EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
Dated as of November 14, 2003
Among
AMAZING SAVINGS HOLDING LLC,
OJSAC, INC.
And
ODD JOB STORES, INC.
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TABLE OF CONTENTS
PAGE
ARTICLE I The Merger......................................................................................1
Section 1.01. The Merger............................................................................1
Section 1.02. Closings..............................................................................2
Section 1.03. Effective Time........................................................................2
Section 1.04. Effects of the Merger.................................................................2
Section 1.05. Articles of Incorporation and Codes of Regulations....................................2
Section 1.06. Directors.............................................................................2
Section 1.07. Officers..............................................................................3
ARTICLE II Effect of the Merger on the Common Stock of the Constituent
Corporations; Exchange of Certificates;.........................................................3
Section 2.01. Conversion of Common Stock of OJSAC...................................................3
Section 2.02. Rights of Dissenting Shareholders.....................................................3
Section 2.03. Exchange of Interests.................................................................4
ARTICLE III Representations and Warranties of the Company...................................................5
Section 3.01. Organization..........................................................................5
Section 3.02. Capitalization........................................................................6
Section 3.03. Authority.............................................................................7
Section 3.04. Consents and Approvals; No Violations.................................................7
Section 3.05. SEC Documents; Undisclosed Liabilities................................................8
Section 3.06. Absence of Certain Changes or Events..................................................9
Section 3.07. Legal Proceedings....................................................................10
Section 3.08. Compliance With Applicable Law; Permits..............................................11
Section 3.09. Contracts............................................................................11
Section 3.10. Tax Matters..........................................................................12
Section 3.11. Employee Benefits and Labor Matters..................................................14
Section 3.12. Environmental and Health and Safety Matters..........................................17
Section 3.13. Properties; Real Estate; Intellectual Property.......................................18
Section 3.14. Opinion of Financial Advisor.........................................................22
Section 3.15. Finders or Brokers...................................................................22
Section 3.16. Voting Requirements..................................................................22
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE IV Representations and Warranties of Amazing Savings and OJSAC....................................22
Section 4.01. Organization.........................................................................22
Section 4.02. Capitalization.......................................................................23
Section 4.03. Authority ...........................................................................23
Section 4.04. Consents and Approvals; No Violations................................................23
Section 4.05. Assets and Liabilities...............................................................24
Section 4.06. Operations...........................................................................24
Section 4.07. Investment...........................................................................24
Section 4.08. Legal Proceedings....................................................................24
Section 4.09. Finders or Brokers...................................................................24
ARTICLE V Additional Agreements..........................................................................25
Section 5.01. Indemnification, Exculpation and Insurance...........................................25
Section 5.02. Fees and Expenses....................................................................26
Section 5.03. Public Announcements.................................................................26
Section 5.04. Agreements...........................................................................27
ARTICLE VI General Provisions.............................................................................27
Section 6.01. Nonsurvival of Representations and Warranties........................................27
Section 6.02. Notices..............................................................................27
Section 6.03. Definitions..........................................................................28
Section 6.04. Interpretation.......................................................................29
Section 6.05. Counterparts.........................................................................29
Section 6.06. Entire Agreement; No Third-Party Beneficiaries.......................................29
Section 6.07. Governing Law........................................................................29
Section 6.08. Assignment...........................................................................29
Section 6.09. Specific Enforcement; Consent to Jurisdiction........................................30
Section 6.10. Severability.........................................................................30
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Table of Defined Terms
Term Section
- ---- -------
Affiliate...........................................................................Section 6.03(a)
Agreement..............................................................................Preamble
Amazing Savings........................................................................Preamble
Balance Sheet Date..................................................................Section 3.05(d)
Bankruptcy and Equity Exception.....................................................Section 3.09(b)
Certificate of Merger................................................................Section 1.03
Certificate..........................................................................Section 2.01
Claim...............................................................................Section 5.01(b)
Closing Date.........................................................................Section 1.02
Closings.............................................................................Section 1.02
COBRA...............................................................................Section 3.11(m)
Code...................................................................................Preamble
Company Charter Documents...........................................................Section 3.01(c)
Company Common Stock.................................................................Section 2.01
Company Disclosure Schedule.........................................................Section 3.01(b)
Company Intellectual Property.......................................................Section 3.13(c)
Company Material Adverse Effect.....................................................Section 3.01(a)
Company Plans.......................................................................Section 3.11(a)
Company Preferred Stock.............................................................Section 3.02(a)
Company................................................................................Preamble
DGCL................................................................................Section 1.01(a)
Effective Time.......................................................................Section 1.03
Employees...........................................................................Section 3.11(a)
ERISA Affiliate.....................................................................Section 3.11(a)
ERISA...............................................................................Section 3.11(a)
Exchange Act........................................................................Section 3.05(a)
Fairness Opinion.....................................................................Section 3.14
Filed SEC Documents..................................................................Section 3.06
First Closing........................................................................Section 1.02
First Merger...........................................................................Preamble
Indemnitees.........................................................................Section 5.01(a)
Intellectual Property...............................................................Section 3.13(c)
Knowledge...........................................................................Section 6.03(b)
Laws.................................................................................Section 3.08
Leased Real Property.............................................................Section 3.13(b)(iii)
Liens...............................................................................Section 3.02(b)
Membership Interest..................................................................Section 2.01
Merger.................................................................................Preamble
Multiemployer Plan..................................................................Section 3.11(a)
OGCL................................................................................Section 1.01(a)
OJSAC Charter Documents.............................................................Section 4.01(b)
OJSAC Common Stock...................................................................Section 2.01
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Table of Defined Terms
----------------------
Term Section
- ---- -------
OJSAC Exchange Ratio.....................................................................Section 2.01
OJSAC Merger Consideration...............................................................Section 2.01
OJSAC......................................................................................Preamble
Permits..................................................................................Section 3.08
Person..................................................................................Section 6.03(f)
Real Property Lease Documentation.......................................................Section 3.13(a)
Real Property Lease.....................................................................Section 3.13(a)
SEC Documents...........................................................................Section 3.05(a)
Second Closing...........................................................................Section 1.02
Second Merger..............................................................................Preamble
Securities Act.........................................................................Section 3.02(b)
Sublease................................................................................Section 3.13(a)
Subsidiary Documents....................................................................Section 3.01(c)
Subsidiary..............................................................................Section 6.03(h)
Surviving Corporation...................................................................Section 1.01(a)
Tax Returns.............................................................................Section 3.10(l)
Taxes...................................................................................Section 3.10(l)
Tenant...............................................................................Section 3.13(b)(iii)
Title IV Plans..........................................................................Section 3.11(a)
WARN....................................................................................Section 3.11(r)
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
November 14, 2003, is among Amazing Savings Holding LLC, a Delaware limited
liability company ("Amazing Savings"), OJSAC, Inc., a Delaware corporation and a
wholly-owned Subsidiary of Amazing Savings ("OJSAC"), and Odd Job Stores, Inc.,
an Ohio corporation (the "Company").
WHEREAS, the respective Boards of Directors of OJSAC and the
Company have approved and declared advisable this Agreement and the merger of
OJSAC with and into the Company (the "Merger"), upon the terms and subject to
the conditions set forth in this Agreement;
WHEREAS, this Agreement is part of a plan with the Tender Offer
by Amazing Savings, dated June 10, 2003, to own up to approximately 96% of the
common stock of the Company;
WHEREAS, contemporaneously with the execution of this Agreement,
Amazing Savings is entering into an asset purchase agreement with the Company
pursuant to which Amazing Savings is selling substantially all of its assets to
the Company, and the transaction contemplated by such asset purchase agreement
will be consummated as soon as practicable following the consummation of the
transactions contemplated by this Agreement;
WHEREAS, contemporaneously with the execution of this Agreement,
Amazing Savings and the Company are entering into a registration rights
agreement and an indemnification agreement;
WHEREAS, OJSAC owns 8,184,804 shares of common stock, without par
value, of the Company (the "Company Common Stock") or approximately 90.3% of the
outstanding shares of Company Common Stock; and
WHEREAS, OJSAC and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the parties
hereto agree as follows:
ARTICLE I
The Merger
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Section 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement and in accordance with Section 259 of the
General Corporation Law of the State of Delaware (the "DGCL") and Chapter 1701
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of the Ohio Revised Code (the "OGCL"), OJSAC shall be merged with and into the
Company at the Effective Time (as such term is defined in Section 1.03) of the
Merger. Following the Effective Time of the Merger, the separate corporate
existence of OJSAC shall cease, and the Company shall continue as the surviving
corporation in the Merger and shall succeed to and assume all the rights and
obligations of OJSAC in accordance with the OGCL and DGCL. The Company is
sometimes referred to herein as the "Surviving Corporation" from and after the
Merger.
Section 1.02. Closings. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on November 14, 2003 (the "Closing Date") at the
offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York
10153.
