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EXHIBIT
2.1
MERGER
AGREEMENT
THIS MERGER AGREEMENT (this
“ Agreement
”) is entered into as of the 11 th
day of March, 2005, by and among Mark A. Taylor ,
an individual residing at 48265 Nine Mile Road Northville,
Michigan 48167 (“ Shareholder
”), Taylor Systems
Engineering Corporation , a Michigan corporation with
its principal place of business at 40800 Five Mile Road,
Plymouth, Michigan 48170 (the “ Company
”), RedRoller, Inc. ,
a Delaware corporation with its principal place of business
at 50 Day Street, South Norwalk, CT 06854 (“
Buyer ”),
and RedRoller Merger Sub,
Inc. , a Michigan corporation and wholly owned
subsidiary of Buyer (“ Merger Sub
”) with its
principal place of business at 50 Day Street, South Norwalk,
CT 06845. Shareholder, the Company, Buyer and
Merger Sub are sometimes referred to herein collectively as
the “ Parties ,”
and each individually as a “ Party
”.
RECITALS :
A.
Shareholder is the sole owner of one hundred percent (100%)
of the issued and outstanding capital stock of the Company
(the “ Securities
”).
B.
The Parties desire that Merger Sub merge with and into the
Company (with the Company as the surviving corporation) and
that, in such merger, Shareholder receive capital stock of
Buyer in exchange for, and complete cancellation of, the
Securities.
C.
The Parties intend this transaction to qualify as a tax-free
“reverse subsidiary merger” reorganization under
Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as
amended (the “ Code
”).
AGREEMENTS :
In consideration of and in
reliance upon the mutual representations, warranties,
covenants, obligations and agreements contained herein, the
parties agree as follows:
1.1.
Definition Reference . Certain capitalized terms
not otherwise defined herein are defined in Exhibit
A attached hereto.
1.2.
The Merger . Subject to the terms of this
Agreement, upon the Closing (as hereinafter defined), a Certificate
of Merger consistent with the terms of this Agreement and the
applicable provisions of Michigan Law (the “ Certificate of Merger
”) shall be filed with the appropriate governmental agency in
Michigan and Merger Sub shall thereby be merged with and into the
Company (the “ Merger ”), the
separate corporate existence of Merger Sub shall cease, and the
Company shall continue as the surviving corporation and
wholly-owned subsidiary of Buyer. The time of filing of
such Certificate of Merger is referred to herein as the “
Effective
Time .” The Company, as the surviving
corporation after the Merger, is hereinafter sometimes referred to
as the “ Surviving Corporation
.”
1.3.
Effect of the Merger . 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 and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving
Corporation.
1.4.
Articles of Incorporation; Bylaws; Directors and
Officers.
(a)
Articles of Incorporation . At the Effective
Time, the Articles of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation until thereafter amended
in accordance with Michigan Law.
(b)
Bylaws . At the Effective Time, the bylaws of the
Company, as in effect immediately prior to the Effective Time,
shall be the bylaws of the Surviving Corporation until thereafter
amended in accordance with the terms thereof.
(c)
Directors and Officers . The initial directors of
the Surviving Corporation immediately after the Merger shall be the
directors of Merger Sub in office at the Effective Time, each to
hold office until his or her respective successor is duly elected
or appointed and qualified. The initial officers of the
Surviving Corporation immediately after the Merger shall be the
officers of Merger Sub in office at the Effective Time, each to
hold office until his or her respective successor is duly
appointed.
2.1.
