Assets, to give
receipts and releases for or in respect of the same, to collect, assert or
enforce any claim, right or title of any kind therein or thereto and, for such
purpose, from time to time, to institute and prosecute in the name of Besicorp
and the Retained Subsidiaries, or otherwise, any and all proceedings at law, in
equity or otherwise, which Newco shall deem expedient or desirable. Besicorp
further agrees that Newco and the Contributed Subsidiaries shall retain for
their own account any amounts collected pursuant to the foregoing authorization,
and Besicorp agrees to pay to Newco, if and when received, any amounts which
shall be received by the Company after the Contribution Date in respect of any
of the Contributed Assets. Without limiting in any respect Besicorp's right,
title and interest in and to the Retained Assets, effective upon the
Contribution Closing, Newco hereby irrevocably authorizes Besicorp, the Retained
Subsidiaries and their successors and assigns: to demand and receive, from time
to time, any and all of the Retained Assets, to give receipts and releases for
or in respect of the same, to collect, assert or enforce any claim, right or
title of any kind therein or thereto and, for such purpose, from time to time,
to institute and prosecute in the name of Newco and the Contributed
Subsidiaries, or otherwise, any and all proceedings at law, in equity or
otherwise, which Besicorp shall deem expedient or desirable. Newco further
agrees that Besicorp shall retain for its own account any amounts collected
pursuant to the foregoing authorization, and Newco agrees to pay to Besicorp, if
and when received, any amounts which shall be received by Newco after the
Contribution Date in respect of the Retained Assets.
4.2 Correspondence. The Company hereby authorizes Newco, the Contributed
Subsidiaries and their subsidiaries, on and after the Contribution Date, to
receive and open mail addressed to the Company and to deal with the contents
thereof in a responsible manner, provided that such mail relates (or reasonably
appears to relate) to Newco, the Newco Businesses, the Newco Affiliates, the
Contributed Assets, the Assumed Liabilities or does not relate (or reasonably
appears not to relate) to Besicorp, the Retained Businesses, the Retained
Subsidiaries, the Retained Assets or the Retained Liabilities. Newco, the
Contributed Subsidiaries and their subsidiaries shall deliver to Besicorp any
mail which relates to Besicorp, the Retained Businesses, the Retained
Subsidiaries, the Retained Assets or the Retained Liabilities addressed to the
Company which is delivered to and received by any of them. Newco hereby
authorizes Besicorp, on and after the Contribution Date, to receive and open
mail addressed to Newco and the Contributed Subsidiaries and to deal with the
contents thereof in a responsible manner, provided that such mail relates (or
reasonably appears to relate) to the Retained Businesses, the Retained
Subsidiaries, the Retained Assets or the Retained Liabilities. Besicorp shall
deliver to Newco any mail which relates to the Newco Businesses, the Newco
11
Affiliates, the Contributed Assets or the Assumed Liabilities addressed to Newco
or any Newco Affiliates which is delivered to and received by Besicorp or any
Retained Subsidiary.
4.3 Change of Name. Within thirty days after the effectuation of the Merger,
Besicorp will change its name to a name that does not use the word "Besicorp" or
any variation thereof and shall itself cease all use of the "Besicorp" name and
logo. Thereafter, neither Besicorp, the Retained Subsidiaries nor any of their
subsidiaries or affiliates shall have any right to use, and neither shall use,
the "Besicorp" name.
4.4 Settlement for Cash Collections and Disbursements. For each calendar month,
commencing with the month in which the Contribution Closing occurs and
continuing until determined by the parties no longer to be necessary, (a) Newco
shall cause all cash collections and all requests for cash disbursements
received by Newco, the Newco Affiliates and their subsidiaries for the benefit
of Besicorp, the Retained Subsidiaries and their subsidiaries during the
relevant month to be remitted to the party entitled to the benefit thereof as
promptly as reasonably possible after the receipt thereof and (b) Besicorp shall
cause all cash collections and all requests for cash disbursements received by
Besicorp, the Retained Subsidiaries and their subsidiaries for the benefit of
Newco, the Newco Affiliates and their subsidiaries during the relevant month to
be remitted to the party entitled to the benefit thereof as promptly as
reasonably possible after the receipt thereof..
