AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION
THIS PLAN AND AGREEMENT OF MERGER (hereinafter called the " Agreement"),
dated as of August 19, 2000, is by and between OAK BROOK CAPITAL III, INC., a
Colorado corporation (hereinafter referred to as "Oak Brook" and/or "Surviving
Corporation"), and ALPHA FIBRE MERGER CORPORATION, a Colorado corporation
(hereinafter called "Alpha Fibre"and/or "Disappearing Corporation"), said
corporations being hereafter sometimes collectively referred to as the
"Constituent Corporations."
WITNESSETH:
WHEREAS, Oak Brook is a corporation duly organized and existing under
the laws of the State of Colorado, having been incorporated in 1998, and
Alpha Fibre is a corporation duly organized and existing under the laws of
the State of Colorado, having been incorporated in 2000; and
WHEREAS, the authorized capital stock of Oak Brook consists of fifty
million (50,000,000)shares of $.001 par value Common Stock, of which one
million six hundred seventy-eight thousand (1,678,000) shares are
outstanding, and ten million (10,000,000) shares of Preferred Stock, $.001
par value, of which no shares are outstanding; and
WHEREAS, the authorized capital stock of Alpha Fibre consists of forty
million (40,000,000) shares of .001 par value Common Stock, of which nine
million (9,000,000) shares are outstanding, and forty million (40,000,000)
shares of Preferred Stock, $.001 par value, of which no(0) shares are
outstanding; and
WHEREAS, the Boards of Directors of the Constituent Corporations deem
it advisable for the general welfare and advantage of the Constituent
Corporations and their respective shareholders that the Constituent
Corporations merge pursuant to this Agreement and pursuant to the applicable
provisions of the laws of the States of Colorado; and
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereby agree, in accordance with
the applicable provisions of the laws of the States of Colorado, that the
Constituent Corporations shall merge, to wit: Alpha Fibre Merger Corporation,
a Colorado corporation, one of the Constituent Corporations and which shall
cease its existence under the laws of the State of Colorado pursuant to the
Merger (said corporation hereafter being sometimes called the "Disappearing
Corporation"), and the terms and conditions of the Merger hereby agreed upon
(hereafter called the "Merger")which the parties covenant to observe,keep
and perform and the mode of carrying the same into effect are and shall be
as hereafter set forth:
<PAGE>
A. It is intended that the Merger qualify as a tax-free
reorganization within the meaning of Section 368(B)(1)(a) of the Internal
Revenue Code of 1986, as amended(the "Code"). For accounting purposes, it
is intended that the Merger be accounted for using purchase accounting;
B. This Agreement has been approved by the respective boards of
directors of Oak Brook and Alpha Fibre;
C. Oak Brook has 1,678,000 shares issued and outstanding ("Oak Brook
Common Stock"), constituting all of the outstanding capital stock of
Oak Brook. Contemporaneously with the execution and delivery of this
Agreement, the parties are executing and delivering to Oak Brook
certain other agreements;
D. Oak Brook will issue not less than nine million (9,000,000)
restricted shares of common stock (the "Shares") to allow for the
conversion of shares to be completed on a one for one
basis as more fully described in Section 1.4 below.
AGREEMENT
The parties to this Agreement agree as follows:
ARTICLE I.
Description of Transaction
1.1 Merger of Alpha Fibre into Oak Brook.
Upon the terms and subject to the conditions set forth in this Agreement,
at the Effective Time, Alpha Fibre shall be merged with and into Oak
Brook, and the separate existence of Alpha Fibre shall cease. Oak Brook
will continue as the surviving corporation in the Merger and will change
its name to "ALPHA FIBRE , INC."
1.2 Effect of the Merger.
The Merger shall have the effects set forth in this Agreement and in the
applicable provisions of the Colorado Business Corporation Act.
1.3 Closing; Effective Time.
The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Nadeau & Simmons, P.C.,
1250 Turks Head Building at 10:00 a.m on August 19, 2000 or at such other
time and date as the parties may agree (the "Scheduled Closing Time"). (The
date on which the Closing actually takes place is referred to in this
Agreement as the "Closing Date.")
<PAGE>
Contemporaneously with or within forty-eight (48) hours after the Closing,
a properly executed agreement of merger, together with fully executed
articles of merger (a copy of which is attached hereto as Exhibit A)
conforming to the requirements of Article 7-111 of the Colorado Business
Corporation Act, shall be filed with the Secretary of State of Colorado (the
"Secretary"). The Merger shall become effective at the time such agreement
and articles of merger are filed with the Secretary (the "Effective Time").
1.4 Conversion of Shares.
The mode of carrying into effect the Merger provided in this Agreement, and
the manner and basis of converting the shares of the Constituent Corporations
into shares of the Surviving Corporation are as follows:
1:4:1 Oak Brook Common Stock.
None of the currently issued and outstanding shares of Oak Brook Common
Stock, no par value, issued and outstanding at the effective time of the
Merger shall be converted as a result of the Merger, and all of such shares
shall remain issued shares of common stock of the Surviving Corporation.
1:4:2 Alpha Fibre Common Stock.
At the effective time of the Merger, each share of $.001 par value common
stock of Alpha Fibre issued and outstanding (the "Alpha Fibre Common
Stock") shall be converted into and become nine million (9,000,000) shares
of common stock of the Surviving Corporation by converting each share of
Alpha Fibre common stock into one (1) share of Oak Brook. Oak
Brook will newly issue not less than nine million (9,000,000) shares to be
converted on a one for one basis with the Shares of Oak Brook. Each record
holder of outstanding common stock of Alpha Fibre shall be issued shares of
Oak Brook, upon the ratio set forth above. Upon direction of Alpha Fibre and
receipt by Oak Brook of the stock ledger of Alpha Fibre, each Alpha Fibre
shareholder shall be entitled to receive one or more stock certificates for
the full number of shares of common stock of Oak Brook into which the
common stock of Alpha Fibre shall have be converted as aforesaid together
with any dividends on the common stock of Alpha Fibre as to which the
payment date shall have occurred on or prior to the date of the surrender
of said shares.
The common share allocation (the "Allocation") of the Surviving Corporation
will be as follows:
(a)
_________________________ ( ) fully diluted, common
shares of Oak Brook will be issued and outstanding.
Alpha Fibre shareholders will own approximately __.___% of the
_____________________ ( ) fully diluted, common
shares of Oak Brook issued and outstanding, inclusive of the shares to
be governed pursuant to subparagraph 8 hereof.
<PAGE>
(b) Surrender of Alpha Fibre's Stock Ledger. As soon as practicable after
the Merger becomes effective, the stock ledger representing common stock of
Alpha Fibre issued and outstanding at the time the Merger becomes effective
shall be delivered to Oak Brook, such that shares of the Surviving
Corporation may be issued, as above provided. Until so delivered for
exchange, each shareholder of Alpha Fibre shall be deemed for all corporate
purposes (except for the payment of dividends, which shall be subject to the
exchange of stock as above provided) to own the number of shares of common
stock of the Surviving Corporation which the holder thereof would be
entitled to receive upon its surrender to the Surviving Corporation.
(c) Issuance of Shares Subsequent to Merger. As soon as practicable after
the Merger becomes effective, the Surviving Corporation shall issue to the
shareholders of the Disappearing Corporation, on the basis set forth in
Section 2 above, the necessary Shares of common stock in the Surviving
Corporation.
(d) Fractional Interests. No fractional shares of common stock of the
Surviving Corporation or certificate or scrip representing the same shall be
issued. In lieu thereof each holder of Alpha Fibre Common Stock having a
fractional interest arising upon such conversion will be rounded up into one
full additional share of common stock of the Surviving Corporation by the
Transfer Agent.
(e) Status of Common Stock. All Shares of common stock of the Surviving
Corporation into which shares of Alpha Fibre Common Stock are converted as
herein provided shall be fully paid and non-assessable and shall be issued
in full satisfaction of all rights pertaining to such Shares.
(f) Independent Appraisal, Right to Dissent and Obtain Payment for Shares;
Procedures for Protection of Dissenter's Rights. In order to establish a
"fair value" for the shares of Alpha Fibre Common Stock which are paid in
cash in lieu of conversion into the Shares of Oak Brook, as provided above
in this Article VI, the Board of Directors of Alpha Fibre shall establish
the value of Alpha Fibre's stock prior to the Merger, pursuant to the
provisions of the Colorado General Corporation Law, Section ___, et seq., as
amended, the terms and provisions of which are hereby incorporated by
reference and made a part hereof.
<PAGE>
1.5 Closing of Alpha Fibre's Transfer Books.
At the Effective Time, holders of certificates representing shares of Alpha
Fibre's common stock that were outstanding immediately prior to the
Effective Time shall cease to have any rights as Stockholders of Alpha Fibre,
and the stock transfer books of Alpha Fibre shall be closed with respect to
all shares of such common stock outstanding immediately prior to the
Effective Time. No further transfer of any such shares of Alpha Fibre's
common stock shall be made on such stock transfer books after the Effective
Time. If, after the Effective Time, a valid certificate previously
representing any of such shares of Alpha Fibre's common stock (a "Alpha
Fibre Stock Certificate") is presented to Oak Brook,such Alpha Fibre Stock
Certificate shall be canceled and shall be exchanged as provided in Section
1.6.
