EXHIBIT 10.1
AGREEMENT AND
PLAN OF MERGER
by and between
MARANI BRANDS, INC.
a Nevada corporation,
and
FFBI MERGER SUB CORP.
a California corporation,
on the one hand
and
MARGRIT ENTERPRISES INTERNATIONAL, INC.
a California corporation,
on the other hand
AGREEMENT AND PLAN OF
MERGER
This
AGREEMENT AND PLAN OF MERGER (this " Agreement ") is
dated as of April 4, 2008 (the " Effective Date "), by and
among Marani Brands, Inc. (f/k/a Fit For Business International,
Inc.), a Nevada corporation (" Marani "), and FFBI Merger
Sub Corp., a corporation newly formed under the laws of the State
of California and a wholly owned subsidiary of Marani (the "
Merger Sub "), on the one hand, and Margrit Enterprises
International, Inc., a California corporation (" MEI "), on
the other hand. Each of Marani, Merger Sub, and MEI shall be
referred to herein as a " Party " and collectively as the "
Parties ."
W I T N E S S E T H
WHEREAS , Marani and MEI have determined that a business
combination between them is advisable and in the best interests of
their respective companies and stockholders, and presents an
opportunity for their respective companies to achieve long-term
strategic and financial benefits;
WHEREAS , Marani has proposed to acquire MEI pursuant to a
merger transaction whereby, pursuant to the terms and subject to
the conditions of this Agreement, MEI shall become a wholly owned
subsidiary of Marani through the merger of Merger Sub with and into
MEI (the " Merger ");
WHEREAS , in the Merger all issued and outstanding shares of
capital stock of MEI held by the stockholders of MEI (the " MEI
Stockholders ") shall be cancelled and converted into the right
to receive 100,000,000 shares of common stock of Marani, $0.001 par
value per share (the "Merger Shares"); and
WHEREAS , the Parties desire and intend that the
transactions contemplated by this Agreement will be a tax free
reorganization under Section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended.
NOW THEREFORE , in consideration of these premises and
respective mutual agreements, covenants, representations and
warranties herein contained, and other good and valuable
consideration, the legal adequacy of which is hereby acknowledged,
it is agreed between the Parties hereto as follows:
ARTICLE 1
THE MERGER
1.1
The Merger . Upon the terms and subject to the conditions
set forth in this Agreement and in accordance with the California
Corporations Code, at the Effective Time (as hereinafter defined),
Merger Sub shall merge with and into MEI with MEI being the
surviving corporation (the "Merger") and all MEI Shares (as
hereinafter defined) shall be
1
cancelled and converted into the right to receive
the Merger Shares. In connection therewith, the following terms
shall apply:
(a)
Exchange Agent . The Lebrecht Group, APLC, counsel to MEI,
shall act as the exchange agent (the " Exchange Agent ") for
the purpose of exchanging MEI Shares (as hereinafter defined) for
the Merger Shares. At or prior to the Closing, Marani shall deliver
to the Exchange Agent the Merger Shares.
(b)
Conversion of Securities .
| |
(i)
Conversion of MEI Securities . At the Effective Time, by
virtue of the Merger and without any action on the part of Marani,
MEI or the Merger Sub, or the holders of any of their respective
securities: |
| |
(A)
Each
of the issued and outstanding shares of common stock of MEI (the "
MEI Shares ") immediately prior to the Effective Time shall
be automatically converted into and represent the right to receive,
and shall be exchangeable for, that number of shares of common
stock of Marani as shall be determined by dividing 100,000,000 by
the number of then issued and outstanding MEI Shares (the " MEI
Conversion Rates "). The number of Merger Shares each MEI
Stockholder is eligible to receive is set forth on Exhibit A
. The Merger Shares will be issued based on the representations and
warranties contained in each MEI Stockholder's Letter of
Transmittal (as hereinafter defined) and shall only be issued to an
MEI Stockholder who executes and delivers such MEI Stockholders'
Letter of Transmittal to the Exchange Agent together with the
certificate for their MEI Shares, or if the certificate is not
delivered, the lost certificate affidavit included with the Letter
of Transmittal duly executed and attested to by the MEI
Stockholder.
(B)
Each
holder of a certificate representing any MEI Shares shall cease to
have any rights with respect thereto, except the right to receive
the Merger Shares to be issued pursuant to this Section
1.1(b)(i)(A) upon the surrender of such certificate in accordance
with Section 1.7, without interest. No fractional shares may be
issued; but each fractional share that would result from the Merger
will be rounded to the nearest number of whole shares. |
| |
(ii)
Cancellation of Merger Sub Stock . At the Effective Time, by
virtue of the Merger and without any action on the part of MEI,
Marani, the Merger Sub, or the holders of any of their respective
securities, Merger Sub will merge with and into MEI and each share
of capital stock of Merger Sub outstanding immediately prior to the
Effective Time shall be remain outstanding as shares of the
Surviving Entity and held by Marani and each of the Margrit Shares
shall be cancelled and converted into the right the receive the
amount of Merger Shares set forth on Exhibit A . Immediately
after the Merger, MEI shall be the "Surviving Entity" in the
Merger. The Merger Sub shall cease to exist immediately after the
Merger. |
2
(c)
Letter of Transmittal . In order to exchange their MEI
Shares for Merger Shares, each MEI Stockholder must sign a letter
of transmittal, in the form attached hereto as Exhibit B (the
"Letter of Transmittal"), in which each MEI Stockholder will
represent and warrant that such MEI Stockholder is an accredited
investor, that the issuance of the Merger Shares to the MEI
Stockholders shall be exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) of the Securities Act
and the rules and regulations promulgated thereunder, that the
Merger Shares will be restricted securities under Rule 144 of the
Securities Act of 1933, as amended, and that the Merger Shares will
be subject to a lock-up period as set forth therein.
1.2
Merger; Effective Time . At the Effective Time and subject
to and upon the terms and conditions of this Agreement, Merger Sub
shall, and Marani shall cause Merger Sub to, merge with and into
MEI in accordance with the provisions of the California
Corporations Code, the separate corporate existence of Merger Sub
shall cease and MEI shall continue as the Surviving Entity. The
Effective Time shall occur upon the filing with the Secretary of
State of the State of California of a Certificate of Merger (the "
Certificate of Merger ") executed in accordance with the
applicable provisions of the California Corporations Code (the "
Effective Time "). The date on which the Effective Time
occurs is referred to as the " Effective Date ." Provided
that this Agreement has not been terminated pursuant to Section
5.2, the Parties will cause the Certificate of Merger to be filed
as soon as practicable after the Closing.