Effect on Capital Stock . By virtue of the Merger
and without any further action on the part of the Company, Merger
Sub or the holders of any of the following securities:
(a)
Conversion of Capital Stock of the Company . At
the Effective Time, each share of outstanding Company Common Stock
(as defined in Section 3.6
) outstanding immediately prior to the Effective Time
shall be canceled and extinguished and be converted automatically
into the right to receive that number of shares of Buyer common
stock, par value $.01 per share (“ Buyer Common Stock
”) determined by dividing (A) twenty percent (20%) of the
shares of Buyer Common Stock issued and outstanding as of the
Closing Date on a fully-diluted basis (for clarity, the Parties
agree that Buyer Common Stock or securities exercisable for Buyer
Common Stock held by Shareholder immediately prior to the Closing
Date will not reduce such 20% but will be treated as outstanding
and will be counted for purposes of determining the total number of
shares of Buyer Common Stock outstanding on a fully diluted basis),
by (B) that number of shares of Company Common Stock outstanding
immediately prior to the
Effective
Time, and rounding the quotient down to the next nearest whole
share of Buyer Common Stock; and
(b)
Conversion of Capital Stock of Merger Sub . At
the Effective Time, each share of common stock, $0.001 par value,
of Merger Sub (“ Merger Sub Common
Stock ”) issued and outstanding immediately prior to
the Effective Time shall be converted into and exchanged for one
validly issued, fully paid and nonassessable share of common stock,
no par value, of the Surviving Corporation, and, as a result, the
Surviving Corporation shall be a wholly-owned subsidiary of
Buyer. Each stock certificate evidencing ownership of
any share of Merger Sub Common Stock shall evidence ownership of
such share of capital stock of the Surviving
Corporation.
2.2.
Exchange Procedures . At any time after the
Effective Time, upon surrender of a certificate representing
Company Common Stock to Buyer, Buyer will deliver, in exchange for
such certificate, a certificate representing the number of shares
of Buyer Common Stock to which the holder of such certificate is
entitled pursuant to Section 2.1(a)
hereof. The certificate so surrendered shall be
immediately canceled. From and after the Effective Time,
until surrendered as contemplated by this Section 2.2 , each
certificate representing Company Common Stock shall be deemed for
all corporate purposes to evidence the number of shares of Buyer
Common Stock into which the shares of Company Common Stock
represented by such certificate may be converted.
2.3.
Tax-Free Reorganization . The Parties intend for
this transaction to be a “reverse subsidiary merger”
qualifying as a tax-free corporate reorganization under Section
368(a)(2)(E) of the Code. In this regard, Buyer has
resolved that the Buyer Common Stock referenced in Section 2.1(a) are
shares of voting stock of Buyer, and Shareholder has resolved that,
immediately after the Closing, Buyer shall be in Control of the
Company by way of its ownership of the Securities. No
Party shall, after the Closing, take any action which would
disqualify this transaction as a “reverse subsidiary
merger” which is a tax-free corporate reorganization within
the meaning of Section 368(a)(2)(E) of the Code. Without
limiting the foregoing, no Party shall file any tax return(s) in a
manner inconsistent with the qualification of this transaction as a
tax-free reorganization within the meaning of Section 368(a)(2)(E)
of the Code.
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3.
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R EPRESENTATIONS
AND WARRANTIES OF SELLER AND THE COMPANY .
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Shareholder and the Company
hereby jointly and severally represent and warrant to Buyer
as follows:
3.1.
Organization, Authority and Capacity . The
Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Michigan, is in good
standing as a foreign corporation qualified to do business in such
other states where the nature of its business conducted or the
character of the assets owned requires such
qualification,
and
has full corporate power and authority to own, lease and operate
its assets and properties and, carry on its business as and where
such assets and properties are now owned or leased and as such
business is presently being conducted. Shareholder and
the Company have full power, authority, and legal capacity to
execute, deliver, and perform this Agreement in accordance with its
terms, and such execution, delivery and performance has been
approved by all requisite corporate action by the
Company. This Agreement has been duly executed and
delivered by Shareholder and the Company and constitutes the legal,
valid and binding obligation of Shareholder and the Company,
enforceable against Shareholder and the Company in accordance with
its terms.
3.2.
No Consents or Conflicts . Except as set forth on
Schedule
3.2 : (a) no consent of, or filing with, any Governmental
Entity or third party is required in connection with the execution,
delivery or performance of this Agreement or any of the other
agreements, instruments or documents to be delivered by or on
behalf of Shareholder or the Company in connection herewith; and
(b) neither the execution or delivery nor the performance of this
Agreement or any of the other agreements, instruments or documents
to be delivered by or on behalf of Shareholder or the Company in
connection herewith conflicts with, violates or results in any
breach of: (i) any judgment, decree, order, statute, rule or
regulation applicable to Shareholder or the Company, (ii) any
material agreement or instrument to which Shareholder or the
Company is a party or by which the Company or any of its assets is
bound, or (iii) any provision of the Articles of Incorporation
or the By-Laws of the Company.
3.3.