1.6 Exchange of Certificates.
(a) Upon surrender of a Alpha Fibre Stock Certificate to Oak Brook for
exchange, together with such other documents as may be reasonably required
by Oak Brook, the holder of such Alpha Fibre Stock Certificate shall be
entitled to receive in exchange therefor a certificate representing the
number of whole shares of Oak Brook Common Stock that such holder has the
right to receive pursuant to the provisions of Section 1.4, and Alpha Fibre
Stock Certificate so surrendered shall be canceled. Until surrendered as
contemplated by this Section 1.7, each Alpha Fibre Stock Certificate shall
be deemed, from and after the Effective Time, to represent only the right to
receive upon such surrender a certificate representing shares of Oak Brook
Common Stock (and cash in lieu of any fractional share of Oak Brook Common
Stock) as contemplated by Section 1.4. If any Alpha Fibre Stock Certificate
shall have been lost, stolen or destroyed, Oak Brook may, in its discretion
and as a condition precedent to the issuance of any certificate representing
Oak Brook Common Stock, require the owner of such lost, stolen or destroyed
Alpha Fibre Stock Certificate to provide an appropriate affidavit and to
deliver a bond(in such sum as Oak Brook may reasonably direct) as indemnity
against any claim that may be made against Oak Brook with respect to such
Alpha Fibre Stock Certificate.
(b) No dividends or other distributions declared or made with respect to
Oak Brook Common Stock with a record date after the Effective Time shall be
paid to the holder of any un-surrendered Alpha Fibre Stock Certificate with
respect to the shares of Oak Brook Common Stock represented thereby, and no
cash payment in lieu of any fractional share shall be paid to any such
holder, until such holder surrenders such Alpha Fibre Stock Certificate in
accordance with this Section 1.7 (at which time such holder shall be
entitled to receive all such dividends and distributions and such cash payment).
(c) No fractional shares of Oak Brook Common Stock shall be issued in
connection with the Merger, and no certificates for any such fractional
shares shall be issued. In lieu of such fractional shares, any holder of
capital stock of Alpha Fibre who would otherwise be entitled to receive a
<PAGE>
fraction of a share of Oak Brook Common Stock (after aggregating all
fractional shares of Oak Brook Common Stock issuable to such holder) shall,
upon surrender of such holder's Alpha Fibre Stock Certificate(s), have such
fractional interest rounded up to the nearest whole number.
(d) Oak Brook shall not be liable to any holder or former holder of common
stock of Alpha Fibre for any shares of Oak Brook Common Stock (or dividends
or distributions with respect thereto), or for any cash amounts, delivered
to any public official pursuant to any applicable abandoned property,
escheat or similar law.
1.7 Alpha Fibre Stockholder Approval; Dissenting Shares.
Each of the stockholders of Alpha Fibre (the "Alpha Fibre Stockholders")
hereby agrees and acknowledges the following:
(a) that the terms of the Merger, this Agreement, and all other agreements
contemplated herein are hereby approved, ratified and confirmed and the
officers of Alpha Fibre are, and each of them hereby is, authorized and
directed, in the name and on behalf of Alpha Fibre, to consummate the
transactions contemplated by this Agreement, on the terms set forth in
such documents and such other agreements, and any amendments thereto,
as the officers executing such agreements may in their discretion deem
reasonable and appropriate; and
(b) that he or she hereby agrees to waive any "appraisal rights"
within the meaning of Section ___ of the Colorado General Corporation
Law with respect to the Merger.
1.8 Governing Law; Articles of Incorporation
The laws which are to govern the Surviving Corporation are the
laws of the State of Colorado. The Articles of Incorporation of Oak
Brook, as heretofore amended, shall, prior to the effective time of the
Merger, be amended to the extent set forth in the
Articles of Merger, attached hereto, to amend the name of Oak Brook,
Inc. to Alpha Fibre, Inc. As so amended, such Articles of
Incorporation shall remain in effect thereafter until the same shall be
further amended or altered in accordance with the provisions thereof.
1.9 Bylaws
The By-Laws of Oak Brook, at the effective time of the Merger shall be
the By-Laws of the Surviving Corporation until the same shall be altered
or amended in accordance with the provisions thereof.
1.10 Directors and Officers
Directors. On and after the Effective Date, the Directors of the Surviving
<PAGE>
Corporation at the effective time of the Merger shall be as set forth below,
until their respective successors are duly elected and qualified at the next
annual meeting of shareholders of the Surviving Corporation. As of the
effective time of the Merger, the previous directors of Oak Brook shall resign.
The names and addresses of the Directors of the Surviving Corporation
are as follows:
Name Address
Dr. Prabhat Krishnaswamy 3518 Riverside Drive, Ste 202
Columbus, OH 43221
Deborah L. Kern 801 Falmouth St.
Thousand Oaks, CA 91362
Robert J. Nagy 139B Market Street
Charleston, SC 29401
Officers. The names, titles and addresses of the persons who, upon the
Effective Date, shall constitute the officers of the Surviving Corporation,
and who shall hold office, subject to the By-Laws, until the first meeting
of directors following the next annual meeting of shareholders, are as
follows:
Name Title Address
Deborah L. Kern President/CEO 801 Falmouth St.
Thousand Oaks, CA 91362
Robert J. Nagy Secretary, Treasurer 139B Market Street
and Vice President Charleston, SC 29401
1.11 Tax Consequences. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368(B)
(1)(A) of the Code. The parties to this Agreement hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
1.12 Accounting Treatment. For accounting purposes, the Merger is intended
to be accounted for as a purchase under GAAP.
<PAGE>
1.13 Further Action. If, at any time after the Effective Time, any further
action is determined by Oak Brook to be necessary or desirable to carry out
the purposes of this Agreement or to vest Oak Brook with full right, title
and possession of and to all rights and property of Alpha Fibre, the
officers and directors of Oak Brook shall be fully authorized (in the name
of Alpha Fibre and otherwise) to take such action.
ARTICLE II.
Representations and Warranties of Alpha Fibre and its Stockholders
2.1 Disclosure Schedule.
Except as set forth in the schedule of disclosure attached hereto as
Exhibit D (the "Disclosure Schedule"), Alpha Fibre hereby represents and
warrants as follows:
2:1:2 Organization, Standing and Qualification.
Alpha Fibre is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado, and has all requisite
corporate power and authority to own, to lease or to operate its properties
and to carry on its business as it is now being conducted. Section 2:1:2
of the Disclosure Schedule sets forth a true, complete and correct list of
each jurisdiction, foreign or domestic, in which it (a) owns or leases
property, has employees or otherwise conducts operations and/or (b) is
licensed or qualified to do business as a foreign corporation. Alpha Fibre
is duly licensed or qualified to do business as a foreign corporation in each
jurisdiction in which the character of its properties, owned or leased, or
the nature of its activities, makes such licensing or qualification
necessary, except for where the failure to be so licensed and qualified
would not have a material adverse effect on the business of Alpha Fibre.
2:1:3 Authority.
The execution and delivery of this Agreement has been authorized by the
Board of Directors of Alpha Fibre, and the completion of these transactions
have been duly and validly authorized by all necessary corporate and
shareholder action on the part of Alpha Fibre. This Agreement has been
duly executed and delivered by Alpha Fibre and, assuming the due and valid
execution and delivery of this Agreement by the other parties hereto,
constitutes the legal, valid and binding obligation of Alpha Fibre, to the
extent applicable, enforceable in accordance with its terms, all as may be
subject to or affected by any bankruptcy, reorganization, insolvency,
moratorium or similar laws of general application from time to time in
effect and relating to or affecting the rights or remedies of creditors
generally.
<PAGE>
2:1:4 No Conflict, Breach, Default or Violation.
Except as set forth in Section 2:1:4 of the Disclosure Schedule, the
execution and delivery of this Agreement does not, and the completion of
transactions contemplated by this Agreement will not conflict with, result
in a breach of or the acceleration of any obligation under, or constitute a
default or event of default (or event which with notice or lapse of time or
both would constitute a default) under, any provision of any charter, bylaw,
indenture, mortgage, lien, lease, license,agreement, contract, permit, order,
judgment, or, to the best of the Alpha Fibre's knowledge, any judicial or
administrative decree, ordinance or regulation, or any restriction to which
any property of Alpha Fibre is subject or by which Alpha Fibre is bound, the
result of which would have a material adverse effect on the business of Alpha
Fibre.
2:1:5 Approvals.