1.3
Effect of the Merger . The Merger shall have the effect set
forth in Section 6014 of the California Corporations Code. As set
forth in that certain Agreement of Merger to be filed with the
California Secretary of State by and between MEI and Merger Sub,
and without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the assets, properties, rights,
privileges, powers and franchises of MEI and Merger Sub shall vest
in the Surviving Entity, and all debts, liabilities and duties of
MEI and Merger Sub shall become the debts, liabilities and duties
of the Surviving Entity.
1.4
Certificate of Incorporation and Bylaws; Directors and
Officers .
Pursuant
to the Merger:
(a)
The
Certificate of Incorporation and Bylaws of MEI as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation and Bylaws of the Surviving Entity immediately
following the Merger.
(b)
The
directors and officers of MEI immediately prior to the Merger shall
be the directors and officers of the Surviving Entity subsequent to
the Merger.
1.5
Issuance of Additional Securities . As additional
consideration for the Merger, Marani and MEI have agreed that
Marani shall issue the following simultaneous with the Merger: (i)
42,594,616 shares of Marani common stock to Purrell Partners, LLC
(the
3
" Purrell Shares "), or its designated
assigns (together the " Purrell Group "), and (ii) a warrant
to purchase Ten Million (10,000,000) shares of Marani common stock
at an exercise price of $0.10 per share, in the form attached
hereto as Exhibit C , to the Purrell Group (the " Purrell
Warrant " and together with the Merger Shares, and the Purrell
Shares, the " Marani Securities ").
The
Merger Shares issued to non-executive officers of MEI will be
subject to a lock-up period as set forth in the Letters of
Transmittal. The Merger Shares issued to each of the MEI executive
officers (indicated with an asterisk on Exhibit A ) will be
subject to a separate Officer's Lock-Up Agreement to be entered
into between Marani and those MEI Stockholders in the form attached
hereto as Exhibit D (the " Officer's Lock-Up
Agreement ").
The
Purrell Shares issued to the Purrell Group will be subject to a
lock-up period as set forth in that certain Lock-Up Agreement by
and between Marani and the Purrell Group and its designated
assigns, dated as of the Closing Date, a copy of which is attached
hereto as Exhibit E (the " Purrell Lock-Up Agreement ").
The
address to be used for the notice provisions under the Officer's
Lock-Up Agreements and the Purrell Lock-Up Agreement are listed on
Schedule 1.5 , attached hereto.
1.6
Acknowledgment of Additional Securities Issuances . Marani
and MEI acknowledge that, pursuant to previous investment
agreements, after the Closing, and upon the submission of a proper
conversion notice, Marani is obligated to issue the following: i)
Fifteen Million One Hundred Twenty Thousand Shares (15,120,000)
shares of Marani common stock to certain investors (the "
Investors "), and in certain amounts, as listed on
Exhibit F (the " Investor Shares "); (ii) warrants to
purchase Fifteen Million One Hundred Twenty Thousand Shares
(15,120,000) shares of Marani common stock at an exercise price of
$0.35 per share, in form attached hereto as Exhibit G , to
the Investors, in the amounts listed on Exhibit F (the "
Investor Warrants ").
1.7
Restrictions on Resale .
(a)
The Marani Securities . The Marani Securities will not be
registered under the Securities Act, or the securities laws of any
state, and cannot be transferred, hypothecated, sold or otherwise
disposed of until: (i) a registration statement with respect to
such securities is declared effective under the Securities Act, or
(ii) Marani receives an opinion of counsel for the stockholders,
reasonably satisfactory to counsel for Marani, that an exemption
from the registration requirements of the Securities Act is
available.
The
certificates representing the Marani Securities shall contain a
legend substantially as follows:
| |
"THE SECURITIES WHICH ARE
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE |
|
4
| |
SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS
DECLARED EFFECTIVE UNDER SUCH ACT, OR MARANI BRANDS, INC. RECEIVES
AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO
COUNSEL FOR MARANI BRANDS, INC. THAT AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE." |
|
1.8
Exchange of Certificates .
(a)
Exchange of Certificates. After the Effective Time and pursuant to
a customary letter of transmittal or other instructional form
provided by the Exchange Agent to the MEI Stockholders, the MEI
Stockholders shall surrender all the MEI Shares to the Exchange
Agent, and the MEI Stockholders shall be entitled upon such
surrender to receive in exchange therefor certificates representing
the proportionate number of Merger Shares into which the MEI Shares
theretofore represented by the stock transfer forms so surrendered
shall have been exchanged pursuant to this Agreement. Until so
surrendered, each outstanding certificate that, prior to the
Effective Time, represented MEI Shares shall be deemed for all
corporate purposes, subject to the further provisions of this
Article I, to evidence the ownership of the number of whole Merger
Shares for which such MEI Shares have been so exchanged. No
dividend payable to holders of Merger Shares of record as of any
date subsequent to the Effective Time shall be paid to the owner of
any certificate which, prior to the Effective Time, represented MEI
Shares, until such certificate or certificates representing all the
relevant MEI Shares, together with a stock transfer form, are
surrendered as provided in this Article I or pursuant to letters of
transmittal or other instructions with respect to lost certificates
provided by the Exchange Agent.
(b)
Full Satisfaction of Rights. All Merger Shares for which the MEI
Shares shall have been exchanged pursuant to this Article I shall
be deemed to have been issued in full satisfaction of all rights
pertaining to the MEI Shares.
(c)
Exchange of Certificates. All certificates representing MEI Shares
converted into the right to receive Merger Shares pursuant to this
Article I shall be furnished to Marani subsequent to delivery
thereof to the Exchange Agent pursuant to this Agreement.
(d)
Closing of Transfer Books. On the Effective Date, the stock
transfer book of MEI shall be deemed to be closed and no transfer
of MEI Shares shall thereafter be recorded thereon.
1.9
History of the Merger . MEI has previously provided $650,000
to Purrell Partners for the purpose of identifying an OTCBB-listed
company that MEI could merge with to become listed on the OTCBB.
Purrell Partners paid a portion of the $650,000 to the previous
majority shareholders of Marani for control of Marani and kept the
remaining portion as a consulting fee.
