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AGREEMENT AND PLAN OF MERGER
by and between
9278 COMMUNICATIONS INC.,
and
NTSE HOLDING CORP.
dated as of
January 31, 2003
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TABLE OF CONTENTS
ARTICLE I - THE MERGER
Section 1.1 The Merger...............................................................1
Section 1.2 Effective Time...........................................................1
Section 1.3 Closing..................................................................2
Section 1.4 Certificate of Incorporation; By-Laws....................................2
Section 1.5 Directors and Officers of the Surviving Corporation......................2
ARTICLE II - CONVERSION OF SHARES
Section 2.1 Conversion of Capital Stock..............................................2
Section 2.2 Appointment of Paying Agent; Surrender of Certificates; Payment of
Merger Consideration.....................................................3
Section 2.3 Stock Options............................................................5
Section 2.4 Dissenter's Rights.......................................................5
ARTICLE III -REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Section 3.1 Organization.............................................................6
Section 3.2 Capitalization...........................................................6
Section 3.3 Authorization; Validity of Agreement and Certificate of Designation......7
Section 3.4 No Violations; Consents and Approvals....................................8
Section 3.5 SEC Reports and Financial Statements.....................................8
Section 3.6 Absence of Certain Changes. ............................................9
Section 3.7 Proxy Statement; Information in Schedule 13E-3...........................9
Section 3.8 Opinion of Financial Advisor............................................10
Section 3.9 Financial Statements....................................................10
Section 3.10 No Undisclosed Liabilities..............................................10
Section 3.11 Litigation..............................................................10
Section 3.12 Taxes...................................................................11
ARTICLE IV -REPRESENTATIONS AND
WARRANTIES OF HOLDING
Section 4.1 Organization............................................................11
Section 4.2 Capitalization..........................................................11
Section 4.3 Authorization; Validity of Agreement....................................11
Section 4.4 Consents and Approvals; No Violations...................................12
Section 4.5 Information in Proxy Statement and Schedule 13E-3.......................12
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ARTICLE V - COVENANTS
Section 5.1 Interim Operations of the Company.......................................13
Section 5.2 Further Action; Reasonable Efforts......................................15
Section 5.3 Proxy Statement; Schedule 13E-3.........................................16
Section 5.4 Meeting of Stockholders of the Company..................................16
Section 5.5 Notification of Certain Matters.........................................17
Section 5.6 Publicity...............................................................17
Section 5.7 Directors' and Officers' Insurance and Indemnification..................17
Section 5.8 Brokers or Finders......................................................18
Section 5.9 Funding of Holding Prior to Closing. ...................................18
ARTICLE VI - CONDITIONS
Section 6.1 Conditions to Each Party's Obligation To Effect the Merger..............19
Section 6.2 Conditions to the Obligation of the Company to Effect the Merger........19
Section 6.3 Conditions to Obligations of Holding to Effect the Merger...............20
ARTICLE VII - TERMINATION
Section 7.1 Termination.............................................................21
Section 7.2 Effect of Termination...................................................23
ARTICLE VIII - MISCELLANEOUS
Section 8.1 Fees and Expenses.......................................................23
Section 8.2 Confidentiality.........................................................23
Section 8.3 Amendment; Waiver.......................................................23
Section 8.4 Non-survival of Representations and Warranties..........................24
Section 8.5 Interpretation..........................................................24
Section 8.6 Headings................................................................25
Section 8.7 Counterparts............................................................26
Section 8.8 Entire Agreement; No Third Party Beneficiaries; Rights of Ownership.....26
Section 8.9 Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership...............................................................26
Section 8.10 Severability............................................................26
Section 8.11 Governing Law...........................................................26
Section 8.12 Assignment..............................................................26
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of January 31, 2003, by
and between 9278 Communications, Inc., a Delaware corporation (the "Company"),
and NTSE Holding Corp., a Delaware corporation ("Holding").
WHEREAS, the Board of Directors of Holding and the Board of
Directors of the Company have each approved, and deem it advisable and in the
best interests of their respective stockholders to consummate, the acquisition
of Holding by the Company through the merger transaction, and upon the terms and
subject to the conditions, set forth herein; and
WHEREAS, in furtherance of such acquisition, the Board of
Directors of Holding and the Board of Directors of the Company have each
approved this Agreement and the merger of Holding with and into the Company in
accordance with the terms, and subject to the conditions, of this Agreement and
in accordance with the General Corporation Law of the State of Delaware (the
"DGCL");
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I - THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the
conditions of this Agreement and in accordance with the DGCL, at the Effective
Time (as defined in Section 1.2 hereof), Holding shall be merged with and into
the Company (the "Merger") and the separate corporate existence of Holding shall
cease. After the Merger, the Company shall continue as the surviving corporation
(sometimes hereinafter referred to as the "Surviving Corporation"). The Merger
shall have the effect as provided in the applicable provisions of the DGCL.
Without limiting the generality of the foregoing, upon the Merger, all the
rights, privileges, immunities, powers and franchises of the Company and Holding
shall vest in the Surviving Corporation and all obligations, duties, debts and
liabilities of the Company and Holding shall be the obligations, duties, debts
and liabilities of the Surviving Corporation.
Section 1.2 Effective Time. At the time of the Closing (as
defined in Section 1.3 hereof), Holding and the Company will cause an
appropriate Certificate of Merger (the "Certificate of Merger") to be executed
and
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thereafter to be filed with the Secretary of State of the State of Delaware (the
"Secretary of State") in such form and executed as provided in the DGCL. The
Merger shall become effective on the date on which the Certificate of Merger has
been duly filed with the Secretary of State or, if another effective date is
agreed upon by the parties and specified in the Certificate of Merger, then on
such specified date, and such date is hereinafter referred to as the "Effective
Time."
Section 1.3 Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m., New York time, on a date (the "Closing Date") to
be specified by the parties, which shall be no later than the second business
day after satisfaction or waiver of all of the conditions set forth in Article
VI hereof, at the offices of Snow Xxxxxx Xxxxxx PC, 000 Xxxxx Xxxxxx, Xxx Xxxx,
XX 00000, unless another date, time or place is agreed to in writing by the
parties hereto.
Section 1.4 Certificate of Incorporation; By-Laws. Pursuant to
the Merger, (a) the certificate of incorporation of the Company, as amended, as
in effect immediately prior to the Effective Time (the "Certificate of
Incorporation"), shall be the certificate of incorporation of the Surviving
Corporation until thereafter amended in accordance with applicable law, and (b)
the by-laws of Holding, as in effect immediately prior to the Effective Time
(the "By-laws"), shall be the by-laws of the Surviving Corporation until
thereafter amended in accordance with applicable law.