Except as set forth in Section 2:1:5 of the Disclosure Schedule, no
consent, approval, order or authorization of, or registration, declaration of
filing with, any court, administrative agency or commission or other
governmental agency or instrumentality, domestic or foreign (a "Governmental
Entity"), or third party is required by or with respect to Alpha Fibre in
connection with the execution and delivery by Alpha Fibre of this Agreement,
or the completion of the transactions contemplated hereby, the absence of
which would have a material adverse effect on Alpha Fibre.
2:1:6 Capitalization.
The authorized capital stock of Alpha Fibre consists of forty million
(40,000,000) shares of Alpha Fibre Common Stock, $0.001 par value per share,
of which nine million (9,000,000) shares are issued and outstanding. The
Alpha Fibre shares are validly issued, fully paid and non-assessable
and not subject to preemptive rights. Section 2:1:6 of the Disclosure
Schedule sets forth a true, complete and correct list of (i) the holders of
record of the issued and outstanding shares of Alpha Fibre Common Stock, and
(ii) all claims, commitments or agreements to which Alpha Fibre is a party or
by which it is bound, obligating Alpha Fibre to issue, deliver or sell, or to
cause to be issued, delivered or sold, additional shares of common stock of
Alpha Fibre or obligating Alpha Fibre to grant, extend or enter into any such
option, warrant, call, right or agreement with respect to its capital stock.
Except as set forth in Section 2:1:6 of the Disclosure Schedule, there are no
agreements obligating Alpha Fibre to redeem, repurchase or otherwise acquire
the common stock of Alpha Fibre, or any other securities issued by it, or to
register the sale of the common stock of Alpha Fibre under applicable
securities laws. Except as set forth in Section 2:1:6 of the Disclosure
Schedule, there are no agreements or arrangements prohibiting or otherwise
restricting the payment of dividends or distributions to the Alpha Fibre
Shareholders by Alpha Fibre.
<PAGE>
2:1:7 Financial Statements.
Alpha Fibre has furnished to Oak Brook true, complete and correct copies
of the unaudited balance sheet at December 31, 1999 and the related
unaudited income statement, and statements of operations, cash flows and
changes in stockholders equity for the same year ended (all of these financial
statements being collectively referred to herein as the "Alpha Fibre
Financials"). The Alpha Fibre Financials are in accordance in all material
respects with the books and records of Alpha Fibre, have been prepared in
accordance with generally accepted accounting principle applied on a
consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the financial position of Alpha Fibre
as at the date thereof.
2:1:8 Liabilities.
To the best of Alpha Fibre's knowledge, except as set forth in Section
2:1:8 of the Disclosure Schedule, Alpha Fibre has no liabilities or
obligations, either accrued, absolute, contingent, or otherwise, required to
be but not reflected or reserved against in the Alpha Fibre Financials in
accordance with generally accepted accounting principles, except those
incurred in the ordinary course of business, or those that are not material,
and Alpha Fibre knows of no potential liability that would result in material
adverse effect on the business of Alpha Fibre, other than those (a) reflected
or reserved against in the Alpha Fibre Financials, (b)incurred in the
ordinary course of business since December 31, 1999 or (c) set forth in
Section 2:1:8 of the Disclosure Schedule.
2:1:9 Additional Information.
Section 2:1:9 of the Disclosure Schedule sets forth a true, complete and
correct list, or references the attachment as an Exhibit thereto, of the
following items:
2:1:9:1 Real Property.
All real property and structures thereon, presently (i) owned by, or
subject to a contract of purchase and sale or option agreement involving
Alpha Fibre (collectively, the "Real Property"),(ii) leased by, or subject
to a lease commitment involving, Alpha Fibre (collectively, the "Leased
Property"), with a description of: (x) the general use to which such real
property is or was put; (y)the general nature and amount of any Encumbrances
thereon; and (z) if leased the name of the lessor and a true, complete and
correct copy of any written agreement pursuant to which such real property is
leased.
2:1:9:2 Machinery and Equipment.
All machinery, work product, tools, equipment, furnishings, and fixtures
(excluding such items that had a cost basis of $20,000 or less at the date
hereof) owned,leased or subject to a contract of purchase and sale or lease
<PAGE>
commitment, by Alpha Fibre with, to the extent practical, a description with
respect to each such of: (i) the serial number of such item; (ii) the general
location at which such item is kept; (ii) whether such item is owned or
leased; (iv)if owned, a general description of the nature and amount of any
Encumbrances thereon; and (v) if leased, the name of the lessor and a true,
complete and correct copy of any written agreement pursuant to which such
item is leased.
2:1:9:3 Receivables.
All accounts and notes receivable presently owned by Alpha Fibre,
together with an appropriate aging schedule, as of December 31, 1999, which
list separately all amounts receivable from the Alpha Fibre Shareholders,
director, officer, employee, or agent of Alpha Fibre, from or from many of
their respective affiliates. Except as set forth on Section 2:1:9:3 of the
Disclosure Schedule, to the best of Alpha Fibre's knowledge, all accounts
and notes receivable of Alpha Fibre represent bona fide claims against
debtors for services performed or other charges arising in the ordinary
course of business and are subject to no material defenses, counterclaims or
rights of set-off.
2:1:9:4 Payables.
All accounts and notes payable owed by Alpha Fibre, together with an
appropriate aging schedule, as of December 31, 1999, which list separately
all such amounts payable to any Alpha Fibre Shareholder, director, officer,
employee, or agent of Alpha Fibre, to Alpha Fibre Shareholders or to any of
the irrespective affiliates. Except as set forth in Section 2:1:9:4 of the
Disclosure Schedule, to the best of Alpha Fibre's knowledge, all accounts
and notes payable of Alpha Fibre represent bona fide claims against Alpha
Fibre for services performed or other charges arising in the ordinary course
of business.
2:1:9:5 Contracts.
All contracts, agreements and commitments of Alpha Fibre, whether or not
made in the ordinary course of business, including leases under which Alpha
Fibre is lessor or lessee, which are to be performed in whole or in part
after the Effective Date, and which (i)involve or may involve aggregate
payments by or to Alpha Fibre of $20,000 or more after the Effective Date,
(ii) are not terminable by Alpha Fibre without premium or penalty on 60 (or
fewer) days' notice, (iii)purport to prohibit or restrict the ability of
Alpha Fibre to participate or compete in any material line of business or
with any person, (iv) purport to prohibit or restrict another person's
ability to be in the line of business of Alpha Fibre or to compete with Alpha
Fibre or (v) are otherwise material to the business or properties of Alpha
Fibre. To the best of Alpha Fibre's knowledge, except as set forth
on Schedule 2:1:9:5 of the Disclosure Schedule, Alpha Fibre has complied in
all material respects with all commitments, contracts, agreements and
obligations pertaining to it listed on Section 2:1:9:5 of the Disclosure
Schedule and is not in material default under any such contracts and
agreements and no notice of material default has been received, in each case
which would have a material adverse effect on the business of Alpha Fibre.
2:1:9:6 Licenses; Permits.
All approvals, authorizations, consents, licenses, orders, franchises,
rights, registrations and permits of any type held by Alpha Fibre, which
together constitute all material approvals,authorizations, consents,
licenses, orders, franchises, rights, registrations and permits (the
"Permits") required to operate its business as presently conducted. To the
best of Alpha Fibre's knowledge, except as set forth on Section 2:1:9:6 of
the Disclosure Schedule, all such Permits are currently in full force and
effect and Alpha Fibre is in compliance therewith, except to the extent
noncompliance would not have a material adverse effect on the business of
Alpha Fibre. Except as set forth in Section 2:1:9:6 of the Disclosure
Schedule, the execution and delivery of this Agreement and the completion of
the transactions contemplated hereby will not result in any revocation,
cancellation, suspension or modification of any such approval, authorization,
consent, license, order, franchise, right, registration or permit, which
revocation, cancellation, suspension or modification would have a material
adverse effect on the business of Alpha Fibre.
2:1:9:7 Employment Agreements.
All oral or written employment or consulting agreements to which Alpha
Fibre is a party or by which Alpha Fibre is bound, including, without
limitation, all oral or written employment or consulting agreements or any
other arrangements with any person which provide for the payment of any
consideration by Alpha Fibre to such person as a result of the termination of
such person's employment with Alpha Fibre, or on the completion of the
transactions contemplated hereby.
2:1:9:8 Insurance Policies.
All (i) policies of property, fire and casualty, product liability,
worker's compensation, professional liability and title insurance and other
forms of insurance, under which Alpha Fibre is insured, and (ii) bonds issued
or posted by any person which respect to any operation or other activities of
Alpha Fibre.
2:1:9:9 Transactions with Management.
All material contracts, leases and commitments by and between Alpha
Fibre and any of its officers, directors, stockholders, employees, or agents,
or any affiliate of any such person. Except as set forth in Section 2:1:9:9
of the Disclosure Schedule, none of the officers, directors, stockholders, or
employees of Alpha Fibre owns, leases or licenses any interest in any asset
used by Alpha Fibre in its business,other than solely by and through
ownership of the capital stock of Alpha Fibre.
<PAGE>
2:1:9:10 Assumed Names.
