UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): November 15, 2004
WESTERN STANDARD CORPORATION
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(Exact name of registrant as specified in its charter)
Wyoming 000-3802 83-0184378
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
400 East Snow King Avenue
Post Office Box 1846
Jackson, Wyoming 83001
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (307) 773-5200
N/A
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(Former name or former address, if changed since last report)
Check the appropriate box if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry Into a Material Definitive Agreement
Effective November 15, 2004, the registrant entered into an Agreement and
Plan of Merger. Pursuant to the merger agreement, Snow King Interests LLC
("SKI"), an entity controlled by Manuel B. Lopez and James M. Peck, two officers
and directors of the registrant, have agreed to pay $0.32 per share, in cash,
for each share of common stock of the registrant not currently owned by Messrs.
Lopez or Peck or their affiliates and the registrant will become a wholly-owned
subsidiary of SKI. Consummation of the transaction is subject to various
conditions, including, among other things, the approval by the registrant's
stockholders and the obtaining of various regulatory approvals. If the
transaction fails to close because of SKI's inability to obtain financing, the
registrant will be entitled to debt forgiveness in the amount of approximately
$100,000. The transaction is expected to be consummated early in the first
quarter of calendar 2005 and the merger agreement provides that the transaction
must be completed by March 31, 2005. If the registrant obtains a superior
proposal, its Board of Directors may accept such proposal although the
registrant must pay a $50,000 break-up fee.
Messrs. Lopez and Peck and their affiliates own beneficially 5,438,212
shares, or approximately 54%, of the registrant's issued and outstanding voting
common stock. Messrs. Lopez and Peck and their affiliates have agreed to vote
their shares in accordance with the majority of shares cast for or against the
merger proposal by unaffiliated stockholders of the registrant.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements None.
(b) Pro Forma Financial Statements None.
(c) Exhibits: Filed herewith:
Exhibit No. Description
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2.0 Agreement and Plan of Merger between and among Western
Standard Corporation, Snow King Interests LLC and LZ
Acquisition, Inc. dated November 15, 2004
2.1 Voting Agreements dated November 15, 2004 between
Western Standard Corporation and:
(a) Manuel B. Lopez
(b) James M. Peck
(c) Manuel B. Lopez Living Trust
(d) Deborah W. Lopez Living Trust
(e) James M. Peck, Trustee
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTERN STANDARD CORPORATION
Date: November 16, 2004 By: /s/ Manuel B. Lopez
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Manuel B. Lopez
President
EXHIBIT INDEX
Exhibit No. Description
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2.0 Agreement and Plan of Merger between and among Western
Standard Corporation, Snow King Interests LLC and LZ
Acquisition, Inc. dated November 15, 2004
2.1 Voting Agreements dated November 15, 2004 between Western
Standard Corporation and:
(a) Manuel B. Lopez
(b) James M. Peck
(c) Manuel B. Lopez Living Trust
(d) Deborah W. Lopez Living Trust
(e) James M. Peck, Trustee
EXHIBIT 2.0
AGREEMENT AND PLAN OF MERGER
DATED AS OF
November 15, 2004
AMONG
WESTERN STANDARD CORPORATION
SNOW KING INTERESTS LLC
AND
LZ ACQUISITION, INC.
TABLE OF CONTENTS
ARTICLE I
THE MERGER; CLOSING
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Section 1.01 The Merger
Section 1.02 Effective Time
Section 1.03 Effects of the Merger
Section 1.04 Conversion of Shares
Section 1.05 Payment of Shares
Section 1.06 The Closing
Section 1.07 Dissenters' Rights
ARTICLE II
THE SURVIVING CORPORATION; DIRECTORS AND OFFICERS
Section 2.01 Articles of Incorporation
Section 2.02 Bylaws
Section 2.03 Directors and Officers
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY
Section 3.01 Organization and Qualification
Section 3.02 Authority; Non-Contravention; Approvals
Section 3.03 Proxy Statement and Other SEC Filings
Section 3.04 Brokers and Finders
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.01 Organization and Qualification
Section 4.02 Capitalization
Section 4.03 Subsidiaries
Section 4.04 Authority; Non-Contravention; Approvals
Section 4.05 Reports and Financial Statements
Section 4.06 Absence of Undisclosed Liabilities
Section 4.07 Absence of Certain Changes or Events
Section 4.08 Litigation
Section 4.09 Proxy Statement and Other SEC Filings
Section 4.10 No Violation of Law
Section 4.11 Compliance with Agreements
Section 4.12 Taxes
Section 4.13 Employee Benefit Plans; ERISA
Section 4.14 Labor Controversies
Section 4.15 Environmental Matters
Section 4.16 Title to Assets
Section 4.17 Company Stockholders' Approval; Neutralized Voting
Section 4.18 Brokers and Finders
ARTICLE V
COVENANTS
Section 5.01 Conduct of Business by the Company Pending the Merger
Section 5.02 Control of the Company's Operations
Section 5.03 Acquisition Transactions
Section 5.04 Access to Information
Section 5.05 Notices of Certain Events
Section 5.06 Meeting of the Company's Stockholders
Section 5.07 Proxy Statement and Other SEC Filings
Section 5.08 Public Announcements
Section 5.09 Expenses and Fees
Section 5.10 Agreement to Cooperate
Section 5.11 Directors' and Officers' Indemnification
ARTICLE VI
CONDITIONS TO THE MERGER
Section 6.01 Conditions to the Obligations of Each Party
Section 6.02 Conditions to Obligation of the Company to Effect the Merger
Section 6.03 Conditions to Obligations of Parent and Subsidiary to Effect the Merger
ARTICLE VII
TERMINATION
Section 7.01 Termination
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Effect of Termination
Section 8.02 Nonsurvival of Representations and Warranties
Section 8.03 Notices
Section 8.04 Interpretation
Section 8.05 Miscellaneous
Section 8.06 Counterparts
Section 8.07 Amendments; No Waivers
Section 8.08 Entire Agreement
Section 8.09 Severability
Section 8.10 Specific Performance
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as of
November 15, 2004 by and among Snow King Interests LLC, a Wyoming limited
liability company ("Parent"), LZ Acquisition, Inc., a Wyoming corporation wholly
owned by Parent ("Merger Subsidiary"), and Western Standard Corporation, a
Wyoming corporation (the "Company"). Parent, Merger Subsidiary and the Company
are referred to collectively herein as the "Parties."
WHEREAS, the respective Managers and Boards of Directors of Parent, Merger
Subsidiary and the Company have each approved the merger of Merger Subsidiary
with and into the Company on the terms and subject to the conditions set forth
in this Agreement (the "Merger");
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER; CLOSING
Section 1.01......The Merger. Upon the terms and subject to the conditions
of this Agreement, and in accordance with the Wyoming Business Corporation Act,
Sections 17-16-101 to 1803 of Chapter 16 of the Wyoming Statutes (the "WBCA"),
Merger Subsidiary shall be merged with and into the Company at the Effective
Time (as defined in Section 1.02). Following the Merger, the separate existence
of Merger Subsidiary shall cease and the Company shall continue as the surviving
corporation (the "Surviving Corporation") wholly-owned by Parent, and shall
succeed to and assume all the rights and obligations of Merger Subsidiary in
accordance with the WBCA.
Section 1.02......Effective Time. The Merger shall become effective when
articles of merger (the "Articles of Merger"), executed in accordance with the
relevant provisions of the WBCA, are filed with the Secretary of State of the
State of Wyoming; provided, however, that, upon mutual consent of the
constituent corporations to the Merger, the Articles of Merger may provide for a
later date of effectiveness of the Merger not more than 30 days after the date
the Articles of Merger are filed. When used in this Agreement, the term
"Effective Time" shall mean the date and time at which the Articles of Merger
are accepted for record or such later time established by the Articles of
Merger. The filing of the Articles of Merger shall be made on the date of the
Closing (as defined in Section 1.06).
Section 1.03......Effects of the Merger. The Merger shall have the effects
set forth in Section 17-16-1301 of the WBCA.
Section 1.04......Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Merger Subsidiary, the
Company or the holders of any of the following securities:
(a) each issued and outstanding share of the Company's common stock,
par value $0.05 per share ("Company Common Stock"), held by the Company as
treasury stock and each issued and outstanding share of Company Common
Stock owned by any subsidiary of the Company, Parent, Merger Subsidiary or
any other subsidiary of Parent shall be canceled and retired and shall
cease to exist, and no payment or consideration shall be made with respect
thereto;
(b) each issued and outstanding share of Company Common Stock, other
than shares of Company Common Stock referred to in paragraph (a) above,
shall be converted into the right to receive an amount in cash, without
interest, equal to $0.32 (the "Merger Consideration"). At the Effective
Time, all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease
to exist, and each holder of a certificate representing any such shares of
Company Common Stock shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration, without interest; and
(c) each issued and outstanding share of capital stock or ownership
interest of Merger Subsidiary shall be converted into one fully paid and
nonassessable share of common stock, par value $0.05 per share, of the
Surviving Corporation.
Section 1.05......Payment of Shares. (a) Prior to the Effective Time,
Parent shall appoint a bank, trust company or transfer agent reasonably
satisfactory to the Company to act as disbursing agent (the "Disbursing Agent")
for the payment of Merger Consideration upon surrender of certificates
representing the shares of Company Common Stock. Parent will enter into a
disbursing agent agreement with the Disbursing Agent, in form and substance
reasonably acceptable to the Company. At or prior to the Effective Time, Parent
shall deposit or cause to be deposited with the Disbursing Agent in trust for
the benefit of the Company's stockholders cash in an aggregate amount necessary
to make the payments pursuant to Section 1.04 to holders of shares of Company
Common Stock (such amounts being hereinafter referred to as the "Exchange
Fund"). The Disbursing Agent shall invest the Exchange Fund, as the Surviving
Corporation directs, in direct obligations of the United States of America,
obligations for which the full faith and credit of the United States of America
is pledged to provide for the payment of all principal and interest or
commercial paper obligations receiving the highest rating from either Moody's
Investors Service, Inc. or Standard & Poor's, a division of The McGraw Hill
Companies, or a combination thereof, provided that, in any such case, no such
instrument shall have a maturity exceeding three months. Any net profit
resulting from, or interest or income produced by, such investments shall be
payable to the Surviving Corporation. The Exchange Fund shall be used only as
provided in this Agreement.
(b)......Promptly (but no later than five days) after the Effective
Time, the Surviving Corporation shall cause the Disbursing Agent to mail to
each person who was a record holder as of the Effective Time of an
outstanding certificate or certificates which immediately prior to the
Effective Time represented shares of Company Common Stock (the
"Certificates"), and whose shares were converted into the right to receive
Merger Consideration pursuant to Section 1.04(b), a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Disbursing Agent) and instructions for use in
effecting the surrender of the Certificates in exchange for payment of the
Merger Consideration. Upon surrender to the Disbursing Agent of a
Certificate, together with such letter of transmittal duly executed and
such other documents as may be reasonably required by the Disbursing Agent,
the holder of such Certificate shall be paid promptly in exchange therefor
cash in an amount equal to the product of the number of shares of Company
Common Stock represented by such Certificate multiplied by the Merger
Consideration, and such Certificate shall forthwith be canceled. No
interest will be paid or accrue on the cash payable upon the surrender of
the Certificates. If payment is to be made to a person other than the
person in whose name the Certificate surrendered is registered, it shall be
a condition of payment that the Certificate so surrendered be properly
endorsed or otherwise be in proper form for transfer and that the person
requesting such payment pay any transfer or other taxes required by reason
of the payment to a person other than the registered holder of the
Certificate surrendered or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until
surrendered in accordance with this Section 1.05, each Certificate (other
than Certificates representing shares of Company Common Stock owned by any
subsidiary of the Company, Parent, Merger Subsidiary or any other
subsidiary of Parent and shares of Company Common Stock held in the
treasury of the Company, which have been canceled) shall represent for all
purposes only the right to receive the Merger Consideration in cash
multiplied by the number of shares of Company Common Stock evidenced by
such Certificate, without any interest thereon.
