AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
JSM NEWCO, INC.
a Tennessee corporation.
JSM MERGER SUB, INC.
a Tennessee corporation
AND
SEVEN OAKS INTERNATIONAL, INC.,
a Tennessee corporation
________________
Dated September 8, 1995
________________
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), is
made and entered into this 8th day of September, 1995 by and
between JSM Newco, Inc., a Tennessee corporation ("JSM"), JSM
Newco Merger Sub, Inc., a Tennessee corporation ("JSM Merger"),
and Seven Oaks International, Inc., a Tennessee corporation with
its principal executive offices at 700 Colonial Road, Suite 100,
Memphis, Tennessee 38117 ("Seven Oaks").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of JSM and Seven
Oaks are of the opinion that the transactions described herein
are in the best interests of the parties to this Agreement and
their respective shareholders; and
WHEREAS, JSM has heretofore formed JSM Merger under the
Tennessee Business Corporation Act (the "Act") for the purpose of
effecting a merger (the "Merger") with and into Seven Oaks
pursuant to the applicable provisions of the Act so that Seven
Oaks will continue as the surviving corporation of the Merger;
and
WHEREAS, the respective Boards of Directors of JSM and Seven
Oaks have approved the Merger, and the terms and provisions of
this Agreement, pursuant to which (i) certain holders of
outstanding shares of the Common Stock of Seven Oaks, par value
$.10 per share ("Seven Oaks Common Stock"), will retain some or
all of their Seven Oaks Common Stock and (ii) the remainder of
the holders of Seven Oaks Common Stock will be entitled to
receive cash in the amount of $0.31 for each issued and
outstanding share of Seven Oaks Common Stock held by such holder,
in the manner provided for herein; and
WHEREAS, the Merger is subject to the approval of the
shareholders of Seven Oaks and satisfaction of certain other
conditions described in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants, and agreements
herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.01 Incorporation of JSM Merger. JSM has heretofore
organized JSM Merger under the Act and will provide it with
minimum capital required under the Act and cause it to adopt the
Plan of Merger referred to in Section 1.02 hereto. Promptly
after approval of this Agreement by its Board of Directors, JSM,
as sole shareholder of JSM Merger, will approve the Plan of
Merger in the manner provided in Section 48-21-104 of the Act.
1.02 The Merger. Subject to the terms and conditions of
this Agreement and the Plan of Merger attached hereto as Exhibit
I (the "Plan of Merger"), JSM Merger shall be merged with and
into Seven Oaks in accordance with the applicable provisions of,
and with the effect provided in, the Act. Seven Oaks shall be
the surviving corporation of the Merger (the "Surviving
Corporation") and the separate existence of JSM Merger shall
cease. Upon consummation of the Merger, the charter and by-laws
of JSM Merger prior to the Effective Time (as defined in Section
2.02) of the Merger shall constitute the charter and by-laws of
the Surviving Corporation immediately after the Effective Time.
The Plan of Merger provides for the terms of the Merger and the
mode of carrying the same into effect. The Merger shall be
consummated at the Effective Time.
1.03 Directors and Officers of the Surviving Corporation.
Following the Merger, (i) John Moll, J. Steven Moll, Peter R.
Pettit, Tommy R. Thompson and Frank A. Sullivan shall serve as
the directors of the Surviving Corporation and (ii) the persons
set forth on Schedule 1.03 shall serve in the offices identified
next to their names, each to serve thereafter in accordance with
the charter and by-laws of the Surviving Corporation.
1.04 Manner of Converting Shares.
(a) All of the shares of JSM Common Stock issued and
outstanding at the Effective Time shall remain issued and
outstanding after the Effective Time and shall be unaffected by
the Merger.
(b) All of the outstanding shares of Common Stock, no
par value per share, of JSM Merger at the Effective Time shall at
the Effective Time be exchanged for shares of the Surviving
Corporation on a one-for-one basis.
(c) The manner and basis of converting the shares of
the capital stock of Seven Oaks upon consummation of the Merger
shall be as follows:
(i) Seven Oaks Common Stock Conversion into Cash.
Except as otherwise provided in this Section 1.04(c), each share
of Seven Oaks Common Stock issued and outstanding at the
Effective Time shall, as of the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof,
be converted into the right to receive the sum of thirty-one/one-
hundredths cents ($0.31) cash.
(ii) Authorized and Unissued Shares. Any and all
authorized and unissued shares of Common Stock of Seven Oaks and
any Seven Oaks Subsidiary (as defined in Section 3.02) shall be
canceled and retired at the Effective Time, and no consideration
shall be issued in exchange therefor.
(iii) Surrender of Certificates.
(A) Prior to the Effective Time, Seven Oaks
agrees to appoint Trust Company Bank, Atlanta, Georgia or a
comparable firm (the "Agent") to act as agent in connection with
the Merger. Except as otherwise provided in Section 1.04(c)(ii)
or (v) hereto, from and after the Effective Time, each holder of
a certificate which immediately prior to the Effective Time
represented outstanding shares of Seven Oaks Common Stock (the
"Certificates") shall be entitled to exercise its right to
receive in exchange therefor (except as provided in Section
1.04(c)(iv) hereto), upon surrender thereof to the Agent, a check
for the aggregate amount of cash representing the consideration
which such holder has the right to receive under Section
1.04(c)(i) hereto in the Merger. Immediately prior to the
Effective Time, JSM will deliver to the Agent, in trust for the
benefit of the holders of Seven Oaks Common Stock, the sum of
$1,950,796 representing the aggregate consideration to the
holders of issued and outstanding Seven Oaks Common Stock
necessary to make the exchanges contemplated by Section
1.04(c)(i) hereto on a timely basis.
(B) Promptly after the Effective Time, the
Agent shall mail to each record holder of Seven Oaks Common Stock
as of the Effective Time, a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and
title to Certificates shall pass, only upon proper delivery of
the Certificates to the Agent) and instructions for use in
effecting the surrender of Certificates in exchange for the
consideration specified in Section 1.04(c)(i) hereto. Upon
surrender to the Agent of a Certificate, together with such
letter of transmittal duly executed, and any other required
documents, the holder of such Certificate shall be entitled
to receive in exchange therefor such cash consideration as set
forth in the Plan of Merger, and such Certificate shall forthwith
be canceled. Until surrendered in accordance with the provisions
of this Section 1.04(c)(iii), each Certificate shall represent
for all purposes only the right to receive the cash consideration
provided in Section 1.04(c)(i) hereto, without any interest
thereon.
(C) Any remaining sums of the aggregate cash
consideration specified in Section 1.04(c)(iii)(A) hereto held by
the Agent that remains unclaimed by the former shareholders of
Seven Oaks on the first anniversary of the Effective Time shall
be delivered by the Agent to JSM. Any former shareholders of
Seven Oaks who have not theretofore complied with this Section
1.04(c)(iii) shall thereafter look only to JSM for satisfaction
of their claim for the consideration set forth in the Plan of
Merger, without any interest thereon. Notwithstanding the
foregoing, JSM shall not be liable to any holder of shares of
Seven Oaks Common Stock for any moneys to be issued as
consideration for the Merger delivered to a public official
pursuant to any applicable abandoned property, escheat or similar
law.
(iv) Dissenting Seven Oaks Shareholders. Each
outstanding share of Seven Oaks Common Stock, the holder of which
has demanded and perfected his demand for payment of the fair
value of such share in accordance with Sections 48-23-101 through
48-23-302 of the Act (the "Dissenter Provisions") and has not
effectively withdrawn or lost his right to such payment, shall
not be converted into or represent a right to receive the
consideration specified in Section 1.04(c) hereto pursuant to the
foregoing provisions of this Section 1.04(c) and the Plan of
Merger, but shall represent only the rights granted with respect
to such dissenting shares of Seven Oaks Common Stock pursuant to
the Dissenter Provisions. Seven Oaks shall give prompt notice
upon receipt by Seven Oaks of any written demands for payment of
the fair value of shares of Seven Oaks Common Stock and of
withdrawals of such demands and any other written communications
provided in accordance with or pursuant to the Dissenter
Provisions (any shareholder duly making such a demand being
hereinafter called a "Dissenting Shareholder"); and JSM shall
promptly receive from Seven Oaks copies of such notice(s), and
have the right to participate in all negotiations and proceedings
with respect to any Dissenting Shareholder. Seven Oaks agrees
that it will not, except with the prior written consent of JSM,
make any determination of fair value, any payment with respect
to, or settle or offer to settle any matter arising out of, any
dissent, unless it is reasonably advised by its counsel that it
is required by law to act and that JSM is unreasonably
withholding its consent. Each Dissenting Shareholder, if any,
who becomes entitled to payment for his shares of Seven Oaks
Common Stock pursuant to the Dissenter Provisions shall receive
payment therefor from JSM (but only after the amount thereof
shall have been agreed upon or finally determined pursuant to the
Dissenter Provisions) and such dissenting shares of Seven Oaks
Common Stock shall be canceled. If any holder of shares of Seven
Oaks Common Stock who demands payment of the fair value of his
shares under the Dissenter Provisions shall effectively withdraw
or lose (through failure to perfect or otherwise) his right to
such payment at or prior to the Effective Time, the shares of
Seven Oaks Common Stock of such holder shall be converted into a
right to receive the cash consideration provided for in Section
1.04(c)(i) in accordance with the applicable provisions of this
Section 1.04(c) and the Plan of Merger.
