AGREEMENT AND PLAN OF
MERGER
Among
BROADBAND MARITIME,
INC.
PRIME RESOURCE, INC.
and
PRIME ACQUISITION, INC.
Dated as of January 15, 2007
EXECUTION
COPY
AGREEMENT AND PLAN OF
MERGER
THIS AGREEMENT AND PLAN OF MERGER (the
“ Agreement ”), dated as of the 15
th day of January, 2007, among BROADBAND MARITIME, INC.,
a Delaware corporation (the “ Company ”),
PRIME RESOURCE, INC., a Utah corporation (“
Parent ”), and PRIME
ACQUISITION, INC., a Utah corporation and a wholly owned subsidiary
of Parent (“ Merger Sub ,”); the Company,
Parent, and Merger Sub together are referred to as the “
Constituent Corporations ”).
RECITALS
WHEREAS, the respective boards of
directors of each of Parent, Merger Sub and the Company have
approved the merger of Merger Sub with and into the Company (the
“ Merger ”) upon the terms and subject to
the conditions set forth in this Agreement and have adopted,
approved and declared advisable this Agreement;
WHEREAS, it is the intent of the
Constituent Corporations that immediately following the Effective
Time of the Merger, the Merger Sub will have merged with and into
the Company; that the Company shall be known as BROADBAND MARITIME,
INC.. and be the sole surviving wholly owned subsidiary of the
Parent; and that the directors and officers of both the Surviving
Corporation and the Parent will be the directors and officers of
the Company plus one current director of the Parent;
WHEREAS, the Parent intends to recommend
to its shareholders certain amendments to its Articles of
Incorporation to be effected at or prior to the closing of the
Merger; and
WHEREAS, the Company, Parent and Merger
Sub desire to make certain representations, warranties, covenants
and agreements in connection with this Agreement;
NOW, THEREFORE, in consideration of the
premises, and of the representations, warranties, covenants and
agreements contained herein, the parties hereto agree as
follows:
ARTICLE I
The Merger; Closing; Effective
Time
1.1.
The Merger . Upon the terms and subject to the conditions
set forth in this Agreement, at the Effective Time (as defined in
Section 1.3) Merger Sub shall be merged with and into the
Company and the separate corporate existence of Merger Sub shall
thereupon cease. The Company shall be the surviving
corporation in the Merger (sometimes referred to as the
“ Surviving Corporation ”), such that, at
the Effective Time the Company will be a wholly owned operating
subsidiary of the Parent, and the separate corporate existence of
the Company with all its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger, except as set
forth in Article II. The Merger shall have the effects
specified in the Delaware General Corporation Law, as amended (the
“ DGCL ”). Without limiting
the generality of the foregoing and subject thereto, at the
Effective Time, all of the property, rights, privileges, powers and
franchises of the Company and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities, restrictions,
disabilities and duties of each of the Company and Merger Sub shall
become the debts, liabilities, restrictions, disabilities and
duties of the Surviving Corporation.
1.2.
Closing . Unless otherwise mutually agreed in writing
between the Company and Parent, the closing of the Merger (the
“ Closing ”) shall take place (i) at
the offices of Broadband Maritime Inc., 61 Broadway,
Suite 1905, New York, NY 10006, at 10:00 a.m.
(Eastern Time) on February 16, 2007 (the “ Closing
Date ”) or at such other location or on such other
date as the parties shall mutually agree.
1.3.
Effective Time . As promptly as practicable following the
Closing, the Company and Parent will (a) cause a Certificate of
Merger (the “ Delaware Certificate of Merger
”) to be executed, acknowledged and filed with the Secretary
of State of the State of Delaware as provided in Section 252
of the DGCL and (b) cause the Articles of Merger (the “
Utah Articles of Merger ”), so executed and in
such form as is required under the Utah Revised Business
Corporation Act (the “UTRBCA”), to be delivered to the
Secretary of State of the State of Utah for filing as provided in
Section 16-10a-1105 of the UTRBCA. The Merger shall become
effective as of the date on which the last of the following occurs:
(x) the Utah Articles of Merger have been
duly filed with the Secretary of State of the State of Utah and (y)
Delaware Certificate of Merger has been duly filed with the
Secretary of State of the State of Delaware, or at such later time
as may be agreed by the parties and specified in the Delaware
Certificate of Merger (the “ Effective Time
”).