Section 1.5 Directors and Officers of the Surviving
Corporation. Following the Merger, the directors of the Company immediately
prior to the Effective Time shall be the directors of the Surviving Corporation
until their successors shall have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in accordance with the
Surviving Corporation's certificate of incorporation and by-laws. Following the
Merger, the officers of the Company immediately prior to the Effective Time
shall be the officers of the Surviving Corporation until their respective
successors have been elected or appointed or until their death, resignation or
removal in accordance with the certificate of incorporation and by-laws of the
Surviving Corporation.
ARTICLE II -CONVERSION, CANCELLATION AND
SURRENDER OF SHARES; MERGER CONSIDERATION
Section 2.1 Conversion of Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the holders
of any shares of the Company's Common Stock, $.001 par value (a "Company Share"
or "Company
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Shares") or the holders of shares of Holding's common stock, no par value (the
"Newco Common Stock"):
(a) Each Company Share which is issued and outstanding
immediately prior to the Effective Time, other than (i) Company Shares, if any,
to be cancelled in accordance with Section 2.1(c) hereof and (ii) Dissenting
Shares (as defined in Section 2.4 hereof) if any, shall, from and after the
Effective Time be converted into the right to receive the sum of ten cents
(US$0.10) (the "Merger Consideration"). All Company Shares, as so converted,
shall, from and after the Effective Time, no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each holder
of a certificate representing any such Company Shares shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such certificate in accordance with
the provisions of Section 2.2 below. Any payment made pursuant to this Section
2.1(a) shall be made net of applicable withholding taxes to the extent such
withholding is required by law.
(b) Each issued and outstanding share of Holding Common Stock
which is issued and outstanding immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of common stock
of the Surviving Corporation.
(c) All Company Shares, if any, that are held by the Company
as treasury stock shall be cancelled and retired at the Effective Time and shall
cease to exist, and no Merger Consideration shall be delivered in exchange
therefor.
Section 2.2 Appointment of Paying Agent; Surrender of
Certificates; Payment of Merger Consideration
(a) Prior to the Closing, the Company shall designate a bank,
trust company or stock transfer agent to act as paying agent (the "Paying
Agent") in connection with the Merger. The Paying Agent shall be reasonably
acceptable to Holding, and the Company and Holding shall enter into an agreement
with the Paying Agent, satisfactory to the parties and their attorneys, under
which the Paying Agent shall receive and pay the funds constituting Merger
Consideration, to which holders of Company Shares shall become entitled pursuant
to Section 2.1(a) hereof, and shall take the other actions set forth in this
Article II.
(b) Prior to the Closing, Holding will take such steps as are
necessary in order to ensure that (i) Holding has, as of the Closing, not less
than $1,250,000 in available cash balances and tangible net worth, and (ii) that
such cash balances will be available to and become the property of the Surviving
Corporation immediately after completion of the Closing. Immediately after the
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Effective Time, the Surviving Corporation shall deliver such funds to the Paying
Agent to hold and to use as necessary to pay the Merger Consideration in
accordance with the procedures set forth in Paragraph (c) of this Section 2.2.
Such funds shall be invested by the Paying Agent as directed by the Surviving
Corporation. All interest earned on such funds shall be paid to the Surviving
Corporation and any balance remaining unused for paying the Merger Consideration
after three months from the Effective Time may be refunded to the Surviving
Corporation at its option; provided, however, that the Surviving Corporation
shall be liable for any cash payments required to be made thereafter pursuant to
Section 2.1 hereof. Notwithstanding the foregoing, the Surviving Corporation
shall not be liable to any former holder of the Company Shares for any amount
paid to a public official pursuant to applicable abandoned property, escheat or
similar laws.
(c) At the Effective Time, the Surviving Corporation will
instruct the Paying Agent to promptly mail, to each record holder of a
certificate or certificates ("Certificate" or "Certificates") which represented
Company Shares prior to the Effective Time, (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and which shall be in such form and have such other provisions as Holding
may reasonably specify), and (ii) instructions for effecting the surrender of
the Certificates in exchange for payment of the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Paying Agent together with
such letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor the Merger Consideration for each
Company Share formerly represented by such Certificate, to be mailed to such
holder promptly following the receipt of any such Certificate and such executed
letter of transmittal. If payment of the Merger Consideration is to be made to a
person other than the person in whose name the surrendered Certificate is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.2, each Certificate (other than
Certificates representing (i) Company Common Stock held in the treasury of the
Company or (ii) Dissenting Shares (as defined in Section 2.4)) shall be deemed
at any time after the Effective Time to represent only the right to receive the
Merger Consideration as contemplated by this Section 2.2.
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(d) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person (as
defined in Section 3.1) claiming such Certificate to be lost, stolen or
destroyed, the Paying Agent will issue in exchange for such lost, stolen or
destroyed Certificate the Merger Consideration deliverable in respect thereof as
determined in accordance with this Article II, provided that the Person to whom
the Merger Consideration is paid shall, as a condition precedent to the payment
thereof, give the Surviving Corporation a bond in such sum as it may direct or
otherwise indemnify the Surviving Corporation in a manner satisfactory to it
against any claim that may be made against the Surviving Corporation with
respect to the Certificate claimed to have been lost, stolen or destroyed.
(e) From and after the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no transfers whatsoever
recorded or permitted on the stock transfer books of the Surviving Corporation
with respect to any Company Shares which were outstanding immediately prior to
the Effective Time.
Section 2.3 Stock Options. Holding and the Company each
warrant and represent that no options, warrants, calls, preemptive or other
rights to purchase or acquire their respective securities shall be issued and
outstanding as of the Effective Time.
Section 2.4 Dissenter's Rights. Notwithstanding anything in
this Agreement to the contrary, Company Shares outstanding immediately prior to
the Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has delivered a written demand for
appraisal of such shares in accordance with Section 262 of the DGCL (such
Company Shares being referred to as "Dissenting Shares"), shall not be converted
into the right to receive the Merger Consideration, as provided in Section
2.1(a) hereof. Such holders shall instead be entitled to receive payment of the
appraised value of such Dissenting Shares in accordance with the provisions of
Section 262 of the DGCL, except that all Dissenting Shares held by holders who
shall have failed to perfect, or who effectively shall have withdrawn or lost,
their rights to appraisal under such Section 262 shall thereupon be treated as
if such Dissenting Shares had been converted as of the Effective Time into the
right to receive the Merger Consideration (in accordance with Section 2.1(a)
hereof) to which such holder is entitled, without interest or dividends thereon.