(c)......From and after the Effective Time, there shall be no
registration of transfers of shares of Company Common Stock which were
outstanding immediately prior to the Effective Time on the stock transfer
books of the Surviving Corporation. From and after the Effective Time, the
holders of shares of Company Common Stock outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such
shares of Company Common Stock except as otherwise provided in this
Agreement or by applicable law. All cash paid upon the surrender of
Certificates in accordance with this Article I shall be deemed to have been
paid in full satisfaction of all rights pertaining to the shares of Company
Common Stock previously represented by such Certificates. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for
any reason, such Certificates shall be canceled and exchanged for cash as
provided in this Article I. At the close of business on the day of the
Effective Time the stock ledger of the Company shall be closed.
(d)......At any time more than 365 days after the Effective Time, the
Surviving Corporation shall be entitled to require the Disbursing Agent to
deliver to it any funds which had been made available to the Disbursing
Agent and not disbursed in exchange for Certificates (including, without
limitation, all interest and other income received by the Disbursing Agent
in respect of all such funds). Thereafter, holders of shares of Company
Common Stock shall look only to the Surviving Corporation (subject to the
terms of this Agreement, abandoned property, escheat and other similar
laws) as general creditors thereof with respect to any Merger Consideration
that may be payable, without interest, upon due surrender of the
Certificates held by them. If any Certificates shall not have been
surrendered prior to five years after the Effective Time (or immediately
prior to such time on which any payment in respect hereof would otherwise
escheat or become the property of any governmental unit or agency), the
payment in respect of such Certificates shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and
clear of all claims or interest of any person previously entitled thereto.
Notwithstanding the foregoing, none of Parent, the Company, the Surviving
Corporation nor the Disbursing Agent shall be liable to any holder of a
share of Company Common Stock for any Merger Consideration in respect of
such share of Company Common Stock delivered to a public official pursuant
to any abandoned property, escheat or other similar law.
(e)......If any Certificate has been lost, stolen, or destroyed, upon
the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen, or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against the Surviving Corporation with
respect to such Certificate, the Disbursing Agent will deliver in exchange
for such lost, stolen, or destroyed Certificate, the appropriate Merger
Consideration with respect to the shares of Company Common Stock formerly
represented by that Certificate.
(f)......The Surviving Corporation or the Disbursing Agent, as the
case may be, may deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Company
Common Stock such amounts as the Surviving Corporation or the Disbursing
Agent, as the case may be, may be required to deduct and withhold with
respect to the making of any such payment under the Internal Revenue Code
of 1986, as amended, or any provision of state, local, or foreign tax law.
To the extent withheld by the Surviving Corporation or the Disbursing
Agent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holders of the shares of Company
Common Stock in respect of which such deduction and withholding was made.
Section 1.06......The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the executive offices of
the Company in Jackson, Wyoming, commencing at 9:00 a.m. local time on the
second business day following the satisfaction or waiver of all conditions to
the obligations of the Parties to consummate the transactions contemplated
hereby (other than conditions with respect to actions the Parties will take at
the Closing) or such other place and date as the Parties may mutually determine
(the "Closing Date").
Section 1.07......Dissenters' Rights. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock outstanding
immediately prior to the Effective Time and held by a holder who has not voted
in favor of the Merger and who has dissented from the Merger in accordance with
Chapter 16 of the WBCA ("Dissenting Shares") shall not be converted into the
right to receive the Merger Consideration as provided in Section 1.04(b), unless
and until such holder fails to perfect or withdraws or otherwise loses his right
to payment under the WBCA. If, after the Effective Time, any such holder fails
to perfect or withdraws or loses his right to such payment, such Dissenting
Shares shall thereupon be treated as if they had been converted as of the
Effective Time into the right to receive the Merger Consideration, if any, to
which such holder is entitled, without interest thereon. The Company shall give
Parent and Merger Subsidiary prompt notice of any notice of dissent received by
Company and, prior to the Effective Time, Parent and Merger Subsidiary shall
have the right to participate in all negotiations and proceedings with respect
to such dissents. Prior to the Effective Time, Company shall not, except with
the prior written consent of Parent and Merger Subsidiary, make any payment with
respect to, or settle or offer to settle, any such dissents.
ARTICLE II
THE SURVIVING CORPORATION; DIRECTORS AND OFFICERS
Section 2.01......Articles of Incorporation. The Articles of Incorporation
of the Company in effect at the Effective Time shall be the articles of
incorporation of the Surviving Corporation until amended in accordance with
applicable law and this Agreement.
Section 2.02......Bylaws. The bylaws of Merger Subsidiary in effect at the
Effective Time shall be the bylaws of the Surviving Corporation, until amended
in accordance with applicable law and this Agreement.
Section 2.03......Directors and Officers. The directors of Merger
Subsidiary immediately prior to the Effective Time shall be the directors of the
Surviving Corporation as of the Effective Time. The officers of the Merger
Subsidiary shall be the officers of the Surviving Corporation as of the
Effective Time, subject to the right of the Board of Directors of the Surviving
Corporation to appoint or replace officers.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY
Parent and Merger Subsidiary jointly and severally represent and warrant to
the Company that, except as set forth in the Disclosure Schedule dated as of the
date hereof and signed by an authorized officer of Parent (the "Parent
Disclosure Schedule"), it being agreed that disclosure of any item on the Parent
Disclosure Schedule shall be deemed disclosure with respect to all Sections of
this Agreement if the relevance of such item is reasonably apparent from the
face of the Parent Disclosure Schedule:
Section 3.01......Organization and Qualification. Parent is a limited
liability company and Merger Subsidiary is a corporation, in each case duly
organized, validly existing and in good standing under the laws of the state of
its organization and has the requisite corporate power and authority to own,
lease and operate its assets and properties and to carry on its business as it
is now being conducted. Each of Parent and Merger Subsidiary is qualified to
transact business and is in good standing in each jurisdiction in which the
properties owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified and in good standing would not reasonably be expected to have
Parent Material Adverse Effect. In this Agreement, the term "Parent Material
Adverse Effect" means an effect that is materially adverse to (i) the business,
financial condition or ongoing operations of Parent and its subsidiaries, taken
as a whole or (ii) the ability of Parent or any of its subsidiaries to obtain
financing for or to consummate any of the transactions contemplated by this
Agreement.
Section 3.02......Authority; Non-Contravention; Approvals. (a) Each of
Parent and Merger Subsidiary has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, including
without limitation, the consummation of the financing of the Merger. This
Agreement and the Merger have been approved and adopted by the Managers and
Board of Directors of Parent and Merger Subsidiary and Parent as the sole
stockholder of Merger Subsidiary, and no other proceeding on the part of Parent
or Merger Subsidiary is necessary to authorize the execution and delivery of
this Agreement or the consummation by Parent and Merger Subsidiary of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Parent and Merger Subsidiary and, assuming the due
authorization, execution and delivery hereof by the Company, constitutes a valid
and legally binding agreement of each of Parent and Merger Subsidiary
enforceable against each of them in accordance with its terms, except that such
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally and (ii) general equitable principles.
(b)......The execution, delivery and performance of this Agreement by
each of Parent and Merger Subsidiary and the consummation of the Merger and
the transactions contemplated hereby, do not and will not violate, conflict
with or result in a breach of any provision of, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or
acceleration under, or result in the creation of any lien, security
interest or encumbrance upon any of the properties or assets of Parent or
any of its subsidiaries under any of the terms, conditions or provisions of
(i) the respective certificates of incorporation or bylaws of Parent or any
of its subsidiaries, (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of any court
or governmental authority applicable to Parent or any of its subsidiaries
or any of their respective properties or assets, subject, in the case of
consummation, to obtaining (prior to the Effective Time) the Parent
Required Statutory Approvals (as defined in Section 3.02(c)), or (iii) any
note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or agreement of
any kind (each a "Contract" and collectively "Contracts") to which Parent
or any of its subsidiaries is now a party or by which Parent or any of its
subsidiaries or any of their respective properties or assets may be bound
or affected, except, with respect to any item referred to in clause (ii) or
(iii), for any such violation, conflict, breach, default, termination,
acceleration or creation of liens, security interests or encumbrances that
would not reasonably be expected to have a Parent Material Adverse Effect
and would not materially delay the consummation of the Merger.
(c)......Except for (i) applicable filings with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), (ii) filing of Articles of Merger
with the Secretary of State of the State of Wyoming in connection with the
Merger, and (iii) filings with and approvals by any regulatory authority
with jurisdiction over the Company's, Parent's or any Parent affiliate's
real estate operations required under any Federal, state, local or foreign
statute, ordinance, rule, regulation, permit, consent, approval, license,
judgment, order, decree, injunction or other authorization governing or
relating to the current or contemplated activities and operations of the
Company, Parent or any Parent affiliate (the filings and approvals referred
to in clauses (i) through (iii) being collectively referred to as the
"Parent Required Statutory Approvals"), no declaration, filing or
registration with, or notice to, or authorization, consent or approval of,
any governmental or regulatory body or authority is necessary for the
execution and delivery of this Agreement by Parent or Merger Subsidiary, or
the consummation by Parent or Merger Subsidiary of the transactions
contemplated hereby, other than such declarations, filings, registrations,
notices, authorizations, consents or approvals which, if not made or
obtained, as the case may be, would not reasonably be expected to have a
Parent Material Adverse Effect and would not materially delay the
consummation of the Merger.
Section 3.03......Proxy Statement and Other SEC Filings. None of the
information supplied by Parent or its subsidiaries for inclusion in (i) any
proxy statement to be distributed in connection with the Company's meeting of
stockholders to vote upon this Agreement and the transactions contemplated
hereby (the "Proxy Statement"), at the time of the mailing of the Proxy
Statement and any amendments or supplements thereto, or at the time of the
meeting of stockholders of the Company to be held in connection with the
transactions contemplated by this Agreement, or (ii) the Schedule 13E-3 with
respect to the transactions contemplated hereby (the "Transaction Statement") at
the time of the filing thereof with the SEC or at any time the Transaction
Statement is amended or supplemented, will contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
Section 3.04......Brokers and Finders. Except as disclosed in the Parent
Disclosure Schedule, Parent has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of the
Company to pay any investment banking fees, finder's fees or brokerage fees in
connection with the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Subsidiary that,
except as set forth in the disclosure schedule dated as of the date hereof and
signed by an authorized officer of the Company (the "Company Disclosure
Schedule"), it being agreed that disclosure of any item on the Company
Disclosure Schedule shall be deemed disclosure with respect to all Sections of
this Agreement if the relevance of such item is reasonably apparent from the
face of the Company Disclosure Schedule:
Section 4.01......Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Wyoming and has the requisite corporate power and authority to
own, lease and operate its assets and properties and to carry on its business as
it is now being conducted. The Company is qualified to transact business and is
in good standing in each jurisdiction in which the properties owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified and in good
standing would not reasonably be expected to have a Company Material Adverse
Effect. In this Agreement, the term "Company Material Adverse Effect" means an
effect that is materially adverse to (i) the business, financial condition or
ongoing operations of the Company and its subsidiaries, taken as a whole or (ii)
the ability of the Company to consummate any of the transactions contemplated by
this Agreement. True, accurate and complete copies of the Company's Articles of
Incorporation and bylaws, in each case as in effect on the date hereof,
including all amendments thereto, have heretofore been delivered to Parent.
Section 4.02......Capitalization. (a) The authorized capital stock of the
Company consists of 10,000,000 shares of Company Common Stock, par value $0.05
per share. As of September 30, 2004, (i) 9,963,015 shares of Company Common
Stock were issued and outstanding, all of which shares of Company Common Stock
were validly issued and are fully paid, nonassessable and free of preemptive
rights, (ii) no shares of Company Common Stock were held in the treasury of the
Company, and (iii) no shares of Company Common Stock were reserved for issuance
upon exercise of Options issued and outstanding. Since September 30, 2004,
except as permitted by this Agreement or as set forth in the Company Disclosure
Schedule, (i) no shares of capital stock of the Company have been issued and
(ii) no options, warrants, securities convertible into, or commitments with
respect to the issuance of, shares of capital stock of the Company have been
issued, granted or made.