ARTICLE II
Certificate of Incorporation and
By-Laws
of the Surviving Corporation and Parent
2.1.
The Certificate of
Incorporation . The
certificate of incorporation of the Company as in effect
immediately prior to the Effective Time shall be the certificate of
incorporation of the Surviving Corporation (the “
Charter ”), until duly amended as provided
therein or by applicable Law.
2.2.
The By-Laws . The parties hereto shall take all actions
necessary so that the by-laws of Merger Sub in effect immediately
prior to the Effective Time shall be the by-laws of the Surviving
Corporation (the “ By-Laws ”), until
thereafter amended as provided therein or by applicable
Law.
2.3.
Articles of Incorporation of Parent.
Parent shall take all actions necessary so that its Articles
of Incorporation are amended, at or prior to the Effective Time, to
change its name to “BBM Holdings, Inc.,” to create a
class and series of preferred capital stock (shares of the series
to be declared to be issuable as a distribution to Parent
shareholders prior to the Effective Time, and to include certain
shareholder voting supermajority provisions, all as set forth in
Exhibit 2.3 to this Agreement (the “Parent Articles
Amendments”).
ARTICLE III
Officers and Directors
of the Surviving Corporation
3.1.
Directors of Surviving
Corporation . The
parties hereto shall take all actions necessary so that Andrew
Limpert and the members of the board of directors of the Company at
the Effective Time shall, from and after the Effective Time, be the
directors of the Surviving Corporation until their successors have
been duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Charter and
the By-Laws.
3.2.
Officers . The parties hereto shall take all actions
necessary so that the officers of the Company at the Effective Time
shall, from and after the Effective Time, be the officers of the
Surviving Corporation until their successors have been duly elected
or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Charter and the
By-Laws.
3.3.
Directors of Parent
. The parties hereto shall take all
actions necessary so that Andrew Limpert and the members of the
board of directors of the Company at the Effective Time shall, from
and after the Effective Time, be the directors of the Parent until
their successors have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in accordance
with the Articles of Incorporation of Parent and the By-Laws of
Parent.
ARTICLE IV
Effect of the Merger on Capital
Stock;
Exchange of Certificates
4.1.
Effect on Capital Stock
. At the Effective Time, as a
result of the Merger and without any action on the part of the
Company, Parent, Merger Sub or any holder of any capital stock of
the Company:
(a)
Merger Consideration
. Each share of Common Stock, par
value $0.0001 per share, of the Company (each, a “
Common Share ”) and each share of Class A 5%
Convertible Preferred Stock, par value $0.0001 per share, of the
Company (each, a “ Preferred Share ”)
(the Common Shares and the Preferred Shares, collectively, the
“ Shares ”) issued and outstanding
immediately prior to the Effective Time (other than the Shares that
are owned by shareholders of the Company (“ Dissenting
Shareholders ”) who have perfected and not withdrawn
a demand for, or otherwise lost, the appraisal rights pursuant to
Section 262 of the DGCL (each, an “ Excluded
Share ” and collectively, “ Excluded
Shares ”)) shall be converted into the right to
receive, respectively: (i) in the case of a Preferred Share, one
(1) share of Common Stock, no par value, of Parent (“Parent
Common Stock”) per 0.0595589330784 Class A Share (the “
Preferred Merger Consideration ”) and (ii) in
the case of a Common Share, one (1) share of Parent Common
Stock per 59.5589330784 Common Shares (the “ Common
Merger Consideration ”). At the Effective Time,
all of the Shares shall cease to be outstanding, shall be cancelled
and shall cease to exist, and each certificate (a “
Certificate ”) formerly representing any of
such Shares (other than Excluded Shares) shall thereafter represent
only the right to receive the Class A Merger Consideration or the
Common Merger Consideration, as applicable, and each certificate
formerly representing Shares owned by Dissenting Shareholders shall
thereafter represent only the right to receive the payments set
forth in Section 4.3. Schedule 4.1(a) to this Agreement,
incorporated herein by reference, sets forth the issued and
outstanding capital stock of Parent immediately following the
Effective Time, assuming that there are no Dissenting Shareholders,
that no shareholders of Parent have dissented and demanded to be
paid for their shares and that the Company issues five hundred
thousand (500,000) additional shares of Class A 5% Convertible
Preferred Stock (together with Warrants for the purchase of up to
two hundred fifty million (250,000,000) shares of Common Stock of
the Company.