(v) Notwithstanding Sections 1.04(c)(i) and
(iii), each person set forth on Schedule 1.04(c)(v) shall retain,
and not surrender, Certificates representing the number of
outstanding shares of Seven Oaks Common Stock set forth next to
their name on such schedule, and the shares represented by such
Certificates shall remain outstanding. These shares shall
represent the percentages of outstanding Common Stock of the
Surviving Corporation at the Effective Time set forth on
Schedule 1.04(c)(v).
ARTICLE II
CLOSING AND EFFECTIVE TIME
2.01 Time and Place of Closing. Unless otherwise mutually
agreed upon in writing by officers of JSM and Seven Oaks who are
authorized to execute this Agreement, the closing (the "Closing")
of the transactions contemplated herein will be held at 11:00
a.m. Memphis, Tennessee local time (or such other time as may be
agreed between the parties hereto), on such date as may be agreed
between the parties hereto (the "Closing Date"). The place of
Closing shall be at such place as may be agreed between the
parties hereto.
2.02 Effective Time. The Merger and other transactions
contemplated by this Agreement and the Plan of Merger shall
become effective on the date and at the time specified in the
Articles of Merger reflecting the Merger (the "Effective Time"),
which shall be filed by the Secretary of State of the State of
Tennessee as soon as all actions required to be taken at the
Closing have been completed. Unless the parties otherwise agree
in writing, the Articles of Merger shall specify that the
Effective Time shall be the time of their filing by the Secretary
of State.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SEVEN OAKS
Seven Oaks represents and warrants to JSM, with such
exceptions as are stated in this Article III or set forth in the
disclosure schedules delivered by Seven Oaks simultaneously
herewith, as follows:
3.01 Organization and Authority.
(a) Seven Oaks is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Tennessee, is duly qualified to do business and is in
good standing in the states of the United States and foreign
jurisdictions where its ownership or leasing of material amounts
of property or the conduct of a material portion of its business
requires it to be so qualified, and has the corporate power and
authority to own its properties and assets, to carry on its
business as it is now being conducted, and to execute and deliver
this Agreement and the Plan of Merger (assuming Seven Oaks
shareholder approval of the Plan of Merger) and carry out its
obligations under each. Seven Oaks has in effect all material
federal, state, local, and foreign governmental authorizations
necessary for it to own or lease its properties and assets and to
carry on its business as it is now being conducted.
(b) Seven Oaks previously has delivered to JSM
complete and correct copies of its charter and all amendments
thereto to the date hereof and its by-laws, as presently in
effect, and Seven Oaks is not in default in the performance,
observation, or fulfillment of any provision of its charter or,
in any material respect, of its by-laws.
(c) The minute books (containing the records of
meetings of the stockholders, the board of directors, and any
committees of the board of directors) of Seven Oaks and each
Seven Oaks Subsidiary are correct and complete in all material
respects.
3.02 Seven Oaks Subsidiaries. For purposes of this
Agreement, the term "Seven Oaks Subsidiary" shall mean any
corporation, association, subsidiary, or other entity of which
Seven Oaks owns or controls, directly or indirectly, more than 5%
of the outstanding equity securities. Schedule 3.02 hereto sets
forth a correct and complete list of all Seven Oaks Subsidiaries
as of the date of this Agreement. No equity securities of any
Seven Oaks Subsidiary are or may become required to be issued
(other than to Seven Oaks) by reason of any options, warrants,
scrip, rights to subscribe to, calls, or commitments of any
character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock
of any Seven Oaks Subsidiary; and there are no contracts,
commitments, understandings, or arrangements by which any Seven
Oaks Subsidiary is bound to issue (other than to Seven Oaks)
additional shares of its capital stock or options, warrants, or
rights to purchase or acquire any additional shares of its
capital stock. All of the shares of capital stock of each Seven
Oaks Subsidiary are fully paid and nonassessable and, to the
extent owned by Seven Oaks, are owned free and clear of any
claim, lien, encumbrance, or agreement of any kind with respect
thereto. Each Seven Oaks Subsidiary is duly organized, validly
existing, and in good standing under the laws of its state of
incorporation; is duly qualified to do business and is in good
standing in the states of the United States and foreign
jurisdictions where its ownership or leasing of material amounts
of property or the conduct of a material portion of its business
requires it to be so qualified, has the corporate power and
authority necessary for it to own or lease its properties and
assets and to carry on its business as it is now being conducted;
and has in effect all material federal, state, local, and foreign
governmental authorizations necessary for it to own or lease its
properties and assets and to carry on its business as it is now
being conducted. Neither Seven Oaks nor any Seven Oaks
Subsidiary controls directly or indirectly or has any direct or
indirect equity participation in any corporation, partnership,
trust or other business associations other than those set forth
on Schedule 3.02.
3.03 Capitalization of Seven Oaks. As of the date of this
Agreement, the authorized capital stock of Seven Oaks consists of
20,000,000 shares of Seven Oaks Common Stock, $.10 par value, of
which 8,639,572 shares are issued and outstanding and 11,360,428
authorized and unissued shares. All outstanding shares of Seven
Oaks Common Stock have been duly issued and are validly
outstanding, fully paid, and nonassessable. None of the issued
and outstanding shares of Seven Oaks Common Stock have been
issued in violation of any preemptive right of the current or
former shareholders of Seven Oaks. As of the date of this
Agreement, Seven Oaks has reserved an aggregate of 5,635,322
shares of Seven Oaks Common Stock for issuance in connection with
outstanding stock options and warrants to purchase Seven Oaks
Common Stock. Except as set forth in Schedule 3.03 hereto, as of
the date of this Agreement, there are no shares of capital stock
or other equity securities of Seven Oaks outstanding and no
outstanding options, warrants, scrip, rights to subscribe to,
calls, or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares
of the capital stock of Seven Oaks, or contracts, commitments,
understandings, or arrangements by which Seven Oaks was or may
become bound to issue additional shares of its capital stock or
options, warrants, or rights to purchase or acquire any
additional shares of its capital stock. As of the date of this
Agreement, except as set forth in Schedule 3.03 hereto, there are
no contracts, commitments, understandings, or arrangements by
which Seven Oaks or any Seven Oaks Subsidiary is or may become
bound to transfer any shares of the capital stock or other
securities of any Seven Oaks Subsidiary, except for a transfer to
Seven Oaks or JSM.
3.04 Authorization.
(a) The execution, delivery, and performance of this
Agreement and the Plan of Merger by Seven Oaks and the
consummation of the transactions contemplated hereby and thereby
have been duly authorized by the Board of Directors of Seven Oaks
and, except for the approval of this Agreement and the Plan of
Merger by Seven Oaks' shareholders (in their capacity as
shareholders and not as directors), no other corporate
proceedings on the part of Seven Oaks are necessary to authorize
this Agreement or the Plan of Merger and the transactions
contemplated hereby and thereby. This Agreement is a valid and
binding obligation of Seven Oaks, enforceable against it in
accordance with its terms (except as such enforceability may be
limited by legal and equitable limitations or the availability of
specific performance and other equitable remedies, and by laws or
court decisions which may be applicable limiting the
enforceability of indemnification provisions).
(b) Except as otherwise noted in Schedule 3.04 hereto,
neither the execution, delivery, and performance by Seven Oaks of
this Agreement or the Plan of Merger, nor the consummation of the
transactions contemplated hereby and thereby, nor compliance by
Seven Oaks with any of the provisions hereof or thereof, will (i)
violate, conflict with, result in a breach of any provision of,
constitute a default (or an event that, with or without notice or
lapse of time or both, would constitute a default) under, result
in the termination of, accelerate the performance required by, or
result in a right of termination or acceleration, or the creation
of any lien, security interest, charge, or encumbrance upon any
of the properties or assets of Seven Oaks, under any of the
terms, conditions, or provisions of:
(x) its charter or by-laws; or
(y) any agreement or instrument set forth on a
schedule to this Agreement; or
(z) or any other note, bond, mortgage, indenture,
deed of trust, license, lease, agreement, or other instrument or
obligation to which Seven Oaks is a party, or by which Seven Oaks
may be bound, or to which Seven Oaks or any Seven Oaks Subsidiary
or the properties or assets of any of them may be subject, and
that would, in any such event, have a material adverse effect on
the financial condition or results of operations of Seven Oaks or
any Seven Oaks Subsidiary
or (ii) subject to compliance with the statutes, rules and
regulations to which Section 3.04(c) refers, violate any
judgment, ruling, order, writ, injunction or decree, or, to
Seven Oaks' knowledge, any constitution, statute, rule,
regulation or other restriction of any government or government
agency applicable to Seven Oaks or any Seven Oaks Subsidiaries or
any of their respective properties or assets.
(c) Other than (i) any applicable requirements of the
Securities Exchange Act of 1934 and the regulations promulgated
thereto, as amended (the "Exchange Act") and any applicable
filings under state securities, "Blue Sky" or takeover laws, the
rules of the National Association of Securities Dealers, Inc.
("NASD"), the NASD OTC Bulletin Board, (ii) the filing and
recordation of articles of merger as required by the Act, (iii)
those required filings, registrations, consents and approvals
listed on Schedule 3.04 hereto, (iv) notices to or filings with
the Internal Revenue Service (the "IRS") or the Pension Benefit
Guaranty Corporation (the "PBGC") with respect to any employee
benefit plans and (v) such other filings, registrations,
consents, approvals, permits and authorizations which, if not
obtained or made, will not have a material adverse effect on the
financial condition or results of operations of Seven Oaks or any
Seven Oaks Subsidiary, no notice to, filing with, authorization
of, exemption by, or consent or approval of any public body or
authority is necessary for the consummation by Seven Oaks of the
transactions contemplated by this Agreement and the Plan of
Merger.