(b)......As of the date hereof, there are no outstanding
subscriptions, options, calls, contracts, commitments, understandings,
restrictions, arrangements, rights or warrants, including any right of
conversion or exchange under any outstanding security, instrument or other
agreement and including any rights plan or other anti-takeover agreement,
obligating the Company or any subsidiary of the Company to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of the
capital stock of the Company or obligating the Company or any subsidiary of
the Company to grant, extend or enter into any such agreement or
commitment. There are no outstanding stock appreciation rights or similar
derivative securities or rights of the Company or any of its subsidiaries.
Except as disclosed in the Company SEC Reports or as otherwise contemplated
by this Agreement, there are no voting trusts, irrevocable proxies or other
agreements or understandings to which the Company or any subsidiary of the
Company is a party or is bound with respect to the voting of any shares of
capital stock of the Company.
Section 4.03......Subsidiaries. Each direct and indirect subsidiary of the
Company is duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization and has the requisite power
and authority to own, lease and operate its assets and properties and to carry
on its business as it is now being conducted and each subsidiary of the Company
is qualified to transact business, and is in good standing, in each jurisdiction
in which the properties owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary; except, in all
cases, where the failure to be so organized, existing, qualified and in good
standing would not, singly or in the aggregate with all other such failures,
reasonably be expected to have a Company Material Adverse Effect. All of the
outstanding shares of capital stock of or other equity interests in each
subsidiary of the Company are validly issued, fully paid, nonassessable and free
of preemptive rights. There are no subscriptions, options, warrants, rights,
calls, contracts or other commitments, understandings, restrictions or
arrangements relating to the issuance or sale with respect to any shares of
capital stock of or other equity interests in any subsidiary of the Company,
including any right of conversion or exchange under any outstanding security,
instrument or agreement. For purposes of this Agreement, the term "subsidiary"
means, with respect to any specified person (the "Owner") any other person of
which more than 50% of the total voting power of shares of capital stock or
other equity interests entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, trustees or other
governing body thereof is at the time owned or controlled, directly or
indirectly, by such Owner or one or more of the other subsidiaries of such
Owner.
Section 4.04......Authority; Non-Contravention; Approvals. (a) The Company
has the requisite corporate power and authority to enter into this Agreement
and, subject to the Company Stockholders' Approval (as defined in Section
6.01(a)) with respect solely to the Merger, to consummate the transactions
contemplated hereby. This Agreement and the Merger have been approved and
adopted by the Board of Directors of the Company, and no other corporate
proceedings on the part of the Company are necessary to authorize the execution
and delivery of this Agreement or, except for the Company Stockholders' Approval
with respect solely to the Merger, the consummation by the Company of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company, and, assuming the due authorization, execution and
delivery hereof by Parent and Merger Subsidiary, constitutes a valid and legally
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii) general
equitable principles.
(b)......The execution, delivery and performance of this Agreement by
the Company and the consummation of the Merger and the transactions
contemplated hereby do not and will not violate, conflict with or result in
a breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, contractually
require any offer to purchase or any prepayment of any debt, or result in
the creation of any lien, security interest or encumbrance upon any of the
properties or assets of the Company or any of its subsidiaries under any of
the terms, conditions or provisions of (i) the respective articles or
certificates of incorporation or bylaws or other governing instruments of
the Company or any of its Material Subsidiaries, (ii) any statute, law,
ordinance, rule, regulation, judgment, decree, order, injunction, writ,
permit or license of any court or governmental authority applicable to the
Company or any of its subsidiaries or any of their respective properties or
assets, subject, in the case of consummation, to obtaining (prior to the
Effective Time) the Company Required Statutory Approvals (as defined in
Section 4.04(c)) and the Company Stockholders' Approval, or (iii) any
Contract to which the Company or any of its subsidiaries is now a party or
by which the Company or any of its subsidiaries or any of their respective
properties or assets may be bound or affected, subject, in the case of
consummation, to obtaining (prior to the Effective Time) consents required
from commercial lenders, lessors or other third parties as specified in
Section 4.04(b) of the Company Disclosure Schedule, except, with respect to
any item referred to in clause (ii) or (iii), for any such violation,
conflict, breach, default, termination, acceleration or creation of liens,
security interests or encumbrances that would not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect
and would not materially delay the consummation of the Merger.
(c)......Except for (i) the filing of the Proxy Statement and the
Transaction Statement with the SEC pursuant to the Exchange Act, (ii) the
filing of Articles of Merger with the Secretary of State of the State of
Wyoming in connection with the Merger, and (iii) any filings with or
approvals from authorities required solely by virtue of the jurisdictions
in which Parent or its subsidiaries conduct any business or own any assets
(the filings and approvals referred to in clauses (i) through (iii) and
those disclosed in Section 4.04(c) of the Company Disclosure Schedule being
collectively referred to as the "Company Required Statutory Approvals"), no
declaration, filing or registration with, or notice to, or authorization,
consent or approval of, any governmental or regulatory body or authority is
necessary for the execution and delivery of this Agreement by the Company
or the consummation by the Company of the transactions contemplated hereby,
other than such declarations, filings, registrations, notices,
authorizations, consents or approvals which, if not made or obtained, as
the case may be, would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect and would not
materially delay the consummation of the Merger.
Section 4.05......Reports and Financial Statements. Since January 1, 2001,
the Company has filed with the SEC all forms, statements, reports and documents
(including all exhibits, post-effective amendments and supplements thereto) (the
"Company SEC Reports") required to be filed by it under each of the Securities
Act, the Exchange Act and the respective rules and regulations thereunder, all
of which, as amended if applicable, complied when filed in all material respects
with all applicable requirements of the applicable act and the rules and
regulations thereunder. As of their respective dates, the Company SEC Reports
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The audited consolidated financial statements of the Company
included in its Annual Report on Form 10-KSB for the year ended December 31,
2003 (the "Company Financial Statements") have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
as may be indicated therein or in the notes thereto) and present fairly in all
material respects the financial position of the Company and its subsidiaries as
of the dates thereof and the results of their operations and changes in
financial position for the periods then ended.
Section 4.06......Absence of Undisclosed Liabilities. Except as disclosed
in the Company SEC Reports or the Company Disclosure Schedule, neither the
Company nor any of its subsidiaries had at December 31, 2003, or has incurred
since that date and as of the date hereof, any liabilities or obligations
(whether absolute, accrued, contingent or otherwise) of any nature, except (a)
liabilities, obligations or contingencies (i) which are accrued or reserved
against in the Company Financial Statements or reflected in the notes thereto or
(ii) which were incurred after December 31, 2003 in the ordinary course of
business and consistent with past practice, (b) liabilities, obligations or
contingencies which (i) would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect, or (ii) have been
discharged or paid in full prior to the date hereof in the ordinary course of
business, and (c) liabilities, obligations and contingencies which are of a
nature not required to be reflected in the consolidated financial statements of
the Company and its subsidiaries prepared in accordance with generally accepted
accounting principles consistently applied.
Section 4.07......Absence of Certain Changes or Events. Since the date of
the most recent Company SEC Report filed prior to the date of this Agreement
that contains consolidated financial statements of the Company, there has not
been any Company Material Adverse Effect.
Section 4.08......Litigation. Except as referred to in the Company SEC
Reports, there are no claims, suits, actions or proceedings pending or, to the
knowledge of the Company, threatened against, relating to or affecting the
Company or any of its subsidiaries, before any court, governmental department,
commission, agency, instrumentality or authority, or any arbitrator that would
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect. Except as referred to in the Company SEC Reports,
neither the Company nor any of its subsidiaries is subject to any judgment,
decree, injunction, rule or order of any court, governmental department,
commission, agency, instrumentality or authority, or any arbitrator which
prohibits the consummation of the transactions contemplated hereby or would
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect.
Section 4.09......Proxy Statement and Other SEC Filings. None of the
information supplied by the Company or any of its subsidiaries for inclusion in
(i) the Proxy Statement, at the time of the mailing of the Proxy Statement and
any amendments or supplements thereto, or at the time of the meeting of
stockholders of the Company to be held in connection with the transactions
contemplated by this Agreement, or (ii) the Transaction Statement at the time of
the filing thereof with the SEC or at any time the Transaction Statement is
amended or supplemented, will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading. The Proxy Statement and the Transaction
Statement will comply as to form in all material respects with all applicable
laws, including the provisions of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation is made by the Company
with respect to information supplied by Parent, Merger Subsidiary or any
stockholder of Parent for inclusion therein.
Section 4.10......No Violation of Law. Except as disclosed in the Company
SEC Reports filed prior to the date of this Agreement, neither the Company nor
any of its subsidiaries is in violation of or has been given written (or, to the
knowledge of the Company's executive officers, oral) notice of any violation of,
any law, statute, order, rule, regulation, ordinance or judgment (including,
without limitation, any applicable environmental law, ordinance or regulation)
of any governmental or regulatory body or authority, except for violations which
would not reasonably be expected, individually or in the aggregate, to have a
Company Material Adverse Effect. Except as disclosed in the Company SEC Reports
filed prior to the date of this Agreement, to the knowledge of the Company, no
investigation or review by any governmental or regulatory body or authority is
pending or threatened, nor has any governmental or regulatory body or authority
indicated an intention to conduct the same, other than, in each case, those the
outcome of which would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect. The Company and its
subsidiaries are not in violation of the terms of any permit, license,
franchise, variance, exemption, order or other governmental authorization,
consent or approval necessary to conduct their businesses as presently conducted
(collectively, the "Company Permits"), except for delays in filing reports or
violations which would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect.
Section 4.11......Compliance with Agreements. Except as disclosed in the
Company SEC Reports, neither the Company nor any of its subsidiaries is in
breach or violation of or in default in the performance or observance of any
term or provision of, and no event has occurred which, with lapse of time or
action by a third party, would result in a default under, any Contract to which
the Company or any of its subsidiaries is a party or by which any of them is
bound or to which any of their property is subject, other than breaches,
violations and defaults which would not reasonably be expected, individually or
in the aggregate, to have a Company Material Adverse Effect.
Section 4.12......Taxes. (a) The Company and its subsidiaries have (i) duly
filed with the appropriate governmental authorities all Tax Returns required to
be filed by them, and such Tax Returns are true, correct and complete, and (ii)
duly paid in full or reserved in accordance with generally accepted accounting
principles on the Company Financial Statements all Taxes required to be paid,
except in each such case as would not, individually or in the aggregate, have a
Company Material Adverse Effect. Except as would not, individually or in the
aggregate, have a Company Material Adverse Effect, there are no liens for Taxes
upon any property or asset of the Company or any subsidiary thereof, other than
liens for Taxes not yet due or Taxes contested in good faith and reserved
against in accordance with generally accepted accounting principles. There are
no unresolved issues of law or fact arising out of a notice of deficiency,
proposed deficiency or assessment from the Internal Revenue Service (the "IRS")
or any other governmental taxing authority with respect to Taxes of the Company
or any of its subsidiaries which would individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. Except as
would not, individually or in the aggregate, have a Company Material Adverse
Effect, neither the Company nor any of its subsidiaries has agreed to an
extension of time with respect to a Tax deficiency, other than extensions which
are no longer in effect. Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect, neither the Company nor any of its
subsidiaries is a party to any agreement providing for the allocation or sharing
of Taxes with any entity that is not, directly or indirectly, a wholly-owned
subsidiary of the Company, other than agreements the consequences of which are
fully and adequately reserved for in the Company Financial Statements.
(b)......Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, the Company and each of its subsidiaries
has withheld or collected and has paid over to the appropriate governmental
entities (or is properly holding for such payment) all material Taxes
required to be collected or withheld.