The Company shall give Holding prompt notice of any demands received by the
Company for appraisal of Dissenting Shares, and, prior to the Effective Time,
Holding shall have the right to participate in all negotiations and proceedings
with respect to such demands. Prior to the Effective Time, the Company shall
not, except with the prior written
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consent of Holding, make any payment with respect to, or offer to settle, any
such demands.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Holding, as of the date
hereof and as of and at the Closing Date, as follows:
Section 3.1 Organization. Each of the Company and its
Subsidiaries (hereinafter defined) is a corporation duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation as set forth on Schedule 3.1, and has all requisite corporate
power and authority to own, lease, use and operate its properties and to carry
on its business as it is now being conducted. Each of the Company and its
Subsidiaries is qualified or licensed to do business as a foreign corporation
and is in good standing in each jurisdiction in which it owns real property or
in which the nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so qualified or licensed
individually and in the aggregate would not have or result in a Material Adverse
Effect. The term "Material Adverse Effect" means a material adverse effect on
the business, assets, liabilities, results of operations, condition (financial
or otherwise) or business prospects of the Company and its Subsidiaries, taken
as a whole. None of the Company or any of its Subsidiaries is in breach or
violation of any of its certificate of incorporation, by-laws or other
organizational documents. The term "Subsidiary" means, with respect to any
Person, any corporation or other entity of which 50% or more of the securities
or other interests having by their terms ordinary voting power for the election
of directors or others performing similar functions with respect to such entity
is directly or indirectly owned by such Person. The term "Person" means any
natural person, firm, individual, partnership, joint venture, business trust,
trust, association, corporation, company, unincorporated entity or Governmental
Entity (as defined in Section 3.4(b)).
Section 3.2 Capitalization. As of the date hereof, the
authorized capital stock of the Company consists of (a) 40,000,000 shares of
Company Common Stock, of which 23,932,912 are issued and outstanding, and (b)
5,000,000 shares of preferred stock, none of which are issued and outstanding.
All the outstanding shares of the Company's Common Stock are duly authorized,
validly issued, fully paid and nonassessable. There are no existing (i) options,
warrants, calls, preemptive rights, subscriptions or other rights, convertible
securities, agreements or commitments of any character obligating the Company or
any of its Subsidiaries to issue, transfer or sell any shares of capital stock
of, or other
6
equity interest in, the Company or any of its Subsidiaries or securities
convertible into or exchangeable for such shares or equity interests, (ii)
contractual obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any capital stock of the Company or any of its
Subsidiaries or (iii) voting trusts or similar agreements to which the Company
or any of its Subsidiaries is a party with respect to the voting of the capital
stock of the Company or any of its Subsidiaries. The list of the Company's
stockholders prepared by the Company's stock transfer agent shows that Xxxxxxx
("Xxxxxxx"), the Company's Chief Executive Officer, is the holder of record of
12,705,125 Company Shares and the beneficial holder of an additional 260,500
Company Shares.
Section 3.3 Authorization; Validity of Agreement and
Certificate of Designation.
(a) The Company has the requisite corporate power and
authority to execute and deliver this Agreement and, subject to approval of its
stockholders as contemplated by Sections 5.6 and 6(1)(c) hereof, to consummate
the transactions contemplated hereby. The execution, delivery and performance by
the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Company (the "Board") and, other than approval and adoption of
this Agreement by the holders of the outstanding shares of Company Common Stock
contemplated by Sections 5.6 and 6.1(c) hereof, no other corporate proceedings
on the part of the Company are necessary to authorize the execution, delivery
and performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company and, assuming due authorization, execution
and delivery of this Agreement by Holding, is a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except that such enforcement may be subject to or limited by (i) bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).
(b) The Company's Board of Directors, at a meeting duly called
and held, has (i) unanimously determined that this Agreement and the Merger are
fair to, and in the best interests of, the holders of Company Shares which are
not beneficially owned by Xxxxxxx, (ii) approved this Agreement and the
transactions contemplated hereby and thereby, including the Merger, and such
approval is sufficient to satisfy the provisions of any applicable laws of the
State of Delaware, and (iii) resolved to recommend the approval and adoption of
this Agreement and approval of the Merger by the Company's stockholders.
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Section 3.4 No Violations; Consents and Approvals.
(a) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation by the Company of the transactions
contemplated hereby will (i) violate any provision of the certificate of
incorporation or by-laws of the Company or its Subsidiaries, (ii) conflict with,
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration or to the imposition of any lien) under,
or result in the acceleration or trigger of any payment, time of payment,
vesting, or increase in the amount of any compensation or benefit payable
pursuant to, the terms, conditions or provisions of any note, bond, mortgage,
indenture, guarantee or other evidence of indebtedness, lease, license,
contract, agreement, plan or other instrument or obligation to which the Company
or any of its Subsidiaries is a party or by which any of them or any of their
assets may be bound or (iii) conflict with or violate any federal, state, local
or foreign order, writ, injunction, judgment, award, decree, statute, law, rule
or regulation (collectively, "Laws") applicable to the Company, any of its
Subsidiaries or any of their properties or assets, except, in the case of
clauses (ii) or (iii), for such conflicts, violations, breaches, defaults or
liens which individually and in the aggregate would not have or result in a
Material Adverse Effect or materially impair or delay the consummation of the
transactions contemplated hereby.
(b) No filing or registration with, declaration or
notification to, or order, authorization, consent or approval of, any federal,
state, local or foreign court, legislative, executive or regulatory authority or
agency (a "Governmental Entity") or any other Person is required in connection
with the execution, delivery and performance of this Agreement by the Company or
the consummation by the Company of the transactions contemplated hereby, except
(i) applicable requirements under the Securities Exchange Act of 1934 (the
"Exchange Act"), (ii) the filing of the Certificate of Merger with the Secretary
of State and (iii) such other consents, approvals, orders, authorizations,
notifications, registrations, declarations and filings the failure of which to
be obtained or made, individually and in the aggregate, would not have or result
in a Material Adverse Effect or materially impair or delay the consummation of
the transactions contemplated hereby.