5. THE CONTRIBUTION - CLOSING AND CLOSING CONDITIONS
5.1 Contribution Closing and Contribution Date. Subject to Sections 5.4, 5.5,
5.6 and 5.7, the closing of the transactions contemplated by Article 1 of in
this Agreement (the "Contribution Closing") shall take place at 10:00 A.M. local
time on the first business day after the date when all of the conditions
required pursuant to Sections 5.4, 5.5, 5.6 and 5.7 to be satisfied prior to the
Contribution Closing have been satisfied or waived, or such other time after all
of the conditions required pursuant to Sections 5.4, 5.5, 5.6 and 5.7 to be
satisfied prior to the Contribution Closing have been satisfied or waived (the
"Contribution Date"), and at such place as shall be agreed upon by the parties.
5.2 Besicorp Deliveries at the Contribution Closing. At the Contribution
Closing, Besicorp and the Retained Subsidiaries shall execute and deliver to
Newco:
(a) one or more bills of sale and instruments of assignment
substantially in the form of Exhibit 5.2(a) hereto, duly executed by the
Retained Company;
(b) full warranty deeds, with recourse limited to title insurance, duly
executed by the Retained Company, with respect to such of the Contributed Realty
as is owned in fee by the Retained Company;
12
(c) assignments of the leases included in the Contributed Realty, duly
executed by the Retained Company;
(d) assignments of the Contributed Intellectual Property, duly
executed by the Retained Company;
(e) assignments of the Assigned Instruments, duly executed by the
Retained Company;
(f) the Lease, duly executed by Besicorp;
(g) evidence of the delivery of the Cash Contribution in cash
required by Section 1.1(n);
(h) all of the other Contributed Assets; and
(i) all such other conveyances, deeds, assignments, confirmations,
powers of attorney, and other instruments, duly executed by the Retained
Company, as Newco shall determine are necessary, expedient or proper in order to
effectuate the contribution of the Contributed Assets and the assignment of the
Newco Affiliates, the Employee Plans and the Insurance Policies as contemplated
hereby.
5.3 Newco Deliveries at the Contribution Closing. At the Contribution
Closing, Newco shall execute and deliver to Besicorp:
(a) the Lease, duly executed by Newco; and
(b) a receipt by Newco acknowledging the delivery of the Cash
Contribution pursuant to Section 1.1(n) hereof; and
(c) all such assumptions, confirmations, releases, indemnifications and
other instruments, duly executed by Newco and/or the appropriate Newco
Affiliates, as Besicorp shall determine are necessary or proper in order to
evidence the assumption of the Assumed Liabilities and the Employee Plans.
5.4 General Conditions to the Contribution. The respective obligations of each
party hereto to effectuate the Contribution and to perform all other obligations
set forth herein other than the effectuation of the Distribution are subject to
the satisfaction or waiver (as provided for therein) of all of the conditions
set forth in Section 6.1 and Section 6.2 of the Plan of Merger.
5.5 Conditions to the Obligations of the Retained Company to the Contribution.
The obligations of the Retained Company to effectuate the Contribution and to
perform all other obligations set forth herein other than the effectuation of
the Distribution are subject to the satisfaction or waiver of the condition that
Newco shall have effected its assumption of the Assumed Liabilities, as
contemplated in Section 1.5 hereto.
13
5.6 Conditions to the Obligations of Newco to the Contribution. The obligations
of Newco to effectuate the transactions contemplated herein other than the
Distribution and to perform all other obligations set forth herein (other than
those relating to the Distribution) are subject to the satisfaction or waiver of
the condition that the Retained Company shall have contributed to Newco the
Contributed Assets and Newco Affiliates, as contemplated in Sections 1.1 and 1.2
hereto.
5.7 Other Approvals. All authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations or waiting periods imposed by, any
governmental entity or other public or private entity necessary to effectuate
the Contribution, including the Contribution of the Contributed Assets and the
Newco Affiliates and the assumption of the Assumed Liabilities, or the failure
of which to obtain would have a material adverse effect on either Newco or the
Company, shall have been filed, occurred, or been obtained prior to the
Contribution.
