Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this “ Agreement
”) is made and entered into as of October 11, 2007, by and
among Simex Technologies, Inc., a Delaware corporation (“
Parent ”), Simex CT Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Parent (“
Sub ”), and College Tonight, Inc., a Delaware
corporation (the “ Company ”).
RECITALS
A. The Boards of Directors of the Company, Parent and Sub have
determined that it is advisable and in the best interests of the
shareholders of their respective companies that Sub merge with and
into the Company (the “ Merger ”), with the
Company to survive the Merger and to become a wholly owned
subsidiary of Parent, on the terms and subject to the conditions
set forth in this Agreement, and, in furtherance thereof, have
approved and declared advisable the Merger, this Agreement and the
other transactions contemplated by this Agreement.
B. The Company, Sub and Parent desire to make certain
representations, warranties, covenants and other agreements in
connection with the Merger as set forth herein.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and other agreements contained herein, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE
I
THE
MERGER
Section 1.01
Certain Definitions . As
used in this Agreement, the following terms shall have the meanings
indicated below.
“ Affiliate ” shall have the meaning set forth
in Rule 12b-2 promulgated under the Exchange Act.
“ Business Day ” shall mean a day (A) other
than Saturday or Sunday, and (B) on which commercial banks are
open for business in Atlanta, Georgia.
“ Code ” shall mean the Internal Revenue Code of
1986, as amended.
“ Contract ” means any written, oral or
other agreement, contract, subcontract, lease, binding
understanding, obligation, promise, instrument, indenture,
mortgage, note, option, warranty, purchase order, license,
sublicense, insurance policy, benefit plan, commitment or
undertaking of any nature, which, in each case, is legally binding
upon
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the Parent and Sub or on any of its Subsidiaries, or on Company or
any of its Subsidiaries, as the case may be.
“ Dissenting Shares ” shall mean any
shares of Company Common Stock that are issued and outstanding
immediately prior to the Effective Time and in respect of which
dissenters’ rights shall have been perfected in accordance
with Delaware Law in connection with the Merger.
“ Encumbrance ” means, with respect to any asset
or security, any mortgage, deed of trust, lien, pledge, charge,
security interest, title retention device, conditional sale or
other security arrangement, collateral assignment, charge, adverse
claim of title, ownership or right to use, restriction or other
encumbrance of any kind in respect of such asset or security
(including any restriction on (i) the voting of any security
or the transfer of any security or other asset, (ii) the
receipt of any income derived from any asset, (iii) the use of
any asset, (iv) the transfer of any attribute of ownership of
any asset or (v) the operation of any asset in the conduct of
the business of the entity and its Subsidiaries as currently
conducted and as currently proposed to be conducted by it (without
regard to the Merger)).
“ Exchange Act ” shall mean the Securities
Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder.
“ GAAP ” shall mean United States generally
accepted accounting principles.
“ Delaware Law ” shall mean the Delaware General
Corporation Law, as amended.
“ Governmental Body ” means any foreign,
national, federal, state, provincial, local or municipal government
(including any agency, branch, department, or division thereof and
any court or other tribunal), quasi-government, self-governing body
or any other body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature.
“ Group ” shall have the definition ascribed to
such term under Section 13(d) of the Exchange Act.
“ Knowledge or Known ” means (i) the actual
Knowledge of the Party, and (ii) the Knowledge such Party would
have or should have acquired after conducting a reasonable
investigation concerning the relevant matters as would be adequate
and appropriate under the circumstances.
“ Legal Requirements ” means with respect to any
Person, any federal, state, foreign, local, municipal or other law,
statute, constitution, principle of common law, ordinance, code,
permit, rule, regulation, ruling or requirement issued, enacted,
adopted, promulgated, implemented or otherwise put into effect by
or under the authority of any Governmental Entity and any orders,
writs, injunctions, binding awards of a court or arbitrator,
judgments and decrees applicable to such Person or its
Subsidiaries, their business or any of their respective assets or
properties.
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“ License ” or “ Licenses ”
means any and all governmental and regulatory licenses, permits and
approvals necessary to the conduct of the business of a Party as it
is currently conducted.
“ Material Adverse Effect ” with respect to any
entity means any change, event, violation, inaccuracy, circumstance
or effect (each, an “ Effect ”) that,
individually or taken together with all other Effects, and
regardless of whether or not such Effect constitutes a breach of
the representations or warranties made by such entity in this
Agreement, is, or is reasonably likely to, (i) be or become
materially adverse in relation to the condition (financial or
otherwise), properties, assets (including intangible assets),
business, operations or results of operations of such entity and
its Subsidiaries, taken as a whole, or (ii) materially impede
or delay such entity’s ability to consummate the transactions
contemplated by this Agreement in accordance with its terms and
applicable Legal Requirements, except to the extent that any such
Effect is proximately caused by one or more of the following:
(A) changes or conditions affecting the economy in general or
changes in regulatory conditions generally (provided, in each such
case, that such changes or conditions do not affect such entity
disproportionately as compared to such entity’s competitors),
(B) general changes in the industry in which the entity or its
Subsidiaries operates (provided that such changes do not affect
such entity or its Subsidiaries disproportionately as compared to
such entity’s competitors), and (C) any delay in the
pacing of customer purchases from such entity directly resulting
from the announcement and pendency of the Merger. Changes in the
trading volume or trading prices of such entity’s capital
stock shall not be deemed to constitute a Material Adverse Effect
in and of themselves; provided further, that such exclusion shall
not apply to any underlying Effect that may have caused such change
in trading prices or volumes.