(c)......For purposes of this Agreement, "Tax" (including, with
correlative meaning, the term "Taxes") means all federal, state, local and
foreign income, profits, franchise, gross receipts, environmental, customs
duty, capital stock, communications services, 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 includes any liability for
Taxes of another person by contract, as a transferee or successor, under
Treas. Reg. 1.1502-6 or analogous state, local or foreign law provision or
otherwise, and "Tax Return" means any return, report or similar statement
(including attached schedules) required to be filed with respect to any
Tax, including without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
Section 4.13......Employee Benefit Plans; ERISA. The Company SEC Reports or
the Company Disclosure Letter set forth each employee or director benefit plan,
arrangement or agreement, including without limitation any employee welfare
benefit plan within the meaning of Section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), any employee pension benefit
plan within the meaning of Section 3(2) of ERISA (whether or not such plan is
subject to ERISA) and any bonus, incentive, deferred compensation, vacation,
stock purchase, stock option, severance, employment, change of control or fringe
benefit plan, program or agreement (excluding any multi-employer plan as defined
in Section 3(37) of ERISA (a "Multi-employer Plan") and any multiple employer
plan within the meaning of Section 413(c) of the Code) that is sponsored,
maintained or contributed to by the Company or any of its subsidiaries or by any
trade or business, whether or not incorporated, all of which together with the
Company would be deemed a "single employer" within the meaning of Section 4001
of ERISA (the "Company Plans").
Section 4.14......Labor Controversies. Except as disclosed in the Company
SEC Reports, (a) there are no significant controversies pending or, to the
knowledge of the Company, threatened between the Company or any of its
subsidiaries and any representatives (including unions) of any of their
employees, and (b) to the knowledge of the Company, there are no organizational
efforts presently being made involving any of the presently unorganized
employees of the Company or any of its subsidiaries.
Section 4.15......Environmental Matters. (a) Except as disclosed in the
Company SEC Reports or the Company Disclosure Schedule and for other matters
that would not, singly or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect, (i) the Company and its subsidiaries have
conducted their respective businesses in compliance with all applicable
Environmental Laws, including, without limitation, having all permits, licenses
and other approvals and authorizations necessary for the operation of their
respective businesses as presently conducted, (ii) none of the properties owned
by the Company or any of its subsidiaries contain any Hazardous Substance in
amounts exceeding the levels permitted by applicable Environmental Laws, (iii)
since January 1, 2000, neither the Company nor any of its subsidiaries has
received any notices, demand letters or requests for information from any
Federal, state, local or foreign governmental entity indicating that the Company
or any of its subsidiaries may be in violation of, or liable under, any
Environmental Law in connection with the ownership or operation of their
businesses, (iv) there are no civil, criminal or administrative actions, suits,
demands, claims, hearings, investigations or proceedings pending or threatened,
against the Company or any of its subsidiaries relating to any violation, or
alleged violation, of any Environmental Law, (v) no Hazardous Substance has been
disposed of, released or transported in violation of any applicable
Environmental Law from any properties owned by the Company or any of its
subsidiaries as a result of any activity of the Company or any of its
subsidiaries during the time such properties were owned, leased or operated by
the Company or any of its subsidiaries, and (vi) neither the Company, its
subsidiaries nor any of their respective properties are subject to any
liabilities or expenditures (fixed or contingent) relating to any suit,
settlement, court order, administrative order, regulatory requirement, judgment
or claim asserted or arising under any Environmental Law.
(b)......As used herein, "Environmental Law" means any federal, state,
local or foreign law, statute, ordinance, rule, regulation, code, license,
permit, authorization, approval, consent, legal doctrine, order, judgment,
decree, injunction, requirement or agreement with any governmental entity
relating to (x) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, surface land, subsurface land,
plant and animal life or any other natural resource) or to human health or
safety, or (y) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
release or disposal of Hazardous Substances, in each case as amended and as
in effect at the Effective Time. The term "Environmental Law" includes,
without limitation, (i) the Federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the Federal Water Pollution Control Act of 1972, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976 (including the Hazardous and Solid
Waste Amendments thereto), the Federal Solid Waste Disposal Act and the
Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide
and Rodenticide Act, and the Federal Occupational Safety and Health Act of
1970, each as amended and as in effect at the Effective Time, and (ii) any
common law or equitable doctrine (including, without limitation, injunctive
relief and tort doctrines such as negligence, nuisance, trespass and strict
liability) that may impose liability or obligations for injuries or damages
arising from or threatened as a result of, the presence of, effects of or
exposure to any Hazardous Substance.
(c)......As used herein, "Hazardous Substance" means any substance
presently or hereafter listed, defined, designated or classified as
hazardous, toxic, radioactive, or dangerous, or otherwise regulated, under
any Environmental Law. Hazardous Substance includes any substance to which
exposure is regulated by any government authority or any Environmental Law
including, without limitation, any toxic waste, pollutant, contaminant,
hazardous substance, toxic substance, hazardous waste, special waste,
industrial substance or petroleum or any derivative or by-product thereof,
radon, radioactive material, asbestos, or asbestos-containing material,
urea formaldehyde foam insulation, lead or polychlorinated biphenyls.
Section 4.16......Title to Assets. The Company and each of its subsidiaries
has good and valid title in fee simple to all its real property and good title
to all its leasehold interests and other properties, as reflected in the most
recent balance sheet included in the Company Financial Statements, except for
properties and assets that have been disposed of in the ordinary course of
business since the date of such balance sheet, free and clear of all mortgages,
liens, pledges, charges or encumbrances of any nature whatsoever, except (i) the
lien for current taxes, payments of which are not yet delinquent, (ii) such
imperfections in title and easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present use of the property subject thereto or
affected thereby, or otherwise materially impair the Company's business
operations (in the manner presently carried on by the Company), or (iii) as
disclosed in the Company SEC Reports, and except for such matters which would
not reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect. All leases under which the Company or any of its
subsidiaries leases any real or personal property are in good standing, valid
and effective in accordance with their respective terms, and there is not, under
any of such leases, any existing default or event which with notice or lapse of
time or both would become a default other than failures to be in good standing,
valid and effective and defaults under such leases which would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect.
Section 4.17......Company Stockholders' Approval; Neutralized Voting. The
affirmative vote of stockholders of the Company required for approval and
adoption of this Agreement and the Merger is two-thirds of the outstanding
shares of Company Common Stock entitled to vote thereon; provided however, that
shares of Company Common Stock owned beneficially by Manuel Lopez and James Peck
shall be voted in accordance with the majority of all other votes cast in person
or by proxy at the Stockholder's Meeting.
Section 4.18......Brokers and Finders. The Company has not entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of the Company to pay any investment banking fees, finder's
fees or brokerage fees in connection with the transactions contemplated hereby,
other than fees payable to Ehrhardt Keefe Steiner & Hottman PC (the "Special
Committee Financial Advisor"), or as disclosed in Section 4.18 of the Company
Disclosure Schedule. An accurate copy of any fee agreement with the Company
Financial Advisor has been made available to Parent.
ARTICLE V
COVENANTS
Section 5.01......Conduct of Business by the Company Pending the Merger.
Except as otherwise contemplated by this Agreement or disclosed in Section 5.01
of the Company Disclosure Schedule, after the date hereof and prior to the
Effective Time or earlier termination of this Agreement, unless Parent shall
otherwise agree in writing, the Company shall, and shall cause its subsidiaries
to:
(a) conduct their respective businesses in the ordinary and usual
course of business and consistent with past practice;
(b) not (i) amend or propose to amend their respective articles of
incorporation or bylaws or equivalent constitutional documents, (ii) split,
combine or reclassify their outstanding capital stock or (iii) declare, set
aside or pay any dividend or distribution payable in cash, stock, property
or otherwise, except for the payment of dividends or distributions to the
Company or a wholly-owned subsidiary of the Company by a direct or indirect
wholly-owned subsidiary of the Company;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell,
pledge or dispose of, any additional shares of, or any options, warrants or
rights of any kind to acquire any shares of, their capital stock of any
class or any debt or equity securities convertible into or exchangeable for
any such capital stock, except that the Company may issue shares upon the
exercise of Options outstanding on the date hereof;
(d) not (i) incur or become contingently liable with respect to any
indebtedness for borrowed money other than (A) borrowings in the ordinary
course of business or borrowings under the existing credit facilities of
the Company or of any of its subsidiaries up to the existing borrowing
limit on the date hereof, and (B) borrowings to refinance existing
indebtedness on terms which are reasonably acceptable to Parent, (ii)
redeem, purchase, acquire or offer to purchase or acquire any shares of its
capital stock or any options, warrants or rights to acquire any of its
capital stock or any security convertible into or exchangeable for its
capital stock other than in connection with the exercise of outstanding
Options pursuant to the terms of the Company Option Plans, (iii) except as
disclosed in Section 5.01(d)(i) of the Company Disclosure Schedule, make
any acquisition of any assets or businesses other than expenditures for
current assets in the ordinary course of business and expenditures for
fixed or capital assets in the ordinary course of business, (iv) sell,
pledge, dispose of or encumber any assets or businesses other than (A)
sales of businesses or assets disclosed in Section 5.01 of the Company
Disclosure Schedule, (B) pledges or encumbrances pursuant to Existing
Credit Facilities or other permitted borrowings, (C) sales of real estate,
assets or facilities for cash consideration (including any debt assumed by
the buyer of such real estate, assets or facilities) of less than $100,000
in each such case and $500,000 in the aggregate, (D) sales or dispositions
of businesses or assets as may be required by applicable law, and (E) sales
or dispositions of assets in the ordinary course or (vi) enter into any
binding contract, agreement, commitment or arrangement with respect to any
of the foregoing;
(e) use all reasonable efforts to preserve intact their respective
business organizations and goodwill, keep available the services of their
respective present officers and key employees, and preserve the goodwill
and business relationships with customers and others having business
relationships with them other than as expressly permitted by the terms of
this Agreement;
(f) not enter into, amend, modify or renew any employment, consulting,
severance or similar agreement with, or grant any salary, wage or other
increase in compensation or increase in any employee benefit to, any
director or officer of the Company or of any of its subsidiaries, except
(i) for changes that are required by applicable law, (ii) to satisfy
obligations existing as of the date hereof, or (iii) in the ordinary course
of business consistent with past practice;
(g) not enter into, establish, adopt, amend or modify any pension,
retirement, stock purchase, savings, profit sharing, deferred compensation,
consulting, bonus, group insurance or other employee benefit, incentive or
welfare plan, agreement, program or arrangement, in respect of any
director, officer or employee of the Company or of any of its subsidiaries,
except, in each such case, as may be required by applicable law or by the
terms of contractual obligations existing as of the date hereof, including
any collective bargaining agreement;
(h) not make expenditures, including, but not limited to, capital
expenditures, or enter into any binding commitment or contract to make
expenditures, except (i) expenditures which the Company or its subsidiaries
are currently contractually committed to make, (ii) other expenditures not
exceeding $250,000 individually or $500,000 in the aggregate, (iii) for
emergency repairs and other expenditures necessary in light of
circumstances not anticipated as of the date of this Agreement which are
necessary to avoid significant disruption to the Company's business or
operations consistent with past practice (and, if reasonably practicable,
after consultation with Parent), or (iv) for repairs and maintenance in the
ordinary course of business consistent with past practice. With respect to
the subject matter of this paragraph (h), if the Company requests approval
of Parent to exceed the limits set forth herein, Parent shall respond to
such request and grant or withhold approval promptly following receipt of
such request;
(i) not make, change or revoke any material Tax election unless
required by law or make any agreement or settlement with any taxing
authority regarding any material amount of Taxes or which would reasonably
be expected to materially increase the obligations of the Company or the
Surviving Corporation to pay Taxes in the future; and
(j) not settle or compromise any litigation to which the Company or
any Company subsidiary is a party or with respect to which the Company or
any Company subsidiary may have or incur liability, at an aggregate cost to
the Company in excess of $250,000 with respect to any action or claim or in
excess of $500,000 with respect to all applicable actions and claims in the
aggregate.
Section 5.02......Control of the Company's Operations. Nothing contained in
this Agreement shall give to Parent, directly or indirectly, rights to control
or direct the Company's operations prior to the Effective Time. Prior to the
Effective Time, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of its
operations.