6. THE DISTRIBUTION - CLOSING AND CLOSING CONDITIONS
6.1 Distribution Closing and Distribution Date. Subject to Section 6.4, the
closing of all of the transactions completed by this Agreement (other than those
contemplated by Article 1 of this Agreement) (the "Distribution Closing") shall
take place at 10:00 A.M. local time on the first business day after the date
when all of the conditions required pursuant to Section 6.4 to be satisfied
prior to the Distribution Closing have been satisfied or waived, or such other
time after all of the conditions required pursuant to Article 6 to be satisfied
prior to the Distribution Closing have been satisfied or waived (the
"Distribution Date") and at such place as shall be agreed upon by the parties.
6.2 Company Deliveries at the Distribution Closing. At the Distribution
Closing, Besicorp shall execute and deliver to Newco:
(a) the Indemnification Agreement, duly executed by Besicorp;
(b) the Escrow Agreement, duly executed by Besicorp;
(c) a certificate of an officer of Besicorp indicating that the Record
Date has occurred, the Distribution has commenced and the Instruction has been
delivered; and
(d) all such documents and other instruments as Newco shall reasonably
require to effectuate the Distribution or as evidence of Besicorp's compliance
with all of the conditions precedent to the Distribution.
In addition at the Distribution Closing, Besicorp shall deliver to the
Distribution Agent (i) the Instruction, (ii) the share certificates evidencing
all of the shares of Newco Common Stock held by Besicorp immediately prior to
the Distribution Closing and (iii) the cash necessary to effectuate the Cash
Distribution.
14
6.3 Newco Deliveries at the Distribution Closing. At the Distribution
Closing, Newco shall execute and deliver to Besicorp:
(a) the Indemnification Agreement, duly executed by Newco;
(b) the Escrow Agreement, duly executed by Newco; and
(c) all such documents and other instruments as Besicorp shall
reasonably require from Newco to effectuate the Distribution or as evidence of
Newco's compliance with all its conditions precedent to the Distribution.
In addition at the Distribution Closing, Newco shall deliver to the
Distribution Agent the share certificates necessary to effectuate the
Distribution.
6.4 General Conditions to the Distribution. The respective obligations of each
party hereto to effectuate the Distribution and to perform all other obligations
pursuant to Article 3 hereto are subject to (1) the effectuation of the
Contribution, (2) the Form 10-SB being effective and (3) the satisfaction or
waiver (as provided for therein) of all of the conditions set forth in Section
6.1 and Section 6.2 of the Plan of Merger.
7. ACCESS TO INFORMATION
7.1 Cooperation with Respect to Government Filings and Reports. Each of Besicorp
and Newco agrees to provide the other party (without cost to such other party)
with access during reasonable business hours and for a reasonable business
purpose and such cooperation and information, including, but not limited to, all
records, books, contracts, instruments, computer data and other data, including
all historical financial and tax information, and personnel with relevant
knowledge of such information, as may be reasonably requested by the other in
connection with the preparation or filing of any government report or other
government filing, contemplated by this Agreement or in conducting any other
government proceeding relating to pre-Distribution events. Such cooperation and
information shall include, without limitation, promptly forwarding copies of
appropriate notices and forms or other communications received from or sent to
any government authority to the appropriate party. Each party shall make its
employees and facilities available during normal business hours and on
reasonable prior notice shall provide explanation of any documents or
information provided hereunder.
7.2 Cooperation with Confidentiality. Each of Besicorp and Newco agrees to use
their best efforts to protect the confidentiality of all non-public information,
attorney-client privileged information, attorney work product information and
other privileged information concerning the other party and neither party shall
waive any claim that information is privileged without the written consent of
the other party.
15
8. MISCELLANEOUS
8.1 Termination. This Agreement may be terminated at any time prior to the
Contribution Date by mutual written consent of Besicorp and Newco. This
Agreement shall terminate upon termination of the Plan of Merger prior to the
Merger. If this Agreement is terminated after the Contribution but before the
Distribution on account of the termination of the Plan of Merger prior to the
Merger, the parties hereto agree to use their best efforts to promptly, to the
extent practical, unwind the Contribution.