Financial Statements . Shareholder has previously delivered
to Buyer the Company’s financial statements for each of the
two years ended December 31, 2003 and 2004, and for the two
(2) month period ended at, and as of, February 28, 2005,
including its balance sheet as of February 28, 2005 (the
“ February
Balance Sheet ”) (all of the foregoing described
financial statements, along with the February Balance Sheet, are
hereinafter referred to as the “ Financial Statements
” and true, correct and complete copies are included in
Schedule 3.3(a)
hereto). The Financial Statements were prepared from the
Company’s books of account and present fairly, in all
material respects, the financial position of the Company at the
dates indicated and the results of its operations and cash flows
for each of the periods indicated in conformity with
GAAP. The books of account of the Company accurately
reflect all items of income and expense, including accruals, and
all assets and liabilities of the Company in accordance with normal
accrual accounting practices, subject to customary year-end
adjustments of a normal, recurring type which would not be material
in the aggregate, except as may be indicated therein or in the
notes thereto, or as indicated on Schedule 3.3(b)
hereto.
3.4.
No Liabilities . The Company has no liabilities
or obligations of any kind (accrued, absolute, contingent, known,
unknown or otherwise), except (i) as reflected on
the February Balance Sheet, (ii) as incurred in the Ordinary
Course of Business since the date of the February Balance Sheet, or
(iii) as set forth on Schedule 3.4
or on any other Schedule to this Agreement.
3.5.
No Changes . Except as set forth on Schedule 3.5
, since the date of the February Balance Sheet, Shareholder has
operated the Company’s business only in the Ordinary Course
of Business and there has not been any Material Adverse Effect, or
any event, fact or circumstance which might reasonably be expected
to result in a Material Adverse Effect, in the assets, liabilities,
operating performance, business relationships or prospects of the
Company’s business, and, without limiting the generality of
the foregoing, since the date of the February Balance Sheet, there
has not been with respect to the Company’s business
any:
(a)
waiver,
release, cancellation or compromise of any debts owed to it or
claims or rights against others exceeding $25,000 in the
aggregate;
(b)
sale,
disposition or subjection to any lien of any assets other than
those sold or disposed of in the Ordinary Course of Business, and
other than replacements of assets valued at no greater than $
25,000 in the aggregate made in the Ordinary Course
Business;
(c)
unusual
or novel method of transacting the business engaged in by the
Company or any change in the Company’s accounting procedures
or practices (except as required by Buyer) or its financial
structure;
(d)
any
increase in salaries, bonuses or benefits paid or payable to
employees, other than increases made on the anniversary dates of
employment of employees, which increases have all been consistent
with past practices; or
(e)
any
material damage, destruction or loss to or of the assets of the
Company.
Notwithstanding
the foregoing or anything in this Agreement to the contrary,
Shareholder and the Company may take the actions described in
Sections
7 , 9.4 and
9.5
below at any time prior to the Closing.
3.6.
Capitalization of the Company; Title to Securities
. The authorized capital stock of the Company consists
of 50,000 shares of common stock, par value $1.00 per share
(“ Company
Common Stock ”), of which 1,000 shares are
issued and outstanding. No preferred stock is
authorized. Shareholder is the record and beneficial
owner and holder of all of the Securities, free and clear of all
Encumbrances, and at the Closing will have the right to transfer
the same to Buyer. All of the Securities have been duly
authorized and validly issued and are fully paid and
non-assessable. There are no agreements or other
Documents (other than this Agreement and the Company’s
By-Laws) relating to the issuance, sale or transfer of any equity
securities of the Company. None of the Securities were
issued in violation of the Securities Act, or any state securities
Laws.
3.7.
Compliance with Laws . Except as set forth on
Schedule
3.7 , the Company has conducted its business in compliance,
in all material respects, with all applicable Laws, regulations or
orders of any jurisdiction or governmental authority, including,
without limitation, those pertaining to, environmental protection,
occupational health or safety, employee benefits, or employment
practices. Except as set forth on Schedule
3.7 , the Company has all permits, registrations and
licenses necessary to conduct its business, and all of the
Company’s employees utilized in connection with the
Company’s business have obtained all required permits,
registrations, and licenses required in connection with their
duties rendered on behalf of Company. All such permits
and licenses are in full force and effect, and no proceeding is
pending or, to the knowledge of the Company, threatened, to revoke
or limit any of them.