(b)
Cancellation of Shares
. Subject to Section 4.3, each
Excluded Share shall, by virtue of the Merger and without any
action on the part of the holder thereof, cease to be outstanding,
shall be cancelled without payment of any consideration therefor
and shall cease to exist.
(c)
Merger Sub . At the Effective Time, each share of common
stock, no par value per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into the
right to receive one share of common stock of the Surviving
Corporation. At the Effective Time, all of the stock of
Merger Sub of any class shall cease to be outstanding, shall be
cancelled and shall cease to exist, and each Certificate formerly
representing any share of common stock, no par value per
share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall thereafter represent only the right to
receive one share of common stock of the Surviving Corporation.
The Parent shall surrender to the Surviving Corporation the
certificate representing all the issued and outstanding shares of
the Merger Sub or, in the event such certificate is lost, stolen or
destroyed, an Affidavit and Indemnity of Lost Certificate in a form
acceptable to the Surviving Corporation in exchange for a
certificate issued to the Parent representing all the issued and
outstanding shares of the Surviving Corporation.
(d)
Restricted Stock
. The shares of Parent common stock
issued to shareholders of the Company as Preferred Merger
Consideration and Common Merger Consideration will be
“restricted securities” within the meaning of Securities and Exchange Commission Rule 144 (Reg.
§ 230.144).
(e)
Post-Merger Capitalization of
Surviving Corporation .
The authorized capital stock of the Surviving Corporation
will consist of one hundred thousand (100,000) shares of Common
Stock, par value $0.0001 per share, ten thousand (10,000) of which
will be validly issued and outstanding and the Parent will be the
sole shareholder of the Surviving Corporation.
(f)
Post-Merger Capitalization of
Parent . The authorized
capital stock of the Parent will consist of (i) fifty million
(50,000,000) shares of Common Stock, no par value per share,
twenty-five million eight hundred ninety-three thousand six hundred
twenty-one (25,893,621) of which (assuming that there are no
Dissenting Shareholders and that no shareholders of the Parent have
dissented and demanded to be paid for their shares and that no
shares have been issued or redeemed by either Parent or the Company
other than the issuance by the Company of five hundred thousand
(500,000) additional shares of Class A 5% Convertible Preferred
Stock (together with Warrants for the purchase of up to two hundred
fifty million (250,000,000) shares of Common Stock of the Company))
will be validly issued and outstanding and (ii) ten million
(10,000,000) shares of Preferred Stock, no par value per share, one
million four hundred fifty-four thousand ninety (1,454,090) of
which shares are designated as Series A Preferred Shares, all
of which Series A Preferred Shares will have been issued as a
dividend pro rata to holders of Common Stock prior to the Effective
Time.
4.2.
Exchange of Certificates
.
(a)
Immediately after the Effective
Time, upon surrender by a holder of Shares to the Surviving
Corporation of the certificates which immediately prior to the
Effective Time represented shares of Common Shares or Preferred
Shares, together with a duly executed stock power relating to such
Shares, the Surviving Corporation shall deliver to such holder such
holder’s Common Merger Consideration or Preferred Merger
Consideration, as applicable. In the event of any lost,
stolen or destroyed certificate representing Shares, the record
owner of such certificate may tender in lieu of such certificate an
Affidavit and Indemnity of Lost Certificate in a form acceptable to
the Surviving Corporation.
(b)
Transfers . From and after the Effective Time, there
shall be no transfers on the stock transfer books of the Company of
the Shares that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, any Certificate is
presented to the Surviving Corporation or Parent for transfer, it
shall be cancelled and exchanged for Common Merger Consideration or
Preferred Merger Consideration, as applicable, to which the holder
thereof is entitled pursuant to this Article IV.