8.2 Entire Agreement. This Agreement, together with the schedules and exhibits
hereto, sets forth the entire understanding of the parties with respect to its
subject matter and supersedes all prior understandings of the parties hereto
with respect to its subject matter.
8.3 No Third Party Rights. No person or entity other than the parties hereto,
including, but not limited to, any former or present employee of Newco or the
Company (including, without limitation, any assignee or beneficiary thereof)
shall have any rights with respect to any obligations of any entity under this
Agreement (including, without limitation, the documents and instruments referred
to herein), and nothing in this Agreement (including, without limitation,
Article 1 hereof and the documents and instruments referred to herein),
expressed or implied, is intended to confer on any such employee any rights or
remedies.
8.4 Amendments; Waivers. This Agreement (including the Schedules and Exhibits
hereto) may be amended by the parties at any time prior to the Distribution
Date. Any such amendment shall be in writing signed on behalf of the party or
parties to be charged. At any time prior to the Distribution Date, either
Besicorp or Newco may waive compliance by the other party with any of the
agreements or conditions contained in this Agreement. Any agreement on the part
of a party to any such waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. The waiver of any party to this
Agreement or otherwise shall not constitute a waiver of any future breach of
such provision or any other provision.
8.5 Communications. All notices, consents and other communications given under
this Agreement shall be in writing and shall be deemed to have been duly given
(a) when delivered by hand or by Federal Express or similar overnight courier
to, (b) or the fourth day (other than Sundays or holidays during which there are
no regular postal deliveries) after being deposited in any United States Post
Office enclosed in a postage prepaid registered or certified envelope addressed
to, or (c) when successfully transmitted by telecopier (with a confirming copy
of such communication to be sent as provided in clauses (a) or (b) above) to,
the party for whom intended, at the address, or telecopier number for such party
set forth below, or to such other address, or telecopier number as may be
furnished by such party by notice in the manner provided herein; provided,
however, that any notice of change of address, or telecopier number shall be
effective only upon receipt.
16
If to Besicorp prior to the Effective Date:
Besicorp Group Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxx, Esq.
Fax: (000) 000-0000
With a copy to:
Xxxxxxxx Brog Leinwand Xxxxxx Xxxxxxxx & Xxxxx P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: A. Xxxxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
If to Besicorp on or after the Distribution Date:
BGI Acquisition LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Fax: (000) 000-0000
With a copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to Parent:
BGI Acquisition LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Fax: (000) 000-0000
17
With a copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to Newco:
Besicorp Ltd.
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxx, Esq.
Fax: (000) 000-0000
With a copy to:
Xxxxxxxx Xxxx Xxxxxxxx Xxxxxx Xxxxxxxx & Xxxxx P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: A. Xxxxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
Parent shall be given copies of all notices given prior to the
Effective Time hereunder by any party to any other party hereto promptly after
such notices are given to such other parties.
8.6 Successors and Assigns. This Agreement shall be binding on, enforceable
against and inure to the benefit of the parties hereto and their respective
successors (including, after the Effective Time, the Surviving Corporation as
the successor to Besicorp) and permitted assigns, and nothing herein is intended
to confer any right, remedy or benefit upon any other person. Neither party may
assign its rights or delegate its obligations under this Agreement without the
express written consent of the other party.
8.7 Governing Law; Jurisdiction. This agreement shall in all respects be
governed by and construed in accordance with the laws of the State of New York
without regard to any applicable conflicts of law principles. Each of the
parties hereto expressly and irrevocably submits to the non-exclusive personal
jurisdiction of the United States District Court and to the jurisdiction of any
other competent court of the State of New York located in the County of Ulster,
in connection with all disputes arising out of or in connection with this
Agreement or the transactions contemplated herein and agrees not to commence any
litigation relating thereto except in such courts. Each party hereby waives the
right to any other jurisdiction or venue for any litigation arising out of or in
connection with this Agreement or the transactions contemplated herein to which
any of them may be entitled
18
by reason of its present or future domicile. The parties agree that service of
process may be made by U.S. registered mail, return receipt requested, to a
party at its address set forth in Section 8.5. However, the foregoing shall not
limit the right of a party to effect service of process on the other party by
any other legally available method.