All assumed or fictitious names under which Alpha Fibre engages in or
conducts any business.
2:1:9:11 Bank Accounts and Powers of Attorney.
The name and address of each bank or other financial institution in
which Alpha Fibre has an account or safe deposit box, the account number, the
account name and type of account, the names of all persons authorized to draw
thereon and have access thereto, and the name of all persons, if any, holding
powers of attorney to act for Alpha Fibre, and the name and address of all
persons, other than officers and full-time employees, authorized to bind
Alpha Fibre contractually,including, without limitation, independent
marketing agents or independent contractors.
2:1:10 Litigation.
Except as set forth in Section 2:1:10 of the Disclosure Schedule, there
is no suit, action, proceeding or investigation pending or, to the best
knowledge of Alpha Fibre, threatened against or affecting Alpha Fibre (or any
of its officers or directors in connection with the business of Alpha
Fibre), nor is there any outstanding judgment, order, writ, injunction or
decree against Alpha Fibre.
2:1:11 Absence of Certain Changes.
Except as set forth in Section 2:1:11 of the Disclosure Schedule, to the
best of Alpha Fibre's knowledge, since December 31, 1999, there has not been:
(i) any material adverse change in the financial condition, assets,
liabilities (contingent or otherwise), income or business of Alpha Fibre;
(ii) any damage, destruction or loss (whether or not covered by insurance)
materially and adversely affecting the properties or business of Alpha Fibre;
(iii) any declaration or payment of any dividend or distribution in respect
of the capital stock or any direct or indirect redemption, purchase or other
acquisition of any of the capital stock of Alpha Fibre; (iv) any increase in
the compensation, bonus, sales commissions or fee arrangement payable or to
become payable by Alpha Fibre to any of its officers, directors, employees,
consultants or agents other than raises or increases in compensation
consistent with prior policy that are not in excess of five percent of the
individual's annual compensation or hourly rate; (v) the creation of any
material Encumbrance on any of the assets of Alpha Fibre, or the amendment,
<PAGE>
modification or extension of any existing material Encumbrance on any such
asset other than any such creation, amendment, modification or extension
effected (A) in the ordinary course of business, (B) as required in
connection with the Alpha Fibre Merger, (C)in connection with the transfer of
those certain assets set forth on Section 2:1:11 of the Disclosure Schedule;
or (D) for current taxes or assessments which are not yet due, or being
contemplated in good faith by appropriate proceedings; (vi) any sale,
assignment, transfer, conveyance, lease, hypothecation, abandonment or other
disposition of or agreement to sell, assign, transfer, convey, lease,
hypothecate, abandon or otherwise dispose of, any of the material assets of
Alpha Fibre, other that (A) assets sold in the ordinary course of business;
(B) the assets set forth on Section 2:1:11 of the Disclosure Schedule; or (C)
any assets which are scrapped as obsolete in conformance with customary
procedure.
2:1:12 Title to Assets; Encumbrances.
2.12.1 Except as set forth in Section 2:1:12 of the Disclosure Schedule,
Alpha Fibre owns its material assets, whether real, personal or intangible,
free and clear of all Encumbrances, except for (i) liens for current taxes
and assessments not yet due, or being contested in good faith by appropriate
proceedings, (ii) mechanic's liens arising under the operation of law or for
actions contested in good faith or for which payment arrangements have been
made, (iii) liens granted orincurred by Alpha Fibre in the ordinary course
of its business or in connection with the financing of office space,
furniture and equipment in the ordinary course of its business, (iv) easements,
covenants, restrictions and other exception to title of record (which do not
materially and adversely affect the operation of Alpha Fibre), (v) Encumbrances
otherwise described in Section 2:1:12 of the Disclosure Schedule, or
(vi) Encumbrances reflected on the balance sheet at December 31, 1998 of Alpha
Fibre;
2.12.2 Except as set forth on Section 2:1:12 of the Disclosure Schedule,
there are no parties in possession of any of the material assets of Alpha Fibre
other than Alpha Fibre, other than personal property held by third parties in
the reasonable and ordinary course of business. Subject to the Encumbrances set
forth in Section 2:1:12 of the Disclosure Schedule or described in
Section 2:1:12:1, Alpha Fibre enjoys full, free and exclusive use and quiet
enjoyment of its material assets and its rights pertaining thereto. Subject to
the Encumbrances set forth in Section 2:1:12 of the Disclosure Schedule or
described in Section 2:1:12:1, Alpha Fibre enjoys peaceful and undisturbed
possession under all leases under which it is lessee.
2:1:13 Condition of Assets.
2.13.1 Except as set forth in Section 2:1:13 of the Disclosure Schedule, to
the best of Alpha Fibre's knowledge, each of the buildings, structures,
equipment or other items of tangible personal property of Alpha Fibre with a
cost basis of at least $20,000 is in working order and repair, ordinary wear and
tear excepted.
<PAGE>
2:1:14 Taxes and Returns.
2.14.1 Except as set forth on Section 2:1:14 of the Disclosure
Schedule, Alpha Fibre has (i)filed all material tax returns and reports
required to be filed by it and (ii) paid all material taxes which it has
incurred and which have become due and payable, except such as are being or
may be contested in good faith by appropriate proceedings or relate to the
fiscal year ended December 31,1999. Except as set forth on Section 2:1:14 of
the Disclosure Schedule, no deficiencies for any taxes have been proposed,
asserted, or formally assessed against Alpha Fibre, and no requests for
waivers of the time to assess any such tax are pending. The Alpha Fibre
Financials reflect an adequate accrual, based on the facts and
circumstances existing as of the date hereof, for all material taxes
payable by Alpha Fibre (whether or not shown on any return) through the date
thereof. Section 2:1:14 of the Disclosure Schedule shall include true,
complete and correct copies of all tax returns and reports filed by Alpha
Fibre since January 1, 1998.
2.14.2 For the purposes of this Agreement, the term "tax" (including,
with correlative meaning, the terms "taxes" and "taxable") shall include all
federal, state, local and foreign income,profits, franchise, gross receipt,
payroll, estimated sales, employment, use, property, withholding,excise and
other taxes, duties or assessments of any nature whatsoever, together with
all interest,penalties and additions imposed with respect to such amounts.
2.15 Employment Practices.
Except as set forth in Section 2:1:15 of the Disclosure Schedule, Alpha
Fibre has complied with the Occupational Safety and Health Act and all other
laws relating to equal employment of labor including, without limitation,
laws relating to equal employment opportunity and employment discriminations,
employment of illegal aliens, wages, hours and collective bargaining, the
violation or failure to comply with which would have a material adverse
effect on the business of Alpha Fibre. Notwithstanding anything herein to
the contrary, and except as set for in Section 2:1:15 of the Disclosure
Schedule, Alpha Fibre has complied with all laws relating to the collection and
payment of social security and withholding taxes, or both, and similar taxes
except where the failure to comply with such laws would not have a material
adverse effect on the business of Alpha Fibre. Except as set forth in
Section 2:1:15 of the Disclosure Schedule, Alpha Fibre is not liable for any
arrearage of wages or any taxes or penalties for failure to comply with any of
the foregoing, which would have a material adverse effect on the business of
Alpha Fibre.
2.16 Compliance with Law.
Except as set forth in Section 2:1:16 or any other Section of the
Disclosure Schedule, to the best knowledge of Alpha Fibre, Alpha Fibre is in
compliance with and is not in violation of or in default with respect to, or
in alleged violation of or alleged default with respect to: (a) any applicable
law, rule, regulation or statute applicable to the operations of Alpha
Fibre, or
<PAGE>
(b) any order, permit,certificate, writ, judgment, injunction,
decree, determination, award or other decision of any court or any Government
Entity to which Alpha Fibre is a party or by which Alpha Fibre is bound, which
violation or default or alleged violation or default would materially and
adversely affect the business of Alpha Fibre.
2.17 Environmental Requirements and Health and Safety Requirements.
To the best of Alpha Fibre's knowledge, Section 2:1:17 of the Disclosure
Schedule sets forth true, correct and complete copies of all material claims and
complaints, or reports or other documents related to such material claims or
complaints, in the files of Alpha Fibre made by or against Alpha Fibre during
the past three years pursuant to Environmental Requirements or Health or Safety
Requirements (other than those documents which Alpha Fibre has determined, in
good faith and after consultation with counsel, should remain protected by the
attorney-client privilege). At present, to the best of Alpha Fibre's knowledge,
none of the operations of Alpha Fibre is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging or
addressing a material violation of or a material liability under any
Environmental Requirement or any Health and Safety Requirement, except as set
forth in Section 2:1:17 of the Disclosure Schedule.
2.18 Books and Records.
To the best of Alpha Fibre's knowledge, all the records and stock minute
books of Alpha Fibre have been delivered to or made available upon request
for inspection by Oak Brook. To the best of Alpha Fibre's knowledge, such
books and stock minute books are true and correct in all material respects.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF OAK BROOK
Representations and warranties shall be made by OAK BROOK and shall survive
the Effective Date of the ALPHA FIBRE Merger for a period of one (1) year,
subject to mutually satisfactory exceptions, claims and caveats:
3:1 Representations and Warranties of OAK BROOK .