(c)
Withholding Rights
. Each of Parent and the Surviving
Corporation shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any
holder of the Shares such amounts as it is required to deduct and
withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the “
Code ”), or any other applicable state, local
or foreign Tax (as defined in Section 5.1(l)) law. To
the extent that amounts are so withheld by the Surviving
Corporation or Parent, as the case may be, such withheld amounts
(i) shall be remitted by Parent or the Surviving Corporation, as
applicable, to the applicable Governmental Entity, and (ii) shall
be treated for all purposes of this Agreement as having been paid
to the holder of the Shares in respect of which such deduction and
withholding was made by the Surviving Corporation or Parent, as the
case may be.
4.3.
Appraisal Rights
. (a) Company Appraisal Rights.
No Person who has perfected a demand for appraisal rights
pursuant to DEGCL § 262 shall be entitled to receive the
Common Merger Consideration, the Preferred Merger Consideration or
any dividends or other distributions pursuant to this Article IV
unless and until the holder thereof shall have effectively
withdrawn the demand for, or otherwise lost such holder’s
right to, appraisal under the DEGCL, and any Dissenting Shareholder
shall be entitled to receive only the payment provided by DEGCL
§ 262 with respect to Shares owned by such Dissenting
Shareholder. For the purposes of this Agreement, the term
“ Person ” shall mean any individual,
corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate,
trust, association, organization, governmental entity or other
entity of any kind or nature. If any Dissenting Shareholder
shall have effectively withdrawn the demand for, or otherwise lost
the right to, appraisal with respect to any Shares, such Dissenting
Shareholder shall be entitled to receive only the amount to which
such shareholder would be entitled pursuant to this Article IV.
The Company shall give Parent (i) prompt notice of any
written demands for appraisal, attempted withdrawals of such
demands, and any other instruments served pursuant to applicable
law received by the Company relating to shareholders’ rights
of appraisal and (ii) the opportunity to direct all negotiations
and proceedings with respect to demand for appraisal under the
DEGCL. The Company shall provide such notices and take such
actions as are required by law with respect to the administration
of the appraisal rights provided pursuant to the DEGCL.
(b) Parent Appraisal Rights. Any
Person who has perfected a demand for appraisal rights pursuant to
Utah Revised Business Corporation Act (URBCA)
§16-10(a)-1301-1333 (a “Prime Dissenter”) shall be
entitled to receive the fair value of their shares unless and until
the holder thereof shall have effectively withdrawn the demand for,
or otherwise lost such holder’s right to, appraisal under the
URBCA. The Parent shall give Company (i) prompt notice of any
written demands for appraisal, attempted withdrawals of such
demands, and any other instruments served pursuant to applicable
law received by the Parent relating to shareholders’ rights
of appraisal. The Parent shall provide such notices and take
such actions as are required by law with respect to extending
appraisal rights pursuant to the UTRBCA with respect to the
transactions contemplated by this Agreement. The Parent shall
provide the Company with a reasonable opportunity to review and
comment on written material provided to shareholders in connection
with the granting and administration of appraisal
rights.
4.4.
Treatment of Stock Plans, Phantom
Shares and Share Loans
(a)
Treatment of Options and
Warrants . At the Effective Time, each debenture, warrant,
option and other right with respect to shares of any class of the
Company granted and unexercised immediately prior to the Effective
Time (a “ Company Option ”), vested or
unvested, shall be converted into a debenture, warrant, option or
other right, as the case may be, to acquire Common Stock of the
Parent at the rate of one (1) share of Parent Common Stock
per 59.5589330784 Common Shares and one (1) share of
Parent Common Stock per 0.0595589330784 Preferred Share issuable
upon exercise of the Company Option. The debentures,
warrants, options or other rights that will be granted and
exercisable for shares of Parent Common Stock at the Effective
Time, in the aggregate, are set forth on Schedule 4.1(a) to this
Agreement.
(b)
Corporate Actions
. At or prior to the Effective
Time, the Company, the board of directors of the Company shall
adopt any resolutions and take any actions which are necessary or
appropriate to effectuate the provisions of Section
4.4(a).
ARTICLE V
Representations and
Warranties
5.1.