Section 1.03. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date, the parties shall file a
certificate of merger for the Merger (a "Certificate of Merger") executed in
accordance with the relevant provisions of the DGCL and OGCL and, as soon as
practicable on or after the Closing Date, shall make all other filings or
recordings required under the DGCL and OGCL. The Merger shall become effective
at such time as the Certificate of Merger with respect thereto is duly filed
with the Secretary of State of the State of Ohio, or at such other time as the
parties shall agree and shall specify in the Certificate of Merger (the time the
Merger becomes effective being referred to as the "Effective Time"). Upon the
Effective Time all shares of Company Common Stock owned by OJSAC shall be
cancelled.
Section 1.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 1701.82 of the OGCL and Section 259 of the DGCL.
Section 1.05. Articles of Incorporation and Codes of Regulations.
(a) The Articles of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Articles of Incorporation
of the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable Law.
(b) The Codes of Regulation of the Company, as in effect
immediately prior to the Effective Time, shall be the Codes of Regulation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable Law.
Section 1.06. Directors. The directors of the Company immediately
prior to the Effective Time shall be the directors of the Surviving Corporation
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
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Section 1.07. Officers. The officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE II
Effect of the Merger on the Common Stock of the
-----------------------------------------------
Constituent Corporations; Exchange of Certificates;
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Section 2.01. Conversion of Common Stock of OJSAC. As of the
Effective Time of the Merger, by virtue of the Merger and without any action on
the part of the holder of any shares of Company Common Stock or any shares of
common stock, par value $.01, of OJSAC ("OJSAC Common Stock"), subject to
Section 2.03(c), 100 issued and outstanding shares of OJSAC Common Stock shall
be converted into the right to receive 4,851,471 (the "OJSAC Exchange Ratio")
validly issued, fully paid and nonassessable shares of Company Common Stock (the
"OJSAC Merger Consideration"). As of the Effective Time, all such shares of
OJSAC Common Stock shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and any holder of shares of OJSAC
Common Stock shall cease to have any rights with respect thereto, except the
right to receive the OJSAC Merger Consideration and cash in lieu of any
fractional shares of Company Common Stock to which such holder is entitled
pursuant to Section 2.03(c), in each case to be issued or paid in consideration
therefor upon surrender of such shares of OJSAC Common Stock in accordance with
Section 2.03(a), without interest.
Section 2.02. Rights of Dissenting Shareholders. On or before
November 25, 2003, the Company shall deliver or send notice of the approval of
this Agreement by the Board of Directors of the Company and a copy of this
Agreement to each holder of shares of Company Common Stock of record as of
November 5, 2003 by mail, overnight delivery service, or any other means of
communication authorized by such holder to whom the notice and copy of the
Agreement are sent. Notwithstanding anything in this Agreement to the contrary,
each holder of shares of Company Common Stock who is a record holder of such
shares as of November 5, 2003, who shall deliver to the Company a written demand
for payment to the holder of the fair cash value of the shares of Company Common
Stock as to which the holder seeks relief (the "Demand") in the manner provided
in Section 1701.85 of the OGCL and who shall otherwise comply fully with all of
the requirements of Section 1701.85 of the OGCL (a "Dissenting Shareholder"),
shall be entitled to payment of the fair cash value of such shares in accordance
with the provisions of Section 1701.85 of the OGCL. From the time of the giving
of the Demand until the termination of the rights and obligations arising from
it or the purchase of the shares by the Surviving Corporation, all other rights
accruing from the shares subject to the Demand, including voting and dividend or
distribution rights, shall be suspended in accordance with Section 1701.85 of
the OGCL. In the event a Dissenting Shareholder (i) shall subsequently withdraw
the Demand, (ii) shall fail to comply with Section 1701.85 of the OGCL or (iii)
has not filed a complaint under Section 1701.85(B) of the OGCL within the time
period provided in that division, the right of such Dissenting Shareholder to
receive the fair cash value of the shares as to which relief was sought shall
terminate.
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Section 2.03. Exchange of Interests.
(a) OJSAC. As of the Effective Time, in exchange for the shares
of OJSAC held by Amazing Savings, the Company shall issue 4,851,471 shares of
Company Common Stock to Amazing Savings. Each certificate representing shares of
Company Common Stock received by Amazing Savings shall be stamped with a legend
in substantially the following form:
"The shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended, or any state
securities law and may not be transferred, sold or otherwise disposed
of in the absence of such registration or an exemption therefrom under
such Act and applicable state securities laws."
(b) No Further Ownership Rights in OJSAC Common Stock. All shares
of Company Common Stock issued upon the surrender for exchange of shares of
OJSAC Common Stock in accordance with the terms of this Article II (including
any cash paid in lieu of any fractional shares pursuant to Section 2.03(c))
shall be deemed to have been issued (and paid) in full satisfaction of all
rights pertaining to the shares of OJSAC Common Stock.
(c) No Fractional Shares. (i) In lieu of such fractional share
interests, the Company shall pay to each former holder of OJSAC Common Stock an
amount in cash equal to the product obtained by multiplying (A) the fractional
share interest to which such former holder (after taking into account all shares
of OJSAC Common Stock held at the Effective Time by such holder) would otherwise
be entitled by (B) the per share closing price of Company Common Stock on the
Closing Date on the Over The Counter Bulletin Board (as reported by any
authoritative source).
(ii) No certificates or scrip representing fractional shares of
Company Common Stock shall be issued upon the surrender for exchange of any
shares of OJSAC Common Stock, no dividends or other distributions of the Company
shall relate to such fractional share interests and such fractional share
interests will not entitle the owner thereof to vote or to any rights of a
stockholder of the Company.
(d) No Liability. Neither OJSAC nor the Company shall be liable
to any Person in respect of any shares of Company Common Stock (or dividends or
other distributions with respect thereto) or cash in lieu of any fractional
shares of Company Common Stock, in each case delivered to a public official
pursuant to any applicable abandoned property, escheat or similar Law.
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ARTICLE III
Representations and Warranties of the Company
---------------------------------------------
The Company represents and warrants to Amazing Savings and OJSAC
as follows:
Section 3.01. Organization.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Ohio and has the requisite
corporate power and authority necessary to own or lease all of its properties
and assets and to carry on its business as it is now being conducted. The
Company is duly licensed or qualified to do business and is in good standing in
each jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed, qualified or in good standing has not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect. For purposes of this agreement, a "Company Material Adverse Effect"
shall mean (i) a state of facts, effect, event, change or occurrence which has
or would reasonably be expected to have a material adverse effect on the
business, operations, financial condition, assets or liabilities of the Company
and its subsidiaries taken as a whole, it being understood that such events may
include the commencement of any action, proceeding or litigation that would or
that is reasonably likely to result in (A) liability to the Company that would
have a material adverse effect on its business, operations or financial
condition or (B) the imposition of material limitations on the ability of the
Surviving Corporation effectively to exercise full rights of ownership or
operation of all or any material portion of the businesses and assets of the
Company and its subsidiaries taken as a whole; provided, however, that a
"Company Material Adverse Effect" shall not include any change, effect, event or
occurrence (i) relating to the economy or capital or securities markets of the
United States or any other region in general, including changes in the general
retail environment, (ii) resulting from entering into this Agreement or the
consummation of the Merger contemplated hereby or the announcement thereof or
(iii) relating to geopolitical events (including war or acts of terrorism, other
than such acts that actually damage or destroy property of or premises leased by
the Company).
(b) Set forth in Section 3.01(b) of the disclosure schedule of
the Company delivered to Amazing Savings and OJSAC concurrently herewith (the
"Company Disclosure Schedule") is a list of all subsidiaries of the Company
together with the jurisdiction of organization of each such subsidiary. Except
for the subsidiaries of the Company, the Company does not own any capital stock
or ownership interests, directly or indirectly, in any other entities. Each of
the Company's subsidiaries is a corporation or entity duly organized, validly
existing and in good standing under the Laws of the jurisdiction of its
organization and has the requisite power and authority to own or lease all of
its properties and assets and to carry on its business as it is now being
conducted. Each of the Company's subsidiaries is duly licensed or qualified to
5
do business and is in good standing in each jurisdiction in which the nature of
the business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed, qualified or in good standing has
not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(c) The Company has heretofore made available to OJSAC and
Amazing Savings a complete and correct copy of its articles of incorporation and
code of regulations as amended to date (the "Company Charter Documents") and
complete and correct copies of the certificates of incorporation and by-laws (or
equivalent organizational documents) of each of its subsidiaries as amended to
date (the "Subsidiary Documents"). All such Company Charter Documents and
Subsidiary Documents are in full force and effect and neither the Company nor
any of its subsidiaries is in violation of any of the provisions of the Company
Charter Documents or the Subsidiary Documents.
Section 3.02. Capitalization.