3.05 Regulatory Reports; Seven Oaks Consolidated Financial
Statements. Except as set forth on Schedule 3.05, since
January 1, 1992, Seven Oaks and all Seven Oaks Subsidiaries have
timely filed all reports, registrations, information statements,
and all other documents, together with any amendments required to
be made thereto, required to be filed with the appropriate state
and federal agencies having jurisdiction over them, including the
Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"), and
the Exchange Act (collectively, the "Reports," and in the case of
Seven Oaks, the "Seven Oaks Reports"). Each of the Reports has
complied, or will comply, as the case may be, with the applicable
provisions of the Securities Act and the Securities Exchange Act,
in all material respects. Seven Oaks has heretofore furnished to
JSM the audited consolidated balance sheets of Seven Oaks and the
Seven Oaks Subsidiaries at April 30, 1993, 1994 and 1995 and the
unaudited balance sheets of Seven Oaks and the Seven Oaks
Subsidiaries at July 31, 1995, and the related consolidated
statements of income, changes in stockholders' equity, and
changes in financial position for the periods then ended, and the
notes thereto. Such financial statements are collectively
referred to herein as the "Seven Oaks Consolidated Financial
Statements ." Except as set forth in Schedule 3.05 hereto, the
Seven Oaks Consolidated Financial Statements for April 30, 1995
and July 31, 1995, fairly presented, or will fairly present, as
the case may be, the financial position of Seven Oaks and the
Seven Oaks Subsidiaries as at the dates mentioned and the results
of operations and changes in financial position for the period
then ended. Each of the financial statements (including the
related notes and schedules) included in the Seven Oaks Reports
and for the quarter ended July 31, 1995 (i) complied as to form
with the applicable accounting requirements and rules and
regulations of the SEC, and (ii) was prepared in accordance with
generally accepted accounting principles consistently applied
during the periods presented, except as otherwise noted therein
and subject to normal year-end and audit adjustments in the case
of any unaudited interim financial statements. Except as set
forth in Schedule 3.05 hereto, the Seven Oaks Consolidated
Financial Statements for the years ended April 30, 1993, 1994
and 1995 and the quarter ended July 31, 1995 accurately present
the revenues and expenses of Seven Oaks as at the dates mentioned
and the results of operations. Except as set forth in Schedule
3.05 hereto, as of their respective dates, the Reports and the
Seven Oaks Consolidated Financial Statements did not, or will
not, as the case may be, 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
light of the circumstances under which they were made, not
misleading.
3.06 Absence of Certain Changes or Events. Except as set
forth in the Seven Oaks Reports or the Seven Oaks Consolidated
Financial Statements filed prior to the date of this Agreement or
as otherwise disclosed in Schedule 3.06 hereto, since April 30,
1995, there has not been, occurred, or arisen: (i) any damage,
destruction, loss, or casualty, whether or not covered by
insurance, which has had or is reasonably likely to have a
material adverse effect on the business of Seven Oaks or any
Seven Oaks Subsidiary; (ii) any declaration, setting aside, or
payment of any dividend or distribution (whether in cash stock,
or property) in respect of the Seven Oaks Common Stock (other
than regular cash dividends) or any redemption or other
acquisition of the Seven Oaks Common Stock by Seven Oaks, or any
split, combination, or reclassification of shares of Seven Oaks
Common Stock declared or made; (iii) any extraordinary losses
suffered not adequately reserved against, whether or not in the
ordinary course of business; (iv) any material assets mortgaged,
pledged, or subjected to any lien, charge, or other encumbrance;
(v) any agreement to do any of the foregoing; or (vi) any other
event, development, or condition of any character including any
change in results of operations, financial condition, method of
accounting or accounting practices, nature of the business, or
manner of conducting the business of Seven Oaks that has had, or
is reasonably likely to have, a material adverse effect on the
financial condition or results of operations of Seven Oaks or any
Seven Oaks Subsidiary.
3.07 Merger Proxy Statement. None of the information with
respect to Seven Oaks or the Merger to be included in the proxy
statement to be distributed to the shareholders of Seven Oaks in
connection with the special meeting of shareholders to consider
and vote upon the Merger (the "Merger Proxy Statement") will, in
the case of the Merger Proxy Statement or any amendments thereof
or supplements thereto, at the time of the mailing of the Merger
Proxy Statement or any amendments thereof or supplements thereto,
and at the time of the special meeting of the shareholders of
Seven Oaks, 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 light of
the circumstances under which they are made, not misleading. The
Merger Proxy Statement will comply in all material respects with
the provisions of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation is made by
Seven Oaks with respect to information supplied in writing by JSM
or any affiliate of JSM for inclusion in the Merger Proxy
Statement.
3.08 Tax Matters.
(a) All federal, state, local, and foreign tax returns
required to be filed by or on behalf of Seven Oaks and all Seven
Oaks Subsidiaries have been timely filed or requests for
extensions have been timely filed, granted, and have not expired
for periods ending on or before December 31, 1994, and all
returns filed are complete and accurate. All taxes shown on
filed returns have been paid. As of the date hereof, there is no
audit examination, deficiency, or refund litigation or matter in
controversy with respect to any taxes that might result in a
determination adverse to Seven Oaks except as indicated in
Schedule 3.08 hereto. All taxes, interest, additions, and
penalties due with respect to completed and settled examinations
or concluded litigation have been paid. No federal income tax
returns for Seven Oaks were examined by the IRS in 1994 and 1995.
(b) Except as set forth in Schedule 3.08 hereto,
neither Seven Oaks nor any Seven Oaks Subsidiary has executed an
extension or waiver of any statute of limitations on the
assessment or collection of any tax due that is currently in
effect.
(c) To the extent any federal, state, local, or
foreign taxes are due from Seven Oaks through and including the
Effective Time, adequate provision on an estimated basis has been
made for the payment of such taxes except as set forth in
Schedule 3.08 hereto.
(d) Deferred taxes of Seven Oaks and the Seven Oaks
Subsidiaries have been reasonably estimated as shown on Schedule
3.08 hereto.
(e) Each of Seven Oaks and the Seven Oaks Subsidiaries
is in material compliance with, and its records contain all
information and documents (including, without limitation,
properly completed IRS Forms W-8 and Forms W-9) necessary to
comply in all material respects with, all applicable information
reporting and tax withholding requirements under federal, state,
local and foreign laws;
(f) Each of Seven Oaks and the Seven Oaks Subsidiaries
has collected or withheld all taxes required to be collected or
withheld by it, and all such taxes have been paid to the
appropriate governmental authority in the proper manner or set
aside in appropriate accounts for future payment when due.
3.09 Legal Proceedings. Except as set forth in Schedule
3.09 hereto, neither Seven Oaks nor any Seven Oaks Subsidiary is
a party to or has received written notice of any pending or
threatened claim, action, suit, investigation, or proceeding
("Legal Proceedings"), nor to the knowledge of Seven Oaks are any
Legal Proceedings otherwise threatened or unasserted but
considered by Seven Oaks to be probable of assertion against any
of them, nor is any of them subject to any order, judgment, or
decree ("Orders") which, if finally determined adversely, might
have, either individually or in the aggregate, a material adverse
effect on the business, properties, financial condition, or
results of operations of Seven Oaks or any Seven Oaks Subsidiary.
Neither Seven Oaks or any Seven Oaks Subsidiary is subject to any
order, judgment, decree or obligation that would materially limit
the ability of Seven Oaks or any Seven Oaks Subsidiary to operate
their respective businesses in the ordinary course.
3.10 Compliance with Laws. Except as set forth in Schedule
3.10 hereto, Seven Oaks and all Seven Oaks Subsidiaries have all
material permits, licenses, certificates of authority, orders,
and approvals of, and have made all filings, applications, and
registrations with, federal, state, local, and foreign
governmental or regulatory bodies that are required to permit
them to carry on their respective businesses as presently
conducted; all such material permits, licenses, certificates of
authority, orders, and approvals are in full force and effect;
and to the knowledge of Seven Oaks no suspension or cancellation
of any of them is threatened. Except for statutory or regulatory
restrictions of general application and as disclosed on Schedule
3.10 hereto, no federal, state, local, or other governmental
authority has placed any restrictions on the business of Seven
Oaks or any Seven Oaks Subsidiary. Except as disclosed in
Schedule 3.10 hereto, Seven Oaks has received no written notice
of any investigation or review by any governmental entity with
respect to Seven Oaks or any Seven Oaks Subsidiary and, to the
knowledge of Seven Oaks, no such investigation or review is
pending or threatened. Neither Seven Oaks nor any Seven Oaks
Subsidiary is, to the knowledge of Seven Oaks, and except as
disclosed in Schedule 3.10 hereto, in violation of any applicable
law or regulation.
3.11 Environmental Matters. Except as set forth on Schedule
3.11 neither Seven Oaks nor any of the Seven Oaks Subsidiaries is
in violation of or subject to any existing, pending or, to Seven
Oaks' knowledge, threatened investigation or inquiry by any
federal, state or local governmental authority or any response
costs or remedial obligations under any applicable laws or
regulations pertaining to the health or the environment or
hazardous substances as such are defined in the federal
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, the Hazardous Materials Transportation
Act, the Resource Conservation and Recovery Act, or any related
regulations thereto, or any similar laws or regulations of any
state or subdivision thereof (collectively, the "Environmental
Laws"). Neither Seven Oaks nor any of the Seven Oaks
Subsidiaries has obtained or is required to obtain any permits,
licenses or similar authorizations to construct, occupy, operate
or use any buildings, improvements, fixtures and equipment
forming a part of their business by reason of any applicable
Environmental Laws. Seven Oaks has taken all steps necessary to
determine and has determined, to the best of its knowledge, that
no oil, toxic or hazardous substances or solid wastes (all within
the meaning of the applicable Environmental Laws) have been
disposed of or otherwise released by Seven Oaks or any of the
Seven Oaks Subsidiaries. The operation and ownership by Seven
Oaks and the Seven Oaks Subsidiaries of Seven Oaks' business has
not resulted in the disposal or other release of any oil, toxic
or hazardous substances or solid waste.