“ Ordinary Course of Business ” means any action
taken by a Party will be deemed to have been taken in the
“Ordinary Course of Business” only if:
(a)
such action is consistent with the past practices of the Party and
is taken in the ordinary course of the normal day-to-day operations
of the Party;
(b)
such action is similar in nature and magnitude to actions
customarily taken without any authorization by the board of
directors (or by any Person or group of Persons exercising similar
authority) in the ordinary course of normal day-to-day operations
of other Persons that are in the same line of business as the
Party.
“ Organizational Documents ” means, in respect
of any corporation, limited liability company or any other entity:
(a) its articles or Articles of Incorporation, Articles of
Organization, memorandum of association, charter or other
constitutive document; (b) its bylaws, articles of
association, statutes, operating agreement or other governing
document; and (c) any amendment to any of the foregoing.
“Parent Capital Stock” shall mean the Parent
Common Stock and the Parent Capital Stock.
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“Parent Common Stock” shall mean the common
stock, par value $0.0001 per share, of Parent.
“ Parent Preferred Stock ” shall mean the Series
A Convertible Preferred Stock, par value $0.001 per share, of the
Parent.
“Party” shall mean any signatory to this
Agreement.
“ Per-Share Stock Amount ” shall mean 2,412,800
divided by the number of shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time.
“ Person ” shall mean any natural person,
company, corporation, limited liability company, general
partnership, limited partnership, trust, proprietorship, joint
venture, business organization or Governmental Entity.
“ Proceeding ” means any action, arbitration,
audit, hearing, investigation, litigation, notice, challenge,
proceeding or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard
by or before, or otherwise involving, any Governmental Body or
arbitrator.
“ SEC ” shall mean the United States Securities
and Exchange Commission.
“ Securities Act ” shall mean the Securities Act
of 1933, as amended, including the rules and regulations
promulgated thereunder.
“ Subsidiary ” shall mean, with respect to an
entity, any Person of which such entity, either alone or together
with one or more Subsidiaries or by one or more other Subsidiaries
(i) directly or indirectly owns or controls securities or
other interests representing more than 50% of the voting power of
such Person, or (ii) is entitled, by Contract or otherwise, to
elect, appoint or designate directors constituting a majority of
the members of such Person’s board of directors or other
governing body.
“ Tax ” (and, with correlative meaning, “
Taxes ” and “ Taxable ”) shall mean
(i) any income, alternative or add-on minimum tax, gross
income, estimated, gross receipts, sales, use, ad valorem, value
added, transfer, franchise, capital stock, profits, license,
registration, withholding, payroll, social security (or
equivalent), employment, unemployment, disability, excise,
severance, stamp, occupation, premium, property (real, tangible or
intangible), environmental or windfall profit tax, custom duty or
other tax, governmental fee or other like assessment or charge of
any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount (whether disputed or not)
imposed by any Governmental Entity responsible for the imposition
of any such tax (domestic or foreign) (each, a “ Tax
Authority ”), (ii) any liability for the payment of
any amounts of the type described in clause (i) of this
sentence as a result of being a member of an affiliated,
consolidated, combined, unitary or aggregate group for any Taxable
period, and (iii) any liability for the payment of any amounts
of the type described in clause (i) or (ii) of this
sentence as a result of being a transferee of or
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successor to any Person or as a result of any express or implied
obligation to assume such Taxes or to indemnify any other
Person.
“ Tax Return ” shall mean any return, statement,
report or form (including estimated Tax returns and reports,
withholding Tax returns and reports, any schedule or attachment,
and information returns and reports) required to be filed with
respect to Taxes.
Other capitalized terms defined elsewhere in this Agreement and not
defined in this Section 1.1 shall have the meanings assigned
to such terms in this Agreement.
Section 1.02
The Merger. At the Effective Time (as
defined in Section 1.04), on the terms and subject to the
conditions set forth in this Agreement, a Certificate of Merger
filed with the Secretary of State of Delaware in accordance with
Delaware law (the “Certificate of Merger”) and the
applicable provisions of Delaware Law, Sub shall merge with and
into the Company, the separate corporate existence of Sub shall
cease and the Company shall continue as the surviving corporation.
The Company, as the surviving corporation after the Merger, is
hereinafter sometimes referred to as the “Surviving
Corporation.”