5
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF MARANI
2.1
Representations and Warranties of Marani . To induce MEI to
enter into this Agreement and to consummate the transactions
contemplated hereby, Marani, and, where applicable, the Merger Sub,
represent and warrant as of the date hereof and as of the Closing
(unless specified otherwise), as follows:
| |
2.1.1
Authority of Marani and Merger Sub; Transfer of Marani
Securities . Each of Marani and the Merger Sub has the full
right, power and authority to enter into this Agreement and to
carry out and consummate the Merger and other transactions
contemplated herein. This Agreement, and all of the Exhibits
attached hereto, constitutes a legal, valid and binding obligation
of Marani, and, where applicable, the Merger Sub, enforceable
against Marani and the Merger Sub, as applicable, in accordance
with their respective terms. Marani shall issue the Marani
Securities to the MEI Shareholders, the Investors, and the Purrell
Group, as set forth herein, duly issued, fully paid,
non-assessable, free and clear of all liens, security interests,
pledges, encumbrances, charges, restrictions, demands, and claims
of any kind or nature whatsoever, whether direct or indirect or
contingent, other than those imposed by the Securities Act of 1933,
as amended.
2.1.2
Existence of Marani and Merger Sub . Marani is duly
organized, validly existing, and in good standing under the laws of
the State of Nevada. It has all requisite power, franchises,
licenses, permits and authority to own its properties and assets
and to carry on its business as it has been and is being conducted.
It is qualified to do business and is in good standing in each
province, state, nation or other jurisdiction wherein the character
of the business transacted by it makes such qualification
necessary. Merger Sub is duly organized, validly existing, and in
good standing under the laws of the state of California. Merger Sub
is a recently formed corporation and prior to the date hereof and
through the Closing, Merger Sub shall not conduct any operating
business, become a party to any agreements, or incur any
liabilities or obligations.
2.1.3
Capitalization of Marani . As of the signing of this
Agreement, the authorized capital stock of Marani is 300,000,000
shares of common stock, $0.001 par value, of which 405,384 shares
are issued and outstanding. There are 10,000,000 shares of
preferred stock of Marani authorized, $0.001 par value, none of
which are issued or outstanding. No other shares of capital stock
of any class or series of Marani are issued and outstanding. All of
the issued and outstanding shares have been duly and validly issued
in accordance and compliance with all applicable laws, rules and
regulations and are fully paid and nonassessable. Other than as set
forth in Schedule 2.1.3, there are no options, warrants, rights,
calls, commitments, plans, contracts or other agreements of any
character granted or issued by Marani which |
6
| |
provide for the purchase, issuance
or transfer of any shares of the capital stock of Marani nor are
there any outstanding securities granted or issued by Marani that
are convertible into any shares of the equity securities of Marani
or exchangeable into any of the equity securities of Marani, and
none is authorized. Marani is not obligated or committed to
purchase, redeem or otherwise acquire any of its equity. All
presently exercisable voting rights in Marani are vested
exclusively in its outstanding shares of common stock, each share
of which is entitled to one vote on every matter to come before its
shareholders, and other than as may be contemplated by this
Agreement, there are no voting trusts or other voting arrangements
with respect to any of Marani's equity securities.
2.1.4
Capitalization of Merger Sub . As of the signing of this
Agreement, and at Closing, the authorized capital stock of Merger
Sub consists of 1,000 shares of common stock, $0.001 par value, of
which one share is issued and outstanding. There are no shares of
preferred stock authorized for the Merger Sub. No other shares of
capital stock of any class or series of Merger Sub are issued and
outstanding. All of the issued and outstanding shares have been
duly and validly issued in accordance and compliance with all
applicable laws, rules and regulations and are fully paid and
nonassessable. There are no options, warrants, rights, calls,
commitments, plans, contracts or other agreements of any character
granted or issued by Merger Sub which provide for the purchase,
issuance or transfer of any shares of the capital stock of Merger
Sub nor are there any outstanding securities granted or issued by
Merger Sub that are convertible into any shares of the equity
securities of Merger Sub or exchangeable into any of the equity
securities of Merger Sub, and none is authorized. Merger Sub is not
obligated or committed to purchase, redeem or otherwise acquire any
of its equity. All presently exercisable voting rights in Merger
Sub are vested exclusively in its outstanding shares of common
stock, each share of which is entitled to one vote on every matter
to come before its shareholders, and other than as may be
contemplated by this Agreement, there are no voting trusts or other
voting arrangements with respect to any of Merger Sub's equity
securities.
2.1.5
Subsidiaries . " Subsidiary " or "
Subsidiaries " means all corporations, trusts, partnerships,
associations, joint ventures or other Persons, as defined below, of
which a corporation or any other Subsidiary of such corporation
owns, directly or indirectly, not less than twenty percent (20%) of
the voting securities or other equity or of which such corporation
or any other Subsidiary of such corporation possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies, whether through ownership of voting
shares, management contracts or otherwise. " Person " means
any individual, corporation, limited liability company, trust,
association, partnership, proprietorship, joint venture or other
entity. Marani has two Subsidiaries, namely Fit For Business
(Australia) Pty Limited, an entity organized under the laws of
Australia ("FFB Australia"), and Merger Sub, a California
corporation created in contemplation of this
transaction. |
7
| |
2.1.6
Execution of Agreement . The execution and delivery of this
Agreement by Marani and Merger Sub does not, and the consummation
of the Merger and other transactions contemplated hereby will not:
(a) violate, conflict with, modify or cause any default or breach
under or acceleration of (or give any Party any right to declare
any default or acceleration upon notice or passage of time or
both), in whole or in part, any charter, article of incorporation,
bylaw, mortgage, lien, deed of trust, indenture, lease, agreement,
instrument, order, injunction, decree, judgment, law or any other
restriction of any kind to which Marani or its Subsidiaries are a
party or by which it or any of its properties are bound or
otherwise subject; (b) result in the creation of any security
interest, lien, encumbrance, adverse claim, proscription or
restriction on any property or asset (whether real, personal,
mixed, tangible or intangible), right, contract, agreement or
business of Marani or any of its Subsidiaries or upon the Merger
Shares; (c) violate any law, rule or regulation of any federal or
state regulatory agency; or (d) permit any federal or state
regulatory agency to impose any restrictions or limitations of any
nature on Marani or any of its respective actions.
