ACQUISITION AGREEMENT
DATED AS OF AUGUST 22,2000
BETWEEN
MILLENNIUM PLASTICS CORPORATION
AND
SCAC HOLDINGS INC.
TABLE OF CONTENTS
ACQUISTION AGREEMENT
ARTICLE 1. The Acquisition
Section 1.1. The Acquisition
Section 1.2.Effective Time
Section 1.3.Closing of the Acquisition
Section 1.4.Effects of the Acquisition.
Section 1.5.Registration Rights Agreement
Section 1.6.Board of Directors and Officers of SCAC
Section 1.7.Conversion of Shares
Section 1.8.Exchange of Certificates
Section 1.9.Stock Options
Section 1.10Record Date
Section 1.11Taking of Necessary Action; Further Action
ARTICLE 2. Representations and Warranties of MPC
Section 2.1.Organization and Qualification
Section 2.2.Capitalization of MPC
Section 2.3.Authority Relative to this Agreement; Recommendation.
Section 2.4.SEC Reports; Financial Statements
Section 2.5.Consents and Approvals; No Violations
Section 2.6.No Default
Section 2.7.No Undisclosed Liabilities; Absence of Changes
Section 2.8.Litigation
Section 2.9.Compliance with Applicable Law
Section 2.10.Employee Benefit Plans; Labor Matters
Section 2.11.Environmental Laws and Regulations
Section 2.12.Tax Matters
Section 2.13.Title To Property
Section 2.14.Intellectual Property
Section 2.15.Insurance
Section 2.16.Vote Required
Section 2.17.Tax Treatment
Section 2.18.Affiliates
Section 2.19.Certain Business Practices
Section 2.20.Insider Interests
Section 2.21.Opinion of Financial Adviser
Section 2.22.Brokers
Section 2.23.Disclosure
Section 2.24.No Existing Discussion
Section 2.25.Material Contracts
ARTICLE 3. Representations and Warranties of SCAC.
Section 3.1. Organization and Qualification
Section 3.2. Capitalization of SOLPLAX
Section 3.3.Authority Relative to this Agreement; Recommendation
Section 3.4.SEC Reports; Financial Statements
Section 3.5.Information Supplied
Section 3.6.Consents and Approvals; No Violations
Section 3.7.No Default
Section 3.8No Undisclosed Liabilities; Absence of Changes
Section 3.9.Litigation
Section 3.10.Compliance with Applicable Law
Section 3.11.Employee Benefit Plans; Labor Matters
Section 3.12. Environmental Laws and Regulations
Section 3.13. Tax Matters
Section 3.14. Title to Property
Section 3.15. Intellectual Property
Section 3.16. Insurance
Section 3.17. Vote Required
Section 3.18. Tax Treatment
Section 3.19. Affiliates
Section 3.20. Certain Business Practices
Section 3.21. Insider Interests
Section 3.22. Opinion of Financial Adviser
Section 3.23. Brokers
Section 3.24. Disclosure
Section 3.25. No Existing Discussions
Section 3.26. Material Contracts
ARTICLE 4. Covenants
Section 4.1. Conduct of Business of MPC
Section 4.2. Conduct of Business of SOLPLAX
Section 4.3. Preparation of 8-K
Section 4.4. Other Potential Acquirers
Section 4.5. Meetings of Stockholders
Section 4.6. Registration
Section 4.7. Access to Information
Section 4.8. Additional Agreements; Reasonable Efforts.
Section 4.9. Public Announcements
Section 4.10. Indemnification
Section 4.11. Notification of Certain Matters
ARTICLE 5. Conditions to Consummation of the Acquisition
Section 5.1.Conditions to Each Party's Obligations to Effect
the Acquisition
Section 5.2. Conditions to the Obligations of MPC
Section 5.3. Conditions to the Obligations of SCAC
ARTICLE 6. Termination; Amendment; Waiver
Section 6.1.Termination
Section 6.2.Effect of Termination
Section 6.3.Fees and Expenses
Section 6.4.Amendment
Section 6.5.Extension; Waiver
ARTICLE 7. Miscellaneous
Section 7.1. Nonsurvival of Representations and Warranties
Section 7.2. Entire Agreement; Assignment
Section 7.3. Validity
Section 7.4. Notices
Section 7.5. Governing Law
Section 7.6. Descriptive Headings
Section 7.7. Parties in Interest
Section 7.8. Certain Definitions
Section 7.9. Personal Liability
Section 7.10.Specific Performance
Section 7.11.Counterparts
ACQUISITION AGREEMENT
This Acquisition Agreement (this "Agreement"), dated as of August 22,
2000, is between MILLENNIUM PLASTICS CORPORATION, a Nevada corporation
("MPC"), and SCAC Holdings Inc., a Nevada corporation ("SCAC").
Whereas, the Boards of Directors of MPC and SCAC each have, in light of
and subject to the terms and conditions set forth herein, (i) determined that
the Acquisition (as defined below) is fair to their respective stockholders
and in the best interests of such stockholders and (ii) approved the
Acquisition in accordance with this Agreement;
Whereas, for Federal income tax purposes, it is intended that the
Acquisition qualify as a reorganization under the provisions of Section 368
of the Internal Revenue Code of 1986, as amended (the "Code"); and
Whereas, MPC and SCAC desire to make certain representations,
warranties, covenants and agreements in connection with the Acquisition and
also to prescribe various conditions to the Acquisition.
Now, therefore, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, MPC and SCAC hereby agree as follows:
ARTICLE I
The Acquisition
Section 1.1. The Acquisition. At the Effective Time (as defined below)
and upon the terms and subject to the conditions of this Agreement and in
accordance with the General Corporation Law of the state of Nevada (the
"NGCL"), MPC shall acquire 100% of the issued and outstanding shares of
Common Stock of SOLPLAX (as defined below) (the "Acquisition"). Following the
Acquisition, SOLPLAX shall continue as a surviving corporation, shall
continue to be governed by the laws of the jurisdiction of its incorporation
or organization and the separate corporate existence of SOLPLAX shall
continue. The Acquisition is intended to qualify as a tax-free reorganization
under Section 368 of the Code as relates to the non-cash exchange of stock
referenced herein.
Section 1.2. Effective Time. Subject to the terms and conditions set forth in
this Agreement, a stock certificate (the "Stock Certificate") shall be duly
executed and acknowledged by SCAC, and thereafter the Stock Certificate
reflecting the Acquisition of 100% of the issued and outstanding shares of
Common Stock of SOLPLAX shall be delivered to the Secretary of MPC. The
Acquisition shall become effective at such time as a properly executed or
such later time as the parties may agree upon and set forth in this Agreement
(the time at which the Acquisition becomes effective shall be referred to
herein as the "Effective Time").
Section 1.3. Closing of the Acquisition. The closing of the Acquisition
(the "Closing") will take place at a time and on a date to be specified by
the parties, which shall be no later than the second business day after
satisfaction of the latest to occur of the conditions set forth in Article 5
(the "Closing Date"), at the offices of Sperry Young & Stoecklein, 1850 East
Flamingo Rd., Suite 111, Las Vegas, Nevada 89119, unless another time, date
or place is agreed to in writing by the parties hereto.
Section 1.4. Effects of the Acquisition. The Acquisition shall have the
effects set forth in the NGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the outstanding
securities of Solplax shall vest in MPC.
Section 1.5. Registration Rights Agreement. The shares issued pursuant
to paragraph 1.7 below are subject to a Registration Rights Agreement which
is attached hereto as Exhibit `A.'
Section 1.6. Board of Directors and Officers of SCAC. (a) At or prior to
the Effective Time, each of SCAC and MPC agrees to take such action as is
necessary (i) to cause the number of directors comprising the full Board of
Directors of SOLPLAX to be maximum of five (5) persons with a minimum of
three (3) and (ii) to cause Paul Branagan, Jocelyn Carnegie, and Nicholas
Mcllwraith, (the "MPC Designees") to be elected as directors of SOLPLAX. In
addition, SCAC, as the sole stockholder of SOLPLAX prior to the Effective
Time shall take all action necessary to cause, to the greatest extent
practicable, the MPC Designees and the SOLPLAX Designees to serve on
SOLPLAX's Board of Directors until the 2001 Annual Meeting. If any of the MPC
Designees or the SCAC Designees, respectively, shall decline or be unable to
serve as a director prior to the Effective Time, MPC (if such person was a
MPC Designee) or SCAC (if such person was a SCAC Designee), as the case may
be, shall nominate another person to serve in such person's stead which such
person shall be subject to approval of the other party. If any of the MPC
Designees or the SCAC Designees, respectively, shall decline or be unable to
serve as a director during his initial term following the Effective Time, the
remaining MPC Designees (if such person was a MPC Designee) or the SCAC
Designees (if such person was a SCAC Designee), as the case may be, shall
nominate another person to serve in such person's stead, which such person
shall be subject to the approval of the other party's designees.
(a) From and after the Effective Time, until successors are duly elected
or appointed and qualified in accordance with applicable law, the directors
of all of the subsidiaries, if any, of SOLPLAX shall be the same, as changed
from time to time, as the Board of Directors of SOLPLAX.
(b) From and after the Effective Time, and until successors are duly
elected or appointed and qualified in accordance with applicable law, Paul
Branagan shall be Chief Executive Officer, and Chairman of SOLPLAX, Jocelyn
Carnegie shall be Managing Director of SOLPLAX, and Nicholas Mcllwraith shall
be Secretary, Treasurer and Chief Financial Officer of SOLPLAX.
Section 1.7. Conversion of Shares.
(a) At the Effective Time, each share of common stock, par value $.01 per
share of SOLPLAX
(individually a "SOLPLAX Share" and collectively, the "SOLPLAX Shares")
issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Acquisition and without any action on the part of SCAC, MPC or
the holder thereof, be exchanged for fully paid and nonassessable MPC Common
Share(s). MPC Shares and SOLPLAX Shares are sometimes referred to
collectively herein as "Shares." In exchange for its shares in SOLPLAX, SCAC
shall receive, at Closing, twelve million (12,000,000) restricted common
shares, $0.001 par value of MPC subject to the registration rights as set
forth in the Registration Rights Agreement attached hereto and incorporated
herein by this reference
(b) At the Effective Time, each SOLPLAX Share held in the treasury of
SOLPLAX, by SOLPLAX immediately prior to the Effective Time shall, by virtue
of the Acquisition and without any action on the part of MPC, SCAC or MPC be
retained in Treasury by SOLPLAX.
Section 1.8. Exchange of Certificates.
(a). Prior to the Effective Time, MPC shall enter into an agreement
with, and shall deposit with Sperry Young & Stoecklein, or such other agent
or agents as may be satisfactory to MPC and SCAC (the "Exchange Agent'), for
the benefit of SCAC, for exchange through the Exchange Agent in accordance
with this Article I: (i) certificates representing the appropriate number of
MPC Shares to be issued to SCAC issuable pursuant to Section 1.7 in exchange
for outstanding SOLPLAX Shares, which Shares shall be held until such time as
the Shares are registered. In addition, the Exchange Agent shall retain, on
behalf of SCAC, the eight million (8,000,000) shares of MPC, until such time
as the shares are registered pursuant to the Registration Rights Agreement
and subsequently issued by SCAC as a dividend to its shareholders.
(b) As soon as reasonably practicable after the Registration of such
Shares, the Exchange Agent shall mail to each holder of record, on the record
date ("Record Date") of a certificate or certificates which on the Record
Date represented outstanding SOLPLAX Shares (the "Certificates") (currently
the only shareholder of SOLPLAX shares is SCAC), whose shares were exchanged
into the right to receive MPC Shares pursuant to Section 1.7: (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as SCAC and MPC may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing MPC Shares. Upon surrender of a
Certificate to the Exchange Agent, together with such letter of transmittal,
duly executed, and any other required documents, the holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole MPC Shares and, if applicable, a check
representing the cash consideration to which such holder may be entitled on
account of the Cash Fund, which such holder has the right to receive pursuant
to the provisions of this Article I, and the Certificate so surrendered shall
be held by MPC, at which time SOLPLAX shall become a wholly owned subsidiary
of MPC. In the event of a transfer of ownership of SOLPLAX Shares which are
not registered in the transfer records of SOLPLAX, a certificate representing
the proper number of MPC Shares may be issued to a transferee if the
Certificate representing such SOLPLAX Shares is presented to the Exchange
Agent accompanied by all documents required by the Exchange Agent or MPC to
evidence and effect such transfer and by evidence that any applicable stock
transfer or other taxes have been paid. Until surrendered as contemplated by
this Section 1.8, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
certificate representing MPC Shares and cash as contemplated by this Section
1.8.
(c) No dividends or other distributions declared or made after the
Effective Time with respect to MPC Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the MPC Shares represented thereby and no cash payment in
lieu of fractional shares shall be paid to any such holder pursuant to
Section 1.8(f) until the holder of record of such Certificate shall surrender
such Certificate.
(d) In the event that any Certificate for SOLPLAX Shares or MPC Shares
shall have been lost, stolen or destroyed, the Exchange Agent shall issue in
exchange therefor, upon the making of an affidavit of that fact by the holder
thereof such MPC Shares and cash in lieu of fractional MPC Shares, if any, as
may be required pursuant to this Agreement; provided, however, that MPC or
the Exchange Agent, may, in its respective discretion, require the delivery
of a suitable bond, opinion or indemnity.
(e) All MPC Shares issued upon the surrender for exchange of SOLPLAX
Shares in accordance with the terms hereof (including any cash paid pursuant
to Section 1.10 shall be deemed to have been issued in full satisfaction of
all rights pertaining to such SOLPLAX Shares. There shall be no further
registration of transfers on the stock transfer books of SOLPLAX of the
SOLPLAX shares which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to SOLPLAX for
any reason, they shall be canceled and exchanged as provided in this Article
I.