Section 1.03
Closing . The closing of
the transactions contemplated hereby (the “Closing”)
shall take place at a time and date to be specified by the parties
which will be no later than the second Business Day after the
satisfaction or waiver of each of the conditions set forth in
Article V or at such other time as the parties hereto agree in
writing. The Closing shall take place at the offices of Jones,
Haley & Mottern, P.C., 115 Perimeter Center Place, Suite 170,
Atlanta, Georgia 30346, or at such other location as the parties
hereto agree in writing. The date on which the Closing occurs is
herein referred to as the “Effective Time.”
Section 1.04
Effective Time. At the Closing, after
the satisfaction or waiver in writing of each of the conditions set
forth in Article VI, Sub and the Company shall cause the
Certificate of Merger to be filed with the Secretary of State of
the State of Delaware, in accordance with the relevant provisions
of Delaware Law (the time of acceptance by the Secretary of State
of the State of Delaware of such filing or such later time as may
be agreed to by Parent and the Company and specified in the
Certificate of Merger being referred to herein as the
“Effective Time”).
Section 1.05
Effect of the Merger. At the Effective
Time, the effect of the Merger shall be as provided in this
Agreement, the Certificate of Merger and the applicable provisions
of Delaware Law. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all the property,
rights, privileges, powers and franchises of the Company and Sub
shall vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company and Sub shall become debts, liabilities
and duties of the Surviving Corporation.
Section 1.06
Certificate of Incorporation;
Bylaws.
(a)
At the Effective Time, the Certificate
of Incorporation of Sub, as in effect immediately prior to the
Effective Time, shall be the Certificate of
Incorporation
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of the Surviving Corporation until thereafter amended as provided
by Delaware Law and such Certificate of Incorporation;
provided , however , that Article I of the
Certificate of Incorporation of the Surviving Corporation will be
amended as of the Effective Time to read: “The name of the
corporation is College Tonight, Inc.”
(b)
At the Effective Time, the Bylaws of
Sub, as in effect immediately prior to the Effective Time, shall be
the Bylaws of the Surviving Corporation until thereafter amended as
provided by Delaware Law, the Certificate of Incorporation of the
Surviving Corporation and such Bylaws.
Section 1.07
Directors and Officers. At the
Effective Time, the directors and officers of the Sub shall resign
without liability to the Sub, and the Sub shall appoint nominees of
the Company to fill the vacant positions. At the Effective
Time, the Parent shall appoint Zachary Suchin and Jason Schutzbank
to the board of directors of the Parent, and Kjell I. Jagelid and
Warren Traver will tender their resignations, which shall be
effective upon the Parent’s compliance with Section 14 of the
Securities Exchange Act of 1934.
Section 1.08
Effect on Capital Stock.
(a)
On the terms and subject to the
conditions set forth in this Agreement, and without any action on
the part of any holder of Company Common Stock:
(i)
At the Effective Time, each share of Company Common Stock issued
and outstanding immediately prior to the Effective Time (other than
Dissenting Shares and shares canceled pursuant to
Section 1.8(b)) shall be converted into the right to receive,
subject to and in accordance with Section 1.10(c), that number
of shares of Parent Preferred Stock equal to the Per-Share Stock
Amount. As of the Effective Time, all such shares of Company Common
Stock (other than Dissenting Shares and shares canceled pursuant to
Section 1.8(b)) shall automatically be cancelled and no longer
deemed outstanding, and the holders thereof shall not have any
rights with respect thereto, except the right to receive the
Per-Share Stock Amount, without interest, upon surrender of
Certificates (as defined in Section 1.10) in accordance with
Section 1.10.
(ii)
At the Effective Time, each share of capital stock of Sub that is
issued and outstanding immediately prior to the Effective Time
will, by virtue of the Merger and without further action on the
part of the sole shareholder of Sub, be converted into and become
one share of common stock of the Surviving Corporation (and the
shares of Surviving Corporation into which the shares of Sub
capital stock are so converted shall be the only shares of the
Surviving Corporation’s capital stock that are issued and
outstanding immediately after the Effective Time). Each certificate
evidencing ownership of shares of Sub common stock will evidence
ownership of such shares of common stock of the Surviving
Corporation.
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(b)
Cancellation of Company Common Stock
Owned by the Parent and Sub and Company. At the Effective Time, all
shares of Company Common Stock that are owned by the Company as
treasury stock immediately prior to the Effective Time, and each
share of Company Common Stock owned by Parent or Sub or any direct
or indirect wholly owned Subsidiary of the Parent or Sub
immediately prior to the Effective Time, shall be canceled and
extinguished without any conversion thereof.