Section 3.5 SEC Reports and Financial Statements. The Company
has filed with the SEC all forms and documents required to be filed by it since
January 1, 1998 under the Securities Act of 1933, as amended (the "Securities
Act") and the Exchange Act and has heretofore made available to Holding (i) its
Annual Reports on Form 10-K for the years ended December 31,
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1999, 2000 and 2001 and (ii) all other forms, reports and registration
statements filed by the Company with the SEC since January 1, 1999. The
documents described in the preceding sentence (whether filed before, on or after
the date hereof) are referred to in this Agreement collectively as the "Company
SEC Documents". As of their respective dates, the Company SEC Documents (a) did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act , as the case may be,
and the applicable rules and regulations of the SEC promulgated thereunder. The
consolidated financial statements included in the Company SEC Documents have
been prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved and fairly
present the consolidated financial position and the consolidated results of
operations and cash flows of the Company and its consolidated Subsidiaries as of
and at the dates thereof or for the periods presented therein.
Section 3.6 Absence of Certain Changes. Except as contemplated
by this Agreement or disclosed in the Company SEC Documents, since September 30,
2002, the date of the latest Company financial statements included in the
Company SEC Documents, the Company and its Subsidiaries have conducted their
respective businesses only in the ordinary course and in a manner consistent
with past practices and, since such date, (i) there has not been any material
adverse change in the business, assets, liabilities, results of operations,
condition (financial or otherwise) or business prospects of the Company and its
Subsidiaries taken as a whole, and (ii) there has not been any change by the
Company or any of its Subsidiaries in accounting principles or methods.
Section 3.7 Proxy Statement; Information in Schedule 13E-3.
(a) The Proxy Statement (as defined in Section 5.3(b)) and any
amendment thereof or supplement thereto, including any information incorporated
therein by reference, at the date mailed to stockholders of the Company and at
the Effective Time, (i) will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading and (ii) will comply in all material respects with
the provisions of the Exchange Act and the rules and regulations thereunder;
except that no representation is made by the Company with respect to statements
made in the Proxy Statement based on information supplied by Holding in writing
specifically for inclusion therein.
9
(b) The information provided by the Company specifically for
use in any Rule 13e-3 Transaction Statement on SCHEDULE 13E-3 to be filed with
the SEC under the Exchange Act in connection with the Merger (the "Schedule
13E-3") (and any amendment thereto or supplement thereof), at the date filed
with the SEC, will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading.
Section 3.8 Opinion of Financial Advisor. The Company's Board
of Directors has received an opinion (the "Fairness Opinion) of Park Capital
Securities LLC dated January 31, 2003, to the effect that, as of the date
hereof, the Merger Consideration to be received by the holders of Company Shares
(other than Xxxxxxx) in the Merger is fair, from a financial point of view, to
such holders, and such opinion has not been withdrawn or modified.
Section 3.9 Financial Statements. The Company has delivered to
Holding the audited financial statements of the Company as of December 31, 2001.
The Company has also delivered to Holding the unaudited balance sheet of the
Company as of September 30, 2002 and the related unaudited statements of income,
shareholders equity and cash flow for the periods then ended. (Such audited and
unaudited financial statements are referred to herein as the "Financial
Statements", and the unaudited balance sheet of the Company as of September 30,
2002 is referred to as the "Balance Sheet" and the date of such Balance Sheet as
the "Balance Sheet Date".)
Section 3.10 No Undisclosed Liabilities. Except for
liabilities set forth in the Financial Statements and disclosed or provided for
therein, or liabilities incurred in the ordinary course of business consistent
with past practice, since the Balance Sheet Date, the Company has not incurred
any liabilities or obligations of any nature, whether or not accrued, known or
unknown, contingent or otherwise, which have, or could reasonably excepted to
have, individually or in the aggregate, a Material Adverse Effect or could
impair or delay the consummation of the transactions contemplated hereby.
Section 3.11 Litigation. There is no suit, claim, action,
proceeding or investigation pending or threatened against the Company or any of
its Subsidiaries, except as disclosed in the Company SEC Documents or in the
Financial Statements. Since the Balance Sheet Date, no event or state of facts
has occurred or existed, which, to the knowledge of the Company, could
reasonably be expected to give rise to a suit, claim, proceeding or
investigation against the Company.
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Section 3.12 Taxes. There are no pending or, to the Company's
knowledge, threatened actions or proceedings, assessments or collections of any
taxes, fees or other charges of any kind asserted or imposed by any local, state
or federal government taxing authority, which could impair any of the Company's
property or assets or result in a Material Adverse Effect.
ARTICLE IV - REPRESENTATIONS AND
WARRANTIES OF HOLDING
Holding represents and warrants to the Company, as of the date
hereof and as of and at the Closing Date, as follows:
Section 4.1 Organization. Holding is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 4.2 Capitalization. As of the Date hereof, the
authorized capital stock of Holding consists of 200 shares of common stock, no
par value, of which 100 shares are issued and outstanding, all of which are held
beneficially and of record by Xxxxxxx. All of such outstanding shares are duly
authorized, validly issued, fully paid and non-assessable. There are no existing
options, warrants, calls, preemptive rights, subscriptions or other rights or
agreements obligating Holding to issue, transfer or sell any shares of its
capital stock.
Section 4.3 Authorization; Validity of Agreement. Holding has
the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance by Holding of this Agreement and the consummation by
Holding of the transactions contemplated hereby have been duly authorized by the
Board of Directors and the sole stockholder of Holding, and no other corporate
proceedings on the part of Holding are necessary to authorize the execution,
delivery and performance of this Agreement by Holding and the consummation by
Holding of the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Holding, and, assuming due authorization, execution
and delivery of this Agreement by the Company, is a valid and binding obligation
of Holding, enforceable against Holding in accordance with its terms, except
that such enforcement may be subject to or limited by (i) bankruptcy, insolvency
or other similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the effect of general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).
11
Section 4.4 Consents and Approvals; No Violations.
(a) Neither the execution, delivery and performance of this
Agreement by Holding nor the consummation by Holding of the transactions
contemplated hereby will (i) violate any provision of the certificate of
incorporation or by-laws of Holding, (ii) conflict with, result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or to the imposition of any lien) under, or result
in the acceleration or trigger of any payment, time of payment, vesting or
increase in the amount of any compensation or benefit payable pursuant to, the
terms, conditions or provisions of any note, bond, mortgage, indenture,
guarantee or other evidence of indebtedness, lease, license, contract,
agreement, plan or other instrument or obligation to which Holding is a party or
by which Holding or any of its assets may be bound or (iii) conflict with or
violate any Laws applicable to Holding or any of their properties or assets,
except, in the case of clauses (ii) and (iii), for such conflicts, violations,
breaches, defaults or liens which individually and in the aggregate would not
have or result in a Material Adverse Effect on Holding, or materially impair or
delay the consummation of the transactions contemplated hereby.