Section 5.03......Acquisition Transactions. (a) After the date hereof and
prior to the Effective Time or earlier termination of this Agreement, except in
accordance with Section 5.03(b), the Company shall not, and shall not permit any
of its subsidiaries to, initiate, solicit, negotiate, encourage or provide
confidential information to facilitate, and the Company shall use all reasonable
efforts to cause any officer, director or employee of the Company, or any
attorney, accountant, investment banker, financial advisor or other agent
retained by it or any of its subsidiaries, not to initiate, solicit, negotiate,
encourage or provide non-public or confidential information to facilitate, any
proposal or offer to acquire all or any substantial part of the business,
properties or capital stock of the Company, whether by merger, purchase of
assets, tender offer or otherwise, whether for cash, securities or any other
consideration or combination thereof (any such transactions being referred to
herein as an "Acquisition Transaction").
(b) Notwithstanding the provisions of paragraph (a) above, (i) the
Company may, prior to receipt of the Company Stockholders' Approval, in
response to an unsolicited bona fide written offer or proposal with respect
to a potential or proposed Acquisition Transaction ("Acquisition Proposal")
from a corporation, partnership, person or other entity or group (a
"Potential Acquirer") which the Company's Board of Directors determines, in
good faith and after consultation with its independent financial advisor,
would reasonably be expected to result (if consummated pursuant to its
terms) in an Acquisition Transaction more favorable to the Company's
stockholders than the Merger (a "Qualifying Proposal"), furnish (subject to
the execution of a confidentiality agreement) confidential or non-public
information to, and negotiate with, such Potential Acquirer, may resolve to
accept, or recommend, and, upon termination of this Agreement in accordance
with Section 7.01(v) and after payment to Parent of the fee pursuant to
Section 5.09(b), enter into agreements relating to, a Qualifying Proposal
which the Company's Board of Directors, in good faith, has determined is
reasonably likely to be consummated (such Qualifying Proposal being a
"Superior Proposal") and (ii) the Company's Board of Directors may take and
disclose to the Company's stockholders a position contemplated by Rule
14e-2 under the Exchange Act or otherwise make disclosure required by the
federal securities laws. It is understood and agreed that negotiations and
other activities conducted in accordance with this paragraph (b) shall not
constitute a violation of paragraph (a) of this Section 5.03.
(c) The Company shall promptly notify Parent after receipt of any
Acquisition Proposal, indication of interest or request for non-public
information relating to the Company or its subsidiaries in connection with
an Acquisition Proposal or for access to the properties, books or records
of the Company or any subsidiary by any person or entity that informs the
Board of Directors of the Company or such subsidiary that it is considering
making, or has made, an Acquisition Proposal. Such notice to Parent shall
be given orally and in writing and shall indicate in reasonable detail the
identity of the offeror and the material terms and conditions of such
proposal, inquiry or contact.
Section 5.04......Access to Information. The Company and its subsidiaries
shall afford to Parent and Merger Subsidiary and their respective accountants,
counsel, financial advisors, sources of financing and other representatives (the
"Parent Representatives") reasonable access during normal business hours with
reasonable notice throughout the period prior to the Effective Time to all of
their respective properties, books, contracts, commitments and records
(including, but not limited to, Tax Returns) and, during such period, shall
furnish promptly (i) a copy of each report, schedule and other document filed or
received by any of them pursuant to the requirements of federal or state
securities laws or filed by any of them with the SEC in connection with the
transactions contemplated by this Agreement, and (ii) such other information
concerning its businesses, properties and personnel as Parent or Merger
Subsidiary shall reasonably request and will obtain the reasonable cooperation
of the Company's officers, employees, counsel, accountants, consultants and
financial advisors in connection with the investigation of the Company by Parent
and the Parent Representatives. All nonpublic information provided to, or
obtained by, Parent or any Parent Representative in connection with the
transactions contemplated hereby shall be confidential information and shall not
be used by Parent for any purpose, provided that Parent, Merger Subsidiary and
the Company may disclose such information as may be necessary in connection with
seeking the Parent Required Statutory Approvals, the Company Required Statutory
Approvals and the Company Stockholders' Approval. Notwithstanding the foregoing,
the Company shall not be required to provide any information which it reasonably
believes it may not provide to Parent by reason of applicable law, rules or
regulations, which constitutes information protected by attorney/client
privilege, or which the Company or any subsidiary is required to keep
confidential by reason of contract, agreement or understanding with third
parties entered into prior to the date hereof.
Section 5.05......Notices of Certain Events. (a) The Company shall as
promptly as reasonably practicable after executive officers of the Company
acquire knowledge thereof, notify Parent of: (i) any notice or other
communication from any person alleging that the consent of such person (or
another person) is or may be required in connection with the transactions
contemplated by this Agreement which consent relates to a material Contract to
which the Company or any of its subsidiaries is a party or which if not obtained
would materially delay consummation of the Merger; (ii) any notice or other
communication from any governmental or regulatory agency or authority in
connection with the transactions contemplated by this Agreement; and (iii) any
actions, suits, claims, investigations or proceedings commenced or, to the best
of its knowledge threatened against, relating to or involving or otherwise
affecting the Company or any of its subsidiaries that, if pending on the date of
this Agreement, would have been required to have been disclosed pursuant to
Section 4.08 or 4.10 or which relate to the consummation of the transactions
contemplated by this Agreement.
(b)......Each of Parent and Merger Subsidiary shall as promptly as
reasonably practicable after executive officers of the Parent acquire
knowledge thereof, notify the Company of: (i) any notice or other
communication from any person alleging that the consent of such person (or
other person) is or may be required in connection with the transactions
contemplated by this Agreement which consent relates to a material Contract
to which Parent or any of its subsidiaries is a party or which if not
obtained would materially delay the Merger, (ii) any notice or other
communication from any governmental or regulatory agency or authority in
connection with the transactions contemplated by this Agreement, and (iii)
any actions, suits, claims, investigations or proceedings commenced or, to
the best of its knowledge threatened, against Parent or Merger Subsidiary,
which relate to consummation of the transactions contemplated by this
Agreement.
(c)......Each of the Company, Parent and Merger Subsidiary agrees to
give prompt notice to each other of, and to use commercially reasonable
efforts to remedy, (i) the occurrence or failure to occur of any event
which occurrence or failure would be likely to cause any of its
representations or warranties in this Agreement to be untrue or inaccurate
at the Effective Time unless such failure or occurrence would not have a
Company Material Adverse Effect or a Parent Material Adverse Effect, as the
case may be, and (ii) any failure on its part to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder unless such failure or occurrence would not have a Company
Material Adverse Effect or a Parent Material Adverse Effect, as the case
may be. The delivery of any notice pursuant to this Section 5.05(c) shall
not limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
Section 5.06......Meeting of the Company's Stockholders. The Company shall
as promptly as practicable after the date of this Agreement take all action
necessary in accordance with the WBCA and its Articles of Incorporation and
bylaws to convene a meeting of the Company's stockholders (the "Company
Stockholders' Meeting") to act on this Agreement. The Board of Directors of the
Company shall recommend that the Company's stockholders vote to approve the
Merger and adopt this Agreement; provided, however, that the Company may change
its recommendation in any manner if its recommendation of the Merger would be
inconsistent with the board of directors' fiduciary duties under applicable law,
as determined by the board of directors in good faith after consultation with
its financial and legal advisors.
Section 5.07......Proxy Statement and Other SEC Filings. As promptly as
practicable after execution of this Agreement, the parties shall cooperate and
promptly prepare and the Company shall file the Proxy Statement and the
Transaction Statement with the SEC under the Exchange Act, and the parties shall
use all reasonable efforts to have the Proxy Statement and the Transaction
Statement cleared by the SEC. The Company shall notify Parent of the receipt of
any comments of the SEC with respect to the Proxy Statement or Transaction
Statement and of any requests by the SEC for any amendment or supplement thereto
or for additional information, and shall provide to Parent promptly copies of
all correspondence between the Company or any representative of the Company and
the SEC. The Company shall give Parent and its counsel the opportunity to review
the Proxy Statement and Transaction Statement prior to their being filed with
the SEC and shall give Parent and its counsel the opportunity to review all
amendments and supplements to the Proxy Statement and Transaction Statement and
all responses to requests for additional information and replies to comments
prior to their being filed with, or sent to, the SEC. Each of the Company,
Parent and Merger Subsidiary agrees to use its reasonable best efforts, after
consultation with the other parties hereto, to respond promptly to all such
comments of and requests by the SEC. As promptly as practicable after the Proxy
Statement and Transaction Statement have been cleared by the SEC, the Company
shall mail the Proxy Statement to the stockholders of the Company. Prior to the
date of approval of the Merger by the Company's stockholders, each of the
Company, Parent and Merger Subsidiary shall correct promptly any information
provided by it to be used specifically in the Proxy Statement or the Transaction
Statement that shall have become false or misleading in any material respect and
the Company shall take all steps necessary to file with the SEC and cleared by
the SEC any amendment or supplement to the Proxy Statement or the Transaction
Statement so as to correct the same and to cause the Proxy Statement as so
corrected to be disseminated to the stockholders of the Company, in each case to
the extent required by applicable law.
Section 5.08......Public Announcements. Parent and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement and the transactions contemplated hereby and,
except as may be required by applicable law, will not issue any such press
release or make any such public statement prior to such consultation.
Section 5.09......Expenses and Fees. (a) All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses; provided that Parent will loan
approximately $100,000 to the Company on terms acceptable to the Company to be
used by the Company solely to pay its expenses related to the Merger.
(b)......The Company agrees to pay to Parent a fee equal to $50,000
if:
(i) the Company terminates this Agreement pursuant to clause (e)
of Section 7.01;
(ii) Parent terminates this Agreement pursuant to clause (f) of
Section 7.01, which fee shall be payable within two business days of
such termination;
(iii) this Agreement is terminated for any reason at a time at
which Parent was not in material breach of its representations,
warranties, covenants and agreements contained in this Agreement and
was entitled to terminate this Agreement pursuant to clause (g) of
Section 7.01, and (A) prior to the time of the Company Stockholders'
Meeting a proposal by a third party relating to an Acquisition
Transaction had been publicly proposed or publicly announced, and (B)
on or prior to the 12 month anniversary of the termination of this
Agreement the Company or any of its subsidiaries or affiliates enters
into an agreement or letter of intent (or resolves or announces an
intention to do) with respect to an Acquisition Transaction involving
a person, entity or group if such person, entity, group (or any member
of such group, or any affiliate of any of the foregoing) made a
proposal with respect to an Acquisition Transaction on or after the
date hereof and prior to the Company Stockholders' Meeting and such
Acquisition Transaction is consummated.
(c)......Parent agrees to forgive the principal amount and accrued
interest on any loans made by Parent to the Company under Section 5.09(a)
above if Parent fails to consummate the transactions contemplated by this
Agreement on or before 12:00 noon, Mountain Time, on the Outside Date
assuming the satisfaction of the conditions to Parent's obligation to
consummate the transactions contemplated by this Agreement on or before the
Outside Date (not including conditions whose failure to be satisfied is the
result of a breach of a representation, warranty or covenant of Parent or
Merger Subsidiary hereunder) or if Parent terminates this Agreement
pursuant to Section 7.01(h) below.
Section 5.10......Agreement to Cooperate. Subject to the terms and
conditions of this Agreement, including Section 5.03, each of the parties hereto
shall use all reasonable best efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including using its reasonable best
efforts to obtain all necessary or appropriate waivers, consents or approvals of
third parties required in order to preserve material contractual relationships
of Parent and the Company and their respective subsidiaries, all necessary or
appropriate waivers, consents and approvals to effect all necessary
registrations, filings and submissions and to lift any injunction or other legal
bar to the Merger (and, in that case, to proceed with the Merger as
expeditiously as possible). In addition, subject to the terms and conditions
herein provided and subject to the fiduciary duties of the respective boards of
directors of the Company and Parent, none of the parties hereto shall knowingly
take or cause to be taken any action (including, but not limited to, in the case
of Parent, (x) the incurrence of material debt financing, other than the
financing in connection with the Merger and related transactions and other than
debt financing incurred in the ordinary course of business, and (y) the
acquisition of businesses or assets) which would reasonably be expected to delay
materially or prevent consummation of the Merger.
Section 5.11......Directors' and Officers' Indemnification. (a) The
indemnification provisions of the Articles of Incorporation and bylaws of the
Company as in effect at the Effective Time shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who at
the Effective Time were directors, officers, employees or agents of the Company.