(c)
Adjustments. In the event of any stock
split, reverse stock split, stock dividend (including any dividend
or distribution of securities convertible into capital stock),
reorganization, reclassification, combination, recapitalization or
other like change with respect to the Company Common Stock or the
Parent Capital Stock occurring after the date of this Agreement and
prior to the Effective Time, all references in this Agreement to
specified numbers of shares of any class or series affected
thereby, and all calculations provided for that are based upon
numbers of shares of any class or series (or trading prices
therefor) affected thereby, shall be equitably adjusted to the
extent necessary to provide the parties the same economic effect as
contemplated by this Agreement prior to such stock split, reverse
stock split, stock dividend, reorganization, reclassification,
combination, recapitalization or other like change.
(d)
Dissenters’ Rights.
Notwithstanding anything to the contrary contained herein and
except as provided in this Section 1.8(d), no Dissenting Share
shall be converted into the right to receive the Per-Share Stock
Amount but shall instead be converted into the right to receive
such consideration as may be due with respect to such Dissenting
Shares pursuant to Delaware Law. Each holder of Dissenting Shares
who, pursuant to the provisions of Delaware Law, becomes entitled
to payment thereunder for such shares shall receive payment
therefor in accordance with Article 13 of Delaware Law (but only
after the value of such Dissenting Shares shall have been agreed
upon or finally determined pursuant to the provisions of Delaware
Law). The Company shall give Parent (i) prompt notice of any
such demands received by the Company, withdrawals of such demands,
and any other instruments served pursuant to Delaware Law and
received by the Company, and (ii) the right to direct all
negotiations and proceedings with respect to such demands under
Delaware Law. The Company shall not, except with the prior written
consent of Parent, voluntarily make any payment or offer to make
any payment with respect to, or settle or offer to settle, any
claim or demand in respect of any Dissenting Shares. If, after the
Effective Time, any Dissenting Shares lose their status as
Dissenting Shares, then any such shares shall immediately be
converted into the right to receive the Per-Share Stock Amount
without interest pursuant to Section 1.8(a) in respect of such
shares as if such shares never had been Dissenting Shares, and
Parent shall issue and deliver to the holder thereof, at (or as
promptly as reasonably practicable after) the applicable time or
times, following the satisfaction of the applicable conditions, in
each case as set forth in Section 1.10(c), the amount of cash
to which such holder would be entitled in respect thereof under
Section 1.8(a) as if such shares never had been
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Dissenting Shares (and all such cash shall be deemed for all
purposes of this Agreement to have become deliverable to such
holder pursuant to Section 1.8(a)).
Section 1.09
Surrender of Certificates.
(a)
Exchange Agent. Parent’s
transfer agent, Colonial Stock Transfer, Inc., shall act as
exchange agent (the “Exchange Agent”) in the
Merger.
(b)
Parent to Authorize Issuance of
Shares. Promptly following the Effective Time, Parent shall
authorize the Exchange Agent to issue an aggregate 2,412,800 shares
of Parent Preferred Stock in exchange for the Company Common Stock
in accordance with this Article I.
(c)
Exchange Procedures. Promptly
following the Effective Time, Parent shall instruct the Exchange
Agent to mail to each holder of record of a certificate or
certificates (“Certificates”) which immediately prior
to the Effective Time represented outstanding shares of Company
Common Stock, (i) a letter of transmittal (that shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall contain such other
customary provisions as Parent may reasonably specify), and
(ii) instructions for use of such letter of transmittal in
effecting surrender of Certificates in exchange for the Per-Share
Stock Amount payable pursuant to Section 1.08(a). Upon
surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and
such other documents as may reasonably be required by the Exchange
Agent, each holder of such Certificate shall be entitled to receive
in exchange therefor a certificate representing the number of
shares of Parent Preferred Stock that such holder has the right to
receive pursuant to Section 1.8(a) in respect of such
Certificate, and the Certificate so surrendered shall forthwith be
canceled. Until so surrendered, outstanding Certificates will be
deemed from and after the Effective Time, for all corporate
purposes, to evidence only the right to receive the Per-Share Stock
Amount pursuant to Section 1.8(a) for each share of Company
Common Stock to which such Certificate relates.
(d)
Transfers of Ownership. If any share
of Parent Preferred Stock is to be issued to a Person other than
the Person to which the Certificate surrendered in exchange
therefor is registered, it shall be a condition of the payment
thereof that the Certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and that the
person requesting such exchange shall have paid to Parent or any
agent designated by it any transfer or other Taxes required by
reason of the payment of cash in any name other than that of the
registered holder of the Certificate surrendered, or established to
the satisfaction of Parent or any agent designated by it that such
Tax has been paid or is not payable.
(e)
No Liability. Notwithstanding anything
to the contrary in this Section 1.10, none of the Exchange
Agent, the Surviving Corporation or any party hereto shall
be
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liable to any Person for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat or
similar law.
(f)
Unclaimed Shares. Notwithstanding
anything to the contrary contained herein, if any Certificate has
not been surrendered prior to the fifth anniversary of the
Effective Time (or immediately prior to such earlier date on which
the consideration payable pursuant to Section 1.8(a) in
respect of such Certificate would otherwise escheat to or become
the property of any Governmental Entity), any amounts payable in
respect of such Certificate shall, to the extent permitted by
applicable Legal Requirements, become the property of Parent, free
and clear of all claims or interests of any Person previously
entitled thereto.