OAK BROOK, jointly and severally, represent and warrant to ALPHA FIBRE as
follows:
<PAGE>
3:1:1 Organization and Standing.
OAK BROOK are corporations duly organized, validly existing and in good
standing under the laws of the State of Colorado and is duly authorized,
qualified and in good standing under all applicable laws, regulations,
ordinances and orders of public authorities and has all requisite corporate
power and authority to own, lease and operate its properties and to carry on
its business as it is now being conducted, except where the failure to be so
authorized, qualified or licensed would not have a material adverse effect on
the business of OAK BROOK taken as a whole. OAK BROOK is duly licensed or
qualified to do business as a foreign corporation in each jurisdiction in
which the character of its properties, owned or leased, or the nature of
their activities, makes such licensing or qualification necessary, except for
where the failure to be so licensed and qualified would not have a material
adverse effect on the business of OAK BROOK.
True and correct copies of the Articles of Incorporation (certified by the
Secretary of State of the State of Colorado) and the Bylaws, as amended, of
OAK BROOK (certified by the Secretary of OAK BROOK) are attached hereto as
Section 3:1:1 of the Disclosure Schedule.
3:1:2 Authority.
OAK BROOK has the necessary corporate power and authority to enter into this
Agreement, as well as the Transaction Documents more fully defined in Section
6:4, and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Transaction Documents, and the
completion of the transactions contemplated hereby and thereby have been duly
authorized by corporate action of the part of the Board of Directors of OAK
BROOK, and subject to the convening of a shareholder's meeting pursuant to
Article 7-111-101-109 of the Colorado Business Corporation Act in order to
approve this Agreement and the Transaction Documents, no further corporate
proceedings on the part of OAK BROOK will be necessary. When issued pursuant
to this Agreement, the Shares of OAK BROOK common stock to be issued to ALPHA
FIBRE Shareholders on the Effective Date will be duly authorized, validly
issued, fully paid and non-assessable, and the OAK BROOK Shares to be issued
to ALPHA FIBRE Shareholders on the Effective Date shall be legally equivalent
in all respects to the OAK BROOK Common Stock issued and outstanding as of
the date hereof. This Agreement has been executed and delivered by OAK BROOK
and constitutes the legal, valid and binding obligation of OAK BROOK,
enforceable in accordance with its terms. As of the Effective Date, each of
the Transaction Documents will constitute a legal, valid and binding
obligation of OAK BROOK , each enforceable in accordance with its terms.
3:1:3 No Conflict, Default, Breach or Violation.
The execution and delivery of this Agreement does not, and the completion of
the transactions contemplated hereby and thereby will not, conflict with or
<PAGE>
result in a breach of or the acceleration of any obligation under, or
constitute a default or event of default (or event which with notice or lapse
of time or both would constitute a default) under, any provision of any
charter, bylaw,indenture, mortgage, lien, lease, agreement, contract, order,
judgment, or, to the best knowledge of OAK BROOK, any judicial or
administrative decree, ordinance or regulation, permit, license,franchise or
any restriction to which any property of OAK BROOK or any of its subsidiaries is
subject or by which OAK BROOK or any of its subsidiaries is bound, the effect
of which would be materially adverse to OAK BROOK and its subsidiaries taken
as a whole. Neither OAK BROOK nor any of its subsidiaries is alleged to be in
violation or default or under any applicable law, statute,order, rule or
regulation promulgated or judgment entered by any Governmental Entity,
relating to or affecting the operation, conduct or ownership of the property
or business of OAK BROOK or such subsidiaries, which violation or default or
alleged violation or default would have a material, adverse effect, on OAK
BROOK and its subsidiaries taken as a whole.
3:1:4 Approvals.
Except for usual and customary compliance with the Securities Act, the
securities or blue sky laws of various states as set forth in Section 3:1:4
of the Disclosure Schedule, no consent, approval, order or authorization of,
or registration, declaration or filing with, any court, administrative agency or
commission or other governmental agency or instrumentality, domestic or
foreign (a "Governmental Entity"), or third party is required by or with
respect to OAK BROOK in connection with the execution and delivery by OAK
BROOK of this Agreement, or the completion of the transactions contemplated
hereby, the absence of which would have a material adverse effect on OAK BROOK.
3:1:5 SEC Documents; Filings; Financial Statements.
(a) OAK BROOK has delivered to ALPHA FIBRE accurate and complete
copies(excluding copies of exhibits) of each report, registration
statement (on a form other than Form S-8) and definitive proxy
statement filed by OAK BROOK with the SEC between March 18, 2000
and the date of this Agreement (the "OAK BROOK SEDocuments"). As
of the time it was filed with the SEC (or, if amended or superseded
by a filing prior to the date of this Agreement, then on the date
of such filing): (i)each of the OAK BROOK SEC Documents complied
in all material respects with the applicable requirements of the
Securities Act or the Exchange Act (as the case may be); and (ii) none
of the OAK BROOK SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
<PAGE>
(b) The consolidated financial statements contained in the OAK
BROOK SEC Documents: (i) complied as to form in all material
respects with the published rules and regulations of the SEC
applicable thereto; (ii) were prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered,
except as may be indicated in the notes to such financial
statements and (in the case of unaudited statements) as permitted
by Form 10-QSB of the SEC, and except that unaudited financial
statements may not contain footnotes and are subject to year-end audit
adjustments; and (iii) fairly present the consolidated financial
position of OAK BROOK and its subsidiaries as of the respective
dates thereof and the consolidated results of operations of OAK
BROOK and its subsidiaries for the periods covered
thereby.
3:1:6 Information Supplied.
To the best knowledge of OAK BROOK , no written statement, certificate,
schedule, list or other written information furnished by or on behalf of OAK
BROOK to ALPHA FIBRE on or prior to the date hereof in connection herewith
contains (after giving effect to any correction thereof furnished to ALPHA
FIBRE in writing prior to the date hereof) any untrue statement of a material
fact or omits or will omit to state a material fact required to be stated
herein or therein or necessary to make the statements herein or therein, in
light of the circumstances under which they were made,not misleading.
3:1:7 Capitalization of OAK BROOK.
As of the date hereof, the authorized capital stock of OAK BROOK consists of
fifty million (50,000,000) shares of OAK BROOK Common Stock, no par value, of
which one million six hundred seventy-eight thousand (1,678,000) shares of
common stock are issued and outstanding, and ten million (10,000,000) shares
of OAK BROOK Preferred Stock, of which none are issued and outstanding. All
of the issued and outstanding shares of capital stock of OAK BROOK have been
duly and validly authorized and validly issued and are fully paid and
non-assessable. As of the date hereof, except as disclosed herein, there are
no authorized or outstanding subscriptions, options, conversion rights,
warrants or other agreements, securities or commitments of any nature
whatsoever (whether oral or written and whether firm or conditional)
obligating OAK BROOK or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, to any person any shares of OAK BROOK
Common Stock or any other shares of the capital stock of OAK BROOK or any
shares of the capital stock of any of its subsidiaries, or any securities
convertible into or exchangeable for any such shares, or obligating any such
person to grant, extend or enter into any such agreement or commitment. Except
as set forth in Section 3:1:6 of the Disclosure Schedule, there are no
agreements obligating OAK BROOK to redeem, repurchase or otherwise acquire the
<PAGE>
capital stock of OAK BROOK, or any other securities issued by it, or to register
the sale of the capital stock of OAK BROOK under applicable securities laws.
Except as set forth in Section 3:1:6 of the Disclosure Schedule, there are no
agreements or arrangements prohibiting or otherwise restricting the payment of
dividends or distributions to the OAK BROOK Shareholders by OAK BROOK.
3:1:8 Title to Assets; Encumbrances.
3:1:8:1 Except as set forth in Section 3:1:8 of the Disclosure Schedule, OAK
BROOK and its subsidiaries own their respective assets, whether real,
personal or intangible, free and clear of all Encumbrances, except (i) liens
for current taxes and assessments not yet due or being contested in good
faith by appropriate proceedings, (ii) mechanic's liens arising under the
operation of law or for actions contested in good faith or for which payment
arrangements have been made,(iii) liens granted or incurred by OAK BROOK or
any of its subsidiaries in the ordinary course of its business or in
connection with the financing of office space, furniture and equipment in the
ordinary course of its business, (iv) easements, covenants, restrictions and
other exceptions to title of record which do not materially and adversely
affect the operations of OAK BROOK and its subsidiaries, (v) such
Encumbrances as do not secure indebtedness in excess of $10,000, which in
the aggregate (meaning as to OAK BROOK and all of its subsidiaries) do not
secure indebtedness in excess of $10,000, or are otherwise described in
Section 3:1:8 of the Disclosure Schedule, or (vi) Encumbrances reflected in
the SEC Documents;
3:1:10:2 Except as set forth in the 10-KSB for the period ended December 31,
1999("10-K") or Section 3:1:10 of the Disclosure Schedule, there are no
parties in possession of any of the assets of OAK BROOK or its subsidiaries
other than OAK BROOK or such subsidiaries, other than personal property held
by third parties in the reasonable and ordinary course of business.