Representations and Warranties of the
Company . Except as set
forth in the corresponding sections or subsections of the
disclosure letter delivered to Parent by the Company prior to
entering into this Agreement (the “ Company Disclosure
Letter ”), (it being agreed that disclosure of any
item in any section or subsection of the Company Disclosure Letter
shall be deemed disclosure with respect to any other section or
subsection to which the relevance of such item is reasonably
apparent), the Company hereby represents and warrants to Parent and
Merger Sub that:
(a)
Organization, Good Standing and
Qualification . The
Company is a legal entity duly organized, validly existing and in
good standing (where applicable) under the Laws (as defined in
Section 5.1(i)) of its jurisdiction of organization and has
all requisite corporate power and authority to own, lease and
operate its properties and assets and to carry on its business as
presently conducted and is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the
ownership, leasing or operation of its assets or properties or
conduct of its business requires such qualification, except where
the failure to be so organized, qualified or in such good standing,
or to have such power or authority, are not, individually or in the
aggregate, reasonably likely to have a Company Material Adverse
Effect (as defined below). As used in this Agreement, the
term “ Company Material Adverse Effect ”
means a material adverse effect on the financial condition,
business or results of operations of the Company, taken as a
whole; provided , however , that none of the
following, or the results thereof, shall constitute a Company
Material Adverse Effect:
(A)
any change in the economy, capital
markets, financial markets, regulatory or political conditions
(including any change in foreign exchange rates) generally in the
United States or other countries in which the Company conducts
material operations or as a result of an act of war, terrorism,
civil unrest of similar event, in each case, that does not have a
materially disproportionate effect on the Company relative to other
business entities affected in the relevant jurisdiction or
market;
(B)
any change that is the result of factors
generally affecting the industries in which the Company operate
that does not have a materially disproportionate effect on the
Company relative to other business entities affected in the
relevant jurisdiction or market;
(C)
any loss of, or adverse change in, the
relationship of the Company, contractual or otherwise, with its
customers, employees or suppliers arising out of the execution,
delivery or performance of this Agreement, the consummation of the
transactions contemplated by this Agreement or the announcement of
any of the foregoing;
(D)
any change in the applicable GAAP or in
any statute, rule or regulation (or the official interpretation
thereof) unrelated to the Merger and of general applicability after
the date hereof that does not have a materially disproportionate
effect on the Company relative to other business entities affected
in the relevant jurisdiction or market;
(E)
any action, suit or claim brought, or any
public campaign started, by or on behalf of a competitor of the
Company, in each case, after the date of this Agreement;
(F)
any action or omission by the Company
required or expressly permitted by the terms of this Agreement or
taken with the consent of Parent;
(G)
any failure by the Company to meet any
estimates of revenues or earnings for any period ending on or after
the date of this Agreement and prior to the Closing;
provided , that the exception in this clause (G) shall not
prevent or otherwise affect a determination that any change,
effect, event, occurrence, state of facts or development underlying
such failure has resulted in, or contributed to, a Company Material
Adverse Effect;
(H)
any existing event or occurrence or
circumstance with respect to which Parent has knowledge as of the
date hereof; and
(I)
any action taken, or any omission to act,
by Parent or any of its Affiliates.
(b)
Capitalization .
(i)
The authorized capital stock of the
Company consists of two billion two hundred million (2,200,000,000)
shares of Common Stock, par value $0.0001 per share, and one
million seventy-two thousand twenty (1,072,020) shares of Preferred
Stock, par value $0.0001 per share, of which all are designated
Class A 5% Convertible Preferred Stock.
(ii)
The Company has fewer than thirty-five
non-accredited shareholders, all of whom are sophisticated, within
the meaning of Rule 501 under Regulation D of the Securities Act of
1933 (“Securities Act”). The Company will prepare
and deliver offering materials, with respect to the Parent common
stock constituting the Common Merger Consideration and the
Preferred Merger Consideration, that satisfy the requirements of
Rule 502 under Regulation D of the Securities Act.
(c)
Corporate Authority; Approval and
Fairness .