3.8.
No Litigation . Except as set forth on
Schedule
3.8 , there is no (a) Claim pending or, to the
knowledge of the Company, threatened against Shareholder or the
Company; (b) pending or, to the knowledge of the Company,
threatened, controversy, grievance or Claim by any employee or
former employee of the Company with respect to their employment,
compensation, benefits or working conditions; or (c) Claim pending
or, to the knowledge of the Company, threatened before any court,
arbitrator or governmental or regulatory agency, which seek to
restrain, enjoin or otherwise prevent the consummation of the
transactions contemplated by this Agreement.
3.9.
Condition . Except as set forth on Schedule
3.9 , all items of tangible property owned by the Company
(a) are in good operating condition, normal wear and tear
excepted, (b) neither require nor are reasonably expected to
require any special or extraordinary expenditures to remain in such
condition beyond normal maintenance, and (c) are capable of
being used for their intended purposes in the Ordinary Course of
Business.
3.10.
Taxes . All Tax Returns required by any
governmental authority to be filed in connection with the
Company’s business, properties, income, expenses or net worth
of Shareholder or the Company have been timely filed by either
Shareholder or the Company. All Taxes due from
Shareholder or the Company in connection with the Company’s
business have been paid by either Shareholder or the Company, other
than taxes which are not yet due or which, if due, are not yet
delinquent or are being contested in good faith, and for which (in
all cases) adequate reserves have been established on the February
Balance Sheet. There are no Tax claims, audits or
proceedings pending in connection with the Company’s
business, properties, income, expenses or net worth of the Company,
and, to the knowledge of the Company, there are no such threatened
claims, audits or proceedings.
3.11.
Employee Benefits . Shareholder has previously
delivered to Buyer all Plans and Other Arrangements maintained by
the Company, providing benefits to any Company employee(s), or to
which the Company contributes, which Plans and Other Arrangements
are listed on Schedule 3.11
, and, except as disclosed on said Schedule 3.11
, such Plans comply, in all material respects, with all applicable
provisions of any Laws, rules or regulations, including, without
limitation, the Code and ERISA, and have so complied during all
prior periods during
which
any such provisions are applicable. Except as disclosed
on said Schedule 3.11
, the Company (i) has complied in all material respects with
the provisions of ERISA applicable to the Company as an employer,
plan sponsor, plan administrator or fiduciary of any such Plan,
(ii) has administered the Plans in accordance with their terms
and (iii) with respect to any Plan maintained by the Company
or to which the Company contributes, has made all contributions
required of it by any law (including, without limitation, ERISA) or
contract and no unfunded liability exists with respect to any
Plan.
3.12.
Employee; Conflicts . Except as set forth on
Schedule
3.12 , neither Shareholder, nor any other person or entity
controlled by or under common control with the Company or
Shareholder nor any key employee of the Company, has any direct or
indirect interest in any business enterprise which does business
with the Company or competes with the Company in any
manner. Neither the Company nor, to the knowledge of
Company, any other employee or director thereof is a party to, or
is otherwise bound by, any agreement or arrangement, including any
confidentiality, non-competition, or proprietary rights agreement,
between the Company, such employee or director and any other Person
(“ Proprietary Rights
Agreement ”) that in any way adversely affects or will
affect the ability of the Company to conduct its business or the
performance of such employee’s or director’s duties as
an employee or director of the Company after the Closing Date,
including any Proprietary Rights Agreement with Shareholder or the
Company by any such employee or director. To
Shareholder’s knowledge, no director, officer, or other key
employee of the Company intends to terminate his employment with
the Company.
3.13.
Brokers and Finders . Except as set forth on
Schedule
3.13 , no broker, finder or other person or entity acting in
a similar capacity has participated on behalf of Shareholder or the
Company in bringing about the transactions contemplated herein,
rendered any services with respect hereto, or been in any way
involved herewith.
3.14.
Investment Matters .
(a)
Shareholder
is acquiring Buyer Common Stock for investment purposes, for his
own account and not with a view to distribution or resale thereof
or to divide its participation with others. Shareholder
is an “accredited investor” as defined in
Regulation D promulgated under the Securities
Act. Shareholder has knowledge and experience in
financial and business matters such that he is capable of
evaluating the merits and risks of an investment in Buyer Common
Stock. Shareholder acknowledges that he has received and
has reviewed all material and relevant information concerning
Buyer, which the Company has furnished to Shareholder, and has had
the opportunity to ask questions of, receive answers from and
obtain additional information from Buyer concerning the business
and financial condition of Buyer.