Section 1.10
No Further Ownership Rights in Company
Common Stock. All shares of Parent Preferred Stock issued or
issuable following the surrender for exchange of shares of Company
Common Stock in accordance with the terms of this Agreement shall
be so issued or issuable in full satisfaction of all rights
pertaining to such shares of Company Common Stock, and there shall
be no further registration of transfers on the records of the
Company of shares of Company Common Stock which were issued and
outstanding immediately prior to the Effective Time. If, after the
Effective Time, any Certificate is presented to the Surviving
Corporation for any reason, such Certificate shall be canceled and
exchanged as provided in this Article I.
Section 1.11
Lost, Stolen or Destroyed
Certificates. In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact
by the record holder thereof, the Exchange Agent shall issue in
exchange for such Certificate the shares of Parent Preferred Stock
issuable pursuant to Section 1.8(a) in respect of such
Certificate; provided, however, that Parent or the Exchange Agent
may, in its reasonable discretion and as a condition precedent to
the exchange thereof, require the record holder of such Certificate
to deliver a bond in such sum as Parent or the Exchange Agent may
reasonably direct as indemnity against any claim that may be made
against Parent, the Surviving Corporation, the Exchange Agent
and/or any of their respective representatives or agents with
respect to such Certificate.
Section 1.12
Tax Consequences. Parent makes no
representations or warranties to the Company regarding the Tax
treatment of the Merger, or any Tax consequences to the Company of
this Agreement, the Merger, or any of the other transactions or
agreements contemplated hereby. The Company acknowledges that the
Company is relying solely on its own Tax advisors in connection
with this Agreement, the Merger and the other transactions and
agreements contemplated hereby.
Section 1.13
Taking of Necessary Action; Further
Action. If, at any time after the Effective Time, any further
action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right,
title and interest in, to and under, and/or possession of, all
assets, property, rights, privileges, powers and franchises of the
Company and Sub, the officers and directors of the Surviving
Corporation are fully authorized in the name and on behalf of the
Company and Sub or
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otherwise, to take all lawful action necessary or desirable to
accomplish such purpose or acts so long as such action is not
inconsistent with this Agreement.
Section 1.14
Shares to Company Principals.
With respect to the shares of Parent Parent Stock issued Zach
Suchin and Jason Schutzbank in the Merger, 200,000 shares each
shall be subject to future cancellation and forfeiture under the
following conditions:
(a)
If the Company website does not have
documented proof of 500,000 registered users (as defined below) by
the second anniversary of Closing, then 100,000 shares of Parent
Preferred Stock held by each of Zach Suchin and Jason Schutzbank
shall be cancelled.
(b)
If the Company website does not have
documented proof of 1,000,000 registered users (as defined below)
by the third anniversary of Closing, then 100,000 shares of Parent
Preferred Stock held by each of Zach Suchin and Jason Schutzbank
shall be cancelled.
(c)
For purposes of this Section 1.14, a
“registered user” is defined as an individual who
accesses any Company service or subsidiary, by any means, who
provides his or her unique email address, who accepts the terms of
service, and who confirms the validity of his/her email address,
including some users who may initially be registered through an
affiliate program or through strategic partnerships, which will
qualify as registered users.
(d)
200,000 of the shares of Parent
Preferred Stock issued to Messrs. Suchin and Schutzbank will bear a
legend indicating that the shares are subject to forfeiture and
cancellation on the terms set forth in this Section
1.14.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Schedule attached
hereto, the Company represents and warrants to the Parent and Sub
as follows:
Section 2.01
Organization and Good Standing;
Qualifications. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware and is duly qualified to transact business as a foreign
company and is in good standing in each jurisdiction where the
conduct of its business makes such qualification necessary, except
where the failure to be qualified would not have a Material Adverse
Effect on the Company. The Company has the requisite power
and authority to own, lease and operate its properties and to carry
on its business as it is currently being conducted.
Section 2.02
Power; Authorization; Validity;
Enforceability. The Company has the requisite right, power,
authority and capacity to execute, deliver and perform
its
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obligations contemplated under this Agreement and all other
agreements specified in or contemplated by this Agreement to which
it is a party. This Agreement and all other agreements
specified in or contemplated by this Agreement constitute valid and
binding obligations of the Company, as the case may be enforceable
against it in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws or policies
relating to or affecting creditors’ rights or by general
principles of equity.
Section 2.03
Capitalization .
(a)
The total authorized shares of the
Company consist of 10,000 shares of Common Stock, $0.00 par value.
There are no shares of Company Common Stock outstanding,
except as disclosed on Section 2.03(a) of the Company Disclosure
Statement. All such outstanding shares of Company Common
Stock have been duly authorized, validly issued and are fully paid
and nonassessable. All prior issuances of Company Common
Stock were, at the time made, exempt from registration under all
applicable Federal and state securities laws and
regulations.