(a) The authorized capital stock of the Company consists of
14,000,000 shares of Company Common Stock and 2,000,000 shares of preferred
stock, without par value, of the Company (the "Company Preferred Stock"). At the
close of business on October 21, 2003, there were 9,060,695 Shares issued and
outstanding and no shares of Company Preferred Stock issued and outstanding. All
Shares have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. Since March 31, 2003, the Company
has not issued any shares of its capital stock, voting securities or equity
interests, or any securities convertible into or exchangeable or exercisable for
any shares of its capital stock, voting securities or equity interests. As of
the date of this Agreement there are not, any shares of capital stock, voting
securities or equity interests of the Company issued and outstanding or any
subscriptions, options, warrants, calls, convertible or exchangeable securities,
rights, commitments or agreements of any character providing for the issuance of
any shares of capital stock, voting securities or equity interests of the
Company, including any representing the right to purchase or otherwise receive
any Company Common Stock.
(b) (i) Except as set forth in Section 3.02(b) of the Company
Disclosure Schedule, the Company owns, directly or indirectly, all of the issued
and outstanding shares of capital stock, voting securities and equity interests
of each of its subsidiaries, free and clear of any liens, pledges, charges,
mortgages, encumbrances, adverse rights or claims and security interests
whatsoever (including any restriction on the right to vote or transfer the same,
except for such transfer restrictions of general applicability as may be
provided under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act"), and the "blue sky"
Laws of the various States of the United States) ("Liens"), and all of such
shares, securities and interests are duly authorized and validly issued and are
fully paid and nonassessable, and (ii) none of the Company or any of its
subsidiaries has issued or is bound by any outstanding subscriptions, options,
warrants, calls, convertible or exchangeable securities, rights, commitments or
agreements of any character providing for the issuance or disposition of any
shares of capital stock, voting securities or equity interests of any subsidiary
of the Company.
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(c) Except as set forth in Section 3.02(c) of the Company
Disclosure Schedule, there are no outstanding obligations of the Company or any
of its subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock, voting securities or equity interests (or any options, warrants
or other rights to acquire any shares of capital stock, voting securities or
equity interests) of the Company or any of its subsidiaries.
Section 3.03. Authority.
(a) The Company has all necessary corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder
and to consummate the Merger. The execution, delivery and performance by the
Company of this Agreement, and the consummation by it of the Merger, have been
duly authorized and approved by a Special Committee comprised of two
"Independent Directors" as such term is defined in Section 1.7 of the Tender
Agreement between the Company and Amazing Savings, dated June 3, 2003, and its
Board of Directors and no other corporate action on the part of the Company is
necessary to authorize the execution and delivery by the Company of this
Agreement and the consummation by it of the Merger. This Agreement has been duly
executed and delivered by the Company and, assuming due authorization, execution
and delivery hereof by OJSAC and Amazing Savings, constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to the Bankruptcy and Equity Exception.
(b) The Company's Board of Directors, at a meeting duly called
and held, has duly adopted resolutions approving this Agreement and the Merger.
The Company has taken all actions such that no restrictive provision of Chapter
1704 of the Ohio Revised Code is applicable to the Merger.
Section 3.04. Consents and Approvals; No Violations.
(a) No consents or approvals of, or filings, declarations or
registrations with, any Governmental Entity are necessary for the consummation
by the Company of the Merger other than (i) the filing of the Certificate of
Merger with the Secretary of State of the State of Ohio and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, and (ii) consents, approvals, filings, declarations or
registrations that, if not obtained, made or given, would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
(b) Neither the execution and delivery of this Agreement by the
Company nor the consummation by the Company of the Merger, nor compliance by the
Company with any of the terms or provisions hereof, will (i) conflict with or
violate any provision of the Company Charter Documents or any of the Subsidiary
Documents or (ii) assuming that the authorizations, consents and approvals
referred to in Section 3.04(a) are obtained and the filings referred to in
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Section 3.04(a) are made, (x) violate any Law, judgment, writ or injunction of
any Governmental Entity applicable to the Company or any of its subsidiaries or
any of their respective properties or assets, or (y) violate, conflict with,
result in the loss of any material benefit under, constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or cancellation
under, accelerate the performance required by, or result in the creation of any
Lien upon any of the respective properties or assets of, the Company or any of
its subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, Permit, lease, agreement or
other instrument or obligation to which the Company or any of its subsidiaries
is a party, or by which they or any of their respective properties or assets may
be bound or affected except, in the case of clause (ii), for such violations,
conflicts, losses, defaults, terminations, cancellations, accelerations or Liens
as would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
Section 3.05. SEC Documents; Undisclosed Liabilities.
(a) The Company has filed all required reports, schedules, forms
and registration, proxy and other statements with the SEC since January 1, 2000
(collectively, and in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the "SEC Documents"). None of the
Company's subsidiaries are required to file periodic reports with the SEC
pursuant to the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "Exchange Act"). As of their respective
effective dates (in the case of SEC Documents that are registration statements
filed pursuant to the Securities Act) and as of their respective SEC filing
dates (in the case of all other SEC Documents), the SEC Documents complied in
all material respects with the requirements of the Exchange Act and the
Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Documents, and none of the SEC
Documents as of such respective dates contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to the extent
that information contained in any SEC Document has been revised or superseded by
a later-filed SEC Document, none of the SEC Documents contains any untrue
statement of a material fact or omits 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 were made, not misleading. The consolidated
financial statements of the Company included in the SEC Documents comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of unaudited quarterly
statements, as indicated in the notes thereto) applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and fairly present in all material respects the consolidated financial position
of the Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited quarterly statements, to normal
year-end audit adjustments none of which has been or will be, individually or in
the aggregate, material).
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(b) The Company is in compliance in all material respects with
the provisions of Section 13(b) of the Exchange Act.
(c) Except as set forth in the SEC Documents filed prior to the
date hereof or in Section 3.05(c) of the Company Disclosure Schedule, or for
events (or series of related matters) as to which the amounts involved do not
exceed $60,000, since the filing of the Company's proxy statement dated July 22,
2002, no event has occurred that would be required to be reported as a "Certain
Relationship or Related Transaction" pursuant to Item 404 of Regulation S-K
promulgated by the SEC. Neither the Company nor any of its subsidiaries nor, to
the Company's Knowledge, any director, officer, agent, employee or other Person
acting on behalf of the Company or any of its subsidiaries, has, in any material
respect, (i) used any corporate or other funds for unlawful contributions,
payments, gifts, or entertainment, or made any unlawful expenditures relating to
political activity to government officials or others or established or
maintained any unlawful or unrecorded funds in violation of Section 30A of the
Exchange Act or (ii) accepted or received any unlawful contributions, payments,
gifts or expenditures.
(d) Neither the Company nor any of its subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) whether or not required, if known, to be reflected or reserved
against on a consolidated balance sheet of the Company prepared in accordance
with GAAP or the notes thereto, except liabilities (i) as and to the extent set
forth on the unaudited balance sheet of the Company and its subsidiaries as of
June 30, 2003 (the "Balance Sheet Date") (including the notes thereto) included
in the Company's Report on Form 10-Q for the period then ended, (ii) incurred
after the Balance Sheet Date in the ordinary course of business consistent with
past practice, as have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, (iii)
incurred after the Balance Sheet Date in connection with negotiating this
Agreement and the Merger and a reasonable estimate of which is set forth in
Section 3.05(d) of the Company Disclosure Schedule, and (iv) incurred after the
Balance Sheet Date not in the ordinary course that are in the aggregate,
immaterial in amount.