(b)
Shareholder
understands, acknowledges and agrees that: (a) no shares of Buyer
Common Stock have been registered or qualified under the Securities
Act, or under any securities Laws of any state of the United States
or other jurisdiction, in
reliance
upon specific exemptions thereunder for transactions not involving
any public offering; (b) Buyer Common Stock constitutes
“restricted securities” as defined in Rule 144 under
the Securities Act; (c) Buyer Common Stock is neither traded nor
tradable on any securities exchange or over-the-counter; and (d) no
shares of Buyer Common Stock may be sold, transferred or otherwise
disposed of unless a registration statement under the Securities
Act with respect to such shares and qualification in accordance
with any applicable state securities Laws becomes effective or
unless an exemption from such registration and qualification is
available and demonstrated to the reasonable satisfaction of Buyer
and its counsel. Shareholder will refrain from
transferring or otherwise disposing of any of shares of Buyer
Common Stock acquired hereunder or any interest therein in any
manner that may cause Buyer or Shareholder to be in violation of
the Securities Act or any applicable state securities Laws; and
further, Shareholder may only transfer Buyer Common Stock pursuant
to the Stockholders’ Agreement attached hereto as
Exhibit B .
3.15.
Legend . The certificates evidencing the Buyer
Common Stock to be issued under this Agreement will bear a legend
substantially similar to the following:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
ANY STATE SECURITIES LAWS, MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER SUCH ACT AND ANY AP
PLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SUCH
ACT AND ANY APPLICABLE STATE SECURITIES LAW IS NOT REQUIRED WITH
RESPECT TO SUCH SALE OR OFFER.
In
addition, for so long as the referenced Stockholders’
Agreement is in effect, each such certificate shall also bear
a legend substantially similar to the following:
THE
VOTING RIGHTS AND OBLIGATIONS WITH RESPECT TO, AND SALE OR
OTHER DISPOSITION OF, THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE RESTRICTED BY AND SUBJECT TO THE PROVISIONS OF
A STOCKHOLDERS’ AGREEMENT DATED AS OF MARCH [●],
2005, A COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE
OFFICES OF THE COMPANY.
3.16.
Software Non-Infringement .
(a)
Except
as set forth below in Section 3.16(b) , all
software used in connection with the Company’s business
either has been developed by the Company’s employees or has
been developed by third parties and licensed to the Company by such
third parties (“ Third Party Software
”) pursuant to valid license agreements, which agreements are
fully paid and in full force and effect. Neither
Shareholder nor the Company is aware of any pending or threatened
claims against or demands upon Shareholder or the Company alleging
that the Third Party Software infringes upon the rights of any
third party.
(b)
Shareholder
utilizes software (“ Owned Software
”) which was developed by employees of the
Company. To the best of the Company’s knowledge,
the Owned Software is owned by the Company and the Company has the
right to use the same, and will continue to have the right to use
the same after the Closing without the payment to any other person
of any royalty or other sums and without consents or
approvals.
3.17.
Condition and Sufficiency of Assets . The buildings,
structures, and equipment of the Company are structurally sound,
are in good operating condition and repair, and are adequate for
the uses to which they are being put, and none of such buildings,
structures, or equipment is in need of maintenance or repairs
except for ordinary, routine maintenance and repairs that are not
material in nature or cost. The building, structures, and equipment
of the Company are sufficient for the continued conduct of the
Surviving Corporation’s businesses after the Closing in
substantially the same manner as conducted by the Company prior to
the Closing.
3.18.
No Misrepresentations . No representation or
warranty made by the Company or Shareholder in this Agreement, the
Schedules or Exhibits hereto, or any certificate or document
delivered to Buyer contains any untrue statement of a material fact
or omits to state a fact necessary to make the statements and facts
contained therein or herein, in light of the circumstances under
which they are made, not false or misleading. Copies of
all documents included in the Exhibits or Schedules hereto are
complete and accurate copies of such documents.
3.19.