(b)
There are no existing subscriptions,
options, warrants, agreements, calls, commitments, trusts (voting
or otherwise), pledge agreements, buy/sell agreements, proxies,
exchangeable securities, convertible securities, preemptive rights,
rights of first refusal, Encumbrances or other rights of any kind
whatsoever granting any interest in or the right to purchase or
otherwise acquire any interest in or the right to purchase, at any
time, or upon the occurrence of any stated event, any shares of
Company Common Stock or other securities of the Company, whether or
not presently issued or outstanding.
Section 2.04
No Conflicts. Neither the
execution and delivery by the Company of this Agreement or any of
the other instruments or agreements referred to herein to which the
Company is a party, the consummation by the Company of the
transactions contemplated hereby or thereby, nor the compliance by
the Company with any of the terms or provisions of any such
instruments or agreements will: (a) constitute or result in a
breach of any provision of the Organizational Documents of the
Company; (b) contravene any Legal Requirements applicable to
or binding upon the Company; (c) constitute or result in a
material breach of any Contract, mortgage, indenture, agreement,
commitment, lease, plan, authorization or other instrument,
document or understanding, oral or written, to which the Company is
a party or by which any of its respective assets or properties may
be bound or affected (or result in the creation of any Encumbrance
upon their respective assets or properties), or (d) give any party
with rights thereunder, the right to terminate, modify in any
material respect, accelerate or otherwise change in any material
respects the existing rights or obligations of the Company
hereunder.
Section 2.05
No Consents or Governmental Approvals
Required. No consent, approval or authorization of, or
declaration, filing or registration by the Company with
(a) any Governmental Body or (b) any other third party,
is required in connection with
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the execution, delivery and performance of this Agreement by the
Company or the consummation by the Company of the transactions
contemplated hereby.
Section 2.06
Financial Statements. The
Company has provided to Parent unaudited balance sheets, statements
of operations, shareholders’ equity and cash flows for the
three and six months ended June 30, 2007 (collectively, the
“Preliminary Financial Statements”). The
Preliminary Financial Statements are accurate and complete in all
material respects, fairly present the financial condition, results
of operations, changes in shareholders’ equity and cash flows
for the Company at the respective dates of and for the periods
referred to in such Preliminary Financial Statements and are in
accordance with GAAP; subject, in the case of the interim financial
statements, to normal recurring year-end adjustments, the effect of
which will not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
Section 2.07
Litigation. There is no Proceeding pending or claim
asserted or, to the Knowledge of the Company, any basis therefore
or threat thereof, to which the Company or its properties or assets
are subject or, to the Knowledge of the Company, against any
manager, officer, director or employee of the Company in connection
with such Person’s relationship to actions taken on behalf of
the Company before or by any Governmental Body. There is no
Proceeding pending or, to the Knowledge of the Company, threatened
in any jurisdiction to suspend and/or revoke any License or, to the
Knowledge of the Company, any basis for any such suspension or
revocation or other penalties. No such proceedings have been
pending nor, to the Knowledge of the Company, threatened at any
time during the past three years. The Company has not been
found in any administrative hearing to have violated any License
and has conducted its business so as to comply in all material
respects with each License and all applicable Legal Requirements.
There is no Proceeding pending or, to the Knowledge of the
Company, threatened, which (a) questions the legality or propriety
of the transactions contemplated by this Agreement, or (b) that may
prevent, delay, make illegal, or otherwise interfere with any of
the transactions contemplated by this Agreement, and to the
Knowledge of the Company, there is no legislative or regulatory
proposal that has been adopted or is pending which has a Material
Adverse Effect on the Company. There are no judgments,
awards, decrees, injunctions, rules or orders of any Governmental
Body or arbitrator outstanding against the Company.
Section 2.08
Compliance with Laws;
Licenses.
(a)
To the Knowledge of the Company, the
Company is in full compliance with all Legal Requirements
applicable to the Company, the conduct and operation of its
business and the ownership and use of its assets.
(b)
To the Knowledge of the Company, no
event has occurred or circumstance exists that (with or without
notice or lapse of time) (a) may constitute or result in a
violation by the Company of, or a failure on the part of the
Company to comply with, any Legal Requirement or (b) may give rise
to any obligation on the part of the Company to undertake, or to
bear all or any portion of the cost of, any remedial action of any
nature with respect to applicable Legal Requirements.
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(c)
The Company has not received any
unresolved written or, to the Knowledge of Company, oral notice or
other communication from any Governmental Body or any other Person
regarding (a) any actual, alleged, possible or potential violation
of, or failure to comply with, any Legal Requirement or (b) any
actual, alleged, possible or potential obligation on the part of
the Company to undertake, or to bear all or any portion of the cost
of, any remedial action of any nature with respect to applicable
Legal Requirements.