Section 3.06. Absence of Certain Changes or Events. Except (i) as
disclosed in the SEC Documents filed and publicly available not later than two
days prior to the date hereof (the "Filed SEC Documents"), (ii) as set forth in
Section 3.06 of the Company Disclosure Schedule, or (iii) for the Merger, since
the Balance Sheet Date, the Company and its subsidiaries have carried on and
operated their respective businesses in all material respects in the ordinary
course of business consistent with past practice, and there has not occurred
any: (a) event or change that has had or would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, (b) sale or
other disposition of or pledge or other encumbrance upon a material amount of
property or other assets or any Real Property Lease as defined in Section 3.13
9
herein of the Company or any of its subsidiaries, except sales of inventory in
the ordinary course of business consistent with past practice, (c) declaration,
setting aside or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to any class of capital stock of the Company or
any of its subsidiaries (other than dividends by a direct or indirect wholly
owned subsidiary of the Company to its parent), or any repurchase, redemption or
other acquisition by the Company or any of its subsidiaries of any capital stock
of the Company, (d) split, combination or reclassification of any capital stock
of the Company, (e) change in financial or tax accounting methods, principles or
practices by the Company or its subsidiaries, except insofar as may have been
required by a change in GAAP or applicable Law, (f) material Tax election
inconsistent with past practices or the settlement or compromise of any material
Tax liability, (g) damage, destruction or loss of any material asset of the
Company or any of its subsidiaries which materially affects the use or value
thereof or a material part of any improvement Leased by the Company or any of
its subsidiaries pursuant to the Real Property Lease and which damage,
destruction or loss is not covered by insurance, subject to reasonable
deductible limits (it being agreed that the existence, level and coverage of
insurance, if any, shall be taken into account but shall not be determinative
for purposes of determining whether any damage, destruction or loss is material
or would result in a Company Material Adverse Effect), (h) grant by the Company
or any of its subsidiaries to any officer of any increase in compensation,
except as was required under any employment agreements set forth on Section
3.06(h) of the Company Disclosure Schedule, copies of which have been made
available to OJSAC and Amazing Savings, or any granting by the Company or any of
its subsidiaries to any employee of any increase in compensation, except for
normal increases in the ordinary course of business consistent with past
practice, (i) grant by the Company or any of its subsidiaries to any officer of
any increase in (or acceleration of vesting or payment of) severance or
termination pay, except as was required under any employment, severance or
termination agreements set forth on Section 3.06(i) of the Company Disclosure
Schedule, copies of which have been made available to OJSAC and Amazing Savings,
or any grant by the Company or any of its subsidiaries to any employee other
than an officer of any increase in (or acceleration of vesting or payment of)
severance or termination pay, except in the ordinary course of business
consistent with past practice, (j) entry by the Company or any of its
subsidiaries into any (or amendment of any existing) employment, severance or
termination agreement with any officer, (k) establishment, adoption, amendment
or modification of, or increase of benefits under, any plan that would
constitute a Company Plan (as hereinafter defined) or (l) acceleration of
vesting of any Option, except acceleration previously provided for in the Stock
Plan.
Section 3.07. Legal Proceedings. Except as set forth on Section
3.07 of the Company Disclosure Schedule, there is no pending or, to the
Knowledge of the Company, threatened, legal, administrative, arbitral or other
proceeding, claim, suit or action against, or governmental or regulatory
investigation of, the Company or any of its subsidiaries, nor is there any
injunction, order, judgment, ruling or decree imposed (or, to the Knowledge of
the Company, threatened to be imposed) upon the Company, any of its subsidiaries
or the assets of the Company or any of its subsidiaries by any Governmental
Entity, that (a) has had or would reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect or (b) challenges the
Merger, provided that the representation in clause (b) is made only as of the
date hereof.
10
Section 3.08. Compliance With Applicable Law; Permits. The
Company and its subsidiaries are (and since January 1, 2003 have been) in
compliance with all laws, statutes, ordinances, codes, rules, regulations,
decrees and orders of Governmental Entities (collectively, "Laws") applicable to
the Company or any of its subsidiaries, any of their properties or other assets
or any of their businesses or operations, except for such non-compliance as has
not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. The Company and each of its
subsidiaries hold all licenses, franchises, permits, certificates, approvals and
authorizations from Governmental Entities necessary for the lawful conduct of
their respective businesses (collectively, "Permits"), except where the failure
to hold the same has not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. The Company
and its subsidiaries are (and since January 1, 2003 have been) in compliance
with the terms of all Permits, except for such non-compliance as has not had and
would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
Section 3.09. Contracts.
(a) Set forth in Section 3.09(a) of the Company Disclosure
Schedule or otherwise filed as an exhibit to a report publicly filed by the
Company with the SEC is a list of each (i) contract or agreement that would be
required to be filed as an exhibit to any Securities Act registration statement
or Exchange Act report if such registration statement or report was filed by the
Company with the SEC on the date hereof, (ii) contract or agreement that
purports to limit, curtail or restrict the ability of the Company or any of its
affiliates to compete in any geographic area or line of business, (iii)
partnership or joint venture agreement, (iv) contract or agreement for the
acquisition, sale or lease of material properties or assets other than inventory
(by merger, purchase or sale of stock or assets or otherwise) entered into since
January 1, 2002, (v) agreement with any Governmental Entity, (vi) loan or credit
agreement, mortgage, indenture, note or other agreement or instrument evidencing
indebtedness for borrowed money by the Company or any of its subsidiaries or any
agreement or instrument pursuant to which indebtedness for borrowed money may be
incurred or is guaranteed by the Company or any of its subsidiaries, (vii)
voting agreement or registration rights agreement, (viii) executory supply
contract or other executory agreement of the Company or any subsidiary of the
Company (including for the purchase of inventory) that involves consideration in
excess of $100,000 and which contract or agreement is not terminable by the
Company without a penalty, (ix) other executory contract or agreement involving
consideration in excess of $100,000 not terminable by the Company without a
penalty, (x) collective bargaining agreement, (xi) "standstill" or similar
agreement, (xii) to the extent material to the business or financial condition
of the Company and its subsidiaries, taken as a whole, (A) product design or
development agreement, (B) consulting agreement, (C) indemnification contract,
(D) license or royalty agreement, (E) merchandising, sales representative or
11
distribution agreement or (F) contract granting a right of first refusal or
first negotiation, and (xiii) commitment or agreement to enter into any of the
foregoing (the contracts, agreements and other documents required to be listed
on Section 3.09(a) of the Company Disclosure Schedule, each a "Material
Contract"). The Company has heretofore made available to OJSAC and Amazing
Savings true and complete copies of each Material Contract in existence as of
the date hereof, together with any and all amendments and supplements thereto
and material "side letters" and similar documentation relating thereto.
(b) Each of the Material Contracts is enforceable in accordance
with its terms by the Company and its subsidiaries party thereto, except that
such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent
transfer, moratorium or other similar Laws of general application affecting or
relating to the enforcement of creditors' rights generally and (ii) is subject
to general principles of equity, whether considered in a proceeding at law or in
equity (together, the "Bankruptcy and Equity Exception"). Neither the Company
nor any of its subsidiaries is in default under any Material Contract, nor does
any condition exist that, with notice or lapse of time or both, would constitute
a default thereunder by the Company and its subsidiaries party thereto, except
for such defaults as have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. To the
Knowledge of the Company, no other party to any Material Contract is in default
thereunder, nor does any condition exist that with notice or lapse of time or
both would constitute a default by any such other party thereunder, except for
such defaults as have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. Except as
separately identified in Section 3.09(b) of the Company Disclosure Schedule, no
approval or consent of any Person is needed in order that any Material Contract
continue in full force and effect following the consummation of the Merger.
Section 3.10. Tax Matters.
(a) Each of the Company and its subsidiaries has timely filed, or
has caused to be timely filed on its behalf (taking into account any extension
of time within which to file), all material Tax Returns (as hereinafter defined)
required to be filed by it, and all such filed tax returns are correct and
complete in all material respects. All material Taxes shown to be due on such
Tax Returns, or otherwise required to be paid by the Company or a subsidiary of
the Company, have been timely paid.
(b) The most recent financial statements contained in the Filed
SEC Documents reflect an adequate reserve for all Taxes payable by the Company
and its subsidiaries for all taxable periods and portion thereof through the
date of such financial statements. No deficiency with respect to Taxes has been
proposed, asserted or assessed against the Company or any of its subsidiaries.
(c) The Federal income Tax Returns of the Company and each of its
subsidiaries have been examined by and settled with the IRS (or the applicable
statute of limitations has expired) for all years through 1995. All assessments
for Taxes due with respect to such completed and settled examinations or any
concluded litigation have been fully paid.
12
(d) Neither the Company nor any of its subsidiaries has any
obligation to make any payment under any agreement (either with any Person or
any taxing authority) with respect to Taxes.
(e) Neither the Company nor any of its subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation"
(within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of
stock qualifying for tax-free treatment under Section 355 of the Code since the
effective date of Section 355(e) of the Code.
(f) Except as set forth on Schedule 3.10(f) of the Company
Disclosure Schedule, no audit or other administrative or court proceedings are
pending with any Governmental Entity with respect to Taxes of the Company or any
of its subsidiaries and no written notice thereof has been received. No issue
has been raised by any taxing authority in any presently pending Tax audit that
could be material and adverse to the Company or any of its subsidiaries for any
period after the Closing Date. Neither the Company nor any of its subsidiaries
has any outstanding agreements, waivers, or arrangements extending the statutory
period of limitations applicable to any claim for, or the period for the
collection or assessment of Taxes.
(g) No claim has been made by a taxing authority in a
jurisdiction where the Company or a subsidiary of the Company does not file a
Tax Return that the Company or a subsidiary of the Company is or may be subject
to taxation in that jurisdiction.
(h) Neither the Company nor any of its subsidiaries is a party to
any contract, agreement or other arrangement which provides for the payment of
any amount which would not be deductible by reason of Section 162(m) or Section
280G of the Code.
(i) The Company has made available to OJSAC and Amazing Savings
true and complete copies of (i) all income and franchise Tax Returns of the
Company and its subsidiaries for the preceding three taxable years and (ii) any
audit report issued within the last three years (or otherwise with respect to
any audit or proceeding in progress) relating to income and franchise Taxes of
the Company or any subsidiary of the Company.