3.12 Labor Matters. Except as set forth on Schedule 3.12,
Seven Oaks and each of the Seven Oaks Subsidiaries is in
compliance with all federal, state or other applicable laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours, and has not and is
not engaged in any unfair labor practice. No unfair labor
practice complaint against Seven Oaks or any of the Seven Oaks
Subsidiaries is pending or is threatened. Seven Oaks is not a
party to any collective bargaining agreement and no collective
bargaining agreement is currently being negotiated by Seven Oaks.
There is no labor strike, dispute, slowdown or stoppage or union
organization effort pending or, to the best of Seven Oaks'
knowledge, threatened against Seven Oaks or any of the Seven Oaks
Subsidiaries. Neither Seven Oaks nor any of the Seven Oaks
Subsidiaries has experienced any material labor difficulty during
the last three years.
3.13 Employee Benefit Plans.
(a) Seven Oaks has delivered to JSM prior to the
execution of this Agreement copies of all material pension,
retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus or other
material incentive plan, any other material written employee
program, arrangement or agreement, whether arrived at through
collective bargaining or otherwise, any material medical, vision,
dental or other health plan, any life insurance plan, or any
other material employee benefit plan or fringe benefit plan,
including, without limitation, any "employee benefit plan" as
that term is defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), currently
adopted, maintained by, sponsored in whole or in part by, or
contributed to by Seven Oaks or affiliates thereof or any
corporation which is or was a member of a controlled group of
corporations which included Seven Oaks for the benefit of
employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees,
retirees, dependents, spouses, directors, independent contractors
or other beneficiaries are eligible to participate (collectively,
the "Seven Oaks Benefit Plans") and the most recent actuarial
report for any Seven Oaks Benefit Plan that is a defined benefit
pension plan or funded welfare benefit plan. Any of the Seven
Oaks Benefit Plans which is an "employee pension benefit plan,"
as that term is defined in Section 3(2) of ERISA, is referred to
herein as an "ERISA Plan." No Seven Oaks Benefit Plan is or has
been a multi-employer plan within the meaning of Section 3(37) of
ERISA.
(b) All Seven Oaks Benefit Plans are in compliance
with the applicable provisions (including, without limitation,
any funding requirements or limitations) of ERISA, the Internal
Revenue Code of 1986, as amended (the "Code") and any other
applicable laws, the breach or violation of which could result in
a material liability to Seven Oaks.
(c) No Seven Oaks ERISA Plan which is a defined
benefit pension plan has any "unfunded current liability," as
that term is defined in Section 302(d)(8)(A) of ERISA, and the
present fair market value of the assets of any such plan exceeds
the plan's "benefit liabilities," as that term is defined in
Section 4001(a)(16) of ERISA, when determined under actuarial
factors that would apply if the plan terminated in accordance
with all applicable legal requirements.
(d) Seven Oaks has reserved unto its Board of
Directors, or a committee or officer duly authorized by its Board
of Directors, the authority to amend or terminate the Seven Oaks
Benefit Plans at any time without limitation, and neither the
consideration or implementation of the Merger contemplated under
this Agreement nor the amendment or termination of any or all of
the Seven Oaks Benefit Plans on or after the date of this
Agreement will increase (i) Seven Oaks' obligation to make
contributions or any other payments to fund benefits accrued
under such plans as of the date of this Agreement, or (ii) the
benefits accrued or payable with respect to any participant under
such plans.
3.14 Material Contracts. As of the date of this Agreement,
except for this Agreement and the agreements referred to in
Schedule 3.14 hereto and in the Seven Oaks Reports, neither Seven
Oaks nor any Seven Oaks Subsidiary is a party to or is bound by
(a) any material agreement, arrangement, or commitment, (b) any
agreement, arrangement, or commitment relating to the employment,
election, or retention in office of any person; or (c) any
contract, agreement, or understanding with any labor union. True
copies of all agreements and other instruments to which Schedule
3.14 hereto refers have been or will be furnished to JSM to the
extent requested.
3.15 Contract Defaults. Neither Seven Oaks nor any Seven
Oaks Subsidiary is in default under any contract, agreement,
commitment, arrangement, lease, insurance policy, or other
instrument to which they are a party or by which their respective
assets, business, or operations may be bound or affected or under
which they or their respective assets, business, or operations
receive benefits, and there has not occurred any event that with
the lapse of time or the giving of notice or both would
constitute such a default, which default would have a material
adverse affect on the financial condition or results of
operations of Seven Oaks or any Seven Oaks Subsidiary, and to the
knowledge of Seven Oaks no other party to any such instrument is
in default thereunder.
3.16 Brokers and Finders. Neither Seven Oaks nor any of its
respective officers, directors, or employees, has employed any
broker or finder or incurred any liability for any financial
advisory fees (except as to Mercer Capital, with respect to its
opinion regarding the fairness of the consideration for the
Merger to the shareholders of Seven Oaks), whose fee shall be
paid by Seven Oaks, brokerage fees, commissions, or finder's fees
and no broker or finder has acted directly or indirectly for
Seven Oaks in connection with this Agreement or any of the
transactions contemplated hereby.
3.17 Transactions With Affiliates. Except as set forth in
Schedule 3.17 hereto, since April 30, 1995, Seven Oaks has not,
in the ordinary course of business or otherwise, purchased,
leased or otherwise acquired any material property or assets or
obtained any material services from, or sold, leased or otherwise
disposed of any material property or assets or provided any
material services to (except with respect to remuneration for
services rendered as a director, officer or employee of one or
more of Seven Oaks) (a) any holder of 5% or more of the voting
securities of Seven Oaks, (b) any director or executive officer
of Seven Oaks or any of the Seven Oaks Subsidiaries, (c) any
person, firm or corporation that directly or indirectly controls,
is con-trolled by or is under common control with Seven Oaks or
any of the Seven Oaks Subsidiaries or (d) any member of the
immediate family of any of such persons (collectively, for
purposes of this Section, an "Affiliate"). Except as set forth
in Schedule 3.17 hereto, (a) the material contracts of Seven Oaks
do not include any obligation or commitment between Seven Oaks or
any of the Seven Oaks Subsidiaries and any Affiliate, and (b) the
assets of Seven Oaks do not include any receivable or other
obligation or commitment from an Affiliate to Seven Oaks or any
of the Seven Oaks Subsidiaries.
3.18 Insurance. Listed on Schedule 3.18 are all property,
casualty and such other major insurance policies (the "Existing
Policies") currently covering Seven Oaks and each of the Seven
Oaks Subsidiaries. The Existing Policies are in full force and
effect and all premiums required to be paid thereunder have been
paid in full. Seven Oaks has not received any notice that any
coverage under any Existing Policies will be terminated or not
renewed.
3.19 Absence of Undisclosed Liabilities. Seven Oaks does
not have any liabilities or obligations of any kind, whether
absolute, accrued, asserted or unasserted, contingent or
otherwise, except for liabilities disclosed on the consolidated
balance sheet of Seven Oaks prepared as of April 30, 1995, or
that were incurred after the date of such balance sheet in the
ordinary course of business and consistent with past practices,
and except for any such liabilities or obligations which,
individually or in the aggregate (i) would not have a material
adverse effect on Seven Oaks and (ii) exceed $10,000.
3.20 Accuracy of Information. This Agreement, and those
other documents relating to Seven Oaks and the Seven Oaks
Subsidiaries and their respective businesses provided by Seven
Oaks or their employees or agents to JSM in connection with the
transactions contemplated herein, when considered together, do
not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements contained
therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF JSM
JSM represents and warrants to Seven Oaks, with such
exceptions as are stated in this Article IV or set forth in the
disclosure schedules delivered by JSM simultaneously herewith, as
follows:
4.01 Organization and Authority. JSM is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Tennessee, and JSM is duly qualified to do
business and is in good standing in the states of the United
States and foreign jurisdictions where its ownership or leasing
of material amounts of property or the conduct of a material
portion of its business requires it to be so qualified, and has
the corporate power and authority to own its properties and
assets, and to carry on its business as it is now being
conducted, and to execute and deliver this Agreement and the Plan
of Merger and carry out its obligations under each. JSM has in
effect all material federal, state, local, and foreign
governmental authorizations necessary for it to own or lease its
properties and assets and to carry on its business as it is now
being conducted.
4.02 Capitalization of JSM. As of the date of this
Agreement, the authorized capital stock of JSM consists of (a)
10,000 shares of Common Stock, no par value, of which 1,000
shares are issued and outstanding. All outstanding shares of
stock have been duly issued and are validly outstanding, fully
paid, and nonassessable. As of the date of this Agreement, there
are no outstanding options to purchase any shares of JSM Common
Stock. Other than to John Moll or Steve Moll, as of the date of
this Agreement, there are no shares of capital stock or other
equity securities of JSM outstanding and no outstanding options,
warrants, scrip, rights to subscribe to, calls, or commitments of
any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock
of JSM, or contracts, commitments, understandings, or
arrangements by which JSM was or may become bound to issue
additional shares of its capital stock or options, warrants, or
rights to purchase or acquire any additional shares of its
capital stock. Other than to John Moll or Steve Moll, as of the
date of this Agreement, there are no contracts, commitments,
understandings, or arrangements by which JSM or any JSM
Subsidiary is or may become bound to transfer any shares of the
capital stock or other securities of any JSM Subsidiary, except
for a transfer to JSM.