(f) No fractional MPC Shares shall be issued in the Acquisition, but in
lieu thereof each holder of SOLPLAX Shares otherwise entitled to a fractional
MPC Share shall, upon surrender of its, his or her Certificate or
Certificates, be entitled to receive an amount of cash rounded to the nearest
cent (without interest) determined by multiplying the fair market value of a
MPC Share as determined by the MPC Board of Directors by the fractional share
interest to which such holder would otherwise be entitled. The parties
acknowledge that payment of the cash consideration in lieu of issuing
additional shares was separately bargained for consideration and may
constitute taxable consideration to the recipients.
(g) The MPC Shares issued herein, shall contain the following Rule 144
Restrictive Legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (The
"SECURITIES ACT") AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES
ACT.
Section 1.9. Stock Options. At the Effective Time, each outstanding
option to purchase SOLPLAX Shares (a "SOLPLAX Stock Option" or collectively,
"SOLPLAX Stock Options") issued pursuant to any SOLPLAX Stock Option Plan or
SOLPLAX Long Term Incentive Plan whether vested or not, shall be canceled.
Section 1.10. Record Date. The Record Date shall be Five (5) days after
the Effective Date of the Registration of the MPC Shares, pursuant to the
Securities Exchange Act of 1933, being issued under this Agreement.
Section 1.11. Taking of Necessary Action; Further Action. If, at any
time after the Effective Time, MPC, SOLPLAX or MPC reasonably determines that
any deeds, assignments, or instruments or confirmations of transfer are
necessary or desirable to carry out the purposes of this Agreement and to
vest MPC possession to all assets, property, rights, privileges, powers and
franchises of SOLPLAX, the officers and directors of MPC, MPC and SCAC are
fully authorized in the name of their respective corporations or otherwise to
take, and will take, all such lawful and necessary or desirable action.
ARTICLE 2
Representations and Warranties of MPC
Except as set forth on the Disclosure Schedule delivered by MPC to SCAC
(the "MPC Disclosure Schedule"), MPC hereby represents and warrants to SCAC
as follows:
Section 2.1. Organization and Qualification.
(a) MPC is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization and has all
requisite power and authority to own, lease and operate its properties and to
carry on its businesses as now being conducted, except where the failure to
be so organized, existing and in good standing or to have such power and
authority would not have a Material Adverse Effect (as defined below) on MPC.
When used in connection with MPC, the term "Material Adverse Effect" means
any change or effect (i) that is or is reasonably likely to be materially
adverse to the business, results of operations, condition (financial or
otherwise) or prospects of MPC, other than any change or effect arising out
of general economic conditions unrelated to any business in which MPC is
engaged, or (ii) that may impair the ability of MPC to perform its
obligations hereunder or to consummate the transactions contemplated hereby.
(b) MPC has heretofore delivered to SCAC accurate and complete copies of
the Certificate of Incorporation and Bylaws (or similar governing documents),
as currently in effect, of MPC. Except as set forth on Schedule 2.1 of the
MPC Disclosure Schedule, MPC is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary, except in such jurisdictions where
the failure to be so duly qualified or licensed and in good standing would
not have a Material Adverse Effect on MPC.
Section 2.2. Capitalization of MPC.
(a) The authorized capital stock of MPC consists of: (i) Fifty Million
(50,000,000) MPC Shares at $.001 par value, of which, as of March 31, 2000,
23,900,000 MPC Shares were issued and outstanding, and no MPC Shares were
held in treasury. The eight million shares of MPC common stock which were the
subject of the Amended Patent and Royalty Agreement are being transferred to
SCAC as part of this transaction. All of the outstanding MPC Shares have been
duly authorized and validly issued, and are fully paid, nonassessable and
free of preemptive rights. Except as set forth above, as of the date hereof,
there are no outstanding (i) shares of capital stock or other voting
securities of MPC, (ii) securities of MPC convertible into or exchangeable
for shares of capital stock or voting securities of MPC, (iii) options or
other rights to acquire from MPC and, except as defined herein no obligations
of MPC to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of
MPC, and (iv) equity equivalents, interests in the ownership or earnings of
MPC or other similar rights (collectively, "MPC Securities"). As of the date
hereof, except as set forth on Schedule 2.2(a) of the MPC Disclosure Schedule
there are no outstanding obligations of MPC or its subsidiaries to
repurchase, redeem or otherwise acquire any MPC Securities or stockholder
agreements, voting trusts or other agreements or understandings to which MPC
is a party or by which it is bound relating to the voting or registration of
any shares of capital stock of MPC. For purposes of this Agreement, ''Lien"
means, with respect to any asset (including, without limitation, any
security) any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.
(b) The MPC Shares constitute the only class of equity securities of MPC
registered or required to be registered under the Exchange Act.
(c) MPC does not own directly or indirectly more than fifty percent
(50%) of the outstanding voting securities or interests (including membership
interests) of any entity, other than as specifically disclosed in the
disclosure documents.
Section 2.3. Authority Relative to this Agreement; Recommendation.
MPC has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of MPC (the "MPC Board") and no other corporate
proceedings on the part of MPC are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby, except, as referred to in
Section 2.17. This Agreement has been duly and validly executed and delivered
by MPC and constitutes a valid, legal and binding agreement of MPC,
enforceable against MPC in accordance with its terms.
Section 2.4. SEC Reports; Financial Statements.
(a) MPC has filed all required forms, reports and documents with the
Securities and Exchange Commission (the "SEC") meeting all applicable
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the Exchange Act of 1934 (and the rules and regulations
promulgated thereunder, respectively).
(b) MPC has heretofore made available or promptly will make available to
SCAC a complete and correct copy of documents or other instruments which are
required to be filed by MPC with the SEC pursuant to the Exchange Act.
Section 2.5. Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the Hart-Scott-Rodino Antitrust Improvements Act
of 1916, as amended (the ''HSR Act''), the rules of the National Association
of Securities Dealers, Inc. ("NASD"), the filing and recordation of the
Acquisition Certificate as required by the NGCL, and as set forth on Schedule
2.5 of the MPC Disclosure Schedule no filing with or notice to, and no
permit, authorization, consent or approval of, any court or tribunal or
administrative, governmental or regulatory body, agency or authority (a
"Governmental Entity") is necessary for the execution and delivery by MPC of
this Agreement or the consummation by MPC of the transactions contemplated
hereby, except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings or give such notice would not
have a Material Adverse Effect on MPC.
Except as set forth in Section 2.5 of the MPC Disclosure Schedule,
neither the execution, delivery and performance of this Agreement by MPC nor
the consummation by MPC of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
Certificate of Incorporation or Bylaws (or similar governing documents) of
MPC, (ii) result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or Lien) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to
which MPC is a party or by which any of its properties or assets may be
bound, or (iii) violate any order, writ, injunction, decree, law, statute,
rule or regulation applicable to MPC or any of its properties or assets,
except in the case of (ii) or (iii) for violations, breaches or defaults
which would not have a Material Adverse Effect on MPC.
Section 2.6. No Default. Except as set forth in Section 2.6 of the MPC
Disclosure Schedule, MPC is not in breach, default or violation (and no event
has occurred which with notice or the lapse of time or both would constitute
a breach default or violation) of any term, condition or provision of (i) its
Certificate of Incorporation or Bylaws (or similar governing documents), (ii)
any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which MPC is now a party or by which any of
its respective properties or assets may be bound or (iii) any order, writ
injunction, decree, law, statute, rule or regulation applicable to MPC or any
of its respective properties or assets, except in the case of (ii) or (iii)
for violations, breaches or defaults that would not have a Material Adverse
Effect on MPC. Except as set forth in Section 2.6 of the MPC Disclosure
Schedule, each note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which MPC is now a party or by
which its respective properties or assets may be bound that is material to
MPC and that has not expired is in full force and effect and is not subject
to any material default thereunder of which MPC is aware by any party
obligated to MPC thereunder.
Section 2.7. No Undisclosed Liabilities; Absence of Changes. Except as
set forth in Section 2.7 of the MPC Disclosure Schedule and except as and to
the extent publicly disclosed by MPC in the Form 10KSB, as of March 31, 2000,
MPC does not have any liabilities or obligations of any nature, whether or
not accrued, contingent or otherwise, that would be required by generally
accepted accounting principles to be reflected on a balance sheet of MPC
(including the notes thereto) or which would have a Material Adverse Effect
on MPC. Except as publicly disclosed by MPC, since March 31, 2000, MPC has
not incurred any liabilities of any nature, whether or not accrued,
contingent or otherwise, which could reasonably be expected to have, and
there have been no events, changes or effects with respect to MPC having or
which reasonably could be expected to have, a Material Adverse Effect on MPC.
Except as and to the extent disclosed by MPC on 2.7 of the MPC Disclosure
Schedule, since March 31, 2000, there has not been (i) any material change by
MPC in its accounting methods, principles or practices (other than as
required after the date hereof by concurrent changes in generally accepted
accounting principles), (ii) any revaluation by MPC of any of its assets
having a Material Adverse Effect on MPC, including, without limitation, any
write-down of the value of any assets other than in the ordinary course of
business or (iii) any other action or event that would have required the
consent of any other party hereto pursuant to Section 4.1 of this Agreement
had such action or event occurred after the date of this Agreement.
Section 2.8. Litigation. Except as publicly disclosed by MPC herein,
there is no suit, claim, action, proceeding or investigation pending or, to
the knowledge of MPC, threatened against MPC or any of its subsidiaries or
any of their respective properties or assets before any Governmental Entity
which, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect on MPC or could reasonably be expected to prevent
or delay the consummation of the transactions contemplated by this Agreement.
Except as disclosed herein, MPC is not subject to any outstanding order,
writ, injunction or decree which, insofar as can be reasonably foreseen in
the future, could reasonably be expected to have a Material Adverse Effect on
MPC or could reasonably be expected to prevent or delay the consummation of
the transactions contemplated hereby.
Section 2.9. Compliance with Applicable Law. Except as disclosed by MPC
herein, MPC holds all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of
their respective businesses (the `'MPC Permits"), except for failures to hold
such permits, licenses, variances, exemptions, orders and approvals which
would not have a Material Adverse Effect on MPC. Except as disclosed by MPC
herein, MPC is in compliance with the terms of the MPC Permits, except where
the failure so to comply would not have a Material Adverse Effect on MPC.
Except as disclosed herein, the business of MPC is not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity
except that no representation or warranty is made in this Section 2.9 with
respect to Environmental Laws (as defined in Section 2.11 below) and except
for violations or possible violations which do not, and, insofar as
reasonably can be foreseen, in the future will not, have a Material Adverse
Effect on MPC. Except as disclosed by MPC herein, no investigation or review
by any Governmental Entity with respect to MPC is pending or, to the
knowledge of MPC, threatened, nor, to the knowledge of MPC, has any
Governmental Entity indicated an intention to conduct the same, other than,
in each case, those which MPC reasonably believes will not have a Material
Adverse Effect on MPC.
Section 2.10. Employee Benefit Plans; Labor Matters.
(a) Except as set forth in Section 2.10(a) of the MPC Disclosure
Schedule with respect to each employee benefit plan, program, policy,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), maintained or contributed to at
any time by MPC or any entity required to be aggregated with MPC pursuant to
Section 414 of the Code (each, a "MPC Employee Plan"), no event has occurred
and to the knowledge of MPC, no condition or set of circumstances exists in
connection with which MPC could reasonably be expected to be subject to any
liability which would have a Material Adverse Effect on MPC.
(b) (i) No MPC Employee Plan is or has been subject to Title IV of ERISA
or Section 412 of the Code; and (ii) each MPC Employee Plan intended to
qualify under Section 401(a) of the Code and each trust intended to qualify
under Section 501(a) of the Code is the subject of a favorable Internal
Revenue Service determination letter, and nothing has occurred which could
reasonably be expected to adversely affect such determination.
(c) Section 2.10(c) of the MPC Disclosure Schedule sets forth a true and
complete list, as of the date of this Agreement, of each person who holds any
MPC Stock Options, together with the number of MPC Shares which are subject
to such option, the date of grant of such option, the extent to which such
option is vested (or will become vested as a result of the Acquisition), the
option price of such option (to the extent determined as of the date hereof),
whether such option is a nonqualified stock option or is intended to qualify
as an incentive stock option within the meaning of Section 422(b) of the
Code, and the expiration date of such option. Section 2.10(c) of the MPC
Disclosure Schedule also sets forth the total number of such incentive stock
options and such nonqualified options. MPC has furnished SCAC with complete
copies of the plans pursuant to which the MPC Stock Options were issued.
Other than the automatic vesting of MPC Stock Options that may occur without
any action on the part of MPC or its officers or directors, MPC has not taken
any action that would result in any MPC Stock Options that are unvested
becoming vested in connection with or as a result of the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(d) MPC has made available to SCAC (i) a description of the terms of
employment and compensation arrangements of all officers of MPC and a copy of
each such agreement currently in effect; (ii) copies of all agreements with
consultants who are individuals obligating MPC to make annual cash payments
in an amount exceeding $60,000; (iii) a schedule listing all officers of MPC
who have executed a non-competition agreement with MPC and a copy of each
such agreement currently in effect; (iv) copies (or descriptions) of all
severance agreements, programs and policies of MPC with or relating to its
employees, except programs and policies required to be maintained by law; and
(v) copies of all plans, programs, agreements and other arrangements of MPC
with or relating to its employees which contain change in control provisions
all of which are set forth in Section 2.10(d) of the MPC Disclosure Schedule.
(e) There shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any MPC Employee
Plan or any agreement or arrangement disclosed under this Section 2.10 solely
by reason of entering into or in connection with the transactions
contemplated by this Agreement.
(f) There are no controversies pending or, to the knowledge of MPC,
threatened, between MPC and any of their employees, which controversies have
or could reasonably be expected to have a Material Adverse Effect on MPC.