(d)
To the Knowledge of the Company, the
Company owns and possesses all Licenses from Governmental Bodies
which are necessary to enable it to own or lease, operate and use
its assets and to carry on and conduct its business as currently
conducted.
(e)
To the Knowledge of Company, the
Company has fulfilled and performed its obligations under each of
the Licenses and no event has occurred or condition or state of
facts exists which constitutes or, after notice or lapse of time or
both, would constitute a breach or default under or violation of
any such License or which permits or, after notice or lapse of time
or both, would permit revocation or termination of any such License
or which might adversely affect the rights of the Company under any
such License. To the Knowledge of the Company, no notice of
cancellation, of default or of any dispute concerning any License,
or of any event, condition or state of facts described in the
preceding clause, has been received by, or is Known to, the
Company.
(f)
To the Knowledge of the Company, the
Company has operated and currently operates its business in full
compliance with all applicable statutory rules, regulations, and
provisions imposed by federal, state, and local government
authorities
Section 2.09
Absence of Certain Changes or
Events.
(a)
The Company has not engaged in any
activity or entered into or carried out any transaction, or
experienced any occurrence or circumstance since June 30, 2007,
which has had or might reasonably be expected to have an adverse
effect on the condition (financial or otherwise), properties,
assets, prospects or operations of the Company. Since June
30, 2007, the Company has conducted its business only in the
Ordinary Course of Business and (a) there has been no damage,
destruction, loss or claim, whether or not covered by insurance, or
condemnation or other taking adversely affecting any of the assets
of the Company; and (b) there has been no adverse change in the
business, the operations, assets, liabilities, properties, profits,
prospects or condition (financial or otherwise) of the Company and
no fact or condition exists or is contemplated or threatened which
might reasonably be expected to cause such a change in the
future.
(b)
Without limiting the generality of the
foregoing , since June 30, 2007, there
has not been any:
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(i)
authorization, issuance, sale, delivery, or agreement to issue,
sell or deliver, any shares of Company Common Stock, bonds or other
corporate securities (whether authorized and unissued or held in
the treasury of the Company), or purchase, redemption, dividend,
retirement, grant, or agreement to grant any options, warrants,
registration rights, dividend rights or other rights calling for
the issuance, sale or delivery of any capital stock, bonds or other
corporate securities of the Company;
(ii)
increases or promises to increase any bonuses, salaries or other
compensation to any manager, member, director, officer, or, other
than in the Ordinary Course of Business, employee of the Company,
or entry into any employment, severance, or similar Contract with
any member, manager, officer or employee other than as contemplated
by this Agreement;
(iii)
adoption of, or increase in the payments to or benefits under, any
employee benefit plan;
(iv)
declaration or payment of any dividend or other distribution or
payment in respect of units of membership, bonds or other corporate
securities of the Company;
(v)
amendment to any of its Organizational Documents;
(vi)
sale, lease, or other disposition or damage or destruction or loss
of any of its material assets or property or mortgage, pledge, or
imposition of any lien or other Encumbrance on any of its material
assets or properties;
(vii)
entry into, termination of, or receipt of notice of termination of
any (i) employment, severance, joint venture, license or similar
contract or (ii) any contract or transaction involving a total
remaining commitment by the Company of at least $500;
(viii)
borrowings or agreements to borrow any funds or guarantees for the
repayment of any indebtedness;
(ix)
sale (other than in the Ordinary Course of Business), lease or
other disposition of any asset or property of the Company, or the
creation of any Encumbrance on any asset or property of the
Company;
(x)
cancellation or waiver of any claims or rights with a value to the
Company in excess of $500;
(xi)
material change in the accounting methods used by the Company;
(xii)
preparation or filing of any Tax Return with respect to the Company
or any asset of the Company that is inconsistent with past
practice;
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(xiii)
settlements or compromises of any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy
relating to Taxes; or
(xiv)
agreement, whether oral or written, by it to do any of the
foregoing.
Section 2.10
No Undisclosed Liabilities. To the
knowledge of the Company, the Company has no liabilities or
obligations of any nature, either direct or indirect, matured or
unmatured, known or unknown or absolute, contingent or otherwise,
except for liabilities reflected or reserved against in the
Preliminary Financial Statements and current liabilities incurred
in the Ordinary Course of Business since the date of the
Preliminary Financial Statements, none of which (a) has had or
is likely to have a Material Adverse Effect on the Company or (b)
results from or relates to any breach of contract, breach of
warranty, tort, infringement, or breach of law or arose out of any
legal action or court order. To the Knowledge of the Company,
no basis exists for the assertion against the Company of any claim
or liability of any nature other than those, if any, which have
been disclosed in the Preliminary Financial Statements.
Section 2.11
Contract
s. Section
2.11 of the Company Disclosure Statement sets forth an accurate and
complete list of all contracts, leases, arrangements and
commitments (or where they are oral, accurate and complete written
summaries thereof) (the “Material Contracts”).