(j) No Liens for Taxes exist with respect to any assets or
properties of the Company or any of its subsidiaries except for Liens for Taxes
not yet due and payable or other governmental charges not yet delinquent or the
amount or validity of which is being contested in good faith by appropriate
proceedings provided an appropriate reserve is established therefor.
13
(k) All material Taxes required to be withheld by the Company or
any of its subsidiaries have been withheld and duly and timely paid to the
proper taxing authority.
(l) For purposes of this Agreement: (1) "Taxes" shall mean taxes
of any kind (including but not limited to those measured by or referred to as
income, franchise, gross receipts, sales, use, ad valorem, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
value added, property, windfall profits, customs, duties or similar fees,
assessments or charges of any kind whatsoever) together with any interest and
any penalties, additions to tax or additional amounts imposed by any
Governmental Authority, domestic or foreign and shall include any transferee or
successor liability in respect of Taxes (whether by contract or otherwise) and
any several liability in respect of any Tax as a result of being a member of any
affiliated, consolidated, combined, unitary or similar group; and (2) "Tax
Returns" shall mean any return, report, claim for refund, estimate, information
return or statement or other similar document relating to or required to be
filed with any Governmental Entity with respect to Taxes, including any schedule
or attachment thereto, and including any amendment thereof.
Section 3.11. Employee Benefits and Labor Matters.
(a) Section 3.11(a) of the Company Disclosure Schedule sets forth
a true and complete list of: all "employee benefit plans", as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and all other employee benefit plans, programs, agreements, policies,
arrangements or payroll practices, including bonus plans, employment, consulting
or other compensation agreements, collective bargaining agreements, incentive,
equity or equity-based compensation, or deferred compensation arrangements,
change in control, termination or severance plans or arrangements, stock
purchase, severance pay, sick leave, vacation pay, salary continuation for
disability, hospitalization, medical insurance, life insurance and scholarship
plans and programs maintained by the Company or any of its subsidiaries or to
which the Company or any of its subsidiaries contributed or is obligated to
contribute thereunder for current or former employees of the Company or any of
its subsidiaries (the "Employees") (the "Company Plans"). Neither the Company
nor any of its affiliates and any trade or business (whether or not
incorporated) which is or has ever been under common control, or which is or has
ever been treated as a single employer, with any of them under Section 414(b),
(c), (m) or (o) of the Code ("ERISA Affiliate") or to which the Company or any
ERISA Affiliate contributed or has ever been obligated to contribute thereunder
within the last six years maintains, sponsors, contributes or is or has been
obligated to contribute to any "employee pension plans", as defined in Section
3(2) of ERISA, subject to Title IV of ERISA or Section 412 of the Code (the
"Title IV Plans") or to any multiemployer plan, as defined in Section 3(37) of
ERISA ("Multiemployer Plan"), or is or has been subject to Sections 4063 or 4064
of ERISA ("Multiple Employer Plans").
14
(b) True, current and complete copies of the following documents,
with respect to each of the Company Plans, have been made available or delivered
to OJSAC by the Company, to the extent applicable: (i) any plans, all amendments
thereto and related trust documents, insurance contracts or other funding
arrangements, and amendments thereto; (ii) the most recent Forms 5500 and all
schedules thereto and the most recent actuarial report, if any; (iii) the most
recent IRS determination letter; (iv) summary plan descriptions; (v) written
communications to employees relating to the Company Plans; and (vi) written
descriptions of all non-written agreements relating to the Company Plans.
(c) Except as set forth on Section 3.11(c) of the Company
Disclosure Schedule, the Company Plans have been maintained, in all material
respects, in accordance with their terms and with all provisions of ERISA, the
Code (including rules and regulations thereunder) and other applicable federal
and state laws and regulations, and neither the Company nor any "party in
interest" or "disqualified person" with respect to the Company Plans has engaged
in a non-exempt "prohibited transaction" within the meaning of Section 4975 of
the Code or Section 406 of ERISA. No fiduciary has any liability for breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any Company Plan.
(d) The Company Plans intended to qualify under Section 401 of
the Code are so qualified and any trusts intended to be exempt from federal
income taxation under Section 501 of the Code are so exempt, and nothing has
occurred with respect to the operation of the Company Plans which could cause
the loss of such qualification or exemption or the imposition of any liability,
penalty or tax under ERISA or the Code.
(e) Each Company Plan which is intended to meet the requirements
for tax-favored treatment under Subchapter B of Chapter 1 of Subtitle A of the
Code meets such requirements.
(f) Section 3.11(f) of the Company Disclosure Schedule sets
forth, on a plan by plan basis, the present value of benefits payable presently
or in the future to present or former employees of the Company or any subsidiary
of the Company under each unfunded Company Plan, which is a "pension plan"
(within the meaning of Section 3(2) of ERISA).
(g) All contributions (including all employer contributions and
employee salary reduction contributions) required to have been made under any of
the Company Plans (including workers compensation) or by Law (without regard to
any waivers granted under Section 412 of the Code), to any funds or trusts
established thereunder or in connection therewith have been made by the due date
thereof (including any valid extension), and all contributions for any period
ending on or before the Closing Date which are not yet due will have been paid
or sufficient accruals for such contributions and other payments, to the extent
required by GAAP have been duly and fully provided for on the most recent
consolidated balance sheet of the Company included in the filed SEC Documents.
No accumulated funding deficiencies exist in any of the Company Plans subject to
Section 412 of the Code.
15
(h) No liability under any Company Plan has been funded nor has
any such obligation been satisfied with the purchase of a contract from an
insurance company that is not rated AA by Standard & Poor's Corporation and the
equivalent by each other nationally recognized rating agency.
(i) There are no pending actions, claims or lawsuits which have
been asserted or instituted against the Company Plans, the assets of any of the
trusts under such plans or the plan sponsor or the plan administrator, or
against any fiduciary of the Company Plans with respect to the operation of such
plans (other than routine benefit claims), nor, to the Knowledge of the Company,
are there facts which could form the basis for any such claim or lawsuit.
(j) There is no material violation of ERISA or the Code with
respect to the filing of applicable reports, documents and notices regarding the
Company Plans with the Secretary of Labor and the Secretary of the Treasury or
the furnishing of such documents to the participants or beneficiaries of the
Company Plans.
(k) All amendments and actions required to bring the Company
Plans into conformity in all material respects with all of the applicable
provisions of the Code, ERISA and other applicable Laws have been made or taken
except to the extent that such amendments or actions are not required by Law to
be made or taken until a date after the date hereof.
(l) Any bonding required with respect to the Company Plans in
accordance with applicable provisions of ERISA has been obtained and is in full
force and effect.
(m) None of the Company Plans provide for post-employment life or
health insurance, benefits or coverage for any participant or any beneficiary of
a participant, except as may be required under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), and at the expense of the
participant or the participant's beneficiary. Each of the Company and any ERISA
Affiliate which maintains a "group health plan" within the meaning Section
5000(b)(1) of the Code has complied with the notice and continuation
requirements of Section 4980B of the Code, COBRA, Part 6 of Subtitle B of Title
I of ERISA and the regulations thereunder.
(n) Except as set forth on Section 3.11(n) of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the Merger will (i) result in any payment becoming due to
any employee (current, former or retired) of the Company or any of its
subsidiaries, (ii) increase any benefits otherwise payable under any Company
Plan or (iii) result in the acceleration of the time of payment or vesting of
any such benefits under any such plan.
16
(o) The Company has no contract, plan or commitment, whether
legally binding or not, to create any additional Company Plan or to modify any
existing Company Plan.
(p) No stock or other security issued by the Company forms or has
formed a material part of the assets of any Company Plan.
(q) Any individual who performs services for the Company or its
subsidiaries (other than through a contract with an organization other than such
individual) and who is not treated as an employee of the Company or a subsidiary
of the Company for federal income tax purposes by the Company is not an employee
for such purposes.