2.1.7
Taxes . |
| |
2.1.7.1
All taxes, assessments, fees, penalties, interest and other
governmental charges with respect to Marani and its business and
operations, which have become due and payable on the date hereof
have been paid in full or adequately reserved against by Marani and
set forth in Marani's financial statements, (including without
limitation, income, property, sales, use, franchise, capital stock,
excise, added value, employees' income withholding, social security
and unemployment taxes), and all interest and penalties thereon
with respect to the periods then ended and for all periods thereto;
Marani or Merger Sub are not parties to any tax sharing agreement
or tax indemnification with any third party;
2.1.7.2
There are no agreements, waivers or other arrangements providing
for an extension of time with respect to the assessment of any tax
or deficiency against Marani or Merger Sub, nor are there any
actions, suits, proceedings, investigations or claims now pending
against Marani or Merger Sub, nor are there any actions, suits,
proceedings, investigations or claims threatened against Marani or
Merger Sub in respect of any tax or assessment, or any matters
under discussion with any federal, state, local or foreign
authority relating to any taxes or assessments, or any claims for
additional taxes or assessments asserted by any such authority, and
there is no basis for the assertion of any additional taxes or
assessments against Marani or Merger Sub; and
2.1.7.3
The consummation of the Merger and other transactions contemplated
by this Agreement will not result in the imposition of any
additional taxes on or assessments against Marani or Merger
Sub. |
8
| |
2.1.8
Disputes and Litigation . Except as set forth in Schedule
2.1.8, (a) there are no suits, actions, litigation, proceedings,
investigations, claims, complaints, or accusations pending,
threatened against, or affecting Marani or Merger Sub or any of
their properties, assets or business or to which it is a party, in
any court or before any arbitrator of any kind or before or by any
governmental agency (including, without limitation, any federal,
state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality), and there is no basis
for such suit, action, litigation, proceeding, investigation,
claim, complaint, or accusation; (b) there is no pending or
threatened change in any environmental, zoning or building laws,
regulations or ordinances which affect or could affect Marani or
Merger Sub or any of their properties, equipment, assets,
operations, or businesses; and (c) there is no outstanding order,
writ, injunction, decree, judgment or award by any court,
arbitrator or governmental body against or affecting Marani, Merger
Sub, or any of their properties, assets, operations, or businesses.
There is no litigation, proceeding, investigation, claim, complaint
or accusation, formal or informal, or arbitration pending, or any
of the aforesaid threatened, or any contingent liability which
would give rise to any right of indemnification or similar right on
the part of any director or officer of Marani or Merger Sub, or any
third party, or any such person's heirs, executors or
administrators as against Marani or Merger Sub.
2.1.9
Compliance with Laws . Marani and Merger Sub have at all
times been, and presently are, in full compliance with, and has not
received notice of any claimed violation of, any applicable
federal, provincial, state, local, foreign and other laws, rules
and regulations. Marani and Merger Sub has filed all returns,
reports and other documents and furnished all information required
or requested by any federal, provincial, state, local or foreign
governmental agency and all such returns, reports, documents and
information are true and complete in all respects. All permits,
licenses, orders, franchises and approvals of all federal,
provincial, state, local or foreign governmental or regulatory
bodies required of Marani or Merger Sub for the conduct of their
business have been obtained and are in full force and effect, no
violations are or have been recorded in respect of any such
permits, licenses, orders, franchises and approvals, and there is
no litigation, proceeding, investigation, arbitration, claim,
complaint or accusation, formal or informal, pending or threatened,
which may revoke, limit, or question the validity, sufficiency or
continuance of any such permit, license, order, franchise or
approval. Such permits, licenses, orders, franchises and approvals
are valid and sufficient for all operations and businesses
presently carried on by Marani or Merger Sub.
2.1.10
Guaranties . Marani or Merger Sub have not guaranteed any
dividend, obligation, indebtedness, or capital infusion of any
Person; nor has any Person guaranteed any dividend, obligation or
indebtedness of Marani or Merger Sub. Marani or Merger Sub are not
parties to any take or pay contract or other similar
arrangement. |
9
| |
2.1.11
Corporate Documents . Marani keeps its books, records and
accounts (including, without limitation, those kept for financial
reporting purposes and for tax purposes) in accordance with good
business practice and in sufficient detail to reflect the
transactions and dispositions of its assets, liabilities and
equities, and such books and records are true, accurate and
complete. The minute books of Marani contain records of its
directors and shareholders' meetings and of actions taken by such
directors and shareholders. The meetings of directors and
shareholders referred to in such minute books were duly called and
held, and the resolutions appearing in such minute books were duly
adopted. The signatures appearing on all documents contained in
such minute books are the true signatures of the persons purporting
to have signed the same. Each of the following documents, which
shall be true, complete and correct in all material respects, will
be submitted at the Closing with respect to Marani and its
Subsidiaries (if applicable): |
| |
(i)
Certificate of Incorporation
and all amendments thereto;
(ii)
Bylaws and all amendments
thereto;
(iii)
Minutes and Consents of Shareholders;
(iv)
Minutes and Consents of the board of
directors;
(v)
List of officers and directors;
(vi)
Certificate of Good Standing from the
Secretary of State of Nevada;
(vii)
Current Shareholder list from the Transfer
Agent;
(viii)
Stock register and stock certificate records of
Marani;
(ix)
The material contracts of Marani
listed on Schedule 2.1.11, which should be all material contracts
of Marani. |
| |
2.1.12
Closing Documents . All minutes, consents or other documents
pertaining to Marani to be delivered at the Closing shall be valid
and in accordance with the laws of Nevada.
2.1.13
Leases . Marani has no leases.
2.1.14
Financial Statements . Marani is a reporting company under
the 1934 Act and financials can be found within the SEC's EDGAR
database. As of their respective dates, the financial statements of
Marani and its subsidiaries included in the SEC Documents (as
defined herein) complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such |
10
| |
financial statements have been
prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved
(except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may
be condensed or summary statements) and fairly present in all
material respects the financial position of Marani and its
subsidiaries as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit
adjustments). All Marani's financial statements contained in its
reports required under the 1934 Act have been reviewed or audited,
as applicable, as required under the 1934 Act. No other information
provided by or on behalf of Marani to MEI which is not included in
Marani's regulatory filings, contains any untrue statement of a
material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the
circumstance under which they are or were made.
2.1.15
Filings with Government Agencies . Marani is a reporting
company under the 1934 Act and files annual and quarterly reports
with the SEC. Marani has made all required filings with the SEC and
the State of Nevada that are required (the "Regulatory Documents").
As of their respective dates, the Regulatory Documents complied in
all material respects with the requirements of the 1934 Act, and
all other applicable federal and state securities laws, and the
rules and regulations of the SEC promulgated thereunder applicable
to the Regulatory Documents, and none of the Regulatory Documents,
at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. It is understood that the Merger
and other transactions are being made with the understanding Marani
will obtain all financial information from its subsidiaries
necessary for future annual and quarterly reports with the SEC.
Marani will promptly file any required filings with the SEC that
might be due prior to Closing. All filings made by Marani with the
SEC prior to Closing will be true and correct in all material
respects.
2.1.16
Liabilities . It is understood and agreed that the Merger
and other transactions is predicated on Marani not having any
liabilities at Closing, and Marani will not, as of Closing, have
any debt, liability, or obligation of any nature, whether accrued,
absolute, contingent, or otherwise. There is no dispute of any kind
between Marani and any third party, and no such dispute will exist
at the Closing of this transaction, and Marani will be free from
any and all liabilities, liens, claims and/or commitments.