4.03 Authorization.
(a) The execution, delivery, and performance of this
Agreement and Plan of Merger by JSM and JSM Merger and the
consummation of the transactions contemplated hereby and thereby
have been duly authorized by the Boards of Directors of JSM and
JSM Merger and no other corporate proceedings on the part of JSM
and JSM Merger are necessary to authorize this Agreement or the
Plan of Merger and the transactions contemplated hereby and
thereby. This Agreement is the valid and binding obligation of
JSM and JSM Merger enforceable against them in accordance with
its terms (except as such enforceability may be limited by legal
and equitable limitations on the availability of specific
performance and other equitable remedies, and by laws or court
decisions which may be applicable limiting the enforceability of
indemnification provisions).
(b) Neither the execution, delivery, and performance
by JSM and JSM Merger of this Agreement or the Plan of Merger,
nor the consummation of the transactions contemplated hereby and
thereby, nor compliance by JSM and JSM Merger with any of the
provisions hereof or thereof, will violate, conflict with, result
in a breach of any provision of, constitute a default (or an
event that, with or without notice or lapse of time or both,
would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in a right of
termination or acceleration, or the creation of any lien,
security interest, charge, or encumbrance upon any of the
properties or assets of JSM and JSM Merger, under any of the
terms, conditions, or provisions of:
(x) its charter or by-laws; or
(y) any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement, or other instrument or
obligation to which JSM is a party, or by which JSM may be bound
and that would, in any such event, have a material adverse effect
on the financial condition or results of operations of JSM or any
JSM Subsidiary,
4.04 Brokers and Finders. Neither JSM nor any of its
respective officers, directors, or employees, have employed any
broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions, or finder's fees, and
no broker or finder has acted directly or indirectly for JSM in
connection with this Agreement or any of the transactions
contemplated hereby.
4.05 Accuracy of Information. This Agreement, and those
other documents relating to JSM and JSM Subsidiaries and their
respective businesses provided by JSM or their employees or
agents to JSM in connection with the transactions contemplated
herein, when considered together, do not contain an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not
misleading.
ARTICLE V
COVENANTS
5.01 Covenants of Seven Oaks. During the period commencing
on the date hereof and continuing until the earlier of the
Effective Time or the termination of this Agreement, Seven Oaks
agrees (except as expressly contemplated by this Agreement or to
the extent that JSM shall otherwise consent in writing) that:
(a) Seven Oaks will carry on its business in, and only
in, the usual, regular, and ordinary course in substantially the
same manner as heretofore conducted and, to the extent consistent
with such business, use all reasonable efforts to preserve intact
its present business organizations and assets, keep available the
services of its present officers and employees, and preserve its
relationships with customers, suppliers, and others having
business dealings with it.
(b) Seven Oaks will not declare any dividends on or
make other distributions in respect of the Seven Oaks Common
Stock. Seven Oaks will not amend its charter or by-laws as in
effect on the date hereof.
(c) Seven Oaks will not issue, grant, pledge, or sell,
or authorize or propose the issuance of, or split, combine,
reclassify or redeem, purchase, or otherwise acquire or propose
the purchase of, any shares of its capital stock or any class of
securities convertible into, or rights, warrants, or options
(including employee stock options) to acquire, or enter into any
arrangement or contract with respect to the issuance of, any such
shares or other convertible securities or make any other change
in its equity capital structure or issue any stock appreciation
rights.
(d) Seven Oaks will use its best efforts to comply
promptly with all requirements which federal or state law may
impose on it with respect to the Merger and will promptly
cooperate with and furnish information to JSM in connection with
any such requirements imposed upon JSM or Seven Oaks in
connection with the Merger.
(e) Seven Oaks will use its, and will cause the Seven
Oaks Subsidiaries to use their, best efforts to obtain (and to
cooperate with JSM in obtaining) any consent, authorization, or
approval of, or any exemption by, any governmental authority or
agency, or other third party, required to be obtained or made by
Seven Oaks (or by JSM) in connection with the Merger or the
taking of any action contemplated by this Agreement. Seven Oaks
will promptly advise JSM of any notice, complaint, or other
communication which it receives from any regulatory agency with
respect to any of the transactions contemplated in this
Agreement.
(f) Seven Oaks will not acquire direct or indirect
control over any other corporation, association, firm, or
organization, other than in connection with the creation of new
wholly-owned subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement.
(g) Seven Oaks will not sell, lease, or otherwise
dispose of or encumber any of its assets which are material,
individually or in the aggregate, to the business of Seven Oaks.
(h) Seven Oaks will not assume, guarantee, endorse, or
otherwise become liable, whether directly, contingently, or
otherwise, for the obligation of any other party.
(i) Seven Oaks will not make any loans, advances, or
capital contributions to, or investments in, any other person or
entity.
(j) Seven Oaks will not make any capital expenditures
except for capital expenditures authorized prior to the date of
this Agreement or that are the subject of binding contractual
commitments entered into prior to the date of this Agreement,
and, in each case, which are identified on Schedule 5.01(j).
(k) Seven Oaks will not incur any additional debt
obligation or other obligation for borrowed money (other than in
replacement of existing short term debt with other short term
debt) in excess of the remaining borrowing capacity under its
Line of Credit on the date hereof.
(l) Seven Oaks will not grant any increase in
compensation to its employees as a class; pay any bonus or
accelerate or effect any change in any employee or retirement
benefits for any employees or officers (unless such change is
required by applicable law or regulation).
(m) Seven Oaks will not amend any existing employment
contract (unless such amendment is required by law or regulation)
or enter into any new employment contract with any person.
(n) Seven Oaks will not adopt any new employee benefit
plan or make any change in or to any existing employee benefit
plan other than any such change that is required by law or
regulation or that, in the opinion of counsel, is necessary or
advisable to maintain the tax-qualified status of any such plan.
(o) Seven Oaks will promptly advise JSM orally and in
writing of any change in the business of Seven Oaks which is or
may reasonably be expected to be materially adverse to either
Seven Oaks or any Seven Oaks Subsidiary.
(p) Seven Oaks will not take, agree to take, or
knowingly permit to be taken any action, or do or knowingly
permit to be done anything in the conduct of the business of
Seven Oaks, or otherwise, which would (i) be contrary to or in
breach of any of the terms or provisions of this Agreement, (ii)
cause any of the representations of Seven Oaks contained herein
to be or become untrue in any material respect, (iii) adversely
affect the ability of either Seven Oaks or JSM to obtain any
necessary approvals of governmental authorities or other third
parties required for the transactions contemplated hereby or (iv)
adversely affect the ability of Seven Oaks to perform its
covenants and agreements under this Agreement and the Plan of
Merger.
(q) As promptly as possible following the close of
each month which may occur prior to the Closing Date, Seven Oaks
will provide JSM a true copy of its financial statements for such
month, including a balance sheet and income statement, and any
supporting information reasonably requested by JSM.
(r) Seven Oaks will not enter into any contract or
agreement other than in connection with the transactions
contemplated by this Agreement.
(s) Seven Oaks will not effect any change in
accounting policies, practices or procedures, except to the
extent required by applicable accounting pronouncements.
(t) Seven Oaks will not make any tax election or
settle or compromise any material federal, state, local or
foreign income tax liability; notwithstanding the foregoing,
Seven Oaks, may pay up to $10,000 in connection with the
settlement of the matter referred to in Schedule 3.08.
(u) Seven Oaks will not hold any meeting of its
shareholders except to the extent required by the request of the
shareholders entitled to call a meeting under such its Bylaws or
the Act.
(t) Seven Oaks shall use its best efforts to cause to
be delivered to JSM a letter of Deloitte & Touche, dated a date
within two business days before the Closing Date, in form and
substance reasonably satisfactory to JSM and customary in scope,
relating to the unaudited financial statements of Seven Oaks for
the quarter ended July 31, 1995 and for subsequent periods and
substance for letters delivered by independent public accountants
in connection with transactions like the transactions
contemplated by this Agreement.
5.02 Covenants of JSM. During the period commencing on the
date hereof and continuing until the earlier of the Effective
Time or the termination of this Agreement, JSM agrees (except as
expressly contemplated by this Agreement or to the extent that
Seven Oaks shall otherwise consent in writing) that:
(a) JSM will use its best efforts to comply promptly
with all requirements which federal or state law may impose on it
with respect to the Merger and will promptly cooperate with and
furnish information to Seven Oaks in connection with any such
requirements imposed upon Seven Oaks or JSM in connection with
the Merger.
(b) JSM will use its, and will cause the JSM
Subsidiaries to use their, best efforts to obtain (and to
cooperate with Seven Oaks in obtaining) any consent,
authorization, or approval of, or any exemption by, any
governmental authority or agency, or other third party, required
to be obtained or made by JSM (or by Seven Oaks) in connection
with the Merger or the taking of any action contemplated by this
Agreement. JSM will promptly advise Seven Oaks of any notice,
complaint, or other communication which it receives from any
regulatory agency with respect to any of the transactions
contemplated in this Agreement.