(r) Except as set forth on Section 3.11(r) of the Company
Disclosure Schedule: (i) none of the Employees is represented in his or her
capacity as an employee of the Company or its subsidiaries by any labor
organization; (ii) neither the Company nor any of its subsidiaries has
recognized any labor organization nor has any labor organization been elected as
the collective bargaining agent of any Employees, nor has the Company or any of
its subsidiaries entered into any collective bargaining agreement or union
contract recognizing any labor organization as the bargaining agent of any
Employees; (iii) there is no union organization activity involving any of the
Employees pending or, to the Knowledge of the Company, threatened, nor has there
been since February 3, 1998 any union representation efforts involving any of
the Employees; (iv) there is no picketing pending or, to the Knowledge of the
Company, threatened, and there are no strikes, slowdowns, work stoppages, other
job actions, lockouts, arbitrations, grievances or other labor disputes
involving any of the Employees pending or, to the Knowledge of the Company,
threatened; (v) there are no complaints, charges or claims against the Company
or any of its subsidiaries pending or, to the Knowledge of the Company,
threatened, which could be brought or filed with any Governmental Entity or
arbitrator based on, arising out of, in connection with, or otherwise relating
to the employment or termination of employment or failure to employ by the
Company or any of its subsidiaries, of any individual; (vi) the Company and its
subsidiaries are in compliance with all Laws relating to the employment of
labor, including all such Laws relating to wages, hours, the Worker Adjustment
and Retraining Notification Act and any similar state or local "mass layoff" or
"plant closing" law ("WARN"), collective bargaining, discrimination, civil
rights, safety and health, workers' compensation and the collection and payment
of withholding and/or social security taxes and any similar tax, except for
immaterial non-compliance; and (vii) there has been no "mass layoff" or "plant
closing" as defined by WARN with respect to the Company or any of its
subsidiaries since February 3, 2002.
Section 3.12. Environmental and Health and Safety Matters. Except
for those matters that have not had and would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect: (i)
each of the Company and its subsidiaries is, and has been, in compliance with
all applicable Environmental Laws (as hereinafter defined), which compliance
includes the possession, maintenance, and compliance with all permits, licenses,
17
authorizations or similar approvals required by Environmental Laws and (ii)
there is no investigation, suit, claim, action or proceeding pending, or, to the
Knowledge of the Company, threatened against or affecting the Company or any of
its subsidiaries or any real property owned, operated or leased by the Company
or any of its subsidiaries relating to or arising under Environmental Laws;
(iii) to the Knowledge of the Company, neither the Company nor any of its
subsidiaries has received any notice of or entered into or assumed by contract
or operation of law or otherwise, any obligation, liability, order, settlement,
judgment, injunction or decree relating to or arising under Environmental Laws;
(iv) the Company is not aware of any facts, circumstances or conditions relating
to the operations of the Company or any subsidiary or any real property
currently or formerly owned, operated or leased by or for the Company that could
reasonably be expected to result in the Company or subsidiaries incurring
liabilities, losses or damages under Environmental Laws; (v) the Merger
contemplated by this Agreement does not trigger or otherwise require compliance
with the Industrial Site Recovery Act, 13 N.J. Sta. Ann. ss.13:1K-6 and (vi) the
Company has made available to Amazing Savings and OJSAC copies of any
environmental, health and safety assessments, audits, investigation or similar
reports relating to the Company any subsidiary or any real property owned,
operated or leased by the Company or any subsidiary. For purposes of this
Agreement: "Environmental Laws" means all applicable Laws pertaining to the
environment, preservation or reclamation of natural resources, or to human
health and safety, including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. ss. 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. App. ss. 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.),
the Clean Water Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C.
ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et
seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. ss. 136
et seq.), and the Occupational Safety and Health Act (29 U.S.C. ss. 651 et
seq.), as each has been amended and the regulations promulgated pursuant
thereto, and any analogous state or local laws.
Section 3.13. Properties; Real Estate; Intellectual Property.
(a) Each of the Company and its subsidiaries (i) has good and
marketable title to all properties and other assets which are reflected on the
most recent consolidated balance sheet of the Company included in the Filed SEC
Documents as being owned by the Company or one of its subsidiaries (or acquired
after the date thereof) and which are, individually or in the aggregate,
material to the Company's business or financial condition on a consolidated
basis (except properties sold or otherwise disposed of since the date thereof in
the ordinary course of business), free and clear of all Liens except (x)
statutory liens securing payments not yet due, (y) security interests, mortgages
and pledges that are reflected in the Filed SEC Documents that secure
indebtedness that is reflected in the most recent consolidated financial
statements of the Company included in the Filed SEC Documents and (z) such other
imperfections or irregularities of title or other Liens as do not, individually
or in the aggregate, materially affect the value or use of the properties or
18
assets subject thereto or otherwise materially impair business operations, and
(ii) is the lessee, sublessee, sub-sublessee or sublandlord of all leasehold
estates and leasehold interests reflected in the Filed SEC Documents (or
acquired after the date thereof) as more particularly set forth on Section
3.13(a) of the Company Disclosure Schedule (each a "Real Property Lease" and
collectively, the "Real Property Leases", however, the leasehold estates and
leasehold interests whereby the Company or its subsidiaries is the sublandlord
shall also be referred to hereinafter as the "Sublease"), which schedule shall
list all material lease related documentation including, without limitation, all
leases, amendments, assignments, letter agreements, modifications, supplements,
commencement agreements, subleases and prime lease agreements, if applicable,
that the Company or any of its subsidiaries have executed, received, or of which
the Company or any of its subsidiaries otherwise have Knowledge(collectively
referred to hereinafter as the "Real Property Lease Documentation").
(b) (i) There is no real property owned in fee by the Company or
its subsidiaries.
(ii) Each of the Real Property Leases and Subleases are in full
force and effect and neither the Company nor any of its subsidiaries,
nor, to the Company's Knowledge, any other party to any of the Real
Property Leases or Subleases, have exercised any termination rights
with respect thereto. Except where such defaults are immaterial, (a)
neither the Company nor any of its subsidiaries have received or given
any notice of any default under the Real Property Leases or Subleases,
(b) no default or event that with notice or lapse of time, or both,
would constitute a default by the Company or any of its subsidiaries
under any of the Real Property Leases or Subleases has occurred and is
continuing, and (c) to the Company's Knowledge no other party to a
Real Property Lease or Sublease is in default thereof.
(iii) All rent and other sums and charges due and payable by the
Company and its subsidiaries as tenants, subtenant or sub-subtenants
(each a "Tenant" and collectively, "Tenants") under the Real Property
Leases have been paid. Except as set forth on Section 3.13(a) of the
Company Disclosure Schedule, all of the personal property, fixtures
and improvements included on or in all properties leased pursuant to
the Real Property Leases (each a "Leased Real Property and
collectively, the "Leased Real Properties") by the Company or its
subsidiaries are in good operating condition and repair and are in a
satisfactory condition for the continued use of the Leased Real
Properties in the ordinary course of business consistent with past
practices; reasonable wear and tear excepted.
(iv) Section 3.13(a) of the Company Disclosure Schedule is a
true, correct and complete list of all Real Property Leases and all
other Real Property Lease Documentation and the Company has delivered
to Amazing Savings and OJSAC true, correct and complete copies of each
Real Property Lease and all Real Property Lease Documentation (except
for such prime leases, and amendments thereto, and other documents
noted on Section 3.13(a) of the Company Disclosure Schedule as
missing).
19
(v) Except for the dispute and litigation at the East Hanover, NJ
store which is described in more detail on Section 3.13(a) of the
Company Disclosure Schedule, there are no pending or, to the Knowledge
of the Company, threatened, disputes or , legal, administrative,
arbitral or other proceeding, claim, suit or action arising from, or
relating to the Real Property or the Real Property Leases.
(vi) The Company and its subsidiaries hold all material Permits
with respect to the use and occupancy of the Leased Real Property,
except where the failure to hold the same has not had and would not
reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. The Leased Real Property and the
current use and operation thereof by the Company and its subsidiaries
do not violate any Permits, except where such violation has not had
and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(vii) There does not exist any actual or, to the Knowledge of the
Company, threatened or contemplated condemnation or eminent domain
proceedings that affect any of its or its subsidiaries' Leased Real
Properties or any part thereof, except where such condemnation or
eminent domain proceeding has not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
(viii) Neither the Company nor any of its subsidiaries have
received any written notice from any insurance company that has issued
a policy with respect to any of Leased Real Property requiring
performance of any material repairs or alterations to such Leased Real
Property.
(ix) Other than option rights contained in the Real Property
Leases, neither the Company nor any or its subsidiaries own or hold,
or is obligated under or a party to, any option, right of first
refusal or other contractual right to purchase, acquire, sell, assign
or dispose of any real estate or any portion thereof or interest
therein.
(x) Except as set forth on Section 3.13(a) of the Company
Disclosure Schedule, there are no unpaid commissions or fees due or
payable and no obligation to pay or fund any construction or
completion of improvements under any Real Property Lease or Sublease.
(xi) Except for the premises subleased under the Subleases, each
of the Real Property Leases covers the entire estate it purports to
cover, and, upon the consummation of the Merger contemplated hereby,
will entitle the Surviving Corporation to the exclusive use, occupancy
and possession of the Leased Real Property specified therein for the
purposes such Leased Real Property is now being used.
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(xii) Except as set forth on Section 3.13(a) of the Company
Disclosure Schedule, each Real Property Lease subject to a superior
lease or an underlying mortgage, deed of trust or other security
interest affecting the landlord's, sublandlord's or fee owner's
interest in the Real Property Lease is subject to a non-disturbance
agreement, a copy of which has been provided to Amazing Savings and
OJSAC or, as noted on Section 3.13(a) of the Company Disclosure
Schedule as missing, fully executed copies of which have been
requested by the Company from the landlords thereunder.