2.1.17
Liabilities for Subsidiary . Under United States and
Australian law, Marani has no liability, financial or otherwise,
for the actions and/or inactions of FFB Australia, and Marani has
not guaranteed any obligations, financial or otherwise, of FFB
Australia.
2.1.18
Contracts, Leases and Assets . Marani is not a party to any
contract, agreement or lease. No person holds a power of attorney
from Marani or its subsidiaries. At the Closing, Marani's only
asset will be its wholly-owned subsidiary, FFB
Australia. |
11
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MEI
3.1
Representations and Warranties of MEI . To induce Marani and
Merger Sub to enter into this Agreement and to consummate the
transactions contemplated hereby, MEI represents and warrants as of
the date hereof and as of the Closing, as follows:
| |
3.1.1
Authority of MEI; Transfer of MEI Shares . MEI has the full
right, power and authority to enter into this Agreement and to
carry out and consummate the transactions contemplated herein. This
Agreement, and all of the Exhibits attached hereto, constitutes the
legal, valid and binding obligation of MEI.
3.1.2
Existence of MEI . MEI is duly organized, validly existing,
and in good standing under the laws of the State of California. It
has all requisite power, franchises, licenses, permits and
authority to own its properties and assets and to carry on its
business as it has been and is being conducted. It is in good
standing in each state, nation or other jurisdiction wherein the
character of the business transacted by it makes such qualification
necessary.
3.1.3
Capitalization of MEI . The authorized equity securities of
MEI consist of 10,000,000 shares of common stock, no par value, of
which 10,000,000 shares are issued and outstanding, as set forth on
Exhibit A. No shares of preferred stock of MEI are authorized or
outstanding. No other shares of MEI are issued and outstanding. All
of the issued and outstanding shares have been duly and validly
issued in accordance and compliance with all applicable laws, rules
and regulations and are fully paid and nonassessable. There are no
options, warrants, rights, calls, commitments, plans, contracts or
other agreements of any character granted or issued by MEI which
provide for the purchase, issuance or transfer of any shares of the
capital stock of MEI nor are there any outstanding securities
granted or issued by MEI that are convertible into any shares of
the equity securities of MEI, and none is authorized. MEI is not
obligated or committed to purchase, redeem or otherwise acquire any
of its equity. All presently exercisable voting rights in MEI are
vested exclusively in its outstanding shares of common stock, each
share of which is entitled to one vote on every matter to come
before it's Shareholders, and other than as may be contemplated by
this Agreement, there are no voting trusts or other voting
arrangements with respect to any of MEI's equity securities.
3.1.4
Subsidiaries . MEI has one Subsidiary, Golden Hawk, Ltd., a
Hong Kong corporation.
3.1.5
Execution of Agreement . The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated hereby will not: (a) violate, conflict with, modify or
cause any default under or acceleration of (or give any Party any
right to declare any default or acceleration upon notice
or |
12
| |
passage of time or both), in whole
or in part, any charter, article of incorporation, bylaw, mortgage,
lien, deed of trust, indenture, lease, agreement, instrument,
order, injunction, decree, judgment, law or any other restriction
of any kind to which MEI is a party or by which it or any of its
properties are bound; (b) result in the creation of any security
interest, lien, encumbrance, adverse claim, proscription or
restriction on any property or asset (whether real, personal,
mixed, tangible or intangible), right, contract, agreement or
business of MEI; (c) violate any law, rule or regulation of any
federal or state regulatory agency; or (d) permit any federal or
state regulatory agency to impose any restrictions or limitations
of any nature on MEI or any of their respective actions.
3.1.6
Taxes . |
| |
3.1.6.1
All taxes, assessments,
fees, penalties, interest and other governmental charges with
respect to MEI and its business and operations, which have become
due and payable on the date hereof have been paid in full or
adequately reserved against by MEI, (including without limitation,
income, property, sales, use, franchise, capital stock, excise,
added value, employees' income withholding, social security and
unemployment taxes), and all interest and penalties thereon with
respect to the periods then ended and for all periods thereto;
3.1.6.2
There are no agreements,
waivers or other arrangements providing for an extension of time
with respect to the assessment of any tax or deficiency against
MEI, nor are there any actions, suits, proceedings, investigations
or claims now pending against MEI, nor are there any actions,
suits, proceedings, investigations or claims now pending against
MEI in respect of any tax or assessment, or any matters under
discussion with any federal, state, local or foreign authority
relating to any taxes or assessments, or any claims for additional
taxes or assessments asserted by any such authority, and there is
no basis for the assertion of any additional taxes or assessments
against MEI; and
3.1.6.3
The consummation of the
transactions contemplated by this Agreement will not result in the
imposition of any additional taxes on or assessments against
MEI. |
| |
3.1.7
Disputes and Litigation . Except as set forth in Schedule
3.1.7 , (a) there are no suits, actions, litigation,
proceedings, investigations, claims, complaints, or accusations
pending, threatened against, or affecting MEI or any of its
properties, assets or business or to which it is a party, in any
court or before any arbitrator of any kind or before or by any
governmental agency (including, without limitation, any federal,
state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality), and there is no basis
for such suit, action, litigation, proceeding, investigation,
claim, complaint, or accusation; |
13
| |
(b) there is no pending or
threatened change in any environmental, zoning or building laws,
regulations or ordinances which affect or could affect MEI or any
of its properties, equipment, assets or businesses; and (c) there
is no outstanding order, writ, injunction, decree, judgment or
award by any court, arbitrator or governmental body against or
affecting MEI or any of its properties, assets or businesses. There
is no litigation, proceeding, investigation, claim, complaint or
accusation, formal or informal, or arbitration pending, or any of
the aforesaid threatened, or any contingent liability which would
give rise to any right of indemnification or similar right on the
part of any director or officer of MEI or any such person's heirs,
executors or administrators as against MEI.
3.1.8
Compliance with Laws . MEI has at all times been, and
presently is, in full compliance with, and has not received notice
of any claimed violation of, any applicable federal, state, local,
foreign and other laws, rules and regulations. MEI has filed all
returns, reports and other documents and furnished all information
required or requested by any federal, state, local or foreign
governmental agency and all such returns, reports, documents and
information are true and complete in all respects. All permits,
licenses, orders, franchises and approvals of all federal, state,
local or foreign governmental or regulatory bodies required of MEI
for the conduct of its business have been obtained, no violations
are or have been recorded in respect of any such permits, licenses,
orders, franchises and approvals, and there is no litigation,
proceeding, investigation, arbitration, claim, complaint or
accusation, formal or informal, pending or threatened, which may
revoke, limit, or question the validity, sufficiency or continuance
of any such permit, license, order, franchise or approval. Such
permits, licenses, orders, franchises and approvals are valid and
sufficient for all activities presently carried on by MEI.