(b)......Without limiting Section 5.11(a), after the Effective Time, the
Surviving Corporation shall, and Parent shall cause the Surviving Corporation
to, to the fullest extent permitted under applicable law, indemnify and hold
harmless, each present and former director, officer, employee and agent of the
Company or any of its subsidiaries (each, together with such person's heirs,
executors or administrators, an "Indemnified Party" and collectively, the
"Indemnified Parties") against any costs or expenses (including attorneys'
fees), judgments, fines, losses, claims, damages, liabilities and amounts paid
in settlement in connection with any actual or threatened claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative (collectively, "Costs and Expenses"), arising out of, relating to
or in connection with (i) any action or omission occurring or alleged to occur
prior to the Effective Time (including, without limitation, acts or omissions in
connection with such persons serving as an officer, director, special committee
member, or other fiduciary in any entity if such service was at the request or
for the benefit of the Company) or (ii) the Merger and the other transactions
contemplated by this Agreement or arising out of or pertaining to the
transactions contemplated by this Agreement or the events and developments
between Parent and the Company leading up to this Agreement. Any Indemnified
Party hereunder will (1) give prompt notice to the Surviving Corporation of any
claim which arises from or after the Effective Time with respect to which it
seeks indemnification and (2) permit the Surviving Corporation to assume the
defense of such claim with counsel reasonably satisfactory to a majority of the
Indemnified Parties. In connection with the selection of counsel to represent
the Indemnified Parties in connection with clause (2) above, the Surviving
Corporation shall propose counsel to represent the Indemnified Parties. The
applicable Indemnified Parties shall have the right to approve such counsel, but
such approval shall not be unreasonably withheld. If the proposed counsel is not
approved, the Surviving Corporation shall continue to propose counsel until
counsel is approved by the applicable Indemnified Parties. Any Indemnified Party
shall have the right to employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such person unless: (x) the Surviving Corporation has agreed, in
writing, to pay such fees or expenses; (y) the Surviving Corporation shall have
failed to assume the defense of such claim after the receipt of notice from the
Indemnified Party as required above and failed to employ counsel reasonably
satisfactory to a majority of the Indemnified Parties or (z) based upon advice
of counsel to such Indemnified Party and concurrence therewith by counsel for
the group of Indemnified Parties in such matter, there shall be one or more
defenses available to such Indemnified Party that are not available to the
Surviving Corporation or there shall exist conflicts of interest between such
Indemnified Party and the Surviving Corporation or the other Indemnified Parties
(in which case, if the Indemnified Party notifies the Surviving Corporation in
writing that such Indemnified Party elects to employ separate counsel at the
expense of the Surviving Corporation, the Surviving Corporation shall not have
the right to assume the defense of such claim on behalf of such Indemnified
Party), in each of which events the reasonable fees and expenses of such counsel
(which counsel shall be reasonably acceptable to the Surviving Corporation)
shall be at the expense of the Surviving Corporation.
(c)......If the Surviving Corporation or Parent or any of their successors
or assigns (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provision shall be made so
that the successors and assigns of the Surviving Corporation or Parent shall
assume the obligations of the Surviving Corporation or the Parent, as the case
may be, set forth in this Section 5.11.
(d)......The indemnification rights of the Indemnified Parties granted
under (i) this Agreement, (ii) the Articles and Bylaws of the Surviving
Corporation, as amended, and (iii) the WBCA, are the only indemnification rights
available to the Indemnified Parties and supersede any other rights to
indemnification under any other agreement. The provisions of this Section 5.11
shall survive the consummation of the Merger and expressly are intended to
benefit and be binding upon each of the Indemnified Parties.
(e)......Parent hereby fully and unconditionally guarantees the performance
of the Surviving Corporation's obligations under Sections 5.11(a)-(c).
ARTICLE VI
CONDITIONS TO THE MERGER
Section 6.01......Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following conditions:
(a) this Agreement and the Merger shall have been adopted by the
requisite vote of the stockholders of the Company in accordance with WBCA
and this Agreement (the "Company Stockholders' Approval"); and
(b) none of the parties hereto shall be subject to any order or
injunction of any governmental authority of competent jurisdiction that
prohibits the consummation of the Merger. In the event any such order or
injunction shall have been issued, each party agrees to use its reasonable
best efforts to have any such order overturned or injunction lifted.
Section 6.02......Conditions to Obligation of the Company to Effect the
Merger. Unless waived by the Company, the obligation of the Company to effect
the Merger shall be subject to the fulfillment at or prior to the Effective Time
of the following additional conditions:
(a) Parent and Merger Subsidiary shall have performed in all material
respects their agreements contained in this Agreement required to be
performed on or prior to the Effective Time and the representations and
warranties of Parent and Merger Subsidiary contained in this Agreement
shall be true and correct on and as of the Effective Time as if made at and
as of such date (except to the extent that such representations and
warranties speak as of an earlier date), except for such failures to
perform or to be true and correct that would not reasonably be expected to
have a Parent Material Adverse Effect, and the Company shall have received
a certificate of the chief executive officer or the chief financial officer
of Parent to that effect; and
(b) all Parent Statutory Approvals and Company Statutory Approvals
required to be obtained in order to permit consummation of the Merger under
applicable law shall have been obtained, except for any such Parent
Statutory Approvals or Company Statutory Approvals whose unavailability
would not, singly or in the aggregate, reasonably be expected to (i) have a
Company Material Adverse Effect after giving effect to the Merger, or (ii)
result in the Company or its subsidiaries failing to meet the standards
relating to the conduct of Parent's or the Company's business which (after
taking into account the anticipated impact of such failure to so meet such
standards on other authorities) would reasonably be expected to have a
Company Material Adverse Effect (after giving effect to the Merger).
Section 6.03......Conditions to Obligations of Parent and Subsidiary to
Effect the Merger. Unless waived by Parent and Merger Subsidiary, the
obligations of Parent and Merger Subsidiary to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the additional
following conditions:
(a) the Company shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior
to the Effective Time and the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the
Effective Time as if made at and as of such date (except to the extent that
such representations and warranties speak as of an earlier date), except
for such failures to perform and to be true and correct that would not
reasonably be expected to have a Company Material Adverse Effect or, in the
case of Section 4.02(a), shall be true and correct when made except for
immaterial exceptions thereto, and Parent shall have received a certificate
of the chief executive officer or the chief financial officer of the
Company to that effect;
(b) all Parent Statutory Approvals and Company Statutory Approvals
required to be obtained in order to permit consummation of the Merger under
applicable law shall have been obtained, except for any such Parent
Statutory Approvals or Company Statutory Approvals whose unavailability
would not reasonably be expected to (i) have a Parent Material Adverse
Effect, or (ii) result in Parent or its subsidiaries failing to meet the
standards relating to the conduct of Parent's or the Company's business
which (after taking into account the anticipated impact of such failure to
so meet such standards on other authorities) would reasonably be expected
to have a Parent Material Adverse Effect (after giving effect to the
Merger);
(c) the number of Dissenting Shares shall constitute not more than 5%
of the shares of Company Common Stock outstanding immediately prior to the
Effective Time; and
(d) no suit, action or other claim shall have been instituted by any
shareholder or third party challenging the proposed Merger.
ARTICLE VII
TERMINATION
Section 7.01......Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company):
(a) by mutual written consent of the Company, Parent and Merger
Subsidiary;
(b) by either the Company or Parent, if the Merger has not been
consummated by March 31, 2005, provided that the right to terminate this
Agreement under this clause (ii) shall not be available to any party whose
failure to fulfill any of its obligations under this Agreement has been the
cause of or resulted in the failure to consummate the Merger by such date
(the "Outside Date");
(c) by either the Company or Parent if any judgment, injunction, order
or decree of a court or governmental agency or authority of competent
jurisdiction shall restrain or prohibit the consummation of the Merger, and
such judgment, injunction, order or decree shall become final and
nonappealable and was not entered at the request of the terminating party;
(d) by either the Company or Parent, if (x) there has been a material
breach by the other party of any representation or warranty contained in
this Agreement which has not been cured in all material respects within 30
days after written notice of such breach by the terminating party, or (y)
there has been a breach of any of the covenants or agreements set forth in
this Agreement on the part of the other party, which is not curable or, if
curable, is not cured within 30 days after written notice of such breach is
given by the terminating party to the other party;
(e) by the Company if, prior to receipt of the Company Stockholders'
Approval, the Company receives a Superior Proposal, resolves to accept such
Superior Proposal, and shall have given Parent two days' prior written
notice of its intention to terminate pursuant to this provision; provided,
however, that such termination shall not be effective until such time as
the payment required by Section 5.09(b) shall have been received by Parent;
(f) by the Parent, if the Board of Directors of the Company shall have
failed to recommend, or shall have withdrawn, modified or amended in any
material respect its approval or recommendation of the Merger or shall have
resolved to do any of the foregoing, or shall have recommended another
Acquisition Proposal or if the Board of Directors of the Company shall have
resolved to accept a Superior Proposal or shall have recommended to the
stockholders of the Company that they tender their shares in a tender or an
exchange offer commenced by a third party (excluding any affiliate of
Parent or any group of which any affiliate of Parent is a member);
(g) by Parent or the Company if the stockholders of the Company fail
to approve the Merger pursuant to the WBCA at a duly held meeting of
stockholders called for such purpose (including any adjournment or
postponement thereof); or
(h) by Parent if any suit, action or other claim shall have been
instituted by any shareholder or third party challenging the proposed
Merger.
ARTICLE VIII
MISCELLANEOUS
Section 8.01......Effect of Termination. In the event of termination of
this Agreement by either Parent or the Company pursuant to Section 7.01, this
Agreement shall forthwith become void and there shall be no liability or further
obligation on the part of the Company, Parent, Merger Subsidiary or their
respective officers or directors (except as set forth in this Section 8.01, in
the second sentence of Section 5.04 and in Section 5.09, all of which shall
survive the termination). Nothing in this Section 8.01 shall relieve any party
from liability for any breach of any representation, warranty, covenant or
agreement of such party contained in this Agreement, except that if the fee
provided for in Section 5.09(b) or the forgiveness provided for in Section
5.09(c) becomes payable in accordance therewith, that fee or forgiveness will
constitute the exclusive remedy of and the sole amount payable to the party
entitled thereto with respect to the event or circumstances in connection with
which that fee becomes so payable.
Section 8.02......Nonsurvival of Representations and Warranties. No
representation, warranty or agreement in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Merger, and after
effectiveness of the Merger neither the Company, Parent, Merger Subsidiary nor
any of their respective officers or directors shall have any further obligation
with respect thereto except for the agreements contained in Articles I, II and
VIII and Section 5.11.
Section 8.03......Notices. All notices and other communications hereunder
shall be in writing and shall be considered given if delivered personally,
mailed by registered or certified mail (return receipt requested) or sent via
facsimile to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to the Company:
Western Standard Corporation
400 East Snow King Avenue
Post Office Box 1846
Jackson, Wyoming 83001
Attention: Manuel B. Lopez, President
Telephone: 307-734-3003
Telecopier: 307-734-3300
with a copy to:
Stanford E. Clark
Special Committee of the Board of Directors
of Western Standard Corporation
2205 West Main
Riverton, Wyoming 82501
Telephone: 307-856-6939
Gilbert L. McSwain
300 South Jackson Street, Suite 100
Denver, Colorado 80209
Telephone: 303-398-7067
Telecopier: 303-398-7001
If to Parent or Merger Subsidiary:
Snow King Interests LLC
Post Office Box 928
Jackson, Wyoming 83001
Attention: Manuel B. Lopez
Telephone: 307-734-3003
Telecopier: 307-734-3300
with a copy to:
Samuel E. Wing, Esq.
Jones & Keller, P.C.
1625 Broadway, Suite 1600
Denver, Colorado 80202
Telephone: 303-573-1600
Telecopier: 303-573-0769
Section 8.04......Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. In this Agreement, unless a contrary intention
appears, (i) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision, (ii) "knowledge" shall mean actual
knowledge of the executive officers of the Company or Parent, as applicable, and
(iii) reference to any Article or Section means such Article or Section hereof.