(xiii) With respect to the Subleases, (a) all rent and other sums
and charges payable by Tenants under the Subleases are current; and
(b) neither rent or any other sums and charges payable by Tenants
under the Subleases, nor any other material item payable by any Tenant
under any Sublease has been prepaid for more than one month in
advance.
(c) As used herein, the term (i) "Intellectual Property" shall
mean all patents, patent applications, provisional patent applications,
reissues, statutory invention registrations, inventions and other industrial
property rights; trademarks, service marks, trade names, trade dress, logos, and
other source identifiers, including registrations and applications for the
registration thereof; copyrights (including without limitation, copyrights in
computer software programs); Internet domain name registrations; Internet web
sites, web content, and registrations and applications for registrations
thereof; confidential and proprietary information, including know-how and trade
secret rights, technologies, techniques and processes; computer software,
programs and databases in any form, all versions, updates, corrections,
enhancements, replacements, and modifications thereof, and all documentation
related thereto; and rights of privacy, publicity and endorsement, in each case
under the Laws of any jurisdiction in the world, and including rights under and
with respect to all applications, registrations, continuations, divisions,
renewals, extensions and reissues of the foregoing; and (ii) "Company
Intellectual Property" shall mean the Intellectual Property used in connection
with the business of the Company or any of its subsidiaries or owned or held for
use by the Company or any of its subsidiaries.
(d) Except as set forth in Section 3.13(d) of the Company
Disclosure Schedule, the Company and/or each of its subsidiaries owns, or is
licensed or otherwise possesses sufficient rights to use and transfer such
rights as it has in and to all the Company Intellectual Property, except as has
not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. The use of the Company
Intellectual Property by the Company and its subsidiaries and the operation of
the Company's or its subsidiaries' businesses does not constitute an
infringement or misappropriation of any valid third party Intellectual Property,
except as has not had and would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect. Except as set forth in
Section 3.13(d) of the Company Disclosure Schedule, neither the Company nor any
21
of its subsidiaries has received any written notice from any Person since
January 1, 2000 that the use of any of the Company Intellectual Property or the
operation of the Company's or its subsidiaries' businesses infringes, dilutes
(in the case of trademarks), or otherwise violates the Intellectual Property of
any Person.
(e) Except as set forth in Section 3.13(e) of the Company
Disclosure Schedule or as has not had and would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect, there
are no pending claims by the Company or any of its subsidiaries alleging or
asserting that any third party has violated, misappropriated or infringed any of
the Company Intellectual Property nor, to the Knowledge of the Company, is there
any basis for such a claim.
Section 3.14. Opinion of Financial Advisor. The Special Committee
and the Board of Directors of the Company has received the opinion of Ryan Beck
& Co. Inc. ("Ryan Beck"), dated November 5, 2003, that, as of such date, and
subject to the various assumptions and qualifications set forth therein, the
consideration to be offered by the Company in connection with the transactions
contemplated by the Asset Purchase Agreement and this Agreement, taken together,
is fair, from a financial point of view, to the holders of the Company Common
Stock, other than holders that are affiliates of Amazing Savings (the "Fairness
Opinion").
Section 3.15. Finders or Brokers. Other than Ryan Beck, no
broker, investment banker, financial advisor or other Person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the Merger based upon arrangements made by or on behalf of the
Company or any of its subsidiaries.
Section 3.16. Voting Requirements. This Agreement and the Merger
contemplated hereby, including the issuance of shares of Company Common Stock
pursuant to Article II, do not require the approval of the holders of any shares
of Company Common Stock.
ARTICLE IV
Representations and Warranties of Amazing Savings and OJSAC
-----------------------------------------------------------
Amazing Savings and OJSAC hereby represent and warrant to the
Company as follows:
Section 4.01. Organization.
(a) OJSAC is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the requisite
corporate power and authority necessary to own or lease all of its properties
and assets and to carry on its business as it is now being conducted. OJSAC is
duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary.
22
(b) OJSAC has heretofore made available to the Company a complete
and correct copy of its certificate of incorporation and bylaws as amended to
date (the "OJSAC Charter Documents"). The OJSAC Charter Documents are in full
force and effect and the Company is not in violation of any of the provisions of
the OJSAC Charter Documents.
Section 4.02. Capitalization. The authorized capital stock of
OJSAC consists of 1,000 shares of OJSAC Common Stock, of which 100 shares are
issued and outstanding. All of the issued and outstanding shares of OJSAC Common
Stock are owned by Amazing Savings. OJSAC does not have issued or outstanding
any options, warrants, subscriptions, calls, rights, convertible securities or
other agreements or commitments obligating OJSAC to issue, transfer or sell any
shares of OJSAC Common Stock to any Person.
Section 4.03. Authority . Each of Amazing Savings and OJSAC has
all necessary corporate power or limited liability company power, as the case
may be, and authority to execute and deliver this Agreement and to perform its
obligations hereunder and to consummate the Merger. The execution, delivery and
performance by each of Amazing Savings and OJSAC of this Agreement, and the
consummation by it of the Merger, have been duly authorized and approved by its
Board of Directors or Managing Member, as the case may be, and no other limited
liability company or corporate action on the part of Amazing Savings and OJSAC,
as the case may be, is necessary to authorize the execution and delivery by
Amazing Savings or OJSAC of this Agreement and the consummation by it of the
Merger. This Agreement has been duly executed and delivered by Amazing Savings
and OJSAC and, assuming due authorization, execution and delivery hereof by the
Company, constitutes a valid and binding obligation of Amazing Savings and
OJSAC, enforceable against Amazing Savings and OJSAC in accordance with its
terms, subject to the Bankruptcy and Equity Exception.
Section 4.04. Consents and Approvals; No Violations.
(a) No consents or approvals of, or filings, declarations or
registrations with, any Governmental Entity are necessary for the consummation
by OJSAC of the Merger other than the filing of the Certificate of Merger with
the Secretary of State of the State of Ohio.
(b) Neither the execution and delivery of this Agreement by OJSAC
nor the consummation by OJSAC of the Merger, nor compliance by OJSAC with any of
the terms or provisions hereof, will (i) conflict with or violate any provision
of the OJSAC Charter Documents or (ii) assuming that the filings referred to in
Section 4.04(a) are made, (x) violate any Law, judgment, writ or injunction of
any Governmental Entity applicable to OJSAC or any of its properties or assets,
or (y) violate, conflict with, result in the loss of any material benefit under,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
23
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the properties or assets of,
OJSAC under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, Permit, lease, agreement or other
instrument or obligation to which OJSAC is a party, or by which it may be bound
or affected.
Section 4.05. Assets and Liabilities. OJSAC does not have any
assets or liabilities except as follows: (a) it is the record owner of 8,184,704
shares of Company Common Stock free and clear of all Liens and (b) it is the
obligor under a promissory note dated, July 17, 2003 issued to Ascend Retail
Investment LLC, a Delaware limited liability company, in the principal amount of
$10 million.
Section 4.06. Operations. OJSAC does not and has never operated a
business.
Section 4.07. Investment. Amazing Savings is acquiring the shares
of Company Common Stock for its own account for investment purposes and not with
a view to any resale or distribution of any interest therein. Amazing Savings
recognizes that an investment in the Company will be illiquid and that the
shares of Company Common Stock will not be listed on any securities exchange.
Section 4.08. Legal Proceedings. There is no pending or, to the
Knowledge of Amazing Savings and OJSAC, threatened, legal, administrative,
arbitral or other proceeding, claim, suit or action against, or governmental or
regulatory investigation of, OJSAC, nor is there any injunction, order,
judgment, ruling or decree imposed (or, to the Knowledge of Amazing Savings and
OJSAC, threatened to be imposed) upon OJSAC or the assets of OJSAC by any
Governmental Entity, that (a) has had or would reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the financial
condition, assets or liabilities or (b) challenges the Merger, provided that
such representation is made only as of the date hereof.
Section 4.09. Finders or Brokers. Other than Peter J. Solomon
Company, L.P., no broker, investment banker, financial advisor or other Person
is entitled to any broker's, finder's, financial advisor's or other similar fee
or commission in connection with the Merger based upon arrangements made by or
on behalf of the Company or any of its subsidiaries.
ARTICLE V
Additional Agreements
---------------------
Section 5.01. Indemnification, Exculpation and Insurance.
(a) From and after the Effective Time, the Company shall
indemnify and hold harmless the individuals who at or prior to the Effective
Time were directors or officers of OJSAC (collectively, the "Indemnitees") with
respect to all acts or omissions by them in their capacities as such or taken at
the request of the Company or such subsidiaries at any time prior to the
Effective Time, to the fullest extent (A) permitted by the Company Charter
Documents and the Subsidiary Documents of such subsidiaries as currently in
effect and (B) permitted under applicable Law.