Except as set forth in the 10-K or Section 3:1:10 of the Disclosure Schedule,
OAK BROOK and each of its subsidiaries enjoy full, free and exclusive use and
quiet enjoyment of their respective assets and all rights pertaining thereto,
and OAK BROOK and its subsidiaries enjoy peaceful and undisturbed possession
under all leases under which any of them is lessee.
3:1:11 Subsidiaries.
Section 3:1:11 of the Disclosure Schedule sets forth a complete and correct
list of each subsidiary of OAK BROOK, together with the jurisdiction of
incorporation or organization of such subsidiary and the percentage of each
such subsidiary's outstanding capital stock or other equity interest owned
by OAK BROOK or another subsidiary of OAK BROOK.
<PAGE>
Except as set forth in the 10-K or Section 3:1:11 of the Disclosure Schedule,
OAK BROOK owns all of the securities of each of its operating subsidiaries,
free and clear of all Encumbrances, and all capital stock of such
subsidiaries has been duly authorized and validly issued and is fully paid and
nonassessable. None of the subsidiaries has any commitment to issue or sell
any shares of its capital stock, or any securities or obligations convertible
into or exchangeable for, or to give any person other than OAK BROOK any
right to acquire from it, any shares of its capital stock. Each subsidiary
is a corporation duly organized validly existing and in good standing under
the laws of its jurisdiction of incorporation, has the corporate power and
all necessary authorizations to own all of its properties and assets and to
carry on its business as it is now being conducted, and, to the extent
required by law, is duly qualified to do business and is in good standing in
each jurisdiction in which it owns property or conducts business, except
where the failure to have such authorization or to be so qualified would not
have a material adverse effect on the business or operations of OAK BROOK
and its subsidiaries as a whole.
3:1:12 Litigation.
Except as set forth in the 10-K or Section 3:1:12 of the Disclosure Schedule,
there is no suit, action, proceeding or investigation pending or, to the best
knowledge of OAK BROOK, threatened against or affecting OAK BROOK or any of its
subsidiaries (or any of its officers or directors in connection with the
business of OAK BROOK or any of its subsidiaries), nor is there any outstanding
judgment, order, writ, injunction or decree against OAK BROOK or any of its
subsidiaries, which suit, action, proceeding or investigation had or could
reasonably be expected to have a material adverse effect on OAK BROOK and its
subsidiaries, taken as a whole. Except as set forth in the SEC Documents or
Section 3:1:12 of the Disclosure Schedule, to the best knowledge of OAK BROOK:
(i) there are no facts upon which any action, suit or proceeding could be
brought against OAK BROOK or any of its subsidiaries that would have a material
adverse effect on OAK BROOK; and (ii) neither OAK BROOK nor any of its
subsidiaries is subject to any court order, writ, injunction, decree, settlement
agreement or judgment that contains or orders any ongoing obligations, whether
prohibitory or mandatory in nature, on the part of OAK BROOK or its
subsidiaries.
3:1:13 Environmental Requirements and Health and Safety
Requirements.
To the best of OAK BROOK's knowledge, Section 3:1:13 of the Disclosure
Schedule sets forth true, correct and complete copies of all material claims
and complaints, or reports or other documents related to such material claims
or complaints, in the files of OAK BROOK made by or against OAK BROOK during
the past three years pursuant to Environmental Requirements or Health or Safety
Requirements (other than those documents which OAK BROOK have determined, in
good faith and after consultation with counsel, should remain protected by
the attorney-client privilege). At present, to the best of OAK BROOK's
knowledge, none of the operations of OAK BROOK is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging
<PAGE>
or addressing a material violation of or a material liability under any
Environmental Requirement or any Health and Safety Requirement, except as set
forth in Section 3:1:13 of the Disclosure Schedule.
3:1:14 Absence of Undisclosed Liabilities.
To the best of OAK BROOK's knowledge, except as set forth in Section 3:1:14
of the Disclosure Schedule, OAK BROOK have no liabilities or obligations,
either accrued, absolute, contingent, or otherwise, required to be but not
reflected or reserved against in the OAK BROOK Financials in accordance with
generally accepted accounting principles, except those incurred in the ordinary
course of business, and OAK BROOK know of no potential liability that would
result in material adverse effect on the value or business of OAK BROOK
other than those (a) reflected or reserved against in the OAK BROOK
Financials, (b)incurred in the ordinary course of business since December 31,
1999 or (c) set forth in Section 3:1:14 of the Disclosure Schedule.
3:1:15 Financial Statements.
OAK BROOK has furnished to ALPHA FIBRE true, complete and correct copies of
the financial statements of OAK BROOK, at and for the fiscal year ended
December 31, 1999 (these financial statements being collectively referred to
herein as the "OAK BROOK Financials"). The OAK BROOK Financials will be in
accordance with the books and records of OAK BROOK, comply as to form in all
material respects with applicable accounting requirements, have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the financial position of OAK BROOK as
at the date thereof. Since December 31, 1999, there has not been, occurred
or arisen (a) any material adverse change in the business or the consolidated
financial condition of OAK BROOK and its subsidiaries, considered as a whole,
from that shown on the aforementioned balance sheet as of December 31, 1999,
or (b) any event, condition or state of facts of any character which, to the
best of the knowledge of OAK BROOK, materially and adversely affects, or
threatens to materially and adversely affect, the business or results of
operations or financial condition of OAK BROOK and its subsidiaries,
considered as a whole.
3:1:16 Contracts.
All contracts, agreements and commitments of OAK BROOK, whether or not made
in the ordinary course of business, including leases under which OAK BROOK is
lessor or lessee, which are to be performed in whole or in part after the
Effective Date, and which (i) involve or may involve aggregate payments by
or to OAK BROOK of $10,000 or more after the Effective Date, (ii) are not
terminable by OAK BROOK without premium or penalty on 60 (or fewer) days'
notice, (iii) purport to prohibit or restrict the ability of OAK BROOK to
<PAGE>
participate or compete in any material line of business or with any person,
(iv) purport to prohibit or restrict another person's ability to be in the
line of business of OAK BROOK or to compete with OAK BROOK or (v) are
otherwise material to the business or properties of OAK BROOK. To the best
of OAK BROOK's knowledge, except as set forth on Schedule 3:1:16 of the
Disclosure Schedule, OAK BROOK and the have complied with all commitments,
contracts, agreements and obligations pertaining to it listed on Section 3:1:16
of the Disclosure Schedule and is not in material default under any such
contracts and agreements and no notice of material default has been received.
3:1:17 Insurance Policies.
All (i) policies of property, fire and casualty, product liability, worker's
compensation, professional liability and title insurance and other forms of
insurance, under which OAK BROOK is insured, and (ii) bonds issued or posted
by any person which respect to any operation or other activities of OAK
BROOK are in full force and effect on the date hereof.
3:1:18 Transactions with Management.
All material contracts, leases and commitments by and between OAK BROOK and
any of its officers, directors, stockholders, employees, or agents, or any
affiliate of any such person are set forth in Section 3:1:18 of the
Disclosure Schedule, and none of the officers, directors, stockholders,
or employees of OAK BROOK owns, leases or licenses any interest in any
asset used by OAK BROOK in its business, other than solely by and through
ownership of the capital stock of OAK BROOK.
3:1:19 Compliance with ERISA.
Each benefit plan set forth in Section 3:1:19 of the Disclosure Schedule
(collectively the "Benefit Plans") substantially complies with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Code and other applicable laws. Except as provided in Section
3:1:18 of the Disclosure Schedule, all contributions required to be made to each
Benefit Plan under the terms of such Benefit Plans, ERISA or other applicable
laws have been timely made. Except as provided in Section 3:1:19 of the
Disclosure Schedule.
3:1:19:1 Prohibited Transactions.
To the knowledge of OAK BROOK , OAK BROOK has not engaged in a transaction in
connection with which it could be subject (either directly or indirectly) to a
material liability for either a civil penalty assessed pursuant to Section
502(i) of ERISA or a tax imposed by Section 4975 of the Code.
<PAGE>
3:1:19:2 Plan Termination; Material Liabilities.
There has been no termination of an "employee pension benefit plan" as
defined in ERISA which is subject to Title IV of ERISA (a "Statutory Plan")
or trust created under any Statutory Plan that would give rise to a material
liability to the Pension Benefit Guaranty Corporation ("PBGC") on the
part of OAK BROOK . To the best knowledge of OAK BROOK , all OAK BROOK
statutory Plans intended to be tax-qualified under Section 401(a) or 403(a)
of the Code have complied in the past,both in form and operation, with every
provision of the Code, regulation promulgated pursuant thereto, and every
ruling, notice or announcement issued by the Internal Revenue Service necessary
to maintain the qualified status of such Statutory Plans, except where
non-compliance would not have a material adverse effect on OAK BROOK . No
material liability to the PBGC has been or is expected to be incurred with
respect to any Statutory Plan. The PBGC has not instituted proceedings
to terminate any Statutory Plan. To the best knowledge of OAK BROOK, there
exists no condition or set of circumstances which presents a material risk
of termination or partial termination of any Statutory Plan by the PBGC.