(b) No filing or registration with, declaration or
notification to, or order, authorization, consent or approval of, any
Governmental Entity is required in connection with the execution, delivery and
performance of this Agreement by Holding or the consummation by Holding of the
transactions contemplated hereby, except (i) applicable requirements under the
Exchange Act, (ii) the filing of the Certificate of Merger with the Secretary of
State and (iii) such other consents, approvals, orders, authorizations,
notifications, registrations, declarations and filings the failure of which to
be obtained or made individually and in the aggregate would not have a Material
Adverse Effect on Holding, or materially impair or delay the consummation of the
transactions contemplated hereby.
Section 4.5 Information in Proxy Statement and Schedule 13E-3.
(a) The information relating to Xxxxxxx and/or Holding
supplied in writing by Xxxxxxx or Holding specifically for inclusion in the
Proxy Statement (and any amendment thereof or supplement thereto), at the date
mailed to stockholders of the Company and at the Effective Time, will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
12
(b) The information relating to Xxxxxxx and/or Holding
supplied in writing by Xxxxxxx or Holding specifically for inclusion in the
Schedule 13E-3 (and any amendment thereto or supplement thereof), at the date
filed with the SEC, will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
ARTICLE V - COVENANTS
Section 5.1 Interim Operations of the Company. The Company
covenants and agrees that, between the date of this Agreement and the Effective
Time, except as otherwise expressly contemplated by this Agreement or as agreed
to in writing by Holding, the Company and its Subsidiaries will each conduct its
operations according to its ordinary and usual course of business and consistent
with past practice, and the Company and its Subsidiaries will each use its best
efforts to preserve intact its business organization, to keep available the
services of its officers and employees and to maintain existing relationships
with licensors, licensees, suppliers, contractors, distributors, customers,
carriers, lessors and others having business relationships with it. Without
limiting the generality of the foregoing, and except as otherwise expressly
provided in this Agreement, prior to the Effective Time, neither the Company nor
any of its Subsidiaries will, without the prior written consent of Holding:
(a) amend its Certificate of Incorporation or By-laws;
(b) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or otherwise)
any stock of any class or any other securities, or amend any of the terms of any
such securities or agreements outstanding as of the date hereof;
(c) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock (except for its regular quarterly dividend), or redeem or otherwise
acquire any of its securities or any securities of its Subsidiaries;
(d) (i) incur or assume any long-term debt or, except in the
ordinary course of business consistent with past practice under existing lines
of credit, incur or assume any short-term debt; (ii) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the
13
obligations of any other person except in the ordinary course of business and
except for obligations of wholly owned Subsidiaries of the Company which, if
incurred by the Company, would be permitted under clause (i) above; (iii) make
any loans, advances or capital contributions to, or investments in, any other
person (other than to wholly owned Subsidiaries of the Company);
(e) enter into, adopt or (except as may be required by law)
amend or terminate any bonus, profit sharing, compensation, severance,
termination, stock option, stock appreciation right, restricted stock,
performance unit, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan, fund or other
arrangement for the benefit or welfare of any director, officer or employee, or
(except for normal increases in the ordinary course of business that are
consistent with past practices and that, in the aggregate, do not result in a
material increase in benefits or compensation expense to the Company) increase
in any manner the compensation or fringe benefits of any director, officer of
employee or pay any benefit not required by any plan and arrangement as in
effect as of the date hereof (including, without limitation, the granting of
stock options, stock appreciation rights or performance units) or enter into any
contract, agreement, commitment or arrangement to do any of the foregoing;
(f) acquire, sell, lease or dispose of any assets outside the
ordinary course of business or any assets which in the aggregate are material to
the Company and its Subsidiaries taken as a whole or enter into any commitment
or transaction outside the ordinary course of business;
(g) change any of the accounting principles or practices used
by it, except as required by generally accepted accounting principles;
(h) revalue in any material respect any of its assets,
including, without limitation, writing down the value of inventory or writing
off notes or accounts receivable other than in the ordinary course of business;
(i) (i) acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership or other business organization or
division thereof; (ii) enter into any contract or agreement other than in the
ordinary course of business; (iii) except as previously authorized by the
Company and its Board of Directors, authorize any new capital expenditure or
expenditures; or (iv) enter into or amend any contract, agreement, commitment or
arrangement with respect to any of the matters set forth in this Section 5(i);
(j) make any tax election or settle or compromise any material
income tax liability;
14
(k) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business and consistent with past practice of liabilities reflected or
reserved against in the consolidated financial statements (or the notes thereto)
of the Company and its consolidated Subsidiaries or incurred in the ordinary
course of business and consistent with past practice; or
(l) take, or agree in writing or otherwise to take, any of the
actions described in Sections 5.1(a) through 5.1(k) or any action which would
make any of the representations or warranties of the Company contained in this
Agreement untrue or incorrect as of the date when made or as of a future date or
would result in any of the conditions set forth in Sections 6.1 or 6.3 not being
satisfied.
Section 5.2 Further Action; Reasonable Efforts.
(a) Upon the terms and subject to the conditions herein
provided, each of the parties hereto shall use its reasonable efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including using reasonable efforts to satisfy the conditions precedent to the
obligations of any of the parties hereto, to obtain all necessary
authorizations, consents and approvals, and to effect all necessary
registrations and filings. Each of the parties hereto shall promptly consult
with the other parties with respect to, provide any necessary information that
is not subject to legal privilege with respect to, and provide the other parties
(or their counsel) copies of, all filings made by such party with any
Governmental Entity or any other information supplied by such party to a
Governmental Entity in connection with this Agreement and the transactions
contemplated hereby. Each of the parties hereto shall promptly inform the other
of any communication from any Governmental Entity regarding any of the
transactions contemplated by this Agreement. If such party receives a request
from any such Governmental Entity with respect to the transactions contemplated
by this Agreement, then such party will endeavor in good faith to make, or cause
to be made, as soon as reasonably practicable and after consultation with the
other parties, an appropriate response in compliance with such request.