Neither MPC nor any of its subsidiaries is a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by MPC or any of its subsidiaries (and neither MPC nor any of its
subsidiaries has any outstanding material liability with respect to any
terminated collective bargaining agreement or labor union contract), nor does
MPC know of any activities or proceedings of any labor union to organize any
of its or employees. MPC has no knowledge of any strike, slowdown, work
stoppage, lockout or threat thereof, by or with respect to any of its
employees.
Section 2.11. Environmental Laws and Regulations.
(a) Except as disclosed by MPC herein, (i) MPC is in material compliance
with all applicable federal, state, local and foreign laws and regulations
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water,
land surface or subsurface strata) (collectively, "Environmental Laws"),
except for non-compliance that would not have a Material Adverse Effect on
MPC, which compliance includes, but is not limited to, the possession by MPC
of all material permits and other governmental authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof; (ii) MPC has not received written notice of, or, to the knowledge of
MPC, is the subject of, any action, cause of action, claim, investigation,
demand or notice by any person or entity alleging liability under or
non-compliance with any Environmental Law (an ''Environmental Claim") that
could reasonably be expected to have a Material Adverse Effect on MPC; and
(iii) to the knowledge of MPC, there are no circumstances that are reasonably
likely to prevent or interfere with such material compliance in the future.
(b) Except as set forth in Section 2.11 of the MPC Disclosure Schedule,
there are no Environmental Claims which could reasonably be expected to have
a Material Adverse Effect on MPC that are pending or, to the knowledge of
MPC, threatened against MPC or, to the knowledge of MPC, against any person
or entity whose liability for any Environmental Claim MPC has or may have
retained or assumed either contractually or by operation of law.
Section 2.12. Tax Matters.
(a) Except as set forth in Section 2.12 of the MPC Disclosure Schedule:
(i) MPC has filed or has had filed on its behalf in a timely manner (within
any applicable extension periods) with the appropriate Governmental Entity
all income and other material Tax Returns (as defined herein) with respect to
Taxes (as defined herein) of MPC and all Tax Returns were in all material
respects true, complete and correct; (ii) all material Taxes with respect to
MPC have been paid in full or have been provided for in accordance with GAAP
on MPC's most recent balance, (iii) there are no outstanding agreements or
waivers extending the statutory period of limitations applicable to any
federal, state, local or foreign income or other material Tax Returns
required to be filed by or with respect to MPC; (iv) to the knowledge of MPC
none of the Tax Returns of or with respect to MPC is currently being audited
or examined by any Governmental Entity; and (v) no deficiency for any income
or other material Taxes has been assessed with respect to MPC which has not
been abated or paid in full.
(b) For purposes of this Agreement, (i) "Taxes" shall mean all taxes,
charges, fees, levies or other assessments, including, without limitation,
income, gross receipts, sales, use, ad valorem, goods and services, capital,
transfer, franchise, profits, license, withholding, payroll, employment,
employer health, excise, estimated, severance, stamp, occupation, property or
other taxes, customs duties, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority and (ii) "Tax Return"
shall mean any report, return, documents declaration or other information or
filing required to be supplied to any taxing authority or jurisdiction with
respect to Taxes.
Section 2.13. Title to Property. MPC has good and defensible title to
all of its properties and assets, free and clear of all liens, charges and
encumbrances except liens for taxes not yet due and payable and such liens or
other imperfections of title, if any, as do not materially detract from the
value of or interfere with the present use of the property affected thereby
or which, individually or in the aggregate, would not have a Material Adverse
Effect on MPC; and, to MPC's knowledge, all leases pursuant to which MPC
leases from others real or personal property are in good standing, valid and
effective in accordance with their respective terms, and there is not, to the
knowledge of MPC, under any of such leases, any existing material default or
event of default (or event which with notice of lapse of time, or both, would
constitute a default and in respect of which MPC has not taken adequate steps
to prevent such a default from occurring) except where the lack of such good
standing, validity and effectiveness, or the existence of such default or
event, would not have a Material Adverse Effect on MPC.
Section 2.14. Intellectual Property.
(a) MPC owns, or possesses adequate licenses or other valid rights to
use, all existing United States and foreign patents, trademarks, trade names,
service marks, copyrights, trade secrets and applications therefor that are
material to its business as currently conducted (the "MPC Intellectual
Property Rights").
(b) The validity of the MPC Intellectual Property Rights and the title
thereto of MPC is not being questioned in any litigation to which MPC is a
party.
(c) Except as set forth in Section 2.14(c) of the MPC Disclosure
Schedule, the conduct of the business of MPC as now conducted does not, to
MPC's knowledge, infringe any valid patents, trademarks, trade names, service
marks or copyrights of others. The consummation of the transactions completed
hereby will not result in the loss or impairment of any MPC Intellectual
Property Rights.
(d) MPC has taken steps it believes appropriate to protect and maintain
its trade secrets as such, except in cases where MPC has elected to rely on
patent or copyright protection in lieu of trade secret protection.
Section 2.15. Insurance. MPC maintains general liability, directors and
officers liability and other business insurance that MPC believes to be
reasonably prudent for its business.
Section 2.16. Vote Required. Pursuant to NRS 92A.130 of the NGCL the
approval of the shareholders is not required wherein, "The number of voting
shares outstanding immediately after the merger, plus the number of voting
shares issued as a result of the merger, either by the conversion of
securities issued pursuant to the merger or the exercise of rights and
warrants issued pursuant to the merger, will not exceed by more than 20
percent the total number of participating shares outstanding immediately
before the merger."
Section 2.17. Tax Treatment. Neither MPC nor, to the knowledge of MPC,
any of its affiliates has taken or agreed to take action that would prevent
the Acquisition from constituting a reorganization qualifying under the
provisions of Section 368(a) of the Code.
Section 2.18. Affiliates. Except for Principal MPC Stockholder and the
directors and executive officers of MPC, each of whom is listed in Section
2.18 of the MPC Disclosure Schedule, there are no persons who, to the
knowledge of MPC, may be deemed to be affiliates of MPC under Rule 1-02(b) of
Regulation S-X of the SEC (the "MPC Affiliates").
Section 2.19. Certain Business Practices. None of MPC or any directors,
officers, agents or employees of MPC has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties
or campaigns or violated any provision of the Foreign Corrupt Practices Act
of 1977, as amended (the "FCPA"), or (iii) made any other unlawful payment.
Section 2.20. Insider Interests. Except as set forth in Section 2.20 of
the MPC Disclosure Schedule, neither MPC nor any officer or director of MPC
has any interest in any material property, real or personal, tangible or
intangible, including without limitation, any computer software or MPC
Intellectual Property Rights, used in or pertaining to the business of MPC,
expect for the ordinary rights of a stockholder or employee stock
optionholder.
Section 2.21. Opinion of Financial Adviser. No advisers, as of the date
hereof, have delivered to the MPC Board a written opinion to the effect that,
as of such date, the exchange ratio contemplated by the Acquisition is fair
to the holders of MPC Shares.
Section 2.22. Brokers. No broker, finder or investment banker (other
than the MPC Financial Adviser, a true and correct copy of whose engagement
agreement has been provided to SCAC) is entitled to any brokerage, finder's
or other fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of MPC.
Section 2.23. Disclosure. No representation or warranty of MPC in this
Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to SCAC pursuant hereto or in connection
herewith contains, as of the date of such representation, warranty or
instrument, or will contain any untrue statement of a material fact or, at
the date thereof, omits or will omit to state a material fact necessary to
make any statement herein or therein, in light of the circumstances under
which such statement is or will be made, not misleading.
Section 2.24. No Existing Discussions. As of the date hereof, MPC is not
engaged, directly or indirectly, in any discussions or negotiations with any
other party with respect to any Third Party Acquisition (as defined in
Section 4.4).
Section 2.25. Material Contracts.
(a) MPC has delivered or otherwise made available to SCAC true, correct
and complete copies of all contracts and agreements (and all amendments,
modifications and supplements thereto and all side letters to which MPC is a
party affecting the obligations of any party thereunder) to which MPC is a
party or by which any of its properties or assets are bound that are,
material to the business, properties or assets of MPC taken as a whole,
including, without limitation, to the extent any of the following are,
individually or in the aggregate, material to the business, properties or
assets of MPC taken as a whole, all: (i) employment, product design or
development, personal services, consulting, non-competition, severance,
golden parachute or indemnification contracts (including, without limitation,
any contract to which MPC is a party involving employees of MPC); (ii)
licensing, publishing, merchandising or distribution agreements; (iii)
contracts granting rights of first refusal or first negotiation; (iv)
partnership or joint venture agreements; (v) agreements for the acquisition,
sale or lease of material properties or assets or stock or otherwise entered
into since March 31, 2000; (vi) contracts or agreements with any Governmental
Entity. and (vii) all commitments and agreements to enter into any of the
foregoing (collectively, together with any such contracts entered into in
accordance with Section 4.1 hereof, the "MPC Contracts"). MPC is not a party
to or bound by any severance, golden parachute or other agreement with any
employee or consultant pursuant to which such person would be entitled to
receive any additional compensation or an accelerated payment of compensation
as a result of the consummation of the transactions contemplated hereby.
(b) Each of the MPC Contracts is valid and enforceable in accordance
with its terms, and there is no default under any MPC Contract so listed
either by MPC or, to the knowledge of MPC, by any other party thereto, and no
event has occurred that with the lapse of time or the giving of notice or
both would constitute a default thereunder by MPC or, to the knowledge of
MPC, any other party, in any such case in which such default or event could
reasonably be expected to have a Material Adverse Effect on MPC.
(c) No party to any such MPC Contract has given notice to MPC of or made
a claim against MPC with respect to any breach or default thereunder, in any
such case in which such breach or default could reasonably be expected to
have a Material Adverse Effect on MPC.
ARTICLE 3
Representations and Warranties of SCAC
Except as set forth on the Disclosure Schedule delivered by SCAC to MPC
(the "SCAC Disclosure Schedule"), SCAC hereby represents and warrants to MPC
as follows:
Section 3.1. Organization and Qualification.
(a) Each of SOLPLAX and its subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite power and authority to
own, lease and operate its properties and to carry on its businesses as now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power and authority would not have a Material
Adverse Effect (as defined below) on SOLPLAX. When used in connection with
SOLPLAX, the term "Material Adverse Effect'' means any change or effect (i)
that is or is reasonably likely to be materially adverse to the business,
results of operations, condition (financial or otherwise) or prospects of
SOLPLAX and its subsidiaries, taken as a whole, other than any change or
effect arising out of general economic conditions unrelated to any businesses
in which SOLPLAX and its subsidiaries are engaged, or (ii) that may impair
the ability of SCAC to consummate the transactions contemplated hereby.
(b) SCAC has heretofore delivered to MPC accurate and complete copies of
the Certificate of Incorporation and Bylaws (or similar governing documents),
as currently in effect, of SOLPLAX. Each of SOLPLAX and its subsidiaries is
duly qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not have a Material Adverse
Effect on SOLPLAX.
Section 3.2. Capitalization of SOLPLAX.
(a) As of July 15, 2000, the issued and outstanding capital stock of
SOLPLAX consists of 250,000 SOLPLAX Shares. All of the outstanding SOLPLAX
Shares have been duly authorized and validly issued, and are fully paid, non-
assessable and free of preemptive rights.
(b) Except as set forth in Section 3.2(b) of the SCAC Disclosure
Schedule, SOLPLAX is the record and beneficial owner of all of the issued and
outstanding shares of capital stock of its subsidiaries.
(c) Except as set forth in Section 3.2(c) of the SCAC Disclosure
Schedule, between July 15, 2000 and the date hereof, no shares of SOLPLAX's
capital stock have been issued and no SOLPLAX Stock options have been
granted. Except as set forth in Section 3.2(a) above, as of the date hereof,
there are no outstanding (i) shares of capital stock or other voting
securities of SOLPLAX, (ii) securities of SOLPLAX or its subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of SOLPLAX, (iii) options or other rights to acquire from SOLPLAX
or its subsidiaries, or obligations of SOLPLAX or its subsidiaries to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of SOLPLAX, or (iv)
equity equivalents, interests in the ownership or earnings of SOLPLAX or its
subsidiaries or other similar rights (collectively, "SOLPLAX Securities"). As
of the date hereof, there are no outstanding obligations of SOLPLAX or any of
its subsidiaries to repurchase, redeem or otherwise acquire any SOLPLAX
Securities. There are no stockholder agreements, voting trusts or other
agreements or understandings to which SOLPLAX is a party or by which it is
bound relating to the voting or registration of any shares of capital stock
of SOLPLAX.
(d) Except as set forth in Section 3.2(d) of the SCAC Disclosure
Schedule, there are no securities of SOLPLAX convertible into or exchangeable
for, no options or other rights to acquire from SOLPLAX, and no other
contract, understanding, arrangement or obligation (whether or not
contingent) providing for the issuance or sale, directly or indirectly, of
any capital stock or other ownership interests in, or any other securities
of, any subsidiary of SOLPLAX.
(e) The SOLPLAX Shares constitute the only class of equity securities of
SOLPLAX or its subsidiaries.
(f) Except as set forth in Section 3.2(f) of the SCAC Disclosure
Schedule, SOLPLAX does not own directly or indirectly more than fifty percent
(50%) of the outstanding voting securities or interests (including membership
interests) of any entity.
Section 3.3. Authority Relative to this Agreement; Recommendation.
(a) SCAC has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of SCAC (the "SCAC Board"), and no other corporate
proceedings on the part of SCAC are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby, except, as referred to in
Section 3.17, the approval and adoption of this Agreement by the holders of
at least a majority of the then outstanding SOLPLAX Shares. This Agreement
has been duly and validly executed and delivered by SCAC and constitutes a
valid, legal and binding agreement of SCAC, enforceable against SCAC in
accordance with its terms.
(b) The SCAC Board has resolved to approve and adopt this Agreement.
Section 3.4. SEC Reports; Financial Statements. SOLPLAX is not required
to file forms, reports and documents with the SEC.