(c) JSM will promptly advise Seven Oaks orally and in
writing of any change in the business of JSM which is or may
reasonably be expected to be materially adverse to either JSM or
any JSM Subsidiary.
(d) JSM will not take, agree to take, or knowingly
permit to be taken any action, or do or knowingly permit to be
done anything in the conduct of the business of JSM, or
otherwise, which would (i) be contrary to or in breach of any of
the terms or provisions of this Agreement, (ii) cause any of the
representations of JSM contained herein to be or become untrue in
any material respect, (iii) adversely affect the ability of
either JSM or Seven Oaks to obtain any necessary approvals of
governmental authorities or other third parties required for the
transactions contemplated hereby, or (iv) adversely affect the
ability of JSM to perform its covenants and agreements under this
Agreement and the Plan of Merger.
5.03 Notice; Efforts to Remedy. Each party hereto shall
promptly give written notice to the other party hereto upon
becoming aware of the impending occurrence of any event which
would cause or constitute a breach of any of the representations,
warranties, or covenants of the first such party contained or
referred to in this Agreement or the Plan of Merger and shall use
its best efforts to prevent or promptly remedy the same.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Investigation; Confidentiality. Prior to the Effective
Time, Seven Oaks and JSM may make or cause to be made such
investigation, if any, of the business and properties of the
other and of the other's financial and legal condition as such
party reasonably deems necessary or advisable to familiarize
itself and its advisers with such business, properties, and other
matters, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not
interfere unnecessarily with normal operations. Seven Oaks and
JSM each agrees to furnish the other and the other's advisers
with such financial and operating data and other information with
respect to its businesses, properties, and employees as Seven
Oaks or JSM shall from time to time reasonably request. Seven
Oaks agrees to permit JSM and its officers and agents full access
to its premises, properties, personnel, books, records (including
tax records), contracts, and documents of or pertaining to Seven
Oaks or any Seven Oaks Subsidiary, during normal business hours
upon reasonable notice. No investigation by one party hereto
shall affect the representations and warranties of the other
party, and each such representation and warranty shall survive
any such investigation. Each party hereto shall, and shall cause
its advisers to, maintain the confidentiality of all confidential
information furnished to it by the other party hereto concerning
such other party's business, operations, and financial condition,
and shall not use such information for any purpose for a period
of five years after the date hereof, except in furtherance of the
transactions contemplated by this Agreement. If this Agreement
is terminated prior to the Effective Time, each party hereto
shall, and shall cause its advisers to, promptly return all
documents and copies of, and all drafts and working papers
containing, confidential information received from the other
party hereto.
6.02 No Solicitation. Seven Oaks shall not, after the date
hereof and before the Effective Time, directly or indirectly,
through any officer, director, employee, agent or otherwise,
solicit, initiate or encourage submission of proposals or offers
from any person relating to any acquisition or purchase of all or
(other than in the ordinary course of business) a substantial
portion of the assets of, or any equity interest in, Seven Oaks
or any business combination involving Seven Oaks or, except to
the extent required by fiduciary obligations under applicable law
as advised by counsel, participate in any negotiations regarding,
or furnish to any other person any information with respect to,
or otherwise cooperate in any way with, or assist or participate
in, facilitate or encourage, any effort or attempt by any other
person to do or seek any of the foregoing. Seven Oaks shall
promptly advise JSM if any such proposal or offer, or any inquiry
or contact with any person with respect thereto, is made, shall
promptly inform JSM of all the terms and conditions thereof, and
shall furnish to JSM copies of any such written proposal or offer
and the contents of any communications in response thereto.
Seven Oaks shall not waive any provisions of any "standstill"
agreements between it or any Seven Oaks Subsidiary and any party,
except to the extent that such waiver is, as advised by counsel,
required by fiduciary obligations under applicable law.
6.03 Shareholder Approval; Board Recommendation. Seven Oaks
shall cause a meeting of its Shareholders to be held no later
than November 30, 1995 for the purpose of voting upon and
approving the Merger and approving and adopting this Agreement
and the Plan of Merger. The Board of Directors will recommend
approval of the Merger to the Seven Oaks shareholders.
6.04 Current Information. During the period from the date
of this Agreement to the Effective Time, Seven Oaks and JSM each
shall cause one or more of its representatives to confer on a
regular and frequent basis with representatives of the other and
to report on the general status of its ongoing operations. Each
of Seven Oaks and JSM shall promptly notify the other of any
material change in the normal course of its business or in the
operation of its properties and of any governmental complaints,
investigations, or hearings (or communications indicating that
the same may be contemplated), or the institution or the threat
of material litigation involving such party, and will keep the
other fully informed with respect to such events.
6.05 Articles of Merger. The parties agree that pursuant to
the Act, JSM shall deliver appropriate Articles of Merger to the
Secretary of State of the State of Tennessee to be filed promptly
following the Closing.
6.06 Expenses. Each party hereto shall pay its own expenses
incident to preparing for, entering into, and carrying out this
Agreement and to consummating the Merger and Seven Oaks may pay
its reasonable costs and expenses from the assets of Seven Oaks
prior to the Closing. Notwithstanding the foregoing, if prior to
the termination of this Agreement Seven Oaks agrees in writing to
sell its stock or assets to a party other than JSM or JSM Merger,
Seven Oaks will reimburse JSM for its out of pocket costs
reasonably incurred in connection with the Merger.
6.07 Press Releases. Seven Oaks and JSM shall consult with
each other as to the form and substance of any press release or
other public disclosure of matters related to this Agreement or
any of the transactions contemplated hereby; provided, however,
that nothing in this Section 6.07 shall be deemed to prohibit any
party hereto from making any disclosure which its counsel deems
necessary or advisable to fulfill such party's disclosure
obligations imposed by law. Any such disclosure will be
transmitted in writing or read orally to the other party or its
counsel prior to its publication.
6.08 Miscellaneous Agreements and Consent. Subject to the
terms and conditions of this Agreement, each of the parties
hereto agrees to use all reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things
necessary, proper, or advisable under applicable laws and
regulations to consummate and make effective, as soon as
practicable after the date hereof, the transactions contemplated
by this Agreement and the Plan of Merger, including, without
limitation, taking all appropriate actions to lift or rescind any
injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the
transactions contemplated hereby. Seven Oaks and JSM shall each
take all appropriate actions to obtain consents of all third
parties and governmental bodies necessary or desirable for the
consummation of the transactions contemplated by this Agreement
and the Plan of Merger and to remove any condition or state of
facts pertaining to either of them or their respective
subsidiaries that otherwise would make consummation of the
transactions contemplated hereby a violation of applicable law.
ARTICLE VII
CONDITIONS
7.01 Conditions to Obligations of Seven Oaks to Effect the
Merger. The obligations of Seven Oaks to effect the Merger shall
be subject to the fulfillment, or waiver by Seven Oaks, at or
prior to the Closing of the following conditions:
(a) Permits, Consents, and Approvals. All approvals
and authorizations of, filings and registrations with, and
notifications to, all federal and state authorities (including
the SEC and state "Blue Sky" authorities, as applicable) and
other third parties required for the consummation of the Merger
shall have been duly obtained or made and shall be in full force
and effect and all waiting periods required by law shall have
expired.
(b) Corporate Action. The Board of Directors of JSM
(acting as such and as sole shareholder of JSM Merger) shall have
taken all corporate action necessary to effectuate the Merger and
the other transactions contemplated hereby, and JSM shall have
furnished Seven Oaks with certified copies of the resolutions
duly adopted by JSM's Board of Directors evidencing the same.
(c) Representations and Warranties. The
representations and warranties of JSM set forth in this Agreement
were true and correct as of the date of this Agreement, except
for any such representations and warranties waived in writing by
Seven Oaks; and JSM shall have delivered to Seven Oaks a
certificate to that effect, such certificate being dated the
Closing Date and signed by JSM's President. Such certificate may
state, as appropriate, that it is given to the best of such
officer's knowledge.
(d) Covenants. Each and all of the covenants and
agreements of JSM to be performed or complied with pursuant to
this Agreement and the Plan of Merger prior to the Effective Time
shall have been duly performed and complied with in all material
respects or waived in writing by Seven Oaks, and JSM shall have
delivered to Seven Oaks a certificate to that effect dated the
Closing Date and signed by JSM's President.
(e) No Injunction; Permissible Transactions. Neither
Seven Oaks nor JSM shall be prohibited by any order, ruling,
consent decree, judgment, or injunction of a court or regulatory
agency of competent jurisdiction from consummating the Merger or
the other transactions contemplated by this Agreement, and
consummation of the Merger and the other transactions
contemplated hereby shall be legally permissible pursuant to
applicable law.
(f) Material Adverse Changes. There shall have been
no reasonable determination by the Board of Directors of Seven
Oaks that the Merger or the other transactions contemplated by
this Agreement have become impractical because any state of war,
national emergency, or banking moratorium shall have been
declared in the United States or a general suspension or trading
on the New York Stock Exchange shall have occurred. There shall
have been no reasonable determination by the Board of Directors
of Seven Oaks that consummation of the Merger or the other
transactions contemplated by this Agreement is not in the best
interests of Seven Oaks or its shareholders by reason of the
occurrence of a material adverse change in the financial
condition or results of operations of JSM and the JSM
Subsidiaries on a consolidated basis between the date hereof and
the Closing Date.
(g) Opinions of Counsel. JSM shall have delivered to
Seven Oaks an opinion, dated the Closing Date, of Burch, Porter &
Johnson, PLC, or of other counsel reasonably satisfactory to
Seven Oaks and its counsel.