Section 8.05......Miscellaneous. This Agreement (including the documents
and instruments referred to herein) shall not be assigned by operation of law or
otherwise except that Merger Subsidiary may assign its obligations under this
Agreement to any other wholly-owned subsidiary of Parent subject to the terms of
this Agreement, in which case such assignee shall become the "Merger Subsidiary"
for all purposes of this Agreement. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE
STATE OF WYOMING APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY
WITHIN SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAWS OF THAT STATE.
Section 8.06......Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be considered to be an original, but all
of which shall constitute one and the same agreement.
Section 8.07......Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company, Parent and Merger Subsidiary or, in the case of a waiver, by the
party against whom the waiver is to be effective; however, any waiver or
amendment shall be effective against a party only if the board of directors of
such party approves such waiver or amendment.
(b)......No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
Section 8.08......Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter of this
Agreement. No representation, inducement, promise, understanding, condition or
warranty not set forth herein has been made or relied upon by either party
hereto. Neither this Agreement nor any provision hereof is intended to confer
upon any person other than the parties hereto any rights or remedies hereunder,
except Articles I and II, which are intended for the benefit of the Company's
stockholders.
Section 8.09......Severability. If any term or other provision of this
Agreement is invalid, illegal or unenforceable, all other provisions of this
Agreement shall remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.
Section 8.10......Specific Performance. The parties hereto agree that
irreparable damage would occur if any of the provisions of this Agreement were
not to be performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof in addition to any
other remedies at law or in equity.
[Signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
Company: WESTERN STANDARD CORPORATION
By: /s/ Manuel B. Lopez
------------------------------------------
Name: Manuel B. Lopez
-------------------
Title: President
------------
Parent: SNOW KING INTERESTS LLC
By: /s/ Manuel B. Lopez
------------------------------------------
Name: Manuel B. Lopez
Title: Manager
Merger Subsidiary:
LZ ACQUISITION, INC.
By: /s/ Manuel B. Lopez
------------------------------------------
Name: Manuel B. Lopez
Title: President
Approved by the Special Committee of the Board of Directors of the Company
/s/ Stanford E. Clark
- -----------------------------------------------------
Stanford E. Clark, Member
Disclosure Schedule
to
Agreement and Plan of Merger
dated
November 15, 2004
Among
Western Standard Corporation,
LZ Acquisition, Inc.
and
Snow King Interests LLC
Section 4.15 The Company's Alpine Slide components contain asbestos. Some
of the components have been replaced and others will be replaced over time, as
may the entire slide. Some components containing asbestos are being stored in
the Company's "boneyard" and will be transported to a disposal site.
EXHIBIT 2.1(a)
November 15, 2004
Western Standard Corporation
Post Office Box 1846
Jackson, Wyoming 83001
Re: Voting Agreement
Gentlemen:
The undersigned (the "Shareholder") understands that Snow King Interests
LLC ("Parent"), LZ Acquisition, Inc. ("Merger Subsidiary"), and Western Standard
Corporation ("Company"), have entered into an Agreement and Plan of Merger dated
as of November 15, 2004 (the "Agreement"), providing for, among other things,
the merger of Merger Subsidiary into the Company (the "Merger"). Consummation of
the Merger will require the approval of the shareholders of the Company.
The Shareholder is a shareholder of the Company and is entering into this
letter agreement at your request, in exchange for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged.
The Shareholder confirms its agreement with you as follows:
1. Until the earliest date referred to in Section 7, the Shareholder agrees
that it will not, and will not permit any of its affiliates to, contract to
sell, sell or otherwise transfer or dispose of any of its shares of the
Company or any interest therein or securities convertible into shares of
the Company, or any voting rights with respect thereto, without your prior
written consent, with any such consent to be conditioned on the
transferee's execution and delivery to you at or prior to the time of that
transfer of (i) an instrument in form and substance reasonably acceptable
to you under which the transferee becomes bound by this letter agreement
with the same effect as if it were Shareholder hereunder, or (ii) a
separate agreement containing similar undertakings on terms no less
favorable to, and in form and substance reasonably acceptable to, you.
2. The Shareholder agrees that during the term of this agreement all of the
shares of the Company beneficially owned by the Shareholder or any of its
affiliates, or over which the Shareholder or any such affiliate has voting
power or control, directly or indirectly (including any such shares
acquired after the date hereof), at the record date for any meeting of
shareholders of the Company called to consider and vote on the Merger and
the Agreement and the transactions contemplated thereby or any Acquisition
Proposal (as such term is defined in the Agreement) will be voted by the
Shareholder or such affiliate, or any representative or proxy thereof, as
applicable, in accordance with the majority of shares cast for or against
the Merger and the Agreement by unaffiliated stockholders voting in person
or by proxy at the special meeting of stockholders called for that purpose.
3. Each party hereto has all necessary power and authority to enter into this
letter agreement. This letter agreement is the legal, valid and binding
agreement of each party hereto, and is enforceable against that party in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity. Neither party's execution, delivery or performance of
this Agreement violates or conflicts with or will violate or conflict with
any law or governmental order applicable to that party or any agreement or
instrument to which that party is a party or by which that party is bound,
and neither party hereto will enter into or become bound by any agreement
or instrument that would conflict with or be violated by the parties'
execution, delivery or performance of this Agreement. The Shareholder
represents and warrants that the Company's Annual Report on Form 10-K for
the Year Ended December 31, 2003 sets forth the shares of the Company of
which the Shareholder or any affiliate (as defined under the Securities
Exchange Act of 1934, as amended) of the Shareholder is the beneficial
owner except that Manuel B. Lopez has purchased the shares shown as owned
by Stanford E. Clark. This letter agreement shall inure to the benefit of
the parties hereto and their respective successors and assigns.
4. The Shareholder agrees that damages are an inadequate remedy for the breach
by Shareholder of any term or condition of this letter agreement and that
you shall be entitled to a temporary restraining order and preliminary and
permanent injunctive relief in order to enforce our agreements herein.
5. Except to the extent that the laws of the jurisdiction of organization of
any party hereto, or any other jurisdiction, are of mandatory application
to matters arising under or in connection with this letter agreement, this
letter agreement shall be governed by the laws of the State of Colorado,
without application of choice of law principles.
6. This letter agreement constitutes the entire agreement between the parties
hereto with respect to the matters covered hereby and supersedes all prior
agreements, understandings or representations between the parties, written
or oral, with respect to the subject matter hereof.
7. Except as otherwise provided herein, this letter agreement shall terminate
automatically, without the need for any notice or other action by either
party upon the earlier of (i) the date on which the Agreement is
terminated, and (ii) the Closing Date, as defined in the Agreement.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to me a counterpart hereof.
/s/ Manuel B. Lopez
-----------------------------------------------------
Manuel B. Lopez
Accepted and agreed to as of November 15, 2004.
......... Western Standard Corporation
By: /s/ James M. Peck
--------------------------------------------------
Its:Secretary
-------------------------------------------------
EXHIBIT 2.1(b)
November 15, 2004
Western Standard Corporation
Post Office Box 1846
Jackson, Wyoming 83001
Re: Voting Agreement
Gentlemen:
The undersigned (the "Shareholder") understands that Snow King Interests
LLC ("Parent"), LZ Acquisition, Inc. ("Merger Subsidiary"), and Western Standard
Corporation ("Company"), have entered into an Agreement and Plan of Merger dated
as of November 15, 2004 (the "Agreement"), providing for, among other things,
the merger of Merger Subsidiary into the Company (the "Merger"). Consummation of
the Merger will require the approval of the shareholders of the Company.
The Shareholder is a shareholder of the Company and is entering into this
letter agreement at your request, in exchange for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged.
The Shareholder confirms its agreement with you as follows:
1. Until the earliest date referred to in Section 7, the Shareholder agrees
that it will not, and will not permit any of its affiliates to, contract to
sell, sell or otherwise transfer or dispose of any of its shares of the
Company or any interest therein or securities convertible into shares of
the Company, or any voting rights with respect thereto, without your prior
written consent, with any such consent to be conditioned on the
transferee's execution and delivery to you at or prior to the time of that
transfer of (i) an instrument in form and substance reasonably acceptable
to you under which the transferee becomes bound by this letter agreement
with the same effect as if it were Shareholder hereunder, or (ii) a
separate agreement containing similar undertakings on terms no less
favorable to, and in form and substance reasonably acceptable to, you.
2. The Shareholder agrees that during the term of this agreement all of the
shares of the Company beneficially owned by the Shareholder or any of its
affiliates, or over which the Shareholder or any such affiliate has voting
power or control, directly or indirectly (including any such shares
acquired after the date hereof), at the record date for any meeting of
shareholders of the Company called to consider and vote on the Merger and
the Agreement and the transactions contemplated thereby or any Acquisition
Proposal (as such term is defined in the Agreement) will be voted by the
Shareholder or such affiliate, or any representative or proxy thereof, as
applicable, in accordance with the majority of shares cast for or against
the Merger and the Agreement by unaffiliated stockholders voting in person
or by proxy at the special meeting of stockholders called for that purpose.
3. Each party hereto has all necessary power and authority to enter into this
letter agreement. This letter agreement is the legal, valid and binding
agreement of each party hereto, and is enforceable against that party in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity. Neither party's execution, delivery or performance of
this Agreement violates or conflicts with or will violate or conflict with
any law or governmental order applicable to that party or any agreement or
instrument to which that party is a party or by which that party is bound,
and neither party hereto will enter into or become bound by any agreement
or instrument that would conflict with or be violated by the parties'
execution, delivery or performance of this Agreement. The Shareholder
represents and warrants that the Company's Annual Report on Form 10-K for
the Year Ended December 31, 2003 sets forth the shares of the Company of
which the Shareholder or any affiliate (as defined under the Securities
Exchange Act of 1934, as amended) of the Shareholder is the beneficial
owner except that Manuel B. Lopez has purchased the shares shown as owned
by Stanford E. Clark. This letter agreement shall inure to the benefit of
the parties hereto and their respective successors and assigns.
4. The Shareholder agrees that damages are an inadequate remedy for the breach
by Shareholder of any term or condition of this letter agreement and that
you shall be entitled to a temporary restraining order and preliminary and
permanent injunctive relief in order to enforce our agreements herein.
5. Except to the extent that the laws of the jurisdiction of organization of
any party hereto, or any other jurisdiction, are of mandatory application
to matters arising under or in connection with this letter agreement, this
letter agreement shall be governed by the laws of the State of Colorado,
without application of choice of law principles.
6. This letter agreement constitutes the entire agreement between the parties
hereto with respect to the matters covered hereby and supersedes all prior
agreements, understandings or representations between the parties, written
or oral, with respect to the subject matter hereof.
7. Except as otherwise provided herein, this letter agreement shall terminate
automatically, without the need for any notice or other action by either
party upon the earlier of (i) the date on which the Agreement is
terminated, and (ii) the Closing Date, as defined in the Agreement.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to me a counterpart hereof.
/s/ James M. Peck
-----------------------------------------------------
James M. Peck
Accepted and agreed to as of November 15, 2004.
Western Standard Corporation
By: /s/ James M. Peck
--------------------------------------------------
Its:Secretary
-------------------------------------------------
EXHIBIT 2.1(c)
November 15, 2004
Western Standard Corporation
Post Office Box 1846
Jackson, Wyoming 83001
Re: Voting Agreement
Gentlemen:
The undersigned (the "Shareholder") understands that Snow King Interests
LLC ("Parent"), LZ Acquisition, Inc. ("Merger Subsidiary"), and Western Standard
Corporation ("Company"), have entered into an Agreement and Plan of Merger dated
as of November 15, 2004 (the "Agreement"), providing for, among other things,
the merger of Merger Subsidiary into the Company (the "Merger"). Consummation of
the Merger will require the approval of the shareholders of the Company.
The Shareholder is a shareholder of the Company and is entering into this
letter agreement at your request, in exchange for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged.