Section 3.5. Information Supplied. None of the information supplied or
to be supplied by SCAC for inclusion or incorporation by reference to (i) the
8-K will, at the time the 8-K is filed with the SEC and at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
Section 3.6. Consents and Approvals; No Violations. Except as set forth
in Section 3.6 of the SCAC Disclosure Schedule, and for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the HSR Act, the rules of the NASD, and the
filing and recordation of the Acquisition Certificate as required by the
NGCL, no filing with or notice to, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution and
delivery by SCAC of this Agreement or the consummation by SCAC of the
transactions contemplated hereby, except where the failure to obtain such
permits, authorizations consents or approvals or to make such filings or give
such notice would not have a Material Adverse Effect on SCAC.
Neither the execution, delivery and performance of this Agreement by
SCAC nor the consummation by SCAC of the transactions contemplated hereby
will (i) conflict with or result in any breach of any provision of the
respective Certificate of Incorporation or Bylaws (or similar governing
documents) of SOLPLAX or any of SOLPLAX's subsidiaries, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or Lien) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which SOLPLAX or any of
SOLPLAX's subsidiaries is a party or by which any of them or any of their
respective properties or assets may be bound or (iii) violate any order,
writ, injunction, decree, law, statute, rule or regulation applicable to
SOLPLAX or any of SOLPLAX's subsidiaries or any of their respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults which would not have a Material Adverse Effect on
SOLPLAX.
Section 3.7. No Default. None of SOLPLAX or any of its subsidiaries is
in breach, default or violation (and no event has occurred which with notice
or the lapse of time or both would constitute a breach, default or violation)
of any term, condition or provision of (i) its Certificate of Incorporation
or Bylaws (or similar governing documents), (ii) any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which SOLPLAX or any of its subsidiaries is now a party or by
which any of them or any of their respective properties or assets may be
bound or (iii) any order, writ, injunction, decree, law, statute, rule or
regulation applicable to SOLPLAX, its subsidiaries or any of their respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults that would not have a Material Adverse Effect on
SOLPLAX. Each note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which SOLPLAX or any of its
subsidiaries is now a party or by which any of them or any of their
respective properties or assets may be bound that is material to SOLPLAX and
its subsidiaries taken as a whole and that has not expired is in full force
and effect and is not subject to any material default thereunder of which
SOLPLAX is aware by any party obligated to SOLPLAX or any subsidiary
thereunder.
Section 3.8. No Undisclosed Liabilities; Absence of Changes. To the best
knowledge of SCAC's current management, except as and to the extent disclosed
by SCAC in the SCAC Disclosure Schedule, none of SOLPLAX or its subsidiaries
had any liabilities or obligations of any nature, whether or not accrued,
contingent or otherwise, that would be required by generally accepted
accounting principles to be reflected on a consolidated balance sheet of
SOLPLAX and its consolidated subsidiaries (including the notes thereto) or
which would have a Material Adverse Effect on SOLPLAX. Except as disclosed by
SCAC, none of SOLPLAX or its subsidiaries has incurred any liabilities of any
nature, whether or not accrued, contingent or otherwise, which could
reasonably be expected to have, and there have been no events, changes or
effects with respect to SOLPLAX or its subsidiaries having or which could
reasonably be expected to have, a Material Adverse Effect on SOLPLAX. Except
as and to the extent disclosed by SCAC there has not been (i) any material
change by SOLPLAX in its accounting methods, principles or practices (other
than as required after the date hereof by concurrent changes in generally
accepted accounting principles), (ii) any revaluation by SOLPLAX of any of
its assets having a Material Adverse Effect on SOLPLAX, including, without
limitation, any write-down of the value of any assets other than in the
ordinary course of business or (iii) any other action or event that would
have required the consent of any other party hereto pursuant to Section 4.2
of this Agreement had such action or event occurred after the date of this
Agreement.
Section 3.9. Litigation. To the best knowledge of SCAC's current
management, except as set forth in Schedule 3.9 of the SCAC Disclosure
Schedule there is no suit, claim, action, proceeding or investigation pending
or, to the knowledge of SOLPLAX, threatened against SOLPLAX or any of its
subsidiaries or any of their respective properties or assets before any
Governmental Entity which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect on SOLPLAX or could reasonably
be expected to prevent or delay the consummation of the transactions
contemplated by this Agreement. Except as disclosed by SCAC, none of SOLPLAX
or its subsidiaries is subject to any outstanding order, writ, injunction or
decree which, insofar as can be reasonably foreseen in the future, could
reasonably be expected to have a Material Adverse Effect on SOLPLAX or could
reasonably be expected to prevent or delay the consummation of the
transactions contemplated hereby.
Section 3.10. Compliance with Applicable Law. To the best knowledge of
SCAC's current management, except as disclosed by SCAC, SOLPLAX and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of
their respective businesses (the "SOLPLAX Permits"), except for failures to
hold such permits, licenses, variances, exemptions, orders and approvals
which would not have a Material Adverse Effect on SOLPLAX. Except as
disclosed by SCAC, SOLPLAX and its subsidiaries are in compliance with the
terms of the SOLPLAX Permits, except where the failure so to comply would not
have a Material Adverse Effect on SOLPLAX. Except as disclosed by SCAC, the
businesses of SOLPLAX and its subsidiaries are not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity
except that no representation or warranty is made in this Section 3.10 with
respect to Environmental Laws and except for violations or possible
violations which do not, and, insofar as reasonably can be foreseen, in the
future will not, have a Material Adverse Effect on SOLPLAX. Except as
disclosed by SCAC no investigation or review by any Governmental Entity with
respect to SOLPLAX or its subsidiaries is pending or, to the knowledge of
SCAC, threatened, nor, to the knowledge of SCAC, has any Governmental Entity
indicated an intention to conduct the same, other than, in each case, those
which SCAC reasonably believes will not have a Material Adverse Effect on
SOLPLAX.
Section 3.11. Employee Benefit Plans; Labor Matters.
(a) With respect to each employee benefit plan, program, policy,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of ERISA), maintained or
contributed to at any time by SOLPLAX, any of its subsidiaries or any entity
required to be aggregated with SOLPLAX or any of its subsidiaries pursuant to
Section 414 of the Code (each, a "SOLPLAX Employee Plan"), no event has
occurred and, to the knowledge of SCAC, no condition or set of circumstances
exists in connection with which SOLPLAX or any of its subsidiaries could
reasonably be expected to be subject to any liability which would have a
Material Adverse Effect on SOLPLAX.
(b) (i) No SOLPLAX Employee Plan is or has been subject to Title IV of
ERISA or Section 412 of the Code; and (ii) each SOLPLAX Employee Plan
intended to qualify under Section 401(a) of the Code and each trust intended
to qualify under Section 501(a) of the Code is the subject of a favorable
Internal Revenue Service determination letter, and nothing has occurred which
could reasonably be expected to adversely affect such determination.
(c) Section 3.11(c) of the SCAC Disclosure Schedule sets forth a true
and complete list, as of the date of this Agreement, of each person who holds
any SOLPLAX Stock Options, together with the number of SOLPLAX Shares which
are subject to such option, the date of grant of such option, the extent to
which such option is vested (or will become vested as a result of the
Acquisition), the option price of such option (to the extent determined as of
the date hereof), whether such option is a nonqualified stock option or is
intended to qualify as an incentive stock option within the meaning of
Section 422(b) of the Code, and the expiration date of such option. Section
3.11(c) of the SCAC Disclosure Schedule also sets forth the total number of
such incentive stock options and such nonqualified options. SCAC has
furnished MPC with complete copies of the plans pursuant to which the SOLPLAX
Stock Options were issued. Other than the automatic vesting of SOLPLAX Stock
Options that may occur without any action on the part of SOLPLAX or its
officers or directors, SOLPLAX has not taken any action that would result in
any SOLPLAX Stock Options that are unvested becoming vested in connection
with or as a result of the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(d) SCAC has made available to MPC (i) a description of the terms of
employment and compensation arrangements of all officers of SOLPLAX and a
copy of each such agreement currently in effect; (ii) copies of all
agreements with consultants who are individuals obligating SOLPLAX to make
annual cash payments in an amount exceeding $60,000; (iii) a schedule listing
all officers of SOLPLAX who have executed a non-competition agreement with
SOLPLAX and a copy of each such agreement currently in effect; (iv) copies
(or descriptions) of all severance agreements, programs and policies of
SOLPLAX with or relating to its employees, except programs and policies
required to be maintained by law; and (v) copies of all plans, programs,
agreements and other arrangements of the SOLPLAX with or relating to its
employees which contain change in control provisions.
(e) Except as disclosed in Section 3.11(e) of the SCAC Disclosure
Schedule there shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any SOLPLAX
Employee Plan or any agreement or arrangement disclosed under this Section
3.11 solely by reason of entering into or in connection with the transactions
contemplated by this Agreement.
(f) There are no controversies pending or, to the knowledge of SCAC
threatened, between SOLPLAX or any of its subsidiaries and any of their
respective employees, which controversies have or could reasonably be
expected to have a Material Adverse Effect on SOLPLAX. Neither SOLPLAX nor
any of its subsidiaries is a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by SOLPLAX or any
of its subsidiaries (and neither SOLPLAX nor any of its subsidiaries has any
outstanding material liability with respect to any terminated collective
bargaining agreement or labor union contract), nor does SCAC know of any
activities or proceedings of any labor union to organize any of its or any of
its subsidiaries' employees. SCAC has no knowledge of any strike, slowdown,
work stoppage, lockout or threat thereof by or with respect to any of its or
any of its subsidiaries' employees.
Section 3.12. Environmental Laws and Regulations.
(a) Except as disclosed by SCAC, (i) each of SOLPLAX and its
subsidiaries is in material compliance with all Environmental Laws, except
for non-compliance that would not have a Material Adverse Effect on SOLPLAX,
which compliance includes, but is not limited to, the possession by SOLPLAX
and its subsidiaries of all material permits and other governmental
authorizations required under applicable Environmental Laws, and compliance
with the terms and conditions thereof; (ii) none of SOLPLAX or its
subsidiaries has received written notice of, or, to the knowledge of SCAC, is
the subject of, any Environmental Claim that could reasonably be expected to
have a Material Adverse Effect on SOLPLAX; and (iii) to the knowledge of
SCAC, there are no circumstances that are reasonably likely to prevent or
interfere with such material compliance in the future.
(b) Except as disclosed by SCAC, there are no Environmental Claims which
could reasonably be expected to have a Material Adverse Effect on SOLPLAX
that are pending or, to the knowledge of SCAC, threatened against SOLPLAX or
any of its subsidiaries or, to the knowledge of SCAC, against any person or
entity whose liability for any Environmental Claim SOLPLAX or its
subsidiaries has or may have retained or assumed either contractually or by
operation of law.
Section 3.13. Tax Matters. Except as set forth in Section 3.13 of the
SCAC Disclosure Schedule: (i) SOLPLAX and each of its subsidiaries has filed
or has had filed on its behalf in a timely manner (within any applicable
extension periods) with the appropriate Governmental Entity all income and
other material Tax Returns with respect to Taxes of SOLPLAX and each of its
subsidiaries and all Tax Returns were in all material respects true, complete
and correct; (ii) all material Taxes with respect to SOLPLAX and each of its
subsidiaries have been paid in full or have been provided for in accordance
with GAAP on SOLPLAX's most recent balance sheet which is part of the SOLPLAX
SEC Documents; (iii) there are no outstanding agreements or waivers extending
the statutory period of limitations applicable to any federal, state, local
or foreign income or other material Tax Returns required to be filed by or
with respect to SOLPLAX or its subsidiaries; (iv) to the knowledge of SCAC
none of the Tax Returns of or with respect to SOLPLAX or any of its
subsidiaries is currently being audited or examined by any Governmental
Entity; and (v) no deficiency for any income or other material Taxes has been
assessed with respect to SOLPLAX or any of its subsidiaries which has not
been abated or paid in full.
Section 3.14. Title to Property. SOLPLAX and each of its subsidiaries
have good and defensible title to all of their properties and assets, free
and clear of all liens, charges and encumbrances except liens for taxes not
yet due and payable and such liens or other imperfections of title, if any,
as do not materially detract from the value of or interfere with the present
use of the property affected thereby or which, individually or in the
aggregate, would not have a Material Adverse Effect on SOLPLAX; and, to
SCAC's knowledge, all leases pursuant to which SOLPLAX or any of its
subsidiaries lease from others real or personal property are in good
standing, valid and effective in accordance with their respective terms, and
there is not, to the knowledge of SCAC, under any of such leases, any
existing material default or event of default (or event which with notice or
lapse of time, or both, would constitute a material default and in respect of
which SOLPLAX or such subsidiary has not taken adequate steps to prevent such
a default from occurring) except where the lack of such good standing,
validity and effectiveness, or the existence of such default or event of
default would not have a Material Adverse Effect on SOLPLAX.
Section 3.15. Intellectual Property.
(a) Each of SOLPLAX and its subsidiaries owns, or possesses adequate
licenses or other valid rights to use, all existing United States and foreign
patents, trademarks, trade names, services marks, copyrights, trade secrets,
and applications therefor that are material to its business as currently
conducted (the "SOLPLAX Intellectual Property Rights").
(b) Except as set forth in Section 3.15(b) of the SCAC Disclosure
Schedule the validity of the SOLPLAX Intellectual Property Rights and the
title thereto of SOLPLAX or any subsidiary, as the case may be, is not being
questioned in any litigation to which SOLPLAX or any subsidiary is a party.
(c) The conduct of the business of SOLPLAX and its subsidiaries as now
conducted does not, to SCAC's knowledge, infringe any valid patents,
trademarks, trade names, service marks or copyrights of others. The
consummation of the transactions contemplated hereby will not result in the
loss or impairment of any SOLPLAX Intellectual Property Rights.
(d) Each of SOLPLAX and its subsidiaries has taken steps it believes
appropriate to protect and maintain its trade secrets as such, except in
cases where SOLPLAX has elected to rely on patent or copyright protection in
lieu of trade secret protection.