3.1.9
Guaranties . MEI has not guaranteed any dividend, obligation
or indebtedness of any Person; nor has any Person guaranteed any
dividend, obligation or indebtedness of MEI.
3.1.10
Books and Records . MEI keeps its books, records and
accounts (including, without limitation, those kept for financial
reporting purposes and for tax purposes) in accordance with good
business practice and in sufficient detail to reflect the
transactions and dispositions of its assets, liabilities and
equities. The minute books of MEI contain records of its
shareholders' meetings and of action taken by such shareholders.
The meetings shareholders referred to in such minute books were
duly called and held, and the resolutions appearing in such minute
books were duly adopted. The signatures appearing on all documents
contained in such minute books are the true signatures of the
persons purporting to have signed the same. |
ARTICLE 4
CLOSING AND DELIVERY OF DOCUMENTS
14
4.1
Closing . The Closing (the "Closing") shall take place
remotely at the offices of The Lebrecht Group, APLC, 9900 Research
Drive, Irvine, California 92688, no later than the close of
business (Pacific Standard Time) on April 7, 2008, or at such other
place, date and time as the Parties may agree in writing (the
"Closing Date").
4.2
Deliveries by Marani . At the Closing, Marani shall deliver
the following:
| |
4.2.1
Marani shall deliver to
MEI and the Shareholders: |
| |
(a)
the Purrell Shares, and
the Purrell Warrant, as set forth in Section 1.5;
(b)
a certificate of good
standing issued by the state of Nevada, dated within ten (10) days
prior to the Closing Date, evidencing that Marani is a corporation
duly existing under the laws of state of Nevada and has not been
dissolved;
(c)
an Officers Certificate,
executed by the Secretary of Marani, in form and substance
reasonably acceptable to MEI;
(d)
the corporate documents
of Marani as set forth in Section 2.1.10;
(e)
written confirmation by
Marani's Board of Directors of the approval of this Agreement, the
herein described transactions, the appointment of Margrit Eyraud to
Marani's Board of Directors, effective at Closing;
(f)
written confirmation of
the appointment of Margrit Eyraud as Marani's Chairman of the
Board, Chief Executive Officer, and President, Ara Zartarian as
Marani's Executive Vice President, Chief Operating Officer and
Secretary, and Ani Kevorkian as Marani's Executive Vice President,
Chief Financial Officer and Treasurer, with all appointments
effective at immediately prior to Closing; |
15
| |
(g)
a copy of the amended
Articles of Incorporation effectuating the items set forth in
Section 5.1.1(h), below;
(h)
a signed copy of the
Officer's Lock-Up Agreements between Marani and each of Margrit
Eyraud, Ara Zartarian, and Ani Kevorkian;
(i)
a fully executed
copy of the Purrell Lock-Up Agreement; and
(j)
a signed copy of the Agreement of Merger by and between MEI and
Merger Sub for filing with the Secretary of State for the State of
California. |
| |
4.2.2
Marani shall deliver to
the Exchange Agent: |
| |
(a)
The Merger Shares to be
issued by the Exchange Agent to the MEI Stockholders upon
submission of their executed Letter of Transmittal and accompanying
documents. |
| |
4.2.3
MEI shall deliver to
Marani: |
| |
(a)
an Officers Certificate,
executed by the Secretary of MEI, in form and substance reasonably
acceptable to Marani;
(b)
written confirmation by
MEI's Board of Directors of the approval of this Agreement and the
herein described transactions;
(c)
a signed copy of the
Officer's Lock-Up Agreements from each of Margrit Eyraud, Ara
Zartarian, and Ani Kevorkian; and
(d)
a signed copy of the
Agreement of Merger by and between MEI and Merger Sub for filing
with the Secretary of State for the State of
California. |
ARTICLE 5
CONDITIONS, TERMINATION, AMENDMENT AND WAIVER
5.1
Conditions Precedent . This Agreement, and the transactions
contemplated hereby, shall be subject to the following conditions
precedent:
| |
5.1.1
The obligation of MEI to
consummate the Merger and to satisfy its other obligations
hereunder shall be subject to the fulfillment (or waiver by MEI),
at or prior to the Closing, of the following conditions, which
Marani agrees to use its best efforts to cause to be
fulfilled: |
16
| |
(a)
Representations, Performance . The representations and
warranties contained in Sections 2.1 and 2.2 hereof shall be true
at and as of the date hereof and shall be repeated and shall be
true at and as of the Closing Date with the same effect as though
made at and as of the Closing Date, except as affected by the
transactions contemplated hereby; Marani shall have duly performed
and complied with all agreements and conditions required by this
Agreement to be performed or complied with by it prior to or on the
Closing Date.
(b)
Consents . Any required notices or consents to the
transactions contemplated by this Agreement shall have been
obtained or waived.
(c)
Litigation . No suit, action, arbitration or other
proceeding or investigation shall be threatened or pending before
any court or governmental agency in which it is sought to restrain
or prohibit or to obtain material damages or other material relief
in connection with this Agreement or the consummation of the Merger
or other the transactions contemplated hereby or which is likely to
affect materially the value of Marani, other than as set forth in
Schedule 2.1.7.
(d)
Proceedings and Documentation . All proceedings of Marani in
connection with the Merger or other the transactions contemplated
by this Agreement, and all documents and instruments incident to
such proceedings, shall be satisfactory in form and substance to
MEI and MEI's counsel, and MEI and MEI's counsel shall have
received all such receipts, documents and instruments, or copies
thereof, certified if requested, to which MEI is entitled and as
may be reasonably requested.
(e)
Property Loss . No portion of Marani's assets or properties
shall have been destroyed or damaged or taken by condemnation or
other similar proceedings under circumstances where the loss
thereof will not be substantially reimbursed to Marani through the
proceeds of applicable insurance or condemnation award.
(f)
Consents and Approvals . All material licenses, permits,
consents, approvals, authorizations, qualifications and orders of
all governmental or regulatory bodies which are (1) necessary to
enable MEI to fully operate the business of Marani as contemplated
from and after the Closing shall have been obtained and be in full
force and effect, or (2) necessary for the consummation of the
transactions contemplated hereby, shall have been obtained.