The Company has fulfilled and performed its obligations under
each of the Material Contracts, and the Company is not in, or, to
the knowledge of the Company, alleged to be in, breach or default
under, nor is there alleged to be any basis for termination of, any
of the Material Contracts and, to the Knowledge of the Company, no
other party to any of the Material Contracts has breached or
defaulted thereunder.
Section 2.12
Insurance. Section 2.12 of the
Company Disclosure Statement sets forth a true and complete list of
all insurance policies (except group health and life policies) held
by the Company, including those covering its properties, equipment,
fixtures, employees and operations. Such list specifies with
respect to each such policy, the insurer and agent, the types of
coverage, limits, deductibles, annual premiums due thereunder and
expiration dates. Each such policy identified on Section 2.12
is currently in full force and effect. All insurance premiums
due according to the applicable payment schedules reflected in such
policies have been, or will be, timely paid as of the Effective
Time.
Section 2.13
Title to Assets. The Company has
good, valid and marketable title to all of the assets reflected in
the Preliminary Financial Statements, free and clear of all
Encumbrances. There are no outstanding options, warrants,
commitments, agreements or any other rights of any character
entitling any Person to acquire any interest in all, or any part
of, the assets of the Company.
Section 2.14
Real Property.
(a)
The Company does not have any fee
interest in real property.
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(b)
The Company does not lease any real
property, except as disclosed in Section 2.14(b) of the Company
Disclosure Schedule.
Section 2.15
Employees and Independent Contractors. Except as set forth on
Section 2.15 of the Company Disclosure Schedule:
(a)
the Company is and has been in
compliance in all material respects with all applicable Laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours including, without
limitation, any such Laws respecting employment discrimination and
occupational safety and health requirements, and has not and is not
engaged in any unfair labor practice;
(b)
there is no unfair labor practice
charge or complaint against the Company pending or, to the
Knowledge of the Company, threatened before the National Labor
Relations Board or any other comparable authority;
(c)
the Company is not a party to any
collective bargaining agreements;
(d)
there is no Proceeding, litigation,
arbitration proceeding, governmental investigation, citation or
action of any kind pending or, to the Knowledge of the Company
threatened, against Company relating to employment, employment
practices, terms and conditions of employment or wages and
hours;
(e)
there are no pending or, to the
Knowledge of the Company, threatened strikes, lockouts or other
work stoppages involving any persons employed by the
Company;
(f)
there are no representation petitions
or other similar petitions or requests for representation pending
or, to the Knowledge of the Company, threatened, before the
National Labor Relations Board or other federal, provincial, state,
or local agency in connection with any persons employed by the
Company;
(g)
the Company has no
employees;
(h)
the Company has no accrued severance,
vacation, bonus time, personal workdays or comparable employee
benefit to any past or present employee;
(i)
all employees of the Company are
terminable at will, subject only to the obligation to pay base
compensation to the date of termination, with no obligation for
severance payments or accrued bonuses.
Section 2.16
Employee Benefit Plans. The
Company is in compliance with the provisions of and regulations
under ERISA, and the Code, which are applicable to any pension or
other employee benefit plan established or maintained by the
Company or to which contributions are made by the Company (a
“Plan”) and the Company has met all of the funding
standards applicable to each Plan, and there exists no event or
condition which would permit the institution of proceedings to
terminate any Plan under any provision of applicable Law. The
Company has not, with respect to any Plan, engaged in
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a prohibited transaction, as provided in Section 406 of ERISA or
Section 4975(c) of the Code.
Section 2.17
Books and Records. The minute
books, membership unit ownership records and other books of account
and financial records of the Company have been maintained in
accordance with sound business practices, including the maintenance
of an adequate system of internal controls. Such books and
records are accurate and complete and fairly reflect, in reasonable
detail, the transactions and the assets and liabilities of the
Company. The Company has not engaged in any transaction,
maintained any bank account for the business or used any of the
funds of the Company in the conduct of the business except for
transactions, bank accounts and funds which have been and are
reflected in the normally maintained books and records of the
business.
Section 2.18
Indebtedness. Accurate and
complete copies of all instruments evidencing indebtedness or any
contingent indebtedness of the Company, including the following
payables and promissory notes have been provided to
Parent:
(a)
all promissory notes, guarantees of
indebtedness, loan agreements and credit agreements to which the
Company is a party; and
(b)
all indentures, mortgages, security
agreements of the Company.
Section 2.19
Taxes. The Company has timely
paid all taxes and timely filed all federal, state, and local Tax
Returns, and the deadline for timely filing any such returns has
not expired. The Company has established adequate reserves
for all taxes accrued but not yet payable. The Company has
paid all taxes, assessments, and governmental charges that have
become due or payable, including without limitation all taxes that
the Company is obligated to withhold from amounts owing to
employees, creditors, and third parties. No deficiency
assessment with respect to or proposed adjustment of the Company's
federal, state, county or local taxes is pending or threatened.
There is no tax lien (