Section 3.16. Insurance. SOLPLAX and its subsidiaries maintain general
liability and other business insurance that SOLPLAX believes to be reasonably
prudent for its business.
Section 3.17. Vote Required. The affirmative vote of the holders of at
least a majority of the outstanding SOLPLAX Shares is the only vote of the
holders of any class or series of SOLPLAX's capital stock necessary to
approve and adopt this Agreement and the Acquisition.
Section 3.18. Tax Treatment. Neither SOLPLAX nor, to the knowledge of
SCAC, any of its affiliates has taken or agreed to take any action that would
prevent the Acquisition from constituting a reorganization qualifying under
the provisions of Section 368(a) of the Code.
Section 3.19. Affiliates. Except for the directors and executive
officers of SOLPLAX, each of whom is listed in Section 3.19 of the SCAC
Disclosure Schedule, there are no persons who, to the knowledge of SCAC, may
be deemed to be affiliates of SOLPLAX under Rule 1-02(b) of Regulation S-x of
the SEC (the "SOLPLAX Affiliates").
Section 3.20. Certain Business Practices. None of SOLPLAX, any of its
subsidiaries or any directors, officers, agents or employees of SOLPLAX or
any of its subsidiaries has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political
activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the FCPA, or (iii) made any other
unlawful payment.
Section 3.21. Insider Interests. Except as set forth in Section 3.21 of
the SCAC Disclosure Schedule, no officer or director of SOLPLAX has any
interest in any material property, real or personal, tangible or intangible,
including without limitation, any computer software or SOLPLAX Intellectual
Property Rights, used in or pertaining to the business of SOLPLAX or any
subsidiary, except for the ordinary rights of a stockholder or employee stock
optionholder.
Section 3.22. Opinion of Financial Adviser. SCAC management has
determined, without the advise of an outside Financial Adviser, to the effect
that, as of such date the exchange ratio contemplated by the Acquisition is
fair to the holders of SCAC Shares.
Section 3.23. Brokers. No broker, finder or investment banker (other
than the SCAC Financial Adviser, a true and correct copy of whose engagement
agreement has been provided to MPC) is entitled to any brokerage, finders or
other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of SCAC.
Section 3.24. Disclosure. No representation or warranty of SCAC in this
Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to MPC pursuant hereto or in connection herewith
contains, as of the date of such representation, warranty or instrument, or
will contain any untrue statement of a material fact or, at the date thereof,
omits or will omit to state a material fact necessary to make any statement
herein or therein, in light of the circumstances under which such statement
is or will be made, not misleading.
Section 3.25. No Existing Discussions. As of the date hereof, SCAC is
not engaged, directly or indirectly, in any discussions or negotiations with
any other party with respect to any Third Party Acquisition (as defined in
Section 5.4).
Section 3.26. Material Contracts.
(a) SCAC has delivered or otherwise made available to MPC true, correct
and complete copies of all contracts and agreements (and all amendments,
modifications and supplements thereto and all side letters to which SOLPLAX
is a party affecting the obligations of any party thereunder) to which
SOLPLAX or any of its subsidiaries is a party or by which any of their
properties or assets are bound that are, material to the business, properties
or assets of SOLPLAX and its subsidiaries taken as a whole, including,
without limitation, to the extent any of the following are, individually or
in the aggregate, material to the business, properties or assets of SOLPLAX
and its subsidiaries taken as a whole, all: (i) employment, product design or
development, personal services, consulting, non-competition, severance,
golden parachute or indemnification contracts (including, without limitation,
any contract to which SOLPLAX is a party involving employees of SOLPLAX);
(ii) licensing, publishing, merchandising or distribution agreements; (iii)
contracts granting rights of first refusal or first negotiation; (iv)
partnership or joint venture agreements; (v) agreements for the acquisition,
sale or lease of material properties or assets or stock or otherwise entered
into since December 31, 1999, (vi) contracts or agreements with any
Governmental Entity; and (vii) all commitments and agreements to enter into
any of the foregoing (collectively, together with any such contracts entered
into in accordance with Section 5.2 hereof, the 'SOLPLAX Contracts"). Neither
SOLPLAX nor any of its subsidiaries is a party to or bound by any severance,
golden parachute or other agreement with any employee or consultant pursuant
to which such person would be entitled to receive any additional compensation
or an accelerated payment of compensation as a result of the consummation of
the transactions contemplated hereby.
(b) Each of the SOLPLAX Contracts is valid and enforceable in accordance
with its terms, and there is no default under any SOLPLAX Contract so listed
either by SOLPLAX or, to the knowledge of SCAC, by any other party thereto,
and no event has occurred that with the lapse of time or the giving of notice
or both would constitute a default thereunder by SOLPLAX or, to the knowledge
of SCAC, any other party, in any such case in which such default or event
could reasonably be expected to have a Material Adverse Effect on SOLPLAX.
(c) No party to any such SOLPLAX Contract has given notice to SOLPLAX of
or made a claim against SOLPLAX with respect to any breach or default
thereunder, in any such case in which such breach or default could reasonably
be expected to have a Material Adverse Effect on SOLPLAX.
ARTICLE 4
Covenants
Section 4.1. Conduct of Business of MPC. Except as contemplated by this
Agreement or as described in Section 4.1 of the MPC Disclosure Schedule,
during the period from the date hereof to the Effective Time, MPC will
conduct its operations in the ordinary course of business consistent with
past practice and, to the extent consistent therewith, with no less diligence
and effort than would be applied in the absence of this Agreement, seek to
preserve intact its current business organization, keep available the service
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end
that goodwill and ongoing businesses shall be unimpaired at the Effective
Time. Without limiting the generality of the foregoing, except as otherwise
expressly provided in this Agreement or as described in Section 4.1 of the
MPC Disclosure Schedule, prior to the Effective Time, MPC will not, without
the prior written consent of SCAC:
(a) amend its Certificate of Incorporation or Bylaws (or other similar
governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, comments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities (except bank loans) or equity
equivalents (including, without limitation, any stock options or stock
appreciation rights).
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, make any other actual, constructive or deemed distribution in respect
of its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution,
Acquisition, consolidation, restructuring, recapitalization or other
reorganization of MPC (other than the Acquisition);
(e) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingent or otherwise) for the obligations of any other person.
(iii) make any loans, advances or capital contributions to, or investments
in, any other person; (iv) pledge or otherwise encumber shares of capital
stock of MPC; or (v) mortgage or pledge any of its material assets, tangible
or intangible, or create or suffer to exist any material Lien thereupon
(other than tax Liens for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit,
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent MPC from (i) entering into employment
agreements or severance agreements with employees in the ordinary course of
business and consistent with past practice or (ii) increasing annual
compensation and/or providing for or amending bonus arrangements for
employees for fiscal 1999 in the ordinary course of year-end compensation
reviews consistent with past practice and paying bonuses to employees for
fiscal 1999 in amounts previously disclosed to SCAC (to the extent that such
compensation increases and new or amended bonus arrangements do not result in
a material increase in benefits or compensation expense to MPC);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions (other than in the ordinary
course of business);
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets including, without
limitation, writing down the value of inventory or writing-off notes or
accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by Acquisition, consolidation, or acquisition of stock
or assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract
or agreement other than in the ordinary course of business consistent with
past practice which would be material to MPC; (iii) authorize any new capital
expenditure or expenditures which, individually is in excess of $500,000 or,
in the aggregate, are in excess of $1,000,000; provided, however that none of
the foregoing shall limit any capital expenditure required pursuant to
existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to MPC;
(l) settle or compromise any pending or threatened suit, action or claim
which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on
MPC;
(m) commence any material research and development project or terminate
any material research and development project that is currently ongoing, in
either case, except pursuant to the terms of existing contracts or in the
ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1(a) through 4.1(m) or any action which would make
any of the representations or warranties of contained in this Agreement
untrue or incorrect.
Section 4.2. Conduct of Business of SOLPLAX. Except as contemplated by
this Agreement or as described in Section 4.2 of the SCAC Disclosure Schedule
during the period from the date hereof to the Effective Time, SOLPLAX will
conduct its operations in the ordinary course of business consistent with
past practice and, to the extent consistent therewith, with no less diligence
and effort than would be applied in the absence of this Agreement, seek to
preserve intact its current business organization, keep available the service
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end
that goodwill and ongoing businesses shall be unimpaired at the Effective
Time. Without limiting the generality of the foregoing, except as otherwise
expressly provided in this Agreement or as described in Section 4.2 of the
SCAC Disclosure Schedule, prior to the Effective Time, SOLPLAX will not,
without the prior written consent of:
(a) amend its Certificate of Incorporation or Bylaws (or other similar
governing instrument);
(b) amend the terms of the SOLPLAX Warrants, authorize for issuance,
issue, sell, deliver or agree or commit to issue, sell or deliver (whether
through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any stock of any class or any
other securities (except bank loans) or equity equivalents (including,
without limitation, any stock options or stock appreciation rights;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, make any other actual, constructive or deemed distribution in respect
of its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution,
Acquisition consolidation, restructuring, recapitalization or other
reorganization of SOLPLAX (other than the Acquisition);
(e) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business. (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person;
(iii) make any loans, advances or capital contributions to or investments in,
any other person; (iv) pledge or otherwise encumber shares of capital stock
of SOLPLAX or its subsidiaries; or (v) mortgage or pledge any of its material
assets, tangible or intangible, or create or suffer to exist any material
Lien thereupon (other than tax Liens for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent SOLPLAX or its subsidiaries from (i) entering
into employment agreements or severance agreements with employees in the
ordinary course of business and consistent with past practice or (ii)
increasing annual compensation and/or providing for or amending bonus
arrangements for employees for fiscal 1999 in the ordinary course of yearend
compensation reviews consistent with past practice and paying bonuses to
employees for fiscal 1999 in amounts previously disclosed to (to the extent
that such compensation increases and new or amended bonus arrangements do not
result in a material increase in benefits or compensation expense to
SOLPLAX);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions other than in the ordinary
course of business;
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory of writing-off notes
or accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by Acquisition, consolidation, or acquisition of stock
or assets) any corporation, partnership, or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract
or agreement other than in the ordinary course of business consistent with
past practice which would be material to SOLPLAX; (iii) authorize any new
capital expenditure or expenditures which, individually, is in excess of
$500,000 or, in the aggregate, are in excess of $1,000,000: provided, however
that none of the foregoing shall limit any capital expenditure required
pursuant to existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to SOLPLAX and its subsidiaries taken as a whole;
(l) settle or compromise any pending or threatened suit, action or claim
which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on
SOLPLAX;
(m) commence any material research and development project or terminate
any material research and development project that is currently ongoing, in
either case, except pursuant to the terms of existing contracts or except in
the ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.2(a) through 4.2(m) or any action which would make
any of the representations or warranties of the SOLPLAX contained in this
Agreement untrue or incorrect.
Section 4.3. Preparation of 8-K. SCAC shall promptly assist MPC in
filing any 8K report required to be filed by MPC, if required by counsel.
Section 4.4. Other Potential Acquirers. SCAC, its affiliates and their
respective officers, directors, employees, representatives and agents shall
immediately cease any existing discussions or negotiations, if any, with any
parties conducted heretofore with respect to any Third Party Acquisition.
Section 4.5. Meetings of Stockholders. Each of SCAC and MPC shall take
all action necessary, in accordance with the respective General Corporation
Law of its respective state, and its respective certificate of incorporation
and bylaws, to duly call, give notice of, convene and hold a meeting of its
stockholders as promptly as practicable, to consider and vote upon the
adoption and approval of this Agreement and the transactions contemplated
hereby. The stockholder votes required for the adoption and approval of the
transactions contemplated by this Agreement shall be the vote required by the
NGCL and their charter and bylaws and SCAC will, through its respective Board
of Directors, recommend to its respective stockholders approval of such
matters.
Section 4.6. Registration. The parties shall use all reasonable efforts
to cause the MPC Shares to be issued in the Acquisition to be registered
pursuant to the Securities Act of 1933.
Section 4.7. Access to Information.
(a) Between the date hereof and the Effective Time, MPC will give SCAC
and its authorized representatives, and SCAC will give MPC and its authorized
representatives, reasonable access to all employees, plants, offices,
warehouses and other facilities and to all books and records of itself and
its subsidiaries, will permit the other party to make such inspections as
such party may reasonably require and will cause its officers and those of
its subsidiaries to furnish the other party with such financial and operating
data and other information with respect to the business and properties of
itself and its subsidiaries as the other party may from time to time
reasonably request.
(b) Between the date hereof and the Effective Time, MPC shall furnish to
SCAC, and SCAC will furnish to MPC, within 25 business days after the end of
each calendar month (commencing with August 22, 2000, an unaudited balance
sheet of the party furnishing such information as of the end of the such
month and the related statements of earnings, stockholders' equity (deficit)
and, within 25 business days after the end of each calendar quarter cash
flows for the quarter then ended, each prepared in accordance with generally
accepted accounting principles in conformity with the practices consistently
applied by such party with respect to its monthly or quarterly financial
statements. All the foregoing shall be in accordance with the books and
records of the party furnishing such information and shall fairly present its
financial position (taking into account the differences between the monthly
and quarterly statements prepared by such party in conformity with its past
practices) as of the last day of the period then ended.
(c) Each of the parties hereto will hold and will cause its consultants
and advisers to hold in confidence all documents and information furnished to
it in connection with the transactions contemplated by this Agreement.