(g)
SEC Filings . Marani shall have filed with the SEC any and
all filings under the Securities Act of 1933 and the Securities
Exchange Act of 1934 required to be filed prior to the
Closing. |
17
| |
(h)
Amended Articles . Marani shall have filed amended Articles
of Incorporation with the state of Nevada to effectuate the
following: (i) a name change for the corporation to "Marani Brands,
Inc.," (ii) a 1-for-250 shares reverse stock split, and (iii)
increase the authorized common stock of the company to 300,000,000
shares, $0.001 par value. |
| |
5.1.2
The obligation of the Marani to deliver the Marani Securities, to
consummate the Merger, and to satisfy its other obligations
hereunder shall be subject to the fulfillment (or waiver by
Marani), at or prior to the Closing, of the following conditions,
which MEI and the Shareholders agree to use its best efforts to
cause to be fulfilled: |
| |
(a)
Representations, Performance . If the Closing Date is not
the date hereof, the representations and warranties contained in
Sections 3.1 and 3.2 hereof shall be true at and as of the date
hereof and shall be repeated and shall be true at and as of the
Closing Date with the same effect as though made at and as of the
Closing Date, except as affected by the transactions contemplated
hereby; MEI shall have duly performed and complied with all
agreements and conditions required by this Agreement to be
performed or complied with by it prior to or on the Closing
Date.
(b)
Proceedings and Documentation . All corporate and other
proceedings of MEI in connection with the Merger and the other
transactions contemplated by this Agreement, and all documents and
instruments incident to such corporate proceedings, shall be
satisfactory in form and substance to Marani, and their counsel
shall have received all such receipts, documents and instruments,
or copies thereof, certified if requested, to which Marani is
entitled and as may be reasonably requested. |
5.2
Termination . Notwithstanding anything to the contrary
contained in this Agreement, this Agreement may be terminated and
the Merger and other transactions contemplated hereby may be
abandoned prior to the Closing Date only by the mutual consent of
all of the Parties, unless the Closing has not occurred by April 7,
2008, in which case either Party may terminate this Agreement by
written notice to the other Party.
5.3
Waiver and Amendment . Any term, provision, covenant,
representation, warranty or condition of this Agreement may be
waived, but only by a written instrument signed by the Party
entitled to the benefits thereof. The failure or delay of any Party
at any time or times to require performance of any provision hereof
or to exercise its rights with respect to any provision hereof
shall in no manner operate as a waiver of or affect such Party's
right at a later time to enforce the same. No waiver by any Party
of any condition, or of the breach of any term, provision,
covenant, representation or warranty contained in this Agreement,
in any one or more instances, shall be deemed to be or construed as
a further or continuing waiver of any such condition or breach or
waiver of any other condition or of the
18
breach of any other term, provision, covenant,
representation or warranty. No modification or amendment of this
Agreement shall be valid and binding unless it be in writing and
signed by all Parties hereto.
ARTICLE 6
COVENANTS, INDEMNIFICATION
6.1 To
induce MEI to enter into this Agreement and to consummate the
transactions contemplated hereby, and without limiting any
covenant, agreement, representation or warranty made, Marani
covenants and agrees as follows:
| |
6.1.1
Notices and Approvals . Marani and the Merger Sub agree: (a)
to give all notices to third parties which may be necessary or
deemed desirable by MEI in connection with this Agreement and the
consummation of the Merger and the other transactions contemplated
hereby; (b) to use its best efforts to obtain all federal and state
governmental regulatory agency approvals, consents, permit,
authorizations, and orders necessary or deemed desirable by MEI in
connection with this Agreement and the consummation of the
transaction contemplated hereby; and (c) to use their best efforts
to obtain all consents and authorizations of any other third
parties necessary or deemed desirable by MEI in connection with
this Agreement and the consummation of the transactions
contemplated hereby.
6.1.2
Information for MEI's Statements and Applications . Marani
and their employees, accountants and attorneys shall cooperate
fully with MEI in the preparation of any statements or applications
made by MEI to any federal or state governmental regulatory agency
in connection with this Agreement and the transactions contemplated
hereby and to furnish MEI with all information concerning Marani
necessary or deemed desirable by MEI for inclusion in such
statements and applications, including, without limitation, all
requisite financial statements and schedules.
6.1.3
Access to Information . MEI, together with its appropriate
attorneys, agents and representatives, shall be permitted to make
the full and complete investigation of Marani and have full access
to all of the books and records of Marani during reasonable
business hours. Notwithstanding the foregoing, such parties shall
treat all such information as confidential and shall not disclose
such information without the prior consent of the other. The
following information shall not be considered confidential
information: (i) information that is wholly and independently
developed by the party receiving the information without the use of
the confidential information; (ii) information that is or has
become generally available to the public without breach of this
Agreement by the receiving Party; (iii) information that at the
time of disclosure to the receiving party, was known to such Party
free of restriction and evidenced by documentation in the receiving
party's possession; (iv) information that is approved for release
by written authorization of the disclosing party, but only to the
extent of and subject to such conditions as may be imposed in such
written |
19
| |
authorization; or (v) information
that is disclosed in response to a valid order of a court or other
governmental body in the United States or any political subdivision
thereof, but only to the extent of and for the purposes of such
order; provided, however, that the receiving party shall first
notify the disclosing party in writing of the order and permit the
disclosing party to seek an appropriate protective
order. |
6.2
To induce Marani to enter into this Agreement and to consummate the
transactions contemplated hereby, and without limiting any
covenant, agreement, representation or warranty made, MEI covenants
and agrees as follows:
| |
6.2.1
Access to Information . Marani, together with their
appropriate attorneys, agents and representatives, shall be
permitted to make a full and complete investigation of MEI and have
full access to all of the books and records of the other during
reasonable business hours. Notwithstanding the foregoing, such
parties shall treat all such information as confidential and shall
not disclose such information without the prior consent of the
other. The following information shall not be considered
confidential information: (i) information that is wholly and
independently developed by the party receiving the information
without the use of the confidential information; (ii) information
that is or has become generally available to the public without
breach of this Agreement by the receiving Party; (iii) information
that at the time of disclosure to the receiving party, was known to
such Party free of restriction and evidenced by documentation in
the receiving party's possession; (iv) information that is approved
for release by written authorization of the disclosing party, but
only to the extent of and subject to such conditions as may be
imposed in such written authorization; or (v) information that is
disclosed in response to a valid order of a court or other
governmental body in the United States or any political subdivision
thereof, but only to the extent of and for the purposes of such
order; provided, however, that the receiving party shall first
notify the disclosing party in writing of the order and permit the
disclosing party to seek an appropriate protective
order. |
6.3
Indemnification .
| |
6.3.1
Indemnity of Marani . MEI agrees to indemnify, defend and
hold Marani harmless from and against any and all Losses (as
hereinafter defined) arising out of or resulting from the breach by
MEI of any representation, warranty, covenant or agreement of MEI
contained in this Agreement or the schedules and exhibits hereto.