8.8 Savings Clause. If any provision of this Agreement is held to be invalid or
unenforceable by any court or tribunal of competent jurisdiction, the remainder
of this Agreement shall not be affected thereby, and such provision shall be
carried out as nearly as possible according to its original terms and intent to
eliminate such invalidity or unenforceability.
8.9 Expenses. Except as otherwise provided 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 effectuation of the transactions contemplated hereby,
including, without limitation, financial advisors', attorneys', accountants' and
other professional fees and expenses; provided, however, that Newco shall bear
all of such fees and expenses incurred subsequent to the Distribution Date.
8.10 Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
8.11 Construction. Headings contained in this Agreement are for convenience only
and shall not be used in the interpretation of this Agreement. References herein
to the Agreement shall be deemed to include all Schedules and Exhibits hereto,
and references herein to Articles, Sections, Schedules and Exhibits are to the
articles, sections, schedules and exhibits of this Agreement. As used herein,
the singular includes the plural, and the masculine, feminine and neuter gender
each includes the other where the context so indicates.
8.12 No Limitation on Plan of Merger. Notwithstanding any implication to the
contrary which may be implied from this Agreement, nothing in this Agreement
shall be deemed to limit any of the Surviving Corporation's rights or
responsibilities set forth in the Plan of Merger (including, without limitation,
those regarding the right to dissolve the Surviving Corporation set forth in the
Plan of Merger).
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Besicorp Group Inc.
By:__________________________
Title:_________________________
Besicorp Ltd.
By:__________________________
Title:_________________________
20
Exhibits 3.3 the Lease
3.4-a Indemnification Agreement
3.4-b Escrow Agreement
5.2(a) Bills of Sale
Schedules 1.1(a) Contributed Realty
1.1(o) Claims
1.2(a) Contributed Subsidiaries
1.3(a) Section 1.3(a) Securities
1.3(b) Retained Instruments
1.4 Retained Subsidiaries
1.6 Retained Liabilities
1.7(b) Employee Plans
21
Schedule 1.1(a)
Contributed Realty
00 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000
Property bordering Xxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
22
Schedule 1.1(o)
Claims
Besicorp Group Inc. and Bio-Energy Corp. v.
Xxxxxx X. Persons, Xxxxxxx Corporation and Tecogen, Inc.
US District Court, New Jersey
Index No. 93-3241
Besicorp Group Inc. v. Xxxxx Xxxxx, individually and d/b/a
Xxxx Construction
Supreme Court, New York
Index No. 98-1377
23
Schedule 1.2(a)
Contributed Subsidiaries
SunWize Technologies, Inc.
Bio-Energy Systems, Inc.
Bio-Hydroponics, Inc.
Bio-Energy Services Corp.
Beta Allegany, Inc.
Beta Hydroponics, Allegany, Inc.
Besicorp International Power Corp.
Beta International Power Corp.
Beta Worldwide Power Inc.
Beta Mexico
Beta Brasil Inc.
Beta BGE Inc.
Reina Distributing, Inc.
24
Schedule 1.3(a)
Section 1.3(a) Securities
50,000 shares of common stock of Niagara Mohawk Power Corporation
25
Schedule 1.3(b)
Retained Instruments
None
26
Schedule 1.4
Retained Subsidiaries
Beta Beaver Falls, Inc.
Beta Carthage, Inc.
Beta C&S Limited
Beta "N"Limited
Beta Natural Dam, Inc.
Beta Nova, Inc.
Beta South Glens Falls, Inc.
Beta Syracuse, Inc.
27
Schedule 1.6
Retained Liabilities
The Liabilities of Besicorp or any Retained Subsidiary (actual or accrued) for
unpaid federal income Taxes for the current fiscal year based on the
consolidated net income of Besicorp through the Effective Time.
The Liability of Besicorp or its Subsidiaries for New York State income Taxes
for Besicorp's current fiscal year.
The intercompany Liabilities of Besicorp to a Retained Subsidiary as identified
in Schedule 3.2.2 of the Plan of Merger.
The Merger Costs (other than those Merger Costs that have not been paid by the
Effective Time).
28
Schedule 1.7(b)
Employee Plans
401(k) Plan and Trust
Cafeteria
29