(h) Repayment/Refinancing of Line of Credit;
Capitalization. Prior to the Closing, Seven Oaks shall be
provided with evidence reasonably satisfactory to Seven Oaks
regarding (i) repayment or refinancing of the Seven Oaks'
existing $1 million line of credit ("Line of Credit") with
National Bank of Commerce, Memphis, Tennessee ("NBC"), including
the written consent or agreement of NBC to such repayment or
refinancing, (ii) the Surviving Corporation's access to new
capital in the aggregate amount of at least $3 million and (iii)
the release, as of the Effective Time, of all of the current
guarantors of the Line of Credit, who are listed on Schedule
7.01(h).
(i) Valuation/Opinion of Financial Advisor. Seven
Oaks shall have received the opinion of Mercer Capital to the
effect that the consideration contemplated by the Plan of Merger
is fair to the holders of shares of Seven Oaks Common Stock from
a financial point of view.
(j) Shareholders Agreement.The persons listed on
Schedule 1.04(c)(v) shall have entered into a shareholders
agreement covering, among other customary matters, (i) rights to
purchase shares from terminated, resigned, deceased or
incapacitated employees, (ii) restrictions on transfers of shares
and (iii) elections and removals of directors.
(k) JSM Schedules. The completion and attachment to
this Agreement of all Exhibits and Schedules hereto required to
be provided by JSM shall be a condition precedent to the
completion of the transactions contemplated herein at Closing.
7.02 Conditions to Obligations of JSM to Effect the Merger.
The obligations of JSM to effect the Merger shall be subject to
the fulfillment, or waiver by JSM, at or prior to the Closing of
the following conditions:
(a) Permits, Consents, and Approvals. All approvals
and authorizations of, filings and registrations with, and
notifications to, all federal and state authorities (including
the SEC and state "Blue Sky" authorities, as applicable) and
other third parties required for the consummation of the Merger
shall have been duly obtained or made and shall be in full force
and effect and all waiting periods required by law shall have
expired.
(b) Corporate Action. The Board of Directors of Seven
Oaks shall have taken all corporate action necessary to
effectuate the Merger and the other transactions contemplated
hereby, and Seven Oaks shall have furnished JSM with certified
copies of the resolutions duly adopted by Seven Oaks' Board of
Directors evidencing the same.
(c) Shareholder Approval. The shareholders of Seven
Oaks shall have approved the Merger and approved and adopted this
Agreement and the Plan of Merger, and the transactions
contemplated thereby, as and to the extent required by law and by
the provisions of any governing instruments, and Seven Oaks shall
have furnished JSM with certified copies of the resolutions duly
adopted by the Seven Oaks shareholders approving the Merger and
approving and adopting this Agreement and the Plan of Merger.
(d) Representations and Warranties. The
representations and warranties of Seven Oaks set forth in this
Agreement shall be true and correct as of the date of this
Agreement and as of the Closing Date with the same effect as
though all such representations and warranties had been made on
and as of the Closing Date, except for any such representations
and warranties waived in writing by JSM and except for any such
representations and warranties made as of a specific date, which
shall be true and correct in all respects as of such date, and
Seven Oaks shall have delivered to JSM (i) a certificate to that
effect as to Seven Oaks' representations and warranties, which
may state, as appropriate, that it is given to the best of the
knowledge of the officer signing the certificate, and (ii) a
certificate to the effect that, other than as set forth on
Schedule 3.06, there has been no material adverse change in the
financial condition or results of operations of Seven Oaks and
the Seven Oaks Subsidiaries on a consolidated basis from April
30, 1995, to the Closing Date, each such certificate being dated
the Closing Date and signed by Seven Oaks' President.
(e) Covenants. Each and all of the covenants and
agreements of Seven Oaks to be performed or complied with
pursuant to this Agreement and the Plan of Merger prior to the
Effective Time shall have been duly performed and complied with
in all material respects or waived in writing by JSM, and Seven
Oaks shall have delivered to JSM a certificate to that effect
dated as of the Effective Time and signed by its President.
(f) No Injunction; Permissible Transactions. Neither
JSM nor Seven Oaks shall be prohibited by any order, ruling,
consent decree, judgment, or injunction of a court or regulatory
agency of competent jurisdiction from consummating the Merger or
the other transactions contemplated by this Agreement, and
consummation of the Merger and the other transactions
contemplated hereby shall be legally permissible pursuant to
applicable law.
(g) Material Adverse Changes. There shall have been
no reasonable determination by the Board of Directors of JSM that
the Merger or the other transactions contemplated by this
Agreement have become impractical because any state of war,
national emergency, or banking moratorium shall have been
declared in the United States or a general suspension of trading
on the New York Stock Exchange shall have occurred. There shall
have been no reasonable determination by the Board of Directors
of JSM that consummation of the Merger or the other transactions
contemplated by this Agreement is not in the best interests of
JSM or its shareholders by reason of the occurrence of a material
adverse change in the financial condition or results of
operations of Seven Oaks and any Seven Oaks Subsidiary on a
consolidated basis between April 30, 1995 and the Effective Time.
(h) Opinions of Counsel. Seven Oaks shall have
delivered to JSM an opinion, dated the Closing Date, of Hunton &
Williams or of other counsel reasonably satisfactory to JSM and
its counsel.
(i) Repayment of Debentures. Prior to the Closing,
Seven Oaks and JSM shall have reached a satisfactory agreement
regarding the repayment of Seven Oaks' debentures listed on
Schedule 3.03 hereto and cancellation of all outstanding
warrants.
(j) Consent to Continuation and Assumption of Lease.
Prior to the Closing, Seven Oaks shall have obtained and
delivered to JSM the consent of Inmobiliaria Axial, S.A. de C.V.
("Lessor") to the continuation after the Closing, of that certain
lease agreement between Seven Oaks and Lessor for use of Seven
Oaks facilities located in Juarez, Mexico.
(k) Consent to Continuation and Assignment of
Processing Agreement. Seven Oaks shall have obtained and
delivered to JSM the consent of Fleming to the continuation and
assumption of that certain First Amended and Restated Processing
Agreement, dated as of July 31, 1995, by and among Fleming,
certain subsidiaries of Fleming, Seven Oaks and Coupon
Redemption, Inc.
(l) Cancellation of Options and Warrants. Seven Oaks
shall have canceled or caused the cancellation of the options and
warrants held by persons listed on Schedule 3.03, in a manner
that does not create any rights in such holders to obtain Seven
Oaks Common Stock, cash or replacement instruments.
(m) Repayment/Refinancing of Line of Credit;
Capitalization. Prior to the Closing, JSM shall be provided with
evidence reasonably satisfactory to JSM regarding (i) repayment
or refinancing of the Seven Oaks' Line of Credit, including the
written consent or agreement of NBC to such repayment or
refinancing and (ii) the Surviving Corporation's access to new
capital in the aggregate amount of at least $3 million.
(n) Dissenters. The holders of no more than 10% of
the outstanding Seven Oaks Common Stock shall have elected to
exercise their statutory dissenter's rights as provided in the
Act; only holders who have provided notice of the exercise of
their dissenter's rights in the form and within the time periods
required by the Act shall be included in the calculation provided
for by this Section 5.02(o).
(o) Cold Comfort. JSM shall have received the letter
of Deloitte & Touche on the unaudited financial statements of
Seven Oaks for the quarter ended July 31, 1995, in form and
substance as is customary in transactions like the Merger and as
acceptable to JSM in the exercise of its reasonable discretion.
(p) Valuation/Opinion of Financial Advisor. Seven
Oaks shall have received the opinion of Mercer Capital to the
effect that the consideration contemplated by the Plan of Merger
is fair to the holders of shares of Seven Oaks Common Stock from
a financial point of view.
(q) Shareholders Agreement.The persons listed on
Schedule 1.04(c)(v) shall have entered into a shareholders
agreement covering, among other customary matters, (i) rights to
purchase shares from terminated, resigned, deceased or
incapacitated Seven Oaks employees, (ii) restrictions on
transfers of shares and (iii) elections and removals of
directors.
(r) Termination of Certain Agreements. All employment
and severance agreements between Peter R. Pettit, Tommy R.
Thompson and Frank A. Sullivan and Seven Oaks shall have been
canceled.
(s) Seven Oaks Schedules. The completion and
attachment to this Agreement of all Exhibits and Schedules hereto
required to be provided by Seven Oaks shall be a condition
precedent to the completion of the transactions contemplated
herein at Closing.