(i) The Company has all requisite corporate power
and authority and has taken all corporate action necessary in order
to execute, deliver and perform its obligations under this
Agreement, subject only to approval of the plan of Merger contained
in this Agreement by the holders of (A) a majority of the
outstanding Preferred Shares, voting as a single class, and (B) a
majority of the outstanding Common Shares, voting as a single
class, in each case, entitled to vote on such matter at a
shareholders’ meeting duly called and held for such purpose
(together, the “ Requisite Company Vote
”), and to consummate the Merger. This Agreement has
been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by Parent and Merger Sub,
constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar Laws of general
applicability relating to or affecting creditors’ rights and
to general equity principles (the “ Bankruptcy and
Equity Exception ”).
(ii)
On or prior to the date of this
Agreement, the board of directors of the Company has
(A) determined that the Merger is in the best interests of the
Company and its shareholders, adopted a plan of Merger contained in
this Agreement, approved the Merger and the other transactions
contemplated hereby and, subject to Section 6.2(c), resolved to
recommend approval of the plan of Merger contained in this
Agreement to the holders of Shares entitled to vote thereon (the
“ Company Recommendation ”) and (B)
directed that the plan of Merger contained in this Agreement be
submitted to the holders of Shares entitled to vote thereon for
their approval.
(d)
Governmental Filings; No Violations;
Certain Contracts, Etc . To the
Company’s knowledge (except with respect to any state or
federal securities law filings or approvals):
(i)
No notices, reports or other filings are
required to be made by the Company with, nor are any consents,
registrations, approvals, permits or authorizations required to be
obtained by the Company from, any domestic (including federal,
state or local) or foreign governmental or regulatory authority,
agency, commission, body, court or other legislative, executive or
judicial governmental entity (each, a “ Governmental
Entity ”), in connection with the execution, delivery
and performance of this Agreement by the Company and the
consummation of the Merger and the other transactions contemplated
hereby, except those that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to have a
Company Material Adverse Effect or prevent, materially delay or
materially impair the consummation of the transactions contemplated
by this Agreement.
(ii)
The execution, delivery and performance
of this Agreement by the Company do not, and the consummation of
the Merger and the other transactions contemplated hereby will not,
constitute or result in (A) a breach or violation of, a
termination (or right of termination) or a default under, the
creation or acceleration of any obligations or the creation of a
Lien on any of the assets of the Company pursuant to any agreement,
lease, license, contract, note, mortgage, indenture, arrangement or
other obligation not otherwise terminable by the other party
thereto on 90 days’ or less notice (each, a “
Contract ”) binding upon the Company or,
assuming (solely with respect to performance of this Agreement and
consummation of the Merger and the other transactions contemplated
hereby) compliance with the matters referred to in Section
5.1(d)(i), under any Law to which the Company is subject or
(B) any change in the rights or obligations of any party under
any Contract binding on the Company, except for any such breach,
violation, termination, default, creation, acceleration or change
that, individually or in the aggregate, is not reasonably likely to
have a Company Material Adverse Effect or prevent, materially delay
or materially impair the consummation of the transactions
contemplated by this Agreement.
The term “ knowledge
” when used in this Agreement with respect to: (1) the
Company or the executive officers of the Company shall mean the
actual knowledge of Mary Ellen Kramer, President and (2) the Parent
or the Merger Sub or the executive officers of Parent shall mean
the actual knowledge of Andrew Limpert, Terry Deru, and Scott Deru,
in each case, having made reasonable review and inquiry.
(e)
Litigation . As of the date of this Agreement, there are
no civil, criminal or administrative actions, suits, claims,
hearings, arbitrations, inquiries, investigations or other
proceedings pending or, to the knowledge of the executive officers
of the Company, threatened against the Company, except for those
that are not, individually or in the aggregate, reasonably likely
to have a Company Material Adverse Effect. As of the date of
this Agreement, the Company is not a party to or subject to the
provisions of any judgment, order, writ, injunction, decision,
determination, decree or award of any Governmental Entity which is,
individually or in the aggregate, reasonably likely to have a
Company Material Adverse Effect or prevent, materially delay or
materially impair the consummation of the transactions contemplated
by this Agreement.
(f)
Employee Benefits
.