24
(b) An Indemnitee shall notify the Company in writing promptly
upon learning of any claim, action, suit, proceeding, investigation or other
matter in respect of which such indemnification may be sought, provided that the
failure to provide such notice shall not relieve the Company of its obligations
under this Section 5.01 except to the extent that it is materially prejudiced as
a result of such failure. The Company shall have the right, but not the
obligation, to control the defense of, including the investigation of, and
corrective action required to be undertaken in response to, any litigation,
claim or proceeding (each, a "Claim") relating to any acts or omissions covered
under this Section 5.01 with counsel selected by the Company, which counsel
shall be reasonably acceptable to the Indemnitee (and, if the Company shall have
assumed such defense, it shall not be liable for the fees or expenses of any
separate counsel retained by the Indemnitee); provided, however, that the
Indemnitee shall be permitted to participate in the defense of such Claim at his
or her own expense. Notwithstanding anything to the contrary, in no event shall
the Company be liable for any settlement or compromise effected without its
written consent.
(c) In the event any Claim is asserted or made, any determination
required to be made with respect to whether an Indemnitee's conduct complies
with the standards set forth under applicable Law, the applicable Company
Charter Documents and Subsidiary Documents as the case may be, shall be made by
independent legal counsel selected by the Company and reasonably acceptable to
the Indemnitee; provided that nothing in this Section 5.01 shall impair any
rights of any current or former director or officer of the Company or such
subsidiaries, including pursuant to the respective Company Charter Documents and
the Subsidiary Documents of such subsidiaries, under applicable Law or
otherwise.
(d) Each of the Company and the Indemnitees shall cooperate in
the defense of any Claim and shall provide access to properties and individuals
as reasonably requested and furnish or cause to be furnished records,
information and testimony, and attend such conferences, discovery proceedings,
hearings, trials or appeals, as may be reasonably requested in connection
therewith.
(e) The obligations of the Company under this Section 5.01 shall
not be terminated or modified in such a manner as to adversely affect the rights
of any Indemnitee to whom this Section 5.01 applies unless (x) such termination
or modification is required by applicable Law or (y) the affected Indemnitee
shall have consented to such termination or modification (it being expressly
agreed that the Indemnitees to whom this Section 5.01 applies shall be third
party beneficiaries of this Section 5.01). The provisions of this Section 5.01
are (i) intended to be for the benefit of, and shall be enforceable by, each
Indemnitee, his or her heirs and his or her representatives and (ii) in addition
to, and not in substitution for, any other rights to indemnification or
contribution that any such Person may have by contract or otherwise.
25
(f) In the event that the Company or any of its successors or
assigns (i) consolidates with or merges into any other Person and is not the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys 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 Company shall assume all of the
obligations thereof set forth in this Section 5.01.
Section 5.02. Fees and Expenses. All fees and expenses incurred
in connection with this Agreement, the Merger and the other transactions
contemplated by this Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated.
Section 5.03. Public Announcements. (a) The Company and Amazing
Savings shall consult with each other before issuing, and give each other the
opportunity to review and comment upon, any press release or other public
statements with respect to the transactions contemplated by this Agreement,
including the Merger, and shall not issue any such press release or make any
such public statement prior to such consultation, except as may be required by
applicable Law, court process or by obligations pursuant to any listing
agreement with any national securities exchange or national securities quotation
system. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be in the form
heretofore agreed to by the parties.
(b) Notwithstanding anything to the contrary set forth herein or
in any other agreement to which the parties hereto are parties or by which they
are bound, commencing on the Release Date (as defined below), the obligations of
confidentiality contained herein and therein, as they relate to the transactions
contemplated by this Agreement, including the Merger, shall not apply to the tax
structure or tax treatment of such transactions, and each party hereto (and any
employee, representative, or agent of any party hereto) may disclose to any and
all persons, without limitation of any kind, the tax structure and tax treatment
of such transactions commencing on the Release Date; provided, however, that
such disclosure shall not include the name (or other identifying information not
relevant to the tax structure or tax treatment) of any person and shall not
include information for which nondisclosure is reasonably necessary in order to
comply with applicable securities laws. For purposes of this agreement, "Release
Date" means the date that is the earlier of (i) the date of the public
announcement of discussions relating to the transactions contemplated by this
Agreement, (ii) the date of the public announcement of such transactions or
(iii) the date hereof.
Section 5.04. Agreements. Concurrently with the execution of this
Agreement, the Company and Amazing Savings shall enter into (i) the Asset
Purchase Agreement, (ii) the Registration Rights Agreement and (iii) the
Indemnification Agreement.
26
ARTICLE VI
General Provisions
------------------
Section 6.01. Nonsurvival of Representations and Warranties.
Other than the representations and warranties of the Company in Article III and
Amazing Savings in Article IV of this Agreement each of which shall survive the
Effective Time for a period of one year, none of the representations and
warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time. This Section 6.01 shall not limit
any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
Section 6.02. Notices. Except for notices that are specifically
required by the terms of this Agreement to be delivered orally, all notices,
requests, claims, demands and other communications hereunder shall be in writing
and shall be deemed given if delivered personally, facsimiled (which is
confirmed) or sent by overnight courier (providing proof of delivery) 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, to:
Odd Job Stores, Inc.
200 Helen Street
Facsimile No.: 908-222-9783
Attention: Keith Favreau
with a copy (which shall not constitute notice) to:
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, NY 10022
Attention: Salomon R. Sassoon
Facsimile: (212) 735-8708
if to OJSAC or Amazing Savings, to:
Amazing Savings Holding LLC
20 Industry Dr.
P.O. Box 25
Mountainville, NY 10953
Attention: Sam Friedland
Facsimile: (845) 534-4264
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: David E. Zeltner
Facsimile: (212) 310-8007
27
Section 6.03. Definitions. For purposes of this Agreement:
(a) an "Affiliate" of any Person means another Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first Person;
(b) the "Asset Purchase Agreement" means the asset purchase
agreement, of even date herewith, between Amazing Savings and the Company;
(c) "Governmental Entity" means any government or governmental or
regulatory body thereof, or political subdivision thereof, whether foreign,
federal, state, or local, or any agency, instrumentality or authority thereof,
or any court or arbitrator (public or private);
(d) the "Indemnification Agreement" means the indemnification
agreement, of even date herewith, between Amazing Savings and the Company;
(e) "Knowledge" of any Person that is not an individual means,
with respect to any matter in question, the knowledge after due inquiry of such
Person's executive officers;
(f) "Person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity;
(g) the "Registration Rights Agreement" means the registration
rights agreement, of even date herewith, between Amazing Savings and the
Company; and
(h) a "Subsidiary" of any Person means another Person, an amount
of the voting securities, other voting rights or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
Person.
Section 6.04. Interpretation. When a reference is made in this
Agreement to an Article, a Section, Exhibit or Schedule, such reference shall be
to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
28
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns.
Section 6.05. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
Section 6.06. Entire Agreement; No Third-Party Beneficiaries.
This Agreement together with the Asset Purchase Agreement, the Indemnification
Agreement and the Registration Rights Agreement (a) constitutes the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this Agreement
and (b) except for the provisions of Sections 2.02 and 5.01, are not intended to
confer upon any Person other than the parties any rights or remedies.
Section 6.07. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the Laws of the State of Delaware, regardless
of the Laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
Section 6.08. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, in whole or in
part, by operation of Law or otherwise by any of the parties without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
Section 6.09. Specific Enforcement; Consent to Jurisdiction. The
parties agree that irreparable damage would occur and that the parties would not
have any adequate remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
29
enforce specifically the terms and provisions of this Agreement in any Federal
court located in the State of Delaware or in any state court in the State of
Delaware, this being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any Federal court located in the
State of Delaware or of any state court located in the State of Delaware in the
event any dispute arises out of this Agreement or the transactions contemplated
by this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (c) agrees that it will not bring any action relating to this Agreement or
the transactions contemplated by this Agreement in any court other than a
Federal court located in the State of Delaware or a state court located in the
State of Delaware.
Section 6.10. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible to the
fullest extent permitted by applicable Law in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
30
IN WITNESS WHEREOF, the Company, Amazing Savings and OJSAC have
caused this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
ODD JOB STORES, INC.
By: /s/ Keith Favreau
-------------------------------------------
Name: Keith Favreau
Title: Chief Financial Officer
OJSAC, INC.
By: /s/ Moshael Straus
-------------------------------------------
Name: Moshael Straus
Title: Chief Executive Officer
AMAZING SAVINGS HOLDING LLC
By: Ascend Retail Investment LLC, Managing
Member of Amazing Savings Holding LLC
By: Moshael Straus
--------------------------------------
Name: Moshael Straus
Title: Managing Member
31