Section 4.8. Additional Agreements, Reasonable Efforts. Subject to the
terms and conditions herein provided, each of the parties hereto agrees to
use all reasonable efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
(i) cooperating in the preparation and filing of the 8-K, any filings that
may be required under the HSR Act, and any amendments to any thereof; (ii)
obtaining consents of all third parties and Governmental Entities necessary,
proper or advisable for the consummation of the transactions contemplated by
this Agreement; (iii) contesting any legal proceeding relating to the
Acquisition and (iv) the execution of any additional instruments necessary to
consummate the transactions contemplated hereby. Subject to the terms and
conditions of this Agreement, SCAC and MPC agree to use all reasonable
efforts to cause the Effective Time to occur as soon as practicable after the
stockholder votes with respect to the Acquisition. In case at any time after
the Effective Time any further action is necessary to carry out the purposes
of this Agreement, the proper officers and directors of each party hereto
shall take all such necessary action.
Section 4.9. Public Announcements. SCAC, and MPC will consult with one
another before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement,
including, without limitation, the Acquisition, 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 or by obligations pursuant to any
listing agreement with the Nasdaq as determined by SCAC or MPC.
Section 4.10. Indemnification.
(a) To the extent, if any, not provided by an existing right under one
of the parties' directors and officers liability insurance policies, from and
after the Effective Time, MPC shall, to the fullest extent permitted by
applicable law, indemnify, defend and hold harmless any officer or director
who is now, or has been at any time prior to the date hereof, or who becomes
prior to the Effective Time, a director, officer or employee of the parties
hereto or any subsidiary thereof (each an "Indemnified Party" and,
collectively, the ''Indemnified Parties") against all losses, expenses
(including reasonable attorneys' fees and expenses), claims, damages or
liabilities or, subject to the proviso of the next succeeding sentence,
amounts paid in settlement arising out of actions or omissions occurring at
or prior to the Effective Time and whether asserted or claimed prior to, at
or after the Effective Time) that are in whole or in part (i) based on, or
arising out of the fact that such person is or was a director, officer or
employee of such party or a subsidiary of such party or (ii) based on,
arising out of or pertaining to the transactions contemplated by this
Agreement. In the event of any such loss expense, claim, damage or liability
(whether or not arising before the Effective Time), (i) MPC shall pay the
reasonable fees and expenses of counsel selected by the Indemnified Parties,
which counsel shall be reasonably satisfactory to MPC, promptly after
statements therefor are received and otherwise advance to such Indemnified
Party upon request reimbursement of documented expenses reasonably incurred,
in either case to the extent not prohibited by the NGCL or its certificate of
incorporation or bylaws, (ii) MPC will cooperate in the defense of any such
matter and (iii) any determination required to be made with respect to
whether an Indemnified Party's conduct complies with the standards set forth
under the NGCL and MPC's certificate of incorporation or bylaws shall be made
by independent counsel mutually acceptable to MPC and the Indemnified Party;
provided, however, that MPC shall not be liable for any settlement effected
without its written consent (which consent shall not be unreasonably
withheld). The Indemnified Parties as a group may retain only one law firm
with respect to each related matter except to the extent there is, in the
opinion of counsel to an Indemnified Party, under applicable standards of
professional conduct, conflict on any significant issue between positions of
any two or more Indemnified Parties.
(b) In the event MPC or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity or such consolidation or
Acquisition or (ii) transfers all or substantially all of its properties and
assets to any person, then and in either such case, proper provision shall be
made so that the successors and assigns of MPC shall assume the obligations
set forth in this Section 4.11.
(c) To the fullest extent permitted by law, from and after the Effective
Time, all rights to indemnification now existing in favor of the employees,
agents, directors or officers of MPC, SCAC and SOLPLAX and their subsidiaries
with respect to their activities as such prior to the Effective Time, as
provided in MPC's, SCAC's and SOLPLAX's certificate of incorporation or
bylaws, in effect on the date thereof or otherwise in effect on the date
hereof, shall survive the Acquisition and shall continue in full force and
effect for a period of not less than six years from the Effective Time.
(d) The provisions of this Section 4.10 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her representatives.
Section 4.11. Notification of Certain Matters. The parties hereto shall
give prompt notice to the other parties, of (i) the occurrence or
nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the Effective
Time, (ii) any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder, (iii) any notice of, or other communication relating to, a default
or event which, with notice or lapse of time or both, would become a default,
received by such party or any of its subsidiaries subsequent to the date of
this Agreement and prior to the Effective Time, under any contract or
agreement material to the financial condition, properties, businesses or
results of operations of such party and its subsidiaries taken as a whole to
which such party or any of its subsidiaries is a party or is subject, (iv)
any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement, or (v) any material adverse
change in their respective financial condition, properties, businesses,
results of operations or prospects taken as a whole, other than changes
resulting from general economic conditions; provided, however, that the
delivery of any notice pursuant to this Section 4.11 shall not cure such
breach or non-compliance or limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
ARTICLE 5
Conditions to Consummation of the Acquisition
Section 5.1. Conditions to Each Party's Obligations to Effect the
Acquisition. The respective obligations of each party hereto to effect the
Acquisition are subject to the satisfaction at or prior to the Effective Time
of the following conditions:
(a) this Agreement shall have been approved and adopted by the requisite
vote of the stockholders of SOLPLAX;
(b) this Agreement shall have been approved and adopted by the Board of
Directors of MPC and SCAC;
(c) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
United States court or United States governmental authority which prohibits,
restrains, enjoins or restricts the consummation of the Acquisition;
(d) any waiting period applicable to the Acquisition under the HSR Act
shall have terminated or expired, and any other governmental or regulatory
notices or approvals required with respect to the transactions contemplated
hereby shall have been either filed or received; and
Section 5.2. Conditions to the Obligations of MPC. The obligation of MPC
to effect the Acquisition is subject to the satisfaction at or prior to the
Effective Time of the following conditions:
(a) the representations of SOLPLAX contained in this Agreement or in any
other document delivered pursuant hereto shall be true and correct (except to
the extent that the breach thereof would not have a Material Adverse Effect
on SOLPLAX) at and as of the Effective Time with the same effect as if made
at and as of the Effective Time (except to the extent such representations
specifically related to an earlier date, in which case such representations
shall be true and correct as of such earlier date), and at the Closing SCAC
shall have delivered to MPC a certificate to that effect;
(b) each of the covenants and obligations of SCAC to be performed at or
before the Effective Time pursuant to the terms of this Agreement shall have
been duly performed in all material respects at or before the Effective Time
and at the Closing SCAC shall have delivered to MPC a certificate to that
effect;
(c) SCAC shall have obtained the consent or approval of each person
whose consent or approval shall be required in order to permit the succession
by MPC pursuant to the Acquisition to any obligation, right or interest of
SOLPLAX under any loan or credit agreement, note, mortgage, indenture, lease
or other agreement or instrument, except those for which failure to obtain
such consents and approvals would not, in the reasonable opinion of MPC,
individually or in the aggregate, have a Material Adverse Effect on SOLPLAX;
(d) there shall have been no events, changes or effects with respect to
SOLPLAX or its subsidiaries having or which could reasonably be expected to
have a Material Adverse Effect on SOLPLAX; and
(e) the Acquisition contemplated herein shall occur no later than
September 30, 2000.
Section 5.3. Conditions to the Obligations of SCAC. The respective
obligations of SCAC to effect the Acquisition are subject to the satisfaction
at or prior to the Effective Time of the following conditions:
(a) the representations of MPC contained in this Agreement or in any
other document delivered pursuant hereto shall be true and correct (except to
the extent that the breach thereof would not have a Material Adverse Effect
on MPC) at and as of the Effective Time with the same effect as if made at
and as of the Effective Time (except to the extent such representations
specifically related to an earlier date, in which case such representations
shall be true and correct as of such earlier date), and at the Closing MPC
shall have delivered to SCAC a certificate to that effect;
(b) each of the covenants and obligations of MPC to be performed at or
before the Effective Time pursuant to the terms of this Agreement shall have
been duly performed in all material respects at or before the Effective Time
and at the Closing MPC shall have delivered to SCAC a certificate to that
effect; and
(c) there shall have been no events, changes or effects with respect to
MPC having or which could reasonably be expected to have a Material Adverse
Effect on MPC.
ARTICLE 6
Termination; Amendment; Waiver
Section 6.1. Termination. This Agreement may be terminated and the
Acquisition may be abandoned at any time prior to the Effective Time, whether
before or after approval and adoption of this Agreement by SCAC's
stockholders:
(a) by mutual written consent of MPC and SCAC;
(b) by SCAC or MPC if (i) any court of competent jurisdiction in the
United States or other United States Governmental Entity shall have issued a
final order, decree or ruling or taken any other final action restraining,
enjoining or otherwise prohibiting the Acquisition and such order, decree,
ruling or other action is or shall have become nonappealable or (ii) the
Acquisition has not been consummated by September, 30 2000; provided,
however, that no party may terminate this Agreement pursuant to this clause
(ii) if such party's failure to fulfill any of its obligations under this
Agreement shall have been the reason that the Effective Time shall not have
occurred on or before said date;
(c) by MPC if (i) there shall have been a breach of any representation
or warranty on the part of SCAC set forth in this Agreement, or if any
representation or warranty of SCAC shall have become untrue, in either case
such that the conditions set forth in Section 5.2(a) would be incapable of
being satisfied by September 1, 2000 (or as otherwise extended), (ii) there
shall have been a breach by SCAC of any of their respective covenants or
agreements hereunder having a Material Adverse Effect on SOLPLAX or
materially adversely affecting (or materially delaying) the consummation of
the Acquisition, and SCAC, as the case may be, has not cured such breach
within 20 business days after notice by MPC thereof, provided that MPC has
not breached any of its obligations hereunder, (iii) MPC shall have convened
a meeting of its stockholders to vote upon the Acquisition and shall have
failed to obtain the requisite vote of its stockholders; or (iv) MPC shall
have convened a meeting of its Board of Directors to vote upon the
Acquisition and shall have failed to obtain the requisite vote;
(d) by SCAC if (i) there shall have been a breach of any representation
or warranty on the part of MPC set forth in this Agreement, or if any
representation or warranty of MPC shall have become untrue, in either case
such that the conditions set forth in Section 5.3(a) would be incapable of
being satisfied by September 1, 2000 (or as otherwise extended), (ii) there
shall have been a breach by MPC of its covenants or agreements hereunder
having a Material Adverse Effect on MPC or MPC or materially adversely
affecting (or materially delaying) the consummation of the Acquisition, and
MPC or MPC, as the case may be, has not cured such breach within twenty
business days after notice by SCAC thereof, provided that SCAC has not
breached any of its obligations hereunder, (iii) the MPC Board shall have
recommended to MPC's stockholders a Superior Proposal, (iv) the MPC Board
shall have withdrawn, modified or changed its approval or recommendation of
this Agreement or the Acquisition or shall have failed to call, give notice
of, convene or hold a stockholders' meeting to vote upon the Acquisition, or
shall have adopted any resolution to effect any of the foregoing, (v) SCAC
shall have convened a meeting of its stockholders to vote upon the
Acquisition and shall have failed to obtain the requisite vote of its
stockholders or (vi) MPC shall have convened a meeting of its stockholders to
vote upon the Acquisition and shall have failed to obtain the requisite vote
of its stockholders.
Section 6.2. Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 6.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part
of any party hereto or its affiliates, directors, officers or stockholders,
other than the provisions of this Section 6.2 and Sections 4.7(c) hereof.
Nothing contained in this Section 6.2 shall relieve any party from liability
for any breach of this Agreement.
Section 6.3. Fees and Expenses. Each party shall bear its own expenses
in connection with this Agreement and the transactions contemplated hereby.
Section 6.4. Amendment. This Agreement may be amended by action taken by
MPC and SCAC at any time before or after approval of the Acquisition by the
stockholders of MPC and SCAC (if required by applicable law) but, after any
such approval, no amendment shall be made which requires the approval of such
stockholders under applicable law without such approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of the
parties hereto.
Section 6.5. Extension; Waiver. At any time prior to the Effective Time,
each party hereto may (i) extend the time for the performance of any of the
obligations or other acts of any other party, (ii) waive any inaccuracies in
the representations and warranties of any other party contained herein or in
any document, certificate or writing delivered pursuant hereto or (iii) waive
compliance by any other party with any of the agreements or conditions
contained herein. Any agreement on the part of any party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such
rights.
ARTICLE 7
Miscellaneous
Section 7.1. Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement. This Section 7.1 shall not
limit any covenant or agreement of the parties hereto which by its terms
requires performance after the Effective Time.
Section 7.2. Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings both written and oral, between the parties with respect to the
subject matter hereof and (b) shall not be assigned by operation of law or
otherwise.
Section 7.3. Validity. If any provision of this Agreement, or the
application thereof to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby,
and to such end, the provisions of this Agreement are agreed to be severable.
Section 7.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested), to each other party as follows:
If to SCAC:
Jocelyn Carnegie
Managing Director
6265 S. Stevenson Way
Las Vegas, Nevada 89120
Copy to:
Al Greco, Esq.
666 5th Avenue
New York, NY
if to MPC:
MILLENNIUM PLASTICS CORPORATION
6265 S. Stevenson Way
Las Vegas, Nevada 89120
Copy to:
Donald J. Stoecklein, Esq.
Sperry Young & Stoecklein
1850 E. Flamingo Rd. Suite 111
Las Vegas, Nevada 89119
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 7.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, without regard
to the principles of conflicts of law thereof.
Section 7.6. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
Section 7.7. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and except as provided in Sections 4.9 and 4.11, nothing
in this Agreement, express or implied, is intended to or shall confer upon
any other person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
Section 7.8. Certain Definitions. For the purposes of this Agreement,
the term:
(a) "affiliate" means (except as otherwise provided in Sections 2.19,
3.19 and 4.13) a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
the first mentioned person;
(b) "business day" means any day other than a day on which Nasdaq is
closed;
(c) "capital stock" means common stock, preferred stock, partnership
interests, limited liability company interests or other ownership interests
entitling the holder thereof to vote with respect to matters involving the
issuer thereof;
(d) "knowledge'' or "known'' means, with respect to any matter in
question, if an executive officer of MPC or SCAC or its subsidiaries, as the
case may be, has actual knowledge of such matter;
(e) "person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization or other
legal entity; and
(f) "subsidiary" or "subsidiaries" of MPC, SCAC or any other person,
means any corporation, partnership, limited liability company, association,
trust, unincorporated association or other legal entity of which MPC, SCAC or
any such other person, as the case may be (either alone or through or
together with any other subsidiary), owns, directly or indirectly, 50% or
more of the capital stock, the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of
such corporation or other legal entity.