(b) Holding and the Company shall use their respective
reasonable efforts to resolve such objections, if any, as may be asserted with
respect to the transactions contemplated hereby under the laws, rules,
guidelines or regulations of any Governmental Entity.
15
Section 5.3 Proxy Statement; Schedule 13E-3.
(a) As promptly as practicable after the date hereof, the
Company shall prepare and file with the SEC, and Holding shall cooperate with
the Company in such preparation and filing, a preliminary proxy statement
relating to this Agreement and the transactions contemplated hereby and shall
furnish the information required to be included therein by the SEC and, after
consultation with Holding, shall respond promptly to any comments made by the
SEC with respect to the preliminary information statement and cause a definitive
Proxy Statement (the "Proxy Statement") to be mailed to the Company's
stockholders.
(b) The Company and Holding shall cooperate with one another
in the preparation and filing of the Schedule 13E-3 and shall use all reasonable
efforts to promptly obtain and furnish the information required to be included
in the Schedule 13E-3 and to respond promptly to any comments or requests made
by the SEC with respect to the Schedule 13E-3. Each party hereto shall promptly
notify the other of the receipt of comments of, or any requests by, the SEC with
respect to the Schedule 13E-3, and shall promptly supply the other parties with
copies of all correspondence between such party (or its representatives) and the
SEC (or its staff) relating thereto. The Company and Holding each shall correct
any information provided by it for use in the Schedule 13E-3 which shall have
become, or is, false or misleading.
Section 5.4 Meeting of Stockholders of the Company.
(a) The Company shall, as promptly as reasonably practicable
after completion of the Proxy Statement, take all action necessary in accordance
with Delaware law and its Certification of Incorporation and By-laws duly to
mail the Proxy Statement to its stockholders and to call, convene and hold a
special meeting of such stockholders for the purpose of seeking the approval of
such stockholders of the transactions contemplated by this Agreement. The
Company shall, subject to the fiduciary obligations of the Company's directors
under applicable law as advised by outside counsel, recommend approval of the
transactions contemplated by this Agreement, use its best efforts to solicit
from holders of Company Shares proxies in favor of the transactions contemplated
by this Agreement, and take such other action as is necessary or advisable to
secure the vote of such holders required by Delaware law and under this
Agreement to effect the Merger.
(b) By his separate signature to this Agreement, Xxxxxxx
agrees that he will vote, or cause to be voted, all of the Company Shares owned
by Xxxxxxx (or which may be owned by Holding) in favor of the approval and
adoption of this Agreement and the transactions contemplated hereby.
16
Section 5.5 Notification of Certain Matters.
(a) The Company shall give prompt notice to Holding and
Holding shall give prompt notice to the Company, of (i) the occurrence or
non-occurrence of any event the occurrence or non-occurrence of which would
cause any representation or warranty of the Company, or of Holding, as the case
may be, contained in this Agreement to be untrue or inaccurate in any material
respect at the Effective Time and (ii) any material failure of the Company or
Holding, as the case may be, to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder.
(b) If at any time prior to the Effective Time any event or
circumstance relating to the Company or any of its Subsidiaries or affiliates,
or their respective officers or directors, should be discovered by the Company
that is required to be set forth in a supplement to the Proxy Statement, the
Company shall promptly inform Holding, and, after consulting with Holding, so
supplement the Proxy Statement (subject to the provisions of Section 5.3(b)
hereof) and mail such supplement to its stockholders. If at any time prior to
the Effective Time any event or circumstance relating to Holding or its officers
or directors, should be discovered by Holding that is required to be set forth
in a supplement to the Proxy Statement, Holding shall promptly inform the
Company; and upon receipt of such information the Company shall promptly
supplement the Proxy Statement and mail such supplement to its stockholders.
Section 5.6 Publicity. Neither the Company, Holding nor any of
their respective affiliates shall issue or cause the publication of any press
release or other announcement with respect to the Merger, this Agreement or the
other transactions contemplated hereby without the prior consultation of the
other party, except as may be required by law or by any listing agreement with a
securities exchange if all reasonable efforts have been made to consult with the
other party.
Section 5.7 Directors' and Officers' Insurance and
Indemnification.
(a) Holding agrees that all rights to indemnification
existing in favor of the present or former directors and officers of the Company
or any of its Subsidiaries (collectively, the "Indemnified Parties") as provided
in the Company's Certificate of Incorporation or By-Laws or pursuant to other
agreements, or certificates of incorporation or by-laws or similar documents of
any of the Company's Subsidiaries, as in effect as of the date hereof with
respect to matters occurring prior to the Effective Time, shall survive the
Merger and shall continue in full force and effect for a period of six years.
17
(b) Holding shall use reasonable efforts to maintain the
existing officers' and directors' liability insurance applicable to the
Indemnified Parties for a period of not less than three years after the
Effective Time in relation to actions and omissions occurring prior to the
Effective Time; provided, that Holding may substitute therefor policies of
substantially similar coverage and amounts containing terms no less favorable to
such former directors or officers; provided, further, that in no event shall the
Surviving Corporation be required to pay annual premiums for insurance under
this Section in excess of that which the Company spent on directors' and
officers' liability insurance policies during the fiscal year ended December 31,
2002; and provided further, however, that if the annual premiums for such
insurance coverage exceed said amount, the Surviving Corporation shall be
obligated to obtain a policy with the greatest coverage at a cost which is no
greater than that which the Company spent and will have spent on directors' and
officers' liability insurance policies during the fiscal year ended December 31,
2002.
(c) If any actions, suits, proceedings or investigations
relating hereto or to the transactions contemplated hereby are commenced,
whether before or after the Effective Time, the parties hereto agree to
cooperate and use their reasonable best efforts vigorously to defend against and
respond thereto.
Section 5.8 Brokers or Finders. Each of the Company and
Holding represents, as to itself and any of its Subsidiaries or its affiliates,
that no agent, broker, investment banker, financial advisor or other firm or
person is or will be entitled to any brokers' or finders' fee or any other
commission or similar fee in connection with any of the transactions
contemplated by this Agreement, and each of Holding and the Company shall
indemnify and hold the other harmless from and against any and all claims,
liabilities or obligations with respect to any such fees, commissions or
expenses asserted by any person, on the basis of any act or statement alleged to
have been made by such party or its affiliates.