The Shareholder confirms its agreement with you as follows:
1. Until the earliest date referred to in Section 7, the Shareholder agrees
that it will not, and will not permit any of its affiliates to, contract to
sell, sell or otherwise transfer or dispose of any of its shares of the
Company or any interest therein or securities convertible into shares of
the Company, or any voting rights with respect thereto, without your prior
written consent, with any such consent to be conditioned on the
transferee's execution and delivery to you at or prior to the time of that
transfer of (i) an instrument in form and substance reasonably acceptable
to you under which the transferee becomes bound by this letter agreement
with the same effect as if it were Shareholder hereunder, or (ii) a
separate agreement containing similar undertakings on terms no less
favorable to, and in form and substance reasonably acceptable to, you.
2. The Shareholder agrees that during the term of this agreement all of the
shares of the Company beneficially owned by the Shareholder or any of its
affiliates, or over which the Shareholder or any such affiliate has voting
power or control, directly or indirectly (including any such shares
acquired after the date hereof), at the record date for any meeting of
shareholders of the Company called to consider and vote on the Merger and
the Agreement and the transactions contemplated thereby or any Acquisition
Proposal (as such term is defined in the Agreement) will be voted by the
Shareholder or such affiliate, or any representative or proxy thereof, as
applicable, in accordance with the majority of shares cast for or against
the Merger and the Agreement by unaffiliated stockholders voting in person
or by proxy at the special meeting of stockholders called for that purpose.
3. Each party hereto has all necessary power and authority to enter into this
letter agreement. This letter agreement is the legal, valid and binding
agreement of each party hereto, and is enforceable against that party in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity. Neither party's execution, delivery or performance of
this Agreement violates or conflicts with or will violate or conflict with
any law or governmental order applicable to that party or any agreement or
instrument to which that party is a party or by which that party is bound,
and neither party hereto will enter into or become bound by any agreement
or instrument that would conflict with or be violated by the parties'
execution, delivery or performance of this Agreement. The Shareholder
represents and warrants that the Company's Annual Report on Form 10-K for
the Year Ended December 31, 2003 sets forth the shares of the Company of
which the Shareholder or any affiliate (as defined under the Securities
Exchange Act of 1934, as amended) of the Shareholder is the beneficial
owner except that Manuel B. Lopez has purchased the shares shown as owned
by Stanford E. Clark. This letter agreement shall inure to the benefit of
the parties hereto and their respective successors and assigns.
4. The Shareholder agrees that damages are an inadequate remedy for the breach
by Shareholder of any term or condition of this letter agreement and that
you shall be entitled to a temporary restraining order and preliminary and
permanent injunctive relief in order to enforce our agreements herein.
5. Except to the extent that the laws of the jurisdiction of organization of
any party hereto, or any other jurisdiction, are of mandatory application
to matters arising under or in connection with this letter agreement, this
letter agreement shall be governed by the laws of the State of Colorado,
without application of choice of law principles.
6. This letter agreement constitutes the entire agreement between the parties
hereto with respect to the matters covered hereby and supersedes all prior
agreements, understandings or representations between the parties, written
or oral, with respect to the subject matter hereof.
7. Except as otherwise provided herein, this letter agreement shall terminate
automatically, without the need for any notice or other action by either
party upon the earlier of (i) the date on which the Agreement is
terminated, and (ii) the Closing Date, as defined in the Agreement.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to me a counterpart hereof.
Manuel B. Lopez Living Trust
/s/ Manuel B. Lopez
-----------------------------------------------------
Trustee
Accepted and agreed to as of November 15, 2004.
Western Standard Corporation
By: /s/ James M. Peck
--------------------------------------------------
Its:Secretary
-------------------------------------------------
EXHIBIT 2.1(d)
November 15, 2004
Western Standard Corporation
Post Office Box 1846
Jackson, Wyoming 83001
Re: Voting Agreement
Gentlemen:
The undersigned (the "Shareholder") understands that Snow King Interests
LLC ("Parent"), LZ Acquisition, Inc. ("Merger Subsidiary"), and Western Standard
Corporation ("Company"), have entered into an Agreement and Plan of Merger dated
as of November 15, 2004 (the "Agreement"), providing for, among other things,
the merger of Merger Subsidiary into the Company (the "Merger"). Consummation of
the Merger will require the approval of the shareholders of the Company.
The Shareholder is a shareholder of the Company and is entering into this
letter agreement at your request, in exchange for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged.
The Shareholder confirms its agreement with you as follows:
1. Until the earliest date referred to in Section 7, the Shareholder agrees
that it will not, and will not permit any of its affiliates to, contract to
sell, sell or otherwise transfer or dispose of any of its shares of the
Company or any interest therein or securities convertible into shares of
the Company, or any voting rights with respect thereto, without your prior
written consent, with any such consent to be conditioned on the
transferee's execution and delivery to you at or prior to the time of that
transfer of (i) an instrument in form and substance reasonably acceptable
to you under which the transferee becomes bound by this letter agreement
with the same effect as if it were Shareholder hereunder, or (ii) a
separate agreement containing similar undertakings on terms no less
favorable to, and in form and substance reasonably acceptable to, you.
2. The Shareholder agrees that during the term of this agreement all of the
shares of the Company beneficially owned by the Shareholder or any of its
affiliates, or over which the Shareholder or any such affiliate has voting
power or control, directly or indirectly (including any such shares
acquired after the date hereof), at the record date for any meeting of
shareholders of the Company called to consider and vote on the Merger and
the Agreement and the transactions contemplated thereby or any Acquisition
Proposal (as such term is defined in the Agreement) will be voted by the
Shareholder or such affiliate, or any representative or proxy thereof, as
applicable, in accordance with the majority of shares cast for or against
the Merger and the Agreement by unaffiliated stockholders voting in person
or by proxy at the special meeting of stockholders called for that purpose.
3. Each party hereto has all necessary power and authority to enter into this
letter agreement. This letter agreement is the legal, valid and binding
agreement of each party hereto, and is enforceable against that party in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity. Neither party's execution, delivery or performance of
this Agreement violates or conflicts with or will violate or conflict with
any law or governmental order applicable to that party or any agreement or
instrument to which that party is a party or by which that party is bound,
and neither party hereto will enter into or become bound by any agreement
or instrument that would conflict with or be violated by the parties'
execution, delivery or performance of this Agreement. The Shareholder
represents and warrants that the Company's Annual Report on Form 10-K for
the Year Ended December 31, 2003 sets forth the shares of the Company of
which the Shareholder or any affiliate (as defined under the Securities
Exchange Act of 1934, as amended) of the Shareholder is the beneficial
owner except that Manuel B. Lopez has purchased the shares shown as owned
by Stanford E. Clark. This letter agreement shall inure to the benefit of
the parties hereto and their respective successors and assigns.
4. The Shareholder agrees that damages are an inadequate remedy for the breach
by Shareholder of any term or condition of this letter agreement and that
you shall be entitled to a temporary restraining order and preliminary and
permanent injunctive relief in order to enforce our agreements herein.
5. Except to the extent that the laws of the jurisdiction of organization of
any party hereto, or any other jurisdiction, are of mandatory application
to matters arising under or in connection with this letter agreement, this
letter agreement shall be governed by the laws of the State of Colorado,
without application of choice of law principles.
6. This letter agreement constitutes the entire agreement between the parties
hereto with respect to the matters covered hereby and supersedes all prior
agreements, understandings or representations between the parties, written
or oral, with respect to the subject matter hereof.
7. Except as otherwise provided herein, this letter agreement shall terminate
automatically, without the need for any notice or other action by either
party upon the earlier of (i) the date on which the Agreement is
terminated, and (ii) the Closing Date, as defined in the Agreement.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to me a counterpart hereof.
Deborah W. Lopez Living Trust
/s/ Deborah W. Lopez
-----------------------------------------------------
Trustee
Accepted and agreed to as of November 15, 2004.
Western Standard Corporation
By: /s/ James M. Peck
--------------------------------------------------
Its:Secretary
-------------------------------------------------
EXHIBIT 2.1(e)
November 15, 2004
Western Standard Corporation
Post Office Box 1846
Jackson, Wyoming 83001
Re: Voting Agreement
Gentlemen:
The undersigned (the "Shareholder") understands that Snow King Interests
LLC ("Parent"), LZ Acquisition, Inc. ("Merger Subsidiary"), and Western Standard
Corporation ("Company"), have entered into an Agreement and Plan of Merger dated
as of November 15, 2004 (the "Agreement"), providing for, among other things,
the merger of Merger Subsidiary into the Company (the "Merger"). Consummation of
the Merger will require the approval of the shareholders of the Company.
The Shareholder is a shareholder of the Company and is entering into this
letter agreement at your request, in exchange for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged.
The Shareholder confirms its agreement with you as follows:
1. Until the earliest date referred to in Section 7, the Shareholder agrees
that it will not, and will not permit any of its affiliates to, contract to
sell, sell or otherwise transfer or dispose of any of its shares of the
Company or any interest therein or securities convertible into shares of
the Company, or any voting rights with respect thereto, without your prior
written consent, with any such consent to be conditioned on the
transferee's execution and delivery to you at or prior to the time of that
transfer of (i) an instrument in form and substance reasonably acceptable
to you under which the transferee becomes bound by this letter agreement
with the same effect as if it were Shareholder hereunder, or (ii) a
separate agreement containing similar undertakings on terms no less
favorable to, and in form and substance reasonably acceptable to, you.
2. The Shareholder agrees that during the term of this agreement all of the
shares of the Company beneficially owned by the Shareholder or any of its
affiliates, or over which the Shareholder or any such affiliate has voting
power or control, directly or indirectly (including any such shares
acquired after the date hereof), at the record date for any meeting of
shareholders of the Company called to consider and vote on the Merger and
the Agreement and the transactions contemplated thereby or any Acquisition
Proposal (as such term is defined in the Agreement) will be voted by the
Shareholder or such affiliate, or any representative or proxy thereof, as
applicable, in accordance with the majority of shares cast for or against
the Merger and the Agreement by unaffiliated stockholders voting in person
or by proxy at the special meeting of stockholders called for that purpose.
3. Each party hereto has all necessary power and authority to enter into this
letter agreement. This letter agreement is the legal, valid and binding
agreement of each party hereto, and is enforceable against that party in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity. Neither party's execution, delivery or performance of
this Agreement violates or conflicts with or will violate or conflict with
any law or governmental order applicable to that party or any agreement or
instrument to which that party is a party or by which that party is bound,
and neither party hereto will enter into or become bound by any agreement
or instrument that would conflict with or be violated by the parties'
execution, delivery or performance of this Agreement. The Shareholder
represents and warrants that the Company's Annual Report on Form 10-K for
the Year Ended December 31, 2003 sets forth the shares of the Company of
which the Shareholder or any affiliate (as defined under the Securities
Exchange Act of 1934, as amended) of the Shareholder is the beneficial
owner except that Manuel B. Lopez has purchased the shares shown as owned
by Stanford E. Clark. This letter agreement shall inure to the benefit of
the parties hereto and their respective successors and assigns.
4. The Shareholder agrees that damages are an inadequate remedy for the breach
by Shareholder of any term or condition of this letter agreement and that
you shall be entitled to a temporary restraining order and preliminary and
permanent injunctive relief in order to enforce our agreements herein.
5. Except to the extent that the laws of the jurisdiction of organization of
any party hereto, or any other jurisdiction, are of mandatory application
to matters arising under or in connection with this letter agreement, this
letter agreement shall be governed by the laws of the State of Colorado,
without application of choice of law principles.
6. This letter agreement constitutes the entire agreement between the parties
hereto with respect to the matters covered hereby and supersedes all prior
agreements, understandings or representations between the parties, written
or oral, with respect to the subject matter hereof.
7. Except as otherwise provided herein, this letter agreement shall terminate
automatically, without the need for any notice or other action by either
party upon the earlier of (i) the date on which the Agreement is
terminated, and (ii) the Closing Date, as defined in the Agreement.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to me a counterpart hereof.
/s/ James M. Peck
-----------------------------------------------------
James M. Peck, Trustee
Accepted and agreed to as of November 15, 2004.
Western Standard Corporation
By: /s/ James M. Peck
--------------------------------------------------
Its:Secretary
-------------------------------------------------