Section 7.9. Personal Liability. This Agreement shall not create or be
deemed to create or permit any personal liability or obligation on the part
of any direct or indirect stockholder of MPC, SCAC or any officer, director,
employee, agent, representative or investor of any party hereto.
Section 7.10. Specific Performance. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Acquisition, will cause irreparable injury to
the other parties for which damages, even if available, will not be an
adequate remedy. Accordingly, each party hereby consents to the issuance of
injunctive relief by any court of competent jurisdiction to compel
performance of such party's obligations and to the granting by any court of
the remedy of specific performance of its obligations hereunder; provided,
however, that, if a party hereto is entitled to receive any payment or
reimbursement of expenses pursuant to Sections 6.3(a), (b) or (c), it shall
not be entitled to specific performance to compel the consummation of the
Acquisition.
Section 7.11. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
In Witness Whereof, each of the parties has caused this Agreement to be duly
executed on its behalf as of the day and year first above written.
MILLENNIUM PLASTICS CORPORATION
By:/s/ Paul Branagan
Name: Paul Branagan
Title: President
SCAC HOLDINGS INC.
By:/s/ Jocelyn Carnegie
Name: Jocelyn Carnegie
Title: Managing Director
MILLENNIUM DISCLOSURE SCHEDULE
Schedule 2.1 Organization See Amended
Articles/Bylaws/Minutes
Schedule 2.6 Consents & Approvals None Required
Schedule 2.7 No Default Not Applicable
Schedule 2.8 No Undisclosed Liability None Exist
Schedule 2.9 Litigation None Exist
Schedule 2.10 Compliance with Applicable Law Not Applicable - full
disclosed in 10KSB
Schedule 2.11 Employee Benefit Plans Section 2.11(a) Not Applicable -
None Exist
Section 2.11(b) No Benefit Plan Exist
Section 2.11( c)No Options Exist
Section 2.11(d) No Agreements Exist
Schedule 2.12 Environmental Laws and Regs Not Applicable
Schedule 2.13 Tax Matters None Exist
Schedule 2.14 Title to Property None Exist
Schedule 2.15 Intellectual Property None Exist
Schedule 2.16 Insurance None Exist
Schedule 2.17 Vote Required See Shareholder Meeting
Certificate
Schedule 2.18 Tax Treatment Not Applicable
Schedule 2.19 Affiliates Paul Branagan
Bill Lennon
Donato Grieco
Jim Arnold
Schedule 2.20 Certain Business Practices None Exist
Schedule 2.21 Insider Interest None Exist
Schedule 2.22 Opinion of Financial Adviser Waived - None Exist
Schedule 2.23 Broker None Exist
Schedule 4.1 Conduct of Business See Amended & Restated Articles
SCAC DISCLOSURE SCHEDULE
Schedule 3.2(b) Subsidiary Stock None Exist
Schedule 3.2(c) Capital Stock Rights None Exist other than as in
Articles
Schedule 3.2(d) Securities conversions None Exist
Schedule 3.2 (f) Subsidiaries None Exist
Schedule 3.6 Consents & Approvals None Required
Schedule 3.7 No Default Not Applicable
Schedule 3.8 No Undisclosed Liability None Exist ($60,000 loan)
Schedule 3.9 Litigation None Exist
Schedule 3.10 Compliance with Applicable Law Not Applicable - full
disclosed in 10KSB
Schedule 3.11 Employee Benefit Plans Section 3.11( c)No Options Exist
Section 3.11(e) No Agreements Exist
Schedule 3.12 Environmental Laws and Regs Not Applicable
Schedule 3.13 Tax Matters None Exist
Schedule 3.14 Title to Property None Exist
Schedule 3.15(b) Intellectual Property None Exist other than user rights
issue which pursuant to opinion of
independent counsel is a non issue.
Schedule 3.16 Insurance None Exist
Schedule 3.17 Vote Required See Shareholder Meeting
Certificate
Schedule 3.18 Tax Treatment Not Applicable
Schedule 3.19 Affiliates Paul Branagan
Nicholas Mcllwraith
Jocelyn Carnegie
Schedule 3.20 Certain Business Practices None Exist
Schedule 3.21 Insider Interest None Exist
Schedule 3.22 Opinion of Financial Adviser Waived - None Exist
Schedule 2.23 Broker None Exist
Schedule 4.2 Conduct of Business See Amended
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of August 22, 2000, by and between Millennium Plastics
Corporation, a Nevada corporation (the "Company") and SCAC Holdings, Inc., a
Nevada corporation, "SCAC".
This Agreement is made pursuant to the Acquisition Agreement, dated
August 22, 2000 (the "Acquisition Agreement").
The Company and SCAC hereby agree as follows:
1. Definitions
Capitalized terms used and not otherwise defined herein that are
defined in the Acquisition Agreement shall have the meanings given such terms
in the Acquisition Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"Advice" shall have the meaning set forth in Section 3(o).
"Affiliate" means, with respect to any Person, any other Person
that directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, "control,"
when used with respect to any Person, means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities,
by contract or otherwise; and the terms of "affiliated," "controlling" and
"controlled" have meanings correlative to the foregoing.
"Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
state of New York generally are authorized or required by law or other
government actions to close.
"Acquisition Date" means the day the Acquisition of Solplax is
completed.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the Company's Common Stock, no par value per
share.
"Effectiveness Date" means the day the Registration is cleared from
comments from the Commission.
"Effectiveness Period" shall have the meaning set forth in Section
2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Filing Date" means the 60th Business Day following the Acquisition
Date.
"Holder" or "Holder" means the holder or Holder, as the case may
be, from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section
5(c).
"Indemnifying Party" shall have the meaning set forth in Section
5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Nevada Courts" shall have the meaning set forth in Section 6(j).
"Offering" means the Offering to be included in the Registration
Statement (including, without limitation, an Offering that includes any
information previously omitted from an Offering filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any Offering supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments
and supplements to the Offering, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference
in such Offering.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Registrable Securities" means the shares of Common Stock issued
pursuant to (a) the Acquisition Agreement dated August 22, 2000.
"Registration Statement" means the registration statement
contemplated by Section 2(a) (covering such number of Registrable Securities
and any additional Registration Statements contemplated in the definition of
Registrable Securities), including (in each case) the Offering, amendments
and supplements to such registration statement or Offering, including pre-
and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Special Counsel" means one law firm acting as counsel to the
Holder, for which the Holder will be reimbursed by the Company pursuant to
Section 4.
2. Registration
(a) On or prior to the Filing Date the Company shall prepare and
file with the Commission a Registration Statement covering all Registrable
Securities for an offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form SB-2 (or, if the Company is
not permitted to register the resale of the Registrable Securities on Form SB-
2, the Registration Statement shall be on such other appropriate form in
accordance herewith as the Holder of a majority in interest of the
Registrable Securities may consent). The Company shall use its best efforts
to cause the Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof, and shall
use its best efforts to keep such Registration Statement continuously effec
tive under the Securities Act until the date which is one year after the date
that such Registration Statement is declared effective by the Commission or
such earlier date when all Registrable Securities covered by such
Registration Statement have been sold or may be sold pursuant to Rule 144
promulgated under the Securities Act, as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company's transfer agent (the "Effectiveness Period");
provided, however, that the Company shall not be deemed to have used its best
efforts to keep the Registration Statement effective during the Effectiveness
Period if it voluntarily takes any action that would result in the Holder not
being able to sell the Registrable Securities covered by such Registration
Statement during the Effectiveness Period, unless such action is required
under applicable law or the Company has filed a post-effective amendment to
the Registration Statement and the Commission has not declared it effective.
(b) If any of the Registrable Securities are to be sold in an
Underwritten Offering, the investment banker in interest that will administer
the offering will be selected by the Company. No Holder may participate in
any Underwritten Offering hereunder unless such Person (i) agrees to sell its
Registrable Securities on the basis provided in any underwriting agreements
approved by the Person entitled hereunder to approve such arrangements and
(ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such arrangements.
3. Registration Procedures
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Prepare and file with the Commission on or prior to the Filing
Date, a Registration Statement (and any additional Registration Statements as
may be required) in accordance with Section 2(a), and cause the Registration
Statement to become effective and remain effective as provided herein;
provided, however, that not less than five (5) Business Days prior to the
filing of the Registration Statement or any related Offering or any amendment
or supplement thereto (including any document that would be incorporated or
deemed to be incorporated therein by reference), the Company shall (i)
furnish to each Holder, their Special Counsel and any managing underwriters,
copies of all such documents proposed to be filed (in the form proposed to be
filed), which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holder,
their Special Counsel and such managing underwriters, and (ii) cause its
officers and directors, counsel and independent certified public accountants
to respond to such inquiries as shall be necessary, in the opinion of
respective counsel to such Holder and such underwriters, to conduct a
reasonable investigation within the meaning of the Securities Act. The
Company shall not file the Registration Statement or any such Offering or any
amendments or supplements thereto to which the Holder of a majority of the
Registrable Securities, their Special Counsel, or any managing underwriters,
shall reasonably object on a timely basis.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare
and file with the Commission such additional Registration Statements in order
to register for resale under the Securities Act; (ii) cause the related
Offering to be amended or supplemented by any required Offering supplement,
and as so supplemented or amended to be filed pursuant to Rule 424 (or any
similar provisions then in force) promulgated under the Securities Act; (iii)
respond as promptly as practicable to any comments received from the
Commission with respect to the Registration Statement or any amendment
thereto and promptly provide the Holder true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Registrable Securities
covered by the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holder thereof set
forth in the Registration Statement as so amended or in such Offering as so
supplemented.
(c) Notify the Holder of Registrable Securities to be sold, their
Special Counsel and any managing underwriters immediately (and, in the case
of (i)(A) below, not less than five (5) days prior to such filing) and (if
requested by any such Person) confirm such notice in writing no later than
one (1) Business Day following the day (i)(A) when a Offering or any Offering
supplement or post-effective amendment to the Registration Statement is
proposed to be filed; (B) when the Commission notifies the Company whether
there will be a "review" of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company
shall provide true and complete copies thereof and all written responses
thereto to Holder7) and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental
authority for amendments or supplements to the Registration Statement or
Offering or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement covering any or all of the Registrable Securities or the initiation
of any Proceedings for that purpose; (iv) if at any time any of the
representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated hereby ceases to be true
and correct in all material respects; (v) of the receipt by the Company of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (vi) of the occurrence of any event that makes any statement
made in the Registration Statement or Offering or any document incorporated
or deemed to be incorporated therein by reference untrue in any material
respect or that requires any revisions to the Registration Statement,
Offering or other documents so that, in the case of the Registration
Statement or the Offering, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(d) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, at the earliest practicable moment.
(e) If requested by any managing underwriter or the Holder of a
majority in interest of the Registrable Securities to be sold in connection
with an Underwritten Offering, (i) promptly incorporate in a Offering
supplement or post-effective amendment to the Registration Statement such
information as such managing underwriters and such Holder reasonably agree
should be included therein and (ii) make all required filings of such
Offering supplement or such post-effective amendment as soon as practicable
after the Company has received notification of the matters to be incorporated
in such Offering supplement or post-effective amendment; provided, however,
that the Company shall not be required to take any action pursuant to this
Section 3(e) that would, in the opinion of counsel for the Company, violate
applicable law or be materially detrimental to the business prospects of the
Company.
(f) Furnish to each Holder, their Special Counsel and any managing
underwriters, without charge, at least one conformed copy of each Regis
tration Statement and each amendment thereto, including financial statements
and schedules, all documents incorporated or deemed to be incorporated
therein by reference, and all exhibits to the extent reasonably requested by
such Person (including those previously furnished or incorporated by
reference) promptly after the filing of such documents with the Commission.
(g) Promptly deliver to each Holder, their Special Counsel, and
any underwriters, without charge, as many copies of the Offering or Offerings
(including each form of Offering) and each amendment or supplement thereto as
such Persons may reasonably request; and the Company hereby consents to the
use of such Offering and each amendment or supplement thereto by each of the
selling Holder and any underwriters in connection with the offering and sale
of the Registrable Securities covered by such Offering and any amendment or
supplement thereto.
(h) The Company shall qualify or register (or procure any
necessary exceptions from such qualification or registration) of such
Registrable Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions as any Holder or underwriter requests in writing,
to keep each such registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions
of the Registrable Securities covered by a Registration Statement; provided,
however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.
(i) Cooperate with the Holder and any managing underwriters to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to a Registration Statement, which
certificates shall be free of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such
names as any such managing underwriters or Holder may request at least three
Business Days prior to any sale of Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section
3(c)(vi), as promptly as practicable, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Offering or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Offering will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(k) Use its best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on any securities
exchange, quotation system, market or over-the-counter bulletin board, if
any, on which similar securities issued by the Company are then listed as and
when required pursuant to the Acquisition Agreement.