(i)
The Company (i) has satisfied all
contribution obligations in respect of each of its employee benefit
plans, and (ii) is and has at all times been in compliance in all
material respects with all applicable provisions of the federal
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and the Internal Revenue Code of 1986, as
amended (the "Code"), with respect to each such plan. No
employee benefit plan or trust created thereunder has at no time
incurred any accumulated funding deficiency (as such term is
defined in Section 302 of ERISA), whether or not waived.
(ii)
Neither the Company nor any employee
benefit plan thereof, or any trust created thereunder or any
trustee or administrator thereof, has engaged in any prohibited
transaction (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) that would subject any person to the
penalty or tax on such transactions imposed by Section 502 of ERISA
or 4975 of the Code. As used in this Section, the term
"employee benefit plan" shall have the meaning specified in Section
3 of ERISA.
(g)
Compliance with Laws;
Licenses . To the
Company’s knowledge, the businesses of the Company is not
being conducted in violation of any United States (federal, state
or local) or non-United States law, statute or ordinance, common
law or any rule, regulation, standard, judgment, order, writ,
injunction, decree, agency requirement, license or permit of any
Governmental Entity or any award or directive of any arbitration or
mediation panel (collectively, “ Laws ”),
except for violations that, individually or in the aggregate, are
not reasonably likely to have a Company Material Adverse Effect.
The Company has obtained and is in compliance with all
permits, licenses, certifications, approvals, authorizations,
registrations, consents, authorizations, franchises, variances,
exemptions and orders issued or granted by a Governmental Entity
(“ Licenses ”) necessary to conduct its
business as presently conducted except for the absence of such
Licenses or such non-compliance which is not, individually or in
the aggregate, reasonably likely to have a Company Material Adverse
Effect.
(h)
Takeover Statutes
. Assuming the accuracy of
Parent’s and Merger Sub’s representations in Section
5.2(j), no “fair price,” “moratorium,”
“control share acquisition” or other similar
anti-takeover statute or regulation (each a “ Takeover
Statute ”) or any anti-takeover provision in the
Company’s articles of incorporation and by-laws is applicable
to Parent, the Shares, the Merger or the other transactions
contemplated by this Agreement.
(i)
Environmental Matters
.
(A)
The Company is in compliance with all
applicable Environmental Laws, except for such noncompliance
as is not, individually or in the aggregate, reasonably likely to
have a Company Material Adverse Effect.
(B)
The Company possesses all permits,
licenses, registrations, identification numbers, authorizations and
approvals required under applicable Environmental Laws for the
operation of the business as presently conducted, other than as is
not, individually or in the aggregate, reasonably likely to have a
Company Material Adverse Effect.
(C)
The Company has not received any written
claim, notice of violation or citation concerning any violation or
alleged violation of any applicable Environmental Law
during the past three years, except as is not, individually or in
the aggregate, reasonably likely to have a Company Material Adverse
Effect.
(D)
There are no writs, injunctions, decrees,
orders or judgments outstanding, or any actions, suits or
proceedings pending or, to the knowledge of the executive
officers of the Company, threatened, concerning compliance by the
Company with any Environmental Law, except as is not, individually
or in the aggregate, reasonably likely to have a Company Material
Adverse Effect.
(ii)
Notwithstanding any other representation
and warranty in Article V, the representations and warranties
contained in this Section constitute the sole representations and
warranties of the Company relating to any Environmental
Law.
(iii)
As used herein, the term “
Environmental Law ” means any applicable law,
regulation, code, license, permit, order, decree or injunction from
any Governmental Entity relating to the protection of the
environment (including air, water, soil and natural
resources).
(j)
Taxes .
Except as would not, individually or in the aggregate,
reasonably be likely to have a Company Material Adverse Effect, the
Company (i) has duly and timely filed (taking into account any
extension of time within which to file) all Tax Returns (as defined
below) required to be filed it and all such filed Tax Returns are
complete and accurate in all material respects; (ii) has paid
all Taxes (as defined below) that are shown as due on such filed
Tax Returns or that the Company is obligated to withhold from
amounts owing to any employee, creditor or third party, except with
respect to matters contested in good faith or for which adequate
reserves have been established; and (iii) has not waived any
statute of limitations with respect to Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.