Knowledge Defined . For purposes of this
Section 3 ,
“to the knowledge of the Company” or words of similar
import shall mean (i) the actual knowledge of Shareholder or
any officer or member of the board of directors of the Company, and
(ii) the knowledge any of such persons would have had after
making a reasonable inquiry of the Company’s employees and a
reasonable investigation and review of the Company’s books
and records and other relevant documentation.
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4.
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REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB
.
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Buyer and Merger Sub hereby
jointly and severally represent and warrant to Shareholder
and the Company as follows:
4.1.
Organization and Authority . Buyer is a validly
existing corporation in good standing under the laws of the State
of Delaware, and has full corporate power and authority to execute,
deliver and perform this Agreement. This Agreement and
the transactions contemplated by this Agreement, have been
authorized by all necessary corporate action of
Buyer. This Agreement has been duly executed and
delivered by Buyer and constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with
its terms. Merger Sub is a validly existing corporation
in good standing under the laws of the State of Michigan, and has
full corporate power and authority to execute, deliver and perform
this Agreement. This Agreement and the transactions
contemplated by this Agreement, have been authorized by all
necessary corporate action of Merger Sub. This Agreement
has been duly executed and delivered by Merger Sub and constitutes
the legal, valid and binding obligation of Merger Sub, enforceable
against Merger Sub in accordance with its terms.
4.2.
No Consents or Conflicts . No consent of, or
filing with, any governmental authority or third party is required
in connection with the execution, delivery or performance of this
Agreement by Buyer and Merger Sub. Neither the execution
or delivery nor the performance of this Agreement or any of the
other agreements, instruments or documents to be delivered by or on
behalf of Buyer or Merger Sub in connection herewith conflicts
with, violates or results in any breach of: (i) any judgment,
decree, order, statute, rule or regulation applicable to Buyer or
Merger Sub, (ii) any material agreement to which Buyer or
Merger Sub is a party or by which Buyer or Merger Sub is bound, or
(iii) any provision of the Certificate of Incorporation or
Articles of Incorporation, as the case may be, or the By-Laws of
Buyer or Merger Sub.
4.3.
No Misrepresentations . No representation or
warranty made by Buyer or Merger Sub in this Agreement, the
Schedules or Exhibits hereto, or any certificate or document
delivered to Shareholder and the Company contains any untrue
statement of a material fact or omits to state a fact necessary to
make the statements and facts contained therein or herein, in light
of the circumstances under which they are made, not false or
misleading. Copies of all documents included in the
Exhibits or Schedules hereto are complete and accurate copies of
such documents.
4.4.
Capitalization of Buyer and Merger Sub; Buyer Common Stock
. The authorized capital stock of Buyer consists of
(a) 50,000,000 shares of Buyer Common Stock, of which
5,000,000 shares are issued and outstanding as of the date hereof,
and (b) 10,000,000 shares of Preferred Stock, none of which is
issued and outstanding as of the date hereof. The
authorized capital stock of Merger Sub consists of 100 shares of
Merger Sub Common Stock of which 10 shares are
issued and outstanding. No preferred stock is
authorized. Schedule
4.4 sets forth the ownership of the outstanding shares of
Buyer Common Stock and all securities of Buyer convertible into or
exercisable for Buyer Common Stock or Preferred Stock as of the
date hereof. The shares of Buyer Common Stock to which
Shareholder will be entitled as a result of
the
Merger as described in Section 2.1(a) of
this Agreement have been duly authorized and, when issued, will
(x) be validly issued, fully paid and non-assessable
(y) be free and clear of all Encumbrances except for
restrictions on transfer under applicable federal and state
securities Laws and except as provided in the Stockholders’
Agreement, and (z) represent twenty percent (20%) of the
shares of Buyer Common Stock issued and outstanding as of the
Closing Date on a fully-diluted basis (for clarity, the Parties
agree that Buyer Common Stock or securities exercisable for Buyer
Common Stock held by Shareholder immediately prior to the Closing
Date, will not reduce such 20% but will be treated as outstanding
and will be counted for purposes of determining the total number of
shares outstanding on a fully diluted basis). As of the
date hereof, there are no agreements or other Documents (other than
this Agreement, the Stockholders’ Agreement and Buyer’s
By-Laws) relating to the issuance, sale or transfer of any equity
securities of Buyer, except as set forth on Schedule 4.4
.
4.5.
Brokers and Finders . No broker, finder or
othe
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