(l) In the case of an Underwritten Offering, enter into such
agreements (including an underwriting agreement in form, scope and substance
as is customary in Underwritten Offerings) and take all such other actions in
connection therewith (including those reasonably requested by any managing
underwriters and the Holder of a majority of the Registrable Securities being
sold) in order to expedite or facilitate the disposition of such Registrable
Securities, and whether or not an underwriting agreement is entered into, (i)
make such representations and warranties to such Holder and such underwriters
as are customarily made by issuers to underwriters in underwritten public
offerings, and confirm the same if and when requested; (ii) obtain and
deliver copies thereof to each Holder and the managing underwriters, if any,
of opinions of counsel to the Company and updates thereof addressed to each
selling Holder and each such underwriter, in form, scope and substance
reasonably satisfactory to any such managing underwriters and Special Counsel
to the selling Holder covering the matters customarily covered in opinions
requested in Underwritten Offerings and such other matters as may be
reasonably requested by such Special Counsel and underwriters; (iii)
immediately prior to the effectiveness of the Registration Statement or at
the time of delivery of any Registrable Securities sold pursuant thereto (at
the option of the underwriters), obtain and deliver copies to the Holder and
the managing underwriters, if any, of "cold comfort" letters and updates
thereof from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data is, or is required to be,
included in the Registration Statement), addressed to each Person and in such
form and substance as are customary in connection with Underwritten
Offerings; (iv) if an underwriting agreement is entered into, the same shall
contain indemnification provisions and procedures no less favorable to the
selling Holder and the underwriters, if any, than those set forth in Section
7 (or such other provisions and procedures acceptable to the managing
underwriters, if any, and Holder of a majority of Registrable Securities
participating in such Underwritten Offering; and (v) deliver such documents
and certificates as may be reasonably requested by the Holder of a majority
of the Registrable Securities being sold, their Special Counsel and any
managing underwriters to evidence the continued validity of the
representations and warranties made pursuant to clause 3(l)(i) above and to
evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.
(m) Make available for inspection by the selling Holder, a
representative of such Holder, an underwriter participating in any
disposition of Registrable Securities, and an attorney or accountant retained
by such selling Holder or underwriters, at the offices where normally kept,
during reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the officers, directors, agents and employees of the Company and its
subsidiaries to supply all information in each case requested by any such
Holder, representative, underwriter, attorney or accountant in connection
with the Registration Statement; provided, however, that any information that
is determined in good faith by the Company in writing to be of a confidential
nature at the time of delivery of such information shall be kept confidential
by such Persons, unless (i) disclosure of such information is required by
court or administrative order or is necessary to respond to inquiries of
regulatory authorities; (ii) disclosure of such information, in the opinion
of counsel to such Person, is required by law; (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard by such Person; or (iv) such information becomes
available to such Person from a source other than the Company and such source
is not known by such Person to be bound by a confidentiality agreement with
the Company.
(n) Comply with all applicable rules and regulations of the
Commission and make generally available to its security Holder earning
statements satisfying the provisions of Section 11(a) of the Securities Act
and Rule 158 not later than 45 days after the end of any 12-month period (or
90 days after the end of any 12-month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
Underwritten Offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of the Registration Statement, which
statement shall cover said 12-month period, or end shorter periods as is
consistent with the requirements of Rule 158.
(o) The Company may require each selling Holder to furnish to the
Company such information regarding the distribution of such Registrable
Securities and the beneficial ownership of Common Stock held by such selling
Holder as is required by law to be disclosed in the Registration Statement
and the Company may exclude from such registration the Registrable Securities
of any such Holder who unreasonably fails to furnish such information within
a reasonable time after receiving such request.
If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder
shall have the right to require (if such reference to such Holder by name or
otherwise is not required by the Securities Act or any similar Federal
statute then in force) the deletion of the reference to such Holder in any
amendment or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be required.
Each Holder agrees by its acquisition of such Registrable
Securities that (i) it will not offer or sell any Registrable Securities
under the Registration Statement until it has received copies of the Offering
as then amended or supplemented as contemplated in Section 3(g) and notice
from the Company that such Registration Statement and any post-effective
amendments thereto have become effective as contemplated by Section 3(c) and
(ii) it will comply with the Offering delivery requirements of the Securities
Act as applicable to it in connection with sales of Registrable Securities
pursuant to the Registration Statement.
Each Holder agrees by its acquisition of such Registrable
Securities that, upon receipt of a notice from the Company of the occurrence
of any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv),
3(c)(v) or 3(c)(vi), such Holder will forthwith discontinue disposition of
such Registrable Securities until such Holder's receipt of the copies of the
supplemented Offering and/or amended Registration Statement contemplated by
Section 3(j), or until it is advised in writing (the "Advice") by the Company
that the use of the applicable Offering may be resumed, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Offering or
Registration Statement.
4. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall, except as and to the
extent specified in Section 4(c), be borne by the Company whether or not
pursuant to an Underwritten Offering and whether or not the Registration
Statement is filed or becomes effective and whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (A) with respect to filings required to be made
with The NASDAQ Stock Market, Inc. and each other securities exchange or
market on which Registrable Securities are required hereunder to be listed
and (B) in compliance with state securities or Blue Sky laws (including,
without limitation, fees and disbursements of counsel for the underwriters or
Holder in connection with Blue Sky qualifications of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as the managing
underwriters, if any, or the Holder of a majority of Registrable Securities
may designate)), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities and of printing
Offerings if the printing of Offerings is requested by the managing
underwriters, if any, or by the Holder of a majority of the Registrable
Securities included in the Registration Statement), (iii) messenger, tele
phone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and Special Counsel for the Holder, in the case of the Special
Counsel, to a maximum amount of $5,000, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and
expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement. In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated
by this Agreement (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as
required hereunder.
(b) If the Holder require an Underwritten Offering pursuant to the
terms hereof, the Company shall be responsible for all costs, fees and
expenses in connection therewith, except for the fees and disbursements of
the Underwriters (including any underwriting commissions and discounts) and
their legal counsel and accountants. By way of illustration which is not
intended to diminish from the provisions of Section 4(a), the Holder shall
not be responsible for, and the Company shall be required to pay the fees or
disbursements incurred by the Company (including by its legal counsel and
accountants) in connection with, the preparation and filing of a Registration
Statement and related Offering for such offering, the maintenance of such
Registration Statement in accordance with the terms hereof, the listing of
the Registrable Securities in accordance with the requirements hereof, and
printing expenses incurred to comply with the requirements hereof.
5. Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, agents (including any
underwriters retained by such Holder in connection with the offer and sale of
Registrable Securities), brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and
employees of each of them, each Person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from
and against any and all losses, claims, damages, liabilities, settlements,
judgments, costs (including, without limitation, costs of preparation and
attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising
out of or relating to any untrue or alleged untrue statement of a material
fact contained in the Registration Statement, any Offering or any form of
Offering or in any amendment or supplement thereto or in any preliminary
Offering, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Offering or form of Offering or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that such
untrue statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by or on behalf of such
Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder's proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in the Registration Statement, such Offering or
such form of Offering or in any amendment or supplement thereto. The Company
shall notify the Holder promptly of the institution, threat or assertion of
any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
(b) Indemnification by Holder. Each Holder shall, severally and
not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from
and against all Losses (as determined by a court of competent jurisdiction in
a final judgment not subject to appeal or review) arising solely out of or
based solely upon any untrue statement of a material fact contained in the
Registration Statement, any Offering, or any form of Offering, or arising
solely out of or based solely upon any omission of a material fact required
to be stated therein or necessary to make the statements therein not
misleading to the extent, but only to the extent, that such untrue statement
or omission is contained in any information so furnished in writing by such
Holder to the Company specifically for inclusion in the Registration
Statement or such Offering or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Offering or such form
of Offering. In no event shall the liability of any selling Holder hereunder
be greater in amount than the dollar amount of the net proceeds received by
such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity
hereunder (an "Indemnified Party"), such Indemnified Party promptly shall
notify the Person from whom indemnity is sought (the "Indemnifying Party") in
writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except
(and only) to the extent that it shall be finally determined by a court of
competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Indem
nified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; or (2) the Indemnifying Party shall
have failed promptly to assume the defense of such Proceeding and to employ
counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
Proceeding.
All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within 10 Business Days of written notice thereof to the Indem
nifying Party (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided,
that the Indemnifying Party may require such Indemnified Party to undertake
to reimburse all such fees and expenses to the extent it is finally
judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party because of a failure or
refusal of a governmental authority to enforce such indemnification in
accordance with its terms (by reason of public policy or otherwise), then
each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as
well as any other relevant equitable considerations. The relative fault of
such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed
to include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have
been indemnified for such fees or expenses if the indemnification provided
for in this Section was available to such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Purchaser
shall not be required to contribute, in the aggregate, any amount in excess
of the amount by which the proceeds actually received by such Purchaser from
the sale of the Registrable Securities subject to the Proceeding exceeds the
amount of any damages that such Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to
the Indemnified Parties.
6. Miscellaneous
(a) Remedies. In the event of a breach by the Company or by a
Holder, of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of dam
ages, will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not
provide adequate compensation for any losses incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees
that, in the event of any action for specific performance in respect of such
breach, it shall waive the defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Except as and to the extent
specifically set forth in Schedule 6(b) attached hereto, neither the Company
nor any of its subsidiaries has, as of the date hereof, nor shall the Company
or any of its subsidiaries, on or after the date of this Agreement, enter
into any agreement with respect to its securities that is inconsistent with
the rights granted to the Holder in this Agreement or otherwise conflicts
with the provisions hereof. Except as and to the extent specifically set
forth in Schedule 6(b) attached hereto, neither the Company nor any of its
subsidiaries has previously entered into any agreement granting any
registration rights with respect to any of its securities to any Person.
Without limiting the generality of the foregoing, without the written consent
of the Holder of a majority of the then outstanding Registrable Securities,
the Company shall not grant to any Person the right to request the Company to
register any securities of the Company under the Securities Act unless the
rights so granted are subject in all respects to the prior rights in full of
the Holder set forth herein, and are not otherwise in conflict or
inconsistent with the provisions of this Agreement.
(c) No Piggyback on Registrations. Except as and to the extent
specifically set forth in Schedule 6(b) attached hereto, neither the Company
nor any of its security Holders (other than the Holder in such capacity
pursuant hereto) may include securities of the Company in the Registration
Statement other than the Registrable Securities, and the Company shall not
enter into any agreement providing any such right to any of its security
Holders.
(d) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall determine to
prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities
Act of any of its equity securities, other than on Form S-4 or Form S-8 (each
as promulgated under the Securities Act) or their then equivalents relating
to equity securities to be issued solely in connection with any acquisition
of any entity or business or equity securities issuable in connection with
stock option or other employee benefit plans, then the Company shall send to
each holder of Registrable Securities written notice of such determination
and, if within twenty (20) days after receipt of such notice, any such holder
shall so request in writing, the Company shall include in such registration
statement all or any part of the Registrable Securities such holder requests
to be registered. No right to registration of Registrable Securities under
this Section shall be construed to limit any registration otherwise required
hereunder.
(e) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the same shall be in writing and signed by
the Company and the Holder of at least a majority of the then outstanding
Registrable Securities; provided, however, that, for the purposes of this
sentence, Registrable Securities that are owned, directly or indirectly, by
the Company, or an Affiliate of the Company are not deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holder and that does not directly or indirectly affect the rights
of other Holder may be given by Holder of at least a majority of the
Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified,
or supplemented except in accordance with the provisions of the immediately
preceding sentence.
(f) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at
the facsimile telephone number specified in this Section prior to 7:00 p.m.
(Pacific Coast time) on a Business Day, (ii) the Business Day after the date
of transmission, if such notice or communication is delivered via facsimile
at the facsimile telephone number specified in the Acquisition Agreement
later than 7:00 p.m. (Pacific Coast time) on any date and earlier than 11:59
p.m. (Pacific Coast time) on such date, (iii) the Business Day following the
date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to
be given. The address for such notices and communications shall be as
follows:
If to the Company:
Millennium Plastics Corporation
6265 S. Stevenson Way
Las Vegas, Nevada 89120
Attn: Paul Branagan
With copies to: Donald J. Stoecklein, Esq.
401 Broadway, Suite 400
San Diego, California 92101
If to Holder: SCAC Holdings, Inc.
6265 S. Stevenson Way
Las Vegas, Nevada 89120
If to any other Person who is then the registered Holder:
To the address of such Holder as it appears in the stock transfer books
of the Company or such other address as may be designated in writing
hereafter, in the same manner, by such Person.
(g) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. The Company
may not assign its rights or obligations hereunder without the prior written
consent of each Holder. SCAC may assign their respective rights hereunder in
the manner and to the Persons as permitted under the Acquisition Agreement.
(h) Assignment of Registration Rights. The rights of a Purchaser
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall
be automatically assignable by such Purchaser to any assignee or transferee
of all or a portion of the Common Stock referenced in the definition of
Registrable Securities or Registrable Securities without the consent of the
Company if: (i) such Purchaser agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment, (ii) the Company
is, within a reasonable time after such transfer or assignment, furnished
with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to such registration rights are
being transferred or assigned, (iii) at or before the time the Company
receives the written notice contemplated by clause (ii) of this Section, the
transferee or assignee agrees in writing with the Company to be bound by all
of the provisions of this Agreement, and (iv) such transfer shall have been
made in accordance with the applicable requirements of the Acquisition
Agreement. The rights to assignment shall apply to SCAC' (and to subsequent)
successors and assigns.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State
of Nevada, without regard to principles of conflicts of law. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of any Nevada
state in respect of any Proceeding arising out of or relating to this
Agreement, and irrevocably accepts for itself and in respect of its property,
generally and unconditionally, jurisdiction of the Nevada Courts. The
Company irrevocably waives to the fullest extent it may effectively do so
under applicable law any objection that it may now or hereafter have to the
laying of the venue of any such proceeding brought in any Nevada Court and
any claim that any such Proceeding brought in any Nevada Court has been
brought in an inconvenient forum. Nothing herein shall affect the right of
any Holder. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding
by receiving a copy thereof sent to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law.
(k) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(n) Shares Held by The Company and its Affiliates. Whenever the
consent or approval of Holder of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company
or its Affiliates (other than SCAC or transferees or successors or assigns
thereof if such Persons are deemed to be Affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holder of such required
percentage.
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
MILLENNIUM PLASTICS CORPORATION
By:/s/ Paul Branagan
Name:Paul Branagan
Title:President
HOLDER
SCAC Holdings Inc.
By:/s/ Jocelyn Carnegie
Name:Jocelyn Carnegie
Title:Managing Director