Except as is not, individually or in the aggregate,
reasonably likely to have a Company Material Adverse Effect, as of
the date hereof, there are not pending or, to the knowledge of the
executive officers of the Company threatened in writing, any
audits, examinations, investigations or other proceedings in
respect of Taxes or Tax matters.
As used in this Agreement, (i) the term
“ Tax ” (including, with correlative
meaning, the term “ Taxes ”) includes all
federal, state, local and foreign income, profits, franchise, gross
receipts, environmental, customs duty, capital stock, severance,
stamp, payroll, sales, employment, unemployment, disability, use,
property, withholding, excise, production, value added, occupancy
and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with
respect to such amounts and any interest in respect of such
penalties and additions, and (ii) the term “ Tax
Return ” includes all returns and reports (including
elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to a Tax authority
relating to Taxes.
(k)
Labor Matters . As of the date of this Agreement, (i) the
Company is not a party to or otherwise bound by any collective
bargaining agreement or other Contract with a labor union or labor
organization, nor is the Company subject of any material proceeding
asserting that the Company has committed an unfair labor practice
or seeking to compel it to bargain with any labor union or labor
organization nor is there pending or, to the knowledge of the
executive officers of the Company, threatened, nor has there been
for the past five years, any labor strike, dispute, walk-out, work
stoppage, slow-down or lockout involving the Company, and (ii) to
the knowledge of the executive officers of the Company, there are
no organizational efforts with respect to the formation of a
collective bargaining unit presently being made involving employees
of the Company.
(l)
Intellectual Property
. Except as is not, individually or
in the aggregate, reasonably likely to have a Company Material
Adverse Effect:
(i)
the Company has sufficient rights to use
all Intellectual Property used in its business as presently
conducted and there is no litigation, opposition, cancellation,
proceeding, objection or claim pending, asserted or, to the
knowledge of the executive officers of the Company, threatened,
concerning the ownership, validity, registerability,
enforceability, infringement or use of, or licensed right to use,
any Intellectual Property.
(ii)
the Company has not granted any licenses
or other rights to third parties to use its Intellectual Property,
other than non-exclusive licenses granted in the ordinary course of
business pursuant to standard terms.
(iii)
(A) the IT Assets operate and perform in
accordance with their documentation and functional specifications
and otherwise as required by the Company in connection with its
business; (B) to the knowledge of the executive officers of
the Company, as of the date hereof, no person has gained
unauthorized access to the IT Assets; and (C) the Company has
implemented reasonable backup and disaster recovery technology
consistent with industry practices.
For purposes of this Agreement, the
following terms have the following meanings:
“ Intellectual
Property ” means all (i) trademarks, service
marks, brand names, certification marks, collective marks,
d/b/a’s, Internet domain names, logos, symbols, trade dress,
trade names, and other indicia of origin, all applications and
registrations for the foregoing, and all goodwill associated
therewith and symbolized thereby, including all renewals of same;
(ii) inventions and discoveries, whether patentable or not,
and all patents, registrations, invention disclosures and
applications therefor, including divisions, continuations,
continuations-in-part and renewal applications, and including
renewals, extensions and reissues; (iii) confidential
information, trade secrets and know-how, including processes,
schematics, business methods, formulae, drawings, prototypes,
models, designs, customer lists and supplier lists (collectively,
“ Trade Secrets ”); (iv) published
and unpublished works of authorship, whether copyrightable or not
(including without limitation databases and other compilations of
information), copyrights therein and thereto, and registrations and
applications therefor, and all renewals, extensions, restorations
and reversions thereof; and (v) all other intellectual
property or proprietary rights, in each case, to the extent
recognized by applicable Law.
“ IT Assets ”
of a Person means computers, computer software, firmware,
middleware, servers, workstations, routers, hubs, switches, and
other information technology equipment owned by such
Person.
(m)
Insurance . As of the date of this Agreement, each of the
Company’s insurance policies is in full force and effect and
all premiums due with respect to such insurance policies have been
paid, with such exceptions that, individually or in the aggregate,
are not reasonably likely to have a Company Material Adverse
Effect.
(n)
Brokers and Finders
. Neither the Company nor any of
its officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees,
commissions or finders, fees in connection with the Merger or the
other transactions contemplated by this Agreement, except
that