3:1:19:3 Accumulated Funding Deficiency.
Except as provided in Section 3:1:19:3 of the Disclosure Schedule, full
payment has been made of all amounts which are required under the terms of
each statutory plan, ERISA or other applicable laws to have been paid as
contributions to such Statutory Plan, and no accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, exists with respect to any Statutory Plan.
3:1:19:4 Relationship of Benefits to Pension Plan Assets.
The current value of all accrued benefits, both vested and unvested, under
all Statutory Plans does not exceed the current value of the assets of such
Statutory Plans allocable to such accrued benefits,except as disclosed in the
financial statements described in Section 3:1:19. For purposes of the
representation in this Section 3:1:18:4, the term "current value" has the
meaning specified in Section 4062(b)(1)(A) of ERISA, the term "accrued
benefit" has the meaning specified in Section 3 of ERISA and "current value"
is based upon the same actuarial assumptions used by OAK BROOK.
3:1:19:5 Execution of Agreements.
The execution and delivery of this Agreement and the Transaction Documents,
and the consummation of the transaction contemplated hereby will not involve
any transaction which is subject to the prohibitions of Section 406 of ERISA
or in connection with which a tax could be imposed pursuant to Section 4975
of the Code.
<PAGE>
3:1:19:6 Fiduciary Liability.
To the best of OAK BROOK's knowledge, there have been no acts, failures to
act, omissions or transactions involving a Statutory Plan or the assets
thereof which could result in imposition on OAK BROOK (whether direct or
indirect) of material damages or liability in actions brought under
Section 502 or Sections 404 through 409 of ERISA.
3:1:19:7 Pending Claims.
To the best of OAK BROOK's knowledge, there are no claims, pending or overtly
threatened, involving any of the Benefit Plans by any current or former
employee (or beneficiary thereof) of OAK BROOK which allege any material
violation of ERISA or the terms of the Benefit Plans, nor is there any
reasonable basis to anticipate any such claims involving such Benefit Plans
which would likely be successfully maintained against OAK BROOK .
3:1:19:8 Multiemployer Plans.
Except as may be set forth in Schedule 3:1:19 of the Disclosure Schedule,
neither OAK BROOK nor any trade or business (whether or not incorporated)
which together with OAK BROOK would be deemed to be a "single employer"
within the meaning of Section 400(b) of ERISA or Subsections 414(b), (c), (m) or
(o) of the Code sponsors, maintains, or contributes to, or has at any time since
their inception to the date of this Agreement sponsored, maintained or
contributed to, any place (not exempt from the provisions of ERISA), including,
but not limited to, any plan which is a "multiemployer plan" as such term is
defined in Section 3(37) or 4001(a)(3) of ERISA.
3:1:19:9 No Reportable Event.
To the best of OAK BROOK's knowledge, there has been no "reportable event"
(within the meaning of Section 4043(b) of ERISA with respect to a Statutory
Plan) or any "prohibited transaction" (as such term is defined in Section 406
of ERISA and Section 4975(c) of the Code) with respect to any of the Employee
Plans. All reporting and disclosure requirements under Title I of ERISA have
been met.
3:1:20 No Undisclosed Defaults.
Except as set forth in Section 3:1:20 of the Disclosure Schedule, to the best
knowledge of OAK BROOK , OAK BROOK is not in material default with respect
to any obligation, agreement or covenant to be performed by it under any
contract or arrangement of any kind, including, without limitation, those
described in Section 3:1:20 of the Disclosure Schedule, which default would have
a material adverse effect on OAK BROOK .
<PAGE>
3:1:21 Taxes and Returns.
3:1:21:1 Except as set forth on Section 3:1:21 of the Disclosure Schedule, OAK
BROOK has (i) filed all tax returns and reports required to be filed by it
and (ii) paid all taxes, assessments and governmental charges and penalties
which it has incurred and which have become due and payable, except such as
are being or may be contested in good faith by appropriate proceedings or
relate to the fiscal year ended December 31, 1999. Except as set forth on
Section 3:1:21 of the Disclosure Schedule, OAK BROOK is not delinquent in the
payment of any material tax, assessment or governmental charge, and no
deficiencies for any taxes have been proposed, asserted, or formally assessed
against OAK BROOK, and no requests for waivers of the time to assess any such
tax are pending, the OAK BROOK Financials reflect an adequate accrual, based on
the facts and circumstances existing as of the date hereof, for all material
taxes payable by OAK BROOK (whether or not shown in any return) through the
date thereof. Except as set forth in Section 3:1:21 of the Disclosure
Schedule, all tax returns and taxes for periods after December 31,1999 have
or will be filed and paid by OAK BROOK on a timely basis, unless said taxes
are being contested in good faith by appropriate proceedings.
3:1:22 Compliance with Law.
Except as set forth in Section 3:1:22 or any other Section of the Disclosure
Schedule, to the best knowledge of OAK BROOK, OAK BROOK is in compliance
with and is not in violation of or in default with respect to, or in alleged
violation of or alleged default with respect to: (a) any applicable law,
rule, regulation or statute applicable to the operations of OAK BROOK , or
(b) any order, permit, certificate, writ, judgment, injunction, decree,
determination, award or other decision of any court or any Government Entity
to which OAK BROOK is a party or by which OAK BROOK is bound, which violation or
default or alleged violation or default would materially and adversely
affect the business, operations, affairs, prospects, properties, assets,
profits or condition of OAK BROOK . To the best knowledge of OAK BROOK, OAK
BROOK is not delinquent with respect to (a) any report required to be filed
with any Governmental Entity or (b) the preparation and delivery of any
reports required by private agreements to which OAK BROOK is a party, which
delinquency might materially and adversely affect the business, operations,
affairs, prospects,properties, assets, profits, conditions of OAK BROOK .
3:1:23 Environmental Requirements and Health and Safety
Requirements.
To the best of OAK BROOK's knowledge, Section 3:1:23 of the Disclosure
Schedule sets forth true, correct and complete copies of all material claims
and complaints, or reports or other documents related to such material claims or
complaints, in the files of OAK BROOK made by or against OAK BROOK during the
past three years pursuant to Environmental Requirements or Health or Safety
Requirements (other than those documents which OAK BROOK has determined, in good
faith and after consultation with counsel, should remain protected by the
<PAGE>
attorney-client privilege). At present, to the best of OAK BROOK's
knowledge, none of the operations of OAK BROOK is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging
or addressing a material violation of or a material liability under any
Environmental Requirement or any Health and Safety Requirement, except as set
forth in Section 3:1:23 of the Disclosure Schedule.
3:1:24 Agreements, Contracts and Commitments.
Except as set forth in Section 3:1:24 of the Disclosure Schedule, OAK BROOK
are not parties to (a) any collective bargaining agreement, (b) any bonus,
deferred compensation, pension, profit-sharing, or retirement plan or other
arrangement, (c) any employment or other agreement, contract, or commitment
requiring OAK BROOK to pay any employee more than $100,000 a year or any
severance pay in excess of four weeks' salary, (d) any agreement of guarantee or
indemnification which involves, singly or together with other such
agreements, a potential material liability, (e) any agreement, contract, or
commitment which, to the best of the knowledge of OAK BROOK, might reasonably
be expected to have a potential material adverse impact on the business,
financial condition or earnings of OAK BROOK , (f) any agreement, contract,
or commitment containing any covenant limiting the freedom of OAK BROOK to
engage in any line of business in any area of the world or to compete with
any person, (g) any agreement, contract, or commitment relating to capital
expenditures and involving future payments which, together with future payments
under all other agreements, contracts, or commitments relating to the same
capital project, exceed $500,000, (h) any agreement, contract, or commitment
(other than leases of real property) relating to the acquisition of assets or
capital stock of any business enterprise, (i) any agreement, contract,
or commitment which involves $500,000 or more, or which has a remaining term
(including options of renewal or extension to the extent exercisable by a
person other than OAK BROOK ) of three years or more from the date hereof, or
which is not cancelable without penalty of less than $25,000,or (j) any other
agreement or contract which OAK BROOK would be required to file with the
Securities and Exchange Commission ("SEC") as an exhibit were OAK BROOK to
file with the SEC on the date hereof a registration statement on Form SB-1 or
SB-2 covering securities to be offered by OAK BROOK to the public. To the
best of the knowledge of OAK BROOK , neither party has not in any material
respect breached, nor to the best of the knowledge of them is there any
pending or threatened claim or any legal basis for a claim that they have
breached, any of the terms or conditions of (1) any agreement contract or
commitment set forth in any of the schedules heretofore delivered by OAK
BROOK to ALPHA FIBRE pursuant to this agreement or (2) any other agreement,
contract or commitment, the breach or breaches of which singly or in the
aggregate could result in the imposition of damages in an amount material to
OAK BROOK.