For purposes of Section 6.3, the term " Losses " shall mean
all damages, costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) of every kind, nature
or description, it being the intent of the Parties that the amount
of any such Loss shall be the amount necessary to restore the
indemnified party to the position it would have been in
(economically or otherwise), including any costs or expenses
incident to such restoration, had the breach, event, occurrence or
condition occasioning such Loss never occurred. Notwithstanding the
foregoing provisions of this section, no claim for indemnification
shall be made by Marani under this Section unless and until the
aggregate amount of all Losses of Marani in respect thereof shall
exceed $5,000. |
20
| |
6.3.2
Indemnity of MEI . Marani and Merger Sub, jointly and
severally, hereby agree to indemnify, defend and hold MEI harmless
from and against any and all Losses arising out of or resulting
from the breach by Marani or Merger Sub of any representation,
warranty, agreement or covenant contained in this Agreement or the
exhibits and schedules hereto, including, without limitation, the
failure to disclose any liabilities or material contracts or
agreements pursuant to Section 2.1.11. Notwithstanding the
foregoing provisions of this Section, no claim for indemnification
shall be made by MEI under this Section unless and until the
aggregate amount of all Losses of MEI and/or the Shareholders in
respect thereof shall exceed $5,000.
6.3.3
Indemnification of Exchange Agent . |
| |
(a)
Marani, MEI and Merger Sub (for the purposes of this Section 6.3.3,
the " Indemnitors ") agree to indemnify the Exchange Agent
and its partners, officers, directors, employees and agents
(collectively, the " Indemnitees ") against, and hold them
harmless of and from, any and all Losses, which the Indemnitees may
suffer or incur by reason of any action, claim or proceeding
brought against the Indemnitees arising out of or relating in any
way to the Exchange Agent's service in such capacity, unless such
action, claim or proceeding is the result of the willful misconduct
or gross negligence of the Indemnitees.
(b)
If the indemnification provided for in Section 6.3.3(a) is
applicable, but for any reason is held to be unavailable, except
due to the willful misconduct of gross negligence of the
Indemnitees, the Indemnitors shall jointly and severally contribute
such amounts as are just and equitable to pay, or to reimburse the
Indemnitees for, the aggregate of any and all Losses, liabilities,
costs, damages and expenses, including counsel fees, actually
incurred by the Indemnitees as a result of or in connection with,
and any amount paid in settlement of, any action, claim or
proceeding arising out of or relating in any way to any actions or
omissions of the Indemnitors. |
| |
6.3.4
Indemnification Procedure . |
| |
(a)
An indemnified party shall notify the indemnifying party of any
claim of such indemnified party for indemnification under this
Agreement within thirty days of the date on which such indemnified
party or an executive officer of such indemnified party first
obtains actual (not constructive) knowledge of the existence of
such claim. Such notice shall specify the nature of such claim in
reasonable detail and the indemnifying party shall be given
reasonable access to any documents or properties within the control
of the indemnified party as may be useful in the investigation of
the basis for such claim. The failure to so notify the indemnifying
party within such thirty-day period shall not constitute a waiver
of such claim but an indemnified party |
21
| |
shall not be entitled to receive any
indemnification with respect to any additional loss that occurred
as a result of the failure of such person to give such notice.
In
the event any indemnified party is entitled to indemnification
hereunder based upon a claim asserted by a third party (including a
claim arising from an assertion or potential assertion of a claim
for Taxes), the indemnifying party shall be given prompt notice
thereof, in reasonable detail. The failure to so notify the
indemnifying party shall not constitute a waiver of such claim but
an indemnified party shall not be entitled to receive any
indemnification with respect to any Loss that occurred as a result
of the failure of such person to give such notice. The indemnifying
party shall have the right (without prejudice to the right of any
indemnified party to participate at its expense through counsel of
its own choosing) to defend or prosecute such claim at its expense
and through counsel of its own choosing (provided that such legal
counsel is reasonably acceptable to the Indemnifying Party) if it
gives written notice of its intention to do so not later than
twenty days following notice thereof by the indemnifying party or
such shorter time period as required so that the interests of the
indemnified party would not be materially prejudiced as a result of
its failure to have received such notice; provided, however, that
if the defendants in any action shall include both an indemnifying
party and an indemnified party and the indemnified party shall have
reasonably concluded that counsel selected by the indemnifying
party has a conflict of interest because of the availability of
different or additional defenses to the indemnified party, the
indemnified party shall have the right to select separate counsel
to participate in the defense of such action on its behalf, at the
sole cost and expense of the indemnifying party. If the
indemnifying party does not so choose to defend or prosecute any
such claim asserted by a third party for which any indemnified
party would be entitled to indemnification hereunder, then the
indemnified party shall be entitled to recover from the
indemnifying party, on a monthly basis, all of its attorneys'
reasonable fees and other costs and expenses of litigation of any
nature whatsoever incurred in the defense of such claim.
Notwithstanding the assumption of the defense of any claim by an
indemnifying party pursuant to this paragraph, the indemnified
party shall have the right to approve the terms of any settlement
of a claim (which approval shall not be unreasonably withheld).
(b)
The indemnifying party and the indemnified party shall cooperate in
furnishing evidence and testimony and in any other manner which the
other may reasonably request, and shall in all other respects have
an obligation of good faith dealing, one to the other, so as not to
unreasonably expose the other to an undue risk of loss. The
indemnified party shall be entitled to reimbursement for
out-of-pocket expenses reasonably incurred by it in connection with
such cooperation. Except for fees and expenses for
which |
22
| |
indemnification is provided pursuant
to Section 6.3, as the case may be, and as provided in the
preceding sentence, each party shall bear its own fees and expenses
incurred pursuant to this paragraph (b).
(c)
The foregoing indemnification provision is in addition to, and not
derogation of any statutory, equitable or common law remedy any
party may have for breach of representation, warranty, covenant or
agreement. This Section 6.3 survives Closing. |
ARTICLE 7
GENERAL
7.1
Expenses . Except as otherwise specifically provided for
herein, whether or not the transactions contemplated hereby are
consummated, each of the Parties hereto shall bear the cost of all
fees and expenses relating to or arising from its compliance with
the various provisions of this Agreement and such Party's covenants
to be performed hereunder, and except as otherwise specifically
provided for herein, each of the Parties hereto agrees to pay all
of its own expenses (including, without limitation, attorneys and
accountants' fees and expenses and printing expenses) incurred in
connection with this Agreement, the transactions contemplated
hereby, the negotiations leading to the same and the
prepar
|