Section 5.9 Funding of Holding Prior to Closing. Holding
covenants and agrees that, immediately prior to the Closing, Holding will have
aggregate cash balances in its bank accounts and a tangible net worth of at
least $1,250,000, and that such cash balances will become the property of and be
available to the Surviving Corporation from and after the Effective Time.
18
ARTICLE VI - CONDITIONS TO MERGER
Section 6.1 Conditions to Each Party's Obligation To Effect
the Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any or all of which may be waived by the parties hereto in
writing, in whole or in part, to the extent permitted by applicable law):
(a) No statute, rule, regulation, order, decree or injunction
shall have been enacted, entered, promulgated or enforced by a Governmental
Entity and be in effect which prohibits the consummation of the Merger, and no
proceeding which has a reasonable probability of resulting in such relief shall
be pending; provided, however that the parties hereto shall use their reasonable
efforts to have any such order, decree or injunction terminated.
(b) Other than filing the Certificate of Merger in accordance
with the DGCL, all authorizations, consents and approvals required to be
obtained prior to consummation of the Merger shall have been obtained, except
for such authorizations, consents, and approvals the failure of which to be
obtained individually and in the aggregate would not have or result in a
Material Adverse Effect;
(c) This Agreement, the Merger and the transactions
contemplated hereby shall have been approved and adopted by the affirmative vote
of the holders of a majority of the outstanding shares of the Company's Common
Stock and the number of shares voted in favor of the Merger by stockholders
other than Xxxxxxx exceeds the number of shares voted against the Merger by
stockholders other than Xxxxxxx;
(d) Each party and its respective attorneys shall have
completed to their full satisfaction (as to which each party shall be the sole
judge) a due diligence review concerning the other party; and
(e) The parties shall have approved and caused to be executed
the Certificate of Merger.
Section 6.2 Conditions to the Obligation of the Company to
Effect the Merger. The obligation of the Company to effect the Merger is further
subject to the satisfaction or waiver at or prior to the Closing Date of the
following conditions:
(a) The representations and warranties of Holding contained in
this Agreement shall be true and correct in all material respects at and as of
the
19
date hereof, and true and correct in all material respects at and as of the
Closing Date as if made at and as of such time; and
(b) Holding shall have performed in all material respects its
obligations under this Agreement required to be performed by it at or prior to
the Closing Date pursuant to the terms hereof.
(c) Holding shall deliver at or prior to the Closing (i) a
certificate executed by its chief executive officer confirming the performance
of its obligations under (a) and (b) of this Section 6.2, (ii) copies of
resolutions or actions of Holding's Board of Directors and sole stockholder,
certified by Holding's Secretary, approving and authorizing the consummation of
the Merger, (iii) a financial statement of Holding, prepared in accordance with
GAAP (which statement need not be audited) reflecting available cash balances
and a tangible net worth of at least $1,250,000 immediately prior to the
Closing, (iv) a Certificate of Good Standing for Holding, (v) bank verification
indicating a cash balance in Holding's bank account of not less than $1,250,000
and (vi) the opinion of counsel for Holding as to the matters set forth in
Appendix A to this Agreement.
(d) Xxxxxxx shall deliver at or prior to the Closing an
instrument satisfactory to the Company by which Xxxxxxx (i) fully waives any and
all rights to receive Merger Consideration for the Company Shares owned by
Xxxxxxx and (ii) consents to the cancellation of such Company Shares upon the
effectiveness of the Merger.
Section 6.3 Conditions to Obligations of Holding to Effect the
Merger. The obligation of Holding to effect the Merger is further subject to the
satisfaction or waiver at or prior to the Closing Date of the following
conditions:
(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
at and as of the date hereof, and true and correct in all material respects at
and as of the Closing Date as if made at and as of such time;
(b) The Company shall have performed in all material respects
each of its obligations under this Agreement required to be performed by it at
or prior to the Closing Date pursuant to the terms hereof;
(c) The Company shall deliver at or prior to the Closing (i) a
certificate executed by its President and its Chief Financial Officer confirming
the performance of the Company's obligations under Paragraphs (a) and (b) of
this Section 6.3, (ii) copies of resolutions of the Company's Board of
Directors,
20
certified by Holding's secretary, approving and authorizing the consummation of
the Merger, (iii) the report of the Inspector of Election, certified by the
Company's Secretary, on the actions taken by the Company's stockholders at the
stockholder's meeting held for the purpose of considering the Merger, (iv) a
copy of the Fairness Opinion described in Section 3.8 above, with any ancillary
or updating amendment or supplement issued since the date of original issuance
of the Fairness Opinion, (v) a Certificate of Good Standing for the Company,
(vi) a copy of the most recent audited financial statements of the Company
(except that, if such statements have been included in the Proxy Statement, such
audited statements need not be delivered), (vii) a copy of the Company's most
recent un-audited interim financial statements or Form 10-Q report if such
statements are contained therein, and (viii) the opinion of counsel for the
Company as to the matters set forth in Appendix B to this Agreement;
(d) There shall not have been any material adverse change in
the business, assets, liabilities, results of operations, condition (financial
or otherwise) or business prospects of the Company and its Subsidiaries taken as
a whole; and
(e) No more than 9.9% of shares of Company Common Stock which
are outstanding immediately prior to the Closing are held by shareholders who
have not voted in favor of the Merger or consented thereto in writing and have
delivered a written demand for appraisal of such shares in accordance with
Section 262 of the DGCL.
ARTICLE VII - TERMINATION
Section 7.1 Termination. Subject to Section 8.2(c), this
Agreement may be terminated and the Merger may be abandoned at any time prior to
the Effective Time, whether before or after stockholder approval thereof:
(a) By the mutual consent of Holding and the Company.
(b) By either the Company, on the one hand, or Holding, on the
other hand, if:
(i) the Merger has not been consummated on or prior
to the date which is 150 days from the date hereof; provided, however,
that the right to terminate this Agreement under this Section 7.1(b)(i)
shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in,
the failure of the Merger to occur on or prior to such date;
21
(ii) the stockholders of the Company required to
approve and adopt this Agreement and the transactions contemplated
hereby fail to approve and adopt this Agreement and the transactions
contemplated hereby; provided, however, that the right to terminate this
Agreement under this Section 7.1(b)(ii) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of the stockholders of
the Company to approve and adopt this Agreement;
(iii) prior to the consummation of the Merger, any
Governmental Entity shall have issued a statute, order, decree or
regulation or taken any other action, in each case permanently
restraining, enjoining or otherwise prohibiting the Merger and such
statute, order, decree, regulation or other action shall have become
final and non-appealable; or
(iv) Park Capital Securities LLC shall have withdrawn
or modified or amended the Fairness Opinion to indicate that the Merger
Consideration is or may be unfair.