ARTICLE VIII
TERMINATION, AMENDMENT, AND WAIVER
8.01 Termination. Notwithstanding any other provision of
this Agreement or the Plan of Merger, and notwithstanding the
approval of the Merger or adoption or approval of this Agreement
or the Plan of Merger by the shareholders of Seven Oaks and/or
JSM, this Agreement may be terminated and the Merger abandoned:
(a) upon the written notice of JSM delivered to Seven
Oaks on or before September 22, 1995; or
(b) by mutual written consent of JSM and Seven Oaks;
or
(c) by a vote of a majority of the Boards of Directors
of both Seven Oaks and JSM; or
(d) by a vote of a majority of the Board of Directors
of Seven Oaks, in the event of a material breach of this
Agreement by JSM; or
(e) by a vote of a majority of the Board of Directors
of JSM, in the event of a material breach of this Agreement by
Seven Oaks; or
(f) by a vote of a majority of the Board of Directors
of either Seven Oaks or JSM in the event: (i) the Merger shall
not have been consummated on or before December 31, 1995; (ii)
any approval of any governmental or other regulatory authority
required for the consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final
non-appealable action of such authority; or (iii) in the event of
an occurrence described in Section 7.01(f) in the case of Seven
Oaks or Section 7.02(g) in the case of JSM; or
(g) if the Merger shall have been voted on by holders
of Seven Oaks Common Stock at a meeting duly convened therefor,
and the votes shall not have been sufficient to satisfy the
condition set forth in Section 7.02(c) hereof; or
(h) by JSM if the Board of Directors of Seven Oaks has
recommended to its shareholders the approval of a bona fide
proposal to acquire all of the outstanding capital stock or
assets of Seven Oaks and the Seven Oaks Subsidiaries, which the
Board of Directors believes, in good faith after consultation
with its financial advisors, is more favorable from a financial
point of view to the shareholders of Seven Oaks than the proposal
set forth in this Agreement; or
(i) by JSM if the Board of Directors of Seven Oaks, in
the exercise of its fiduciary duties upon the written advice of
counsel, has withdrawn, amended or modified in any manner adverse
to JSM, its favorable recommendation of the transactions
contemplated by this Agreement and the Plan of Merger. *stop
8.02 Effect of Termination. In the event of termination of
this Agreement by either JSM or Seven Oaks as provided above,
this Agreement shall forthwith become void and there shall be no
liability on the part of either JSM or Seven Oaks, except as set
forth in the last two sentences of Section 6.01 and in the last
sentence of Section 6.06.
8.03 Amendment. This Agreement and the Exhibits hereto may
be amended by the parties hereto, by action taken by or on behalf
of their respective Boards of Directors, at any time before or
after approval of the Merger and the approval and adoption of
this Agreement and the Plan of Merger by the shareholders of
Seven Oaks and/or JSM; provided, however, that after such
approval by the Seven Oaks shareholders no such amendment shall
reduce the amount or change in a materially adverse way the form
of the consideration to be delivered to Seven Oaks' shareholders
as provided in Section 1.04 of this Agreement.
8.04 Extensions and Waivers. Each party hereto, by written
instrument signed by its Chairman, Vice Chairman, President, or
Chief Financial Officer, may extend the time for the performance
of any of the obligations or other acts of the other party hereto
and may waive (a) any inaccuracies of the other party in the
representations or warranties contained in this Agreement or in
any document delivered pursuant hereto, (b) compliance with any
of the covenants or agreements of the other party contained in
this Agreement, (c) the performance (including performance to the
satisfaction of a party or its counsel) by the other party of any
of its obligations set out herein, and (d) the satisfaction of
any condition to the obligations of the waiving party pursuant
hereto.
8.05 Amendments, Consents, and Approvals. Any amendment of
this Agreement and any consent or approval of a party required or
permitted pursuant to this Agreement shall be effective only when
it is in writing signed by an executive officer of such party
holding the title of Chairman, Vice Chairman, President, or Chief
Financial Officer.
ARTICLE IX
GENERAL PROVISIONS
9.01 Knowledge. "The knowledge of Seven Oaks" and "the
knowledge of Seven Oaks and the Seven Oaks Subsidiaries" shall
mean the actual knowledge of the persons listed on Schedule 9.01.
9.02 Specific Enforceability. The parties recognize and
hereby acknowledge that it would be impossible to measure in
monetary terms the damages which would result to a party hereto
by reason of the failure of any of the parties hereto to perform
any of the obligations imposed on it by this Agreement.
Accordingly, if after the Seven Oaks shareholders' meeting any
party hereto should institute an action or proceeding seeking
specific enforcement of the provisions hereof, each party hereto
against which such action or proceeding is brought hereby waives
the claim or defense that the party instituting such action or
proceeding has an adequate remedy at law and hereby agrees not to
urge in any such action or proceeding the claim or defense that
such a remedy at law exists.
9.03 Termination of Representations and Warranties;
Survival of Certain Covenants. The respective representations
and warranties of Seven Oaks and JSM contained in this Agreement
and the Plan of Merger and in the instruments and certificates
delivered pursuant hereto or thereto shall expire on, and be
terminated and extinguished at, the earlier of (i) the
termination of this Agreement in accordance with its terms or
(ii) the Effective Time; provided, however, that any
representation or warranty in any agreement, contract, report,
opinion, undertaking, or other document or instrument delivered
hereunder in whole or in part by any person other than Seven Oaks
or JSM (or directors of officers thereof in their capacities as
such) shall not so terminate and shall not be so extinguished;
and provided further that, in the event that the Merger is
consummated, no representation or warranty of Seven Oaks or JSM
contained herein shall be deemed to be terminated or extinguished
so as to deprive JSM or Seven Oaks of any defense at law or in
equity which it otherwise would have to any claim against it by
any person, including, without limitation, any shareholder or
former shareholder of Seven Oaks, the representations and
warranties aforesaid (except to the extent that they shall have
been waived in accordance herewith) being material inducements to
the consummation by Seven Oaks and JSM of the Merger and other
transactions contemplated hereby.
9.04 Brokerage Fees and Commissions. No broker, finder or
investment banker (other than Mercer Capital, whose fees shall be
paid by Seven Oaks) is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or
on behalf of Seven Oaks; and no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of
JSM.
9.05 Notices. Any notice or other communication required or
permitted under this Agreement or the Plan of Merger shall be
effective only when it is in writing and actually delivered
either (a) by hand, (b) by telegram or facsimile transmission, or
(c) by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
(a) If to Seven Oaks:
Seven Oaks International, Inc.
700 Colonial Road, Suite 100
Memphis, Tennessee 38117
Attention: Chairman and Chief Executive Officer
With a copy to:
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
Attention: Thurston R. Moore, Esq.
(b) If to JSM:
1510 Ferdinand Street
Coral Gables, Florida 33134
Attention: Mr. Steve Moll
With a copy to:
Burch, Porter & Johnson, PLC
Morgan Keegan Tower
50 North Front Street
Memphis, Tennessee 30103
Attention: Laurel C. Williams, Esq.
or such other address or firm as any such party may designate by
notice to the other party, and shall be deemed to have been given
as of the date received.
9.06 Parties in Interest. This Agreement is binding upon
and is for the benefit of the parties hereto and their respective
successors, legal representatives, and assigns, and no person not
a party hereto shall have any rights or benefits under this
Agreement, either as a third party beneficiary or otherwise.
9.07 Exhibits and Schedules. Each and all of the exhibits
and schedules referred to herein and attached hereto are hereby
incorporated into this Agreement for all purposes as fully as if
set forth herein.
9.08 Severability; Invalid Provisions. If any provision
hereof is held to be illegal, invalid or unenforceable by a court
of competent jurisdiction under present or future laws effective
during the term hereof, such provision shall be fully severable;
this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a
part hereof; and the remaining provisions hereof shall remain in
full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.
In lieu of such illegal, invalid or unenforceable provision there
shall be added automatically as a part hereof a provision as
similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
9.09 Headings. The headings in this Agreement are inserted
for convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this
Agreement.
9.10 Subsidiaries. For the purpose of this Agreement and
the Plan of Merger, any reference to any subsidiary shall also
refer to and include any subsidiaries of such subsidiaries.
9.11 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
9.12 Time of Essence. Time is of the essence as to each and
every provision of this Agreement.
9.13 Entire Agreement. This Agreement and the Plan of
Merger constitute the entire agreement and supersede any and all
prior agreements and understandings, both written and oral, among
the parties, or any of them, with respect to the subject matter
hereof and thereof.
9.14 Applicable Law. This Agreement and the Plan of Merger
shall be governed by the laws of the State of Tennessee,
regardless of the laws that would otherwise govern under
applicable principles of conflicts of laws thereof, except to the
extent that federal law shall be controlling.
9.15 Delivery by Telecopier. This Merger Agreement shall
become effective upon execution and delivery hereof by all the
parties hereto; delivery of this Merger Agreement may be made by
telecopier to the Parties with original copies promptly to follow
by overnight courier.
IN WITNESS WHEREOF, JSM, JSM Merger and Seven Oaks each have
caused this Agreement to be executed and delivered by its
respective duly authorized officers, all as of the date first
written above.
JSM NEWCO, INC.
By:________________________________
Printed Name:______________________
Title:_____________________________
JSM MERGER SUB, INC.
By:________________________________
Printed Name:______________________
Title:_____________________________
SEVEN OAKS INTERNATIONAL, INC.
By:________________________________
Printed Name:______________________
Title:_____________________________
EXHIBITS:
I - Plan of Merger
SEVEN OAKS DISCLOSURE SCHEDULES:
1.03 - Officers
1.04(c)(v)-Post-Merger Shareholders
3.02 - List of Seven Oaks Subsidiaries
3.03 - Stock Options, Debentures and Warrants
3.04 - Events Constituting a Default in Charter, By-Laws or
Material Agreements
3.05 - Seven Oaks Reports Disclosures
3.06 - Absence of Certain Changes or Events
3.08 - Adverse Tax Matters
3.09 - Legal Proceedings
3.10 - Compliance with Laws
3.11 - Environmental Matters
3.12 - Labor Matters
3.14 - Material Contracts
3.17 - Transactions with Affiliates
3.18 - Insurance
3.19 - Undisclosed Liabilities
5.01(j) - Capital Expenditures
7.01(h) - Line of Credit Guarantors
9.01 - Knowledge
10(a) - Agreement and Plan of Merger by and between
JSM Newco, Inc., JSM Merger Sub, Inc., and
Seven Oaks International, Inc. dated
September 8, 1995