(c) By Holding if, prior to the consummation of the Merger,
(i) the Board shall have withdrawn, or modified or
changed in any manner adverse to Holding its approval or recommendation
of this Agreement or the Merger or its recommendation that the
stockholders of the Company adopt and approve this Agreement and the
Merger;
(ii) there has been any Material Adverse Change in
the business, assets, liabilities, results of operations, condition
(financial or otherwise) or business prospects of the Company and its
Subsidiaries taken as a whole; or
(iii) the Company's stockholders have failed to
approve the Merger as provided in Section 6.1 (c) above;
(iv) Park Capital Securities LLC shall have withdrawn
or modified or amended the Fairness Opinion to indicate that the Merger
Consideration is or may be unfair.
(v) more than 9.9% of shares of Company Common Stock
which are outstanding immediately prior to the Closing are held by
shareholders who have not voted in favor of the Merger or consented
thereto in
22
writing and have delivered a written demand for appraisal of such shares
in accordance with Section 262 of the DGCL.
Section 7.2 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 7.1, written notice thereof
shall forthwith be given by the terminating party or parties to the other party
or parties specifying the provision hereof pursuant to which such termination is
made, and this Agreement shall forthwith become null and void, and there shall
be no liability on the part of Holding or the Company (except as set forth in
this Section 7.2, the confidentiality provisions of Section 8.2, and Sections
5.6, 5.7, 5.8 and 8.1 hereof, each which shall survive any termination of this
Agreement); provided that nothing herein shall relieve any party from any
liability or obligation with respect to any willful breach of this Agreement.
ARTICLE VIII - MISCELLANEOUS
Section 8.1 Fees and Expenses. Except as contemplated by this
Agreement, all costs and expenses incurred in connection with this Agreement and
the consummation of the transactions contemplated hereby shall be paid by the
party incurring such expenses.
Section 8.2 Confidentiality The parties acknowledge that, in
connection with the transactions contemplated herein, they may be exchanging
information which is not public and not generally available, and which is not
required to be disclosed in the Company SEC Documents, Proxy Statement or
Schedule 13E-3. The parties agree to treat all such information as confidential
and not to disclose or cause the disclosure of such information to third persons
without the prior written consent of both parties.
Section 8.3 Amendment; Waiver.
(a) Subject to Section 8.3(c), this Agreement may be amended
by the parties hereto at any time before or after approval by the stockholders
of the Company of the Agreement and the transactions contemplated hereby, but
after any such approval no amendment shall be made without the approval of such
stockholders if required by law or if such amendment changes the Merger
Consideration or alters or changes any of the other terms or conditions of this
Agreement if such alteration or change would adversely affect the rights of
stockholders other than Xxxxxxx. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
23
(b) Subject to Section 8.3(c), at any time prior to the
Effective Time, the parties may (i) extend the time for the performance of any
of the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties of the other parties
contained herein or in any document, certificate or writing delivered pursuant
hereto or (iii) waive compliance with any of the agreements or conditions of the
other parties hereto contained herein. Any agreement on the part of any party to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. Any such waiver shall constitute a
waiver only with respect to the specific matter described in such writing and
shall in no way impair the rights of the party granting such waiver in any other
respect or at any other time. Neither the waiver by any of the parties hereto of
a breach of or a default under any of the provisions of this Agreement, nor the
failure by any of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege hereunder,
shall be construed as a waiver of any other breach or default of a similar
nature, or as a waiver of any of such provisions, rights or privileges
hereunder. The rights and remedies herein provided are cumulative and none is
exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
(c) Notwithstanding any provision of this Agreement to the
contrary, without the approval of its Board of Directors, the Company shall not
amend, terminate or waive any right under this Agreement (including any right to
terminate or any actual or potential cause of action).
Section 8.4 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time, except as otherwise provided herein.
Section 8.5 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon (a) transmitter's
confirmation of a receipt of a facsimile transmission, (b) confirmed delivery by
a standard overnight carrier or when delivered by hand, (c) the expiration of
ten business days after the day when mailed by certified or registered air mail,
postage prepaid, or (d) delivery in person, addressed at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) if to the Company, to:
9278 Communications, Inc.
0000 Xxxxxxxxxxxxxx Xxxx
Xxxxx, XX 00000
24
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxx, President
with a copy to:
Snow Xxxxxx Xxxxxx PC
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
(b) if to Xxxxxxx or Holding, to:
NTSE Holding Corp.
c/o Kurzman Xxxxxxxxx Xxxxxx, et al.
000 Xxxxx xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx, President
with a copy to:
Xxxxxxx Xxxxxxxxx Xxxxxx Lever & Xxxxxxx, LLP.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention Xxxxxxx X. Xxxxxxx, Esq
Section 8.6 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation". The phrase "made available" when used in this
Agreement shall mean that the information referred to has been made available to
the party to whom such information is to be made available. The word
"affiliates" when used in this Agreement shall have the meaning ascribed to it
in Rule 12b-2 under the Exchange Act. The phrase "beneficial ownership" and
words of similar import when used in this Agreement shall have the meaning
ascribed to it in Rule 13d-3 under the Exchange Act.
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Section 8.7 Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 8.8 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which shall be considered one and the same agreement.
Section 8.9 Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership. This Agreement (including the documents and the instruments
referred to herein): (a) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, and (b) except as provided in Section
5.7 is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
Section 8.10 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 8.11 Governing Law. This Agreement shall be governed,
construed and enforced in accordance with the laws of the State of Delaware
without giving effect to the principles of conflicts of law thereof.
Section 8.12 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the first sentence of this
Section 8.11, this Agreement will be binding upon, inure to the benefit of and
be enforceable by, the parties hereto and their respective successors and
assigns.
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IN WITNESS WHEREOF, Holding and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
and Xxxxxxx has executed this agreement in his personal capacity, in each case
as of the date first written above.
9278 COMMUNICATIONS INC.
By: /s/ Xxxxx Xxxx
-----------------------------
Name: Xxxxx Xxxx
Title: President
NTSE HOLDING CORP.
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: President
AGREED AS TO PROVISIONS OF SECTIONS 4.5, 5.4(b) and 6.2(d):
/s/ Xxxxx Xxxxxxx
---------------------------
Xxxxx Xxxxxxx
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