<PAGE>
3:1:25 Intellectual Property
Section 3:1:25 of the Disclosure Schedule furnished by OAK BROOK to ALPHA
FIBRE correctly sets forth a list of all letters patent, patent applications,
inventions upon which patent applications have not yet been filed, trade
names, trademarks, trademark registrations and applications, copyrights,
copyright registrations and applications, both domestic and foreign,
presently owned,possessed, used or held by OAK BROOK . Unless otherwise
indicated in such schedule, OAK BROOK own the entire right, title and
interest in and to the same. Such schedule also correctly sets
forth a list of all licenses granted/software sales to others by OAK BROOK.
All letters patent,patent applications, trade names, trademarks, trademark
registrations and applications, copyrights, copyright registrations, and
applications, and grants of licenses set forth in such schedule are subject
to no pending or, to the best of the knowledge of OAK BROOK threatened
challenge except as set forth in said schedule, and neither the execution and
delivery of this agreement or of the Articles of Share Exchange not the
consummation of this agreement will give any licensor or licensee of OAK
BROOK any right to change the terms or provisions of, or terminate or cancel,
any license to which is a party. OAK BROOK have not agreed to indemnify any
person for or against any infringement of any patent, trademark, or copyright
except as shown on Section 3:1:25 of the Disclosure
Schedule.
3:1:26 Brokers' or Finders' Fees
No agent, broker, person or firm acting on behalf of OAK BROOK or under its
authority is or will be entitled to any commission, broker, finder, or
financial advisory fees from any of the parties hereto in connection with any
of the transactions contemplated herein.
ARTICLE IV
OBLIGATIONS PENDING EFFECTIVE DATE
4:1 Agreements of ALPHA FIBRE.
ALPHA FIBRE agrees that from the date hereof to and through the Effective
Date, ALPHA FIBRE will:
4:1:1 Corporate Approvals.
Use its best efforts for the purpose of authorizing and obtaining the consent
of the ALPHA FIBRE Shareholders to this Agreement and the merger contemplated
hereby.
<PAGE>
4:1:2 Maintenance of Present Business.
Except as contemplated by this Agreement, ALPHA FIBRE shall operate its
business only in the usual, regular, and ordinary manner so as to maintain
the goodwill it now enjoys and, to the extent consistent with such operation,
use all reasonable efforts to preserve intact its present business
organization, keep available the services of its present officers and
employees, and preserve its relationship with all material customers,
suppliers, jobbers, distributors, and others having business dealings with
it. If ALPHA FIBRE proposes to secure a waiver of this covenant from OAK
BROOK with respect to a particular transaction, ALPHA FIBRE shall be deemed
in compliance with this covenant if the President of OAK BROOK or his
successor does not deliver to ALPHA FIBRE his objection in writing to any
action described in such waiver request within 72 hours of receiving notice
of such waiver request from ALPHA FIBRE.
4:1:3 Maintenance of Properties.
At its expense, maintain all of its property and assets in customary (for
ALPHA FIBRE) repair, order, and condition, reasonable wear and use and damage
by fire or unavoidable casualty excepted.
4:1:4 Maintenance of Books and Records.
Maintain its books of account and records in the usual, regular, and ordinary
manner, in accordance with generally accepted accounting principles applied
on a consistent basis.
4:1:5 Compliance with Law.
Continue to conduct its activities in a manner consistent with its current
understanding of the laws applicable to it, unless and until it receives
written notice from a Governmental Entity that it is not in compliance with a
particular law or laws, at which time ALPHA FIBRE will modify its conduct
to comply with such law or laws.
4:1:6 Inspection.
Allow OAK BROOK, its directors, officers and authorized representatives,
during normal business hours, to inspect its records and to consult with its
officers, employees, attorneys, and agents for the purpose of determining the
accuracy of the representations and warranties made, and the compliance with
covenants contained, in this Agreement. OAK BROOK agrees that it and its
officers and representatives shall hold all data and information obtained
with respect to the other parties hereto in strict confidence, and further
agrees that it will not use such data or information or disclose the same to
others, except to the extent such date or information either is, or becomes,
published or a matter of public knowledge.
<PAGE>
OAK BROOK and ALPHA FIBRE agree that they will not issue any press release or
other disclosure of this Agreement without the prior approval of the other,
which shall not be unreasonably withheld, unless, in the good faith opinion
of counsel, such disclosure is required by law and time does not permit the
obtaining of such consent, or such consent is withheld.
In the event of a breach or threatened breach by OAK BROOK or its officers or
representatives of the provision of this Section, ALPHA FIBRE shall be
entitled, in addition to any other available remedy, to an injunction
restraining any disclosure by OAK BROOK, or its officers or representatives
of any of such confidential information.
4:1:7 Prohibition of Certain Contracts.
Not enter into any contracts outside of the ordinary course of business
without the prior written consent of OAK BROOK, which consent will not be
unreasonably withheld. If ALPHA FIBRE proposes to secure a waiver of this
covenant from OAK BROOK with respect to a particular transaction, ALPHA FIBRE
shall be deemed in compliance with this covenant if the President of OAK
BROOK or his successor does not deliver to ALPHA FIBRE his objection in
writing to any action described in such waiver request within 72 hours of
receiving notice of such waiver request from ALPHA FIBRE.
4:1:8 Prohibition of Loans.
Not incur any borrowings, except in the usual and ordinary course of
business, without the prior written consent of OAK BROOK, which consent will
not be unreasonably withheld.
4:1:9 Prohibition of Certain Commitments.
Not enter into a commitment for expenditures or incur any liability exceeding
$25,000, in the aggregate, except (i) as may be necessary or desirable for
the maintenance of existing facilities, machinery and equipment in the
ordinary course of business or in connection with measures taken to effect
the Merger, as described herein, (ii) as in otherwise consented to in writing
by OAK BROOK, or (iii) as may otherwise be in the ordinary course of business.
4:1:10 Disposal of Assets.
The company shall not sell, dispose of, or encumber, any property or assets,
except (i) in the usual and ordinary course of business; or (ii) as is
otherwise consented to in writing by OAK BROOK or authorized hereunder.
<PAGE>
4:1:11 Maintenance of Insurance.
Keep in full force and effect present insurance policies or other comparable
coverage on all its properties.
4:1:12 No Amendment to Articles of Incorporation.
Not amend its certificate of incorporation or merge or consolidate with or
into any other corporation or change in any manner the rights of its capital
stock or the character of its business.
4:1:13 No Issuance, Sale, or Purchase of Securities.
Except as contemplated by this Agreement, not issue or sell, or issue options
or rights to subscribe to, or enter into any contract or commitment to issue
or sell (upon conversion or otherwise), any shares of its capital stock, or
subdivide or in any way reclassify any shares of its capital stock, or
acquire, or agree to acquire, any shares of its capital stock.
4:1:14 Prohibition of Dividends.
Not declare or pay any dividend on shares of its capital stock or make any
other distribution of assets to the holders thereof.
4:1:15 Notice of Material Developments.
Promptly notify OAK BROOK in writing of any material adverse change in, or
any changes which in the aggregate would likely result in a material adverse
change in, the business, properties,condition (financial or otherwise) or
results of operations of ALPHA FIBRE, whether or not occurring in the usual
and ordinary course of its business, but only to the extent ALPHA FIBRE has
actual knowledge of any such changes.
4:2 Agreements of OAK BROOK.
OAK BROOK agrees that from the date hereof to the Effective Date, it will:
4:2:1 Corporate Approvals.
Call and hold a meeting of its shareholders to approve the Transaction
contemplated herein, and its board of directors for the purpose of
authorizing and obtaining the consent of OAK BROOK as sole stockholder of
to this Agreement and the merger contemplated hereby.
4:2:2 Maintenance of Present Business.
Except as contemplated by this Agreement, operate its business and the
businesses of its subsidiaries only in the usual, regular, and ordinary
manner so as to maintain the goodwill they now enjoy and,to the extent
<PAGE>
consistent with such operation, use all reasonable efforts to preserve
intact their present business organization, keep available the services of
their present officers and employees, and preserve their relationships with
customers, suppliers, jobbers, distributors, and others having business
dealings with them.
4:2:3 Maintenance of Books and Records.
Maintain the books of account and records of OAK BROOK and each of its
subsidiaries in the usual,regular, and ordinary manner, in accordance with
generally accepted accounting principles applied on a consistent basis.
4:2:4 Compliance with Law.
Continue, and cause its subsidiaries to continue, to conduct its and their
activities in a manner consistent with OAK BROOK's current understanding of
the laws applicable to said entities, unless and until OAK BROOK receives
written notice from a Government Entity that said entities are not in
compliance with a particular law or laws, at which time OAK BROOK will cause
said entity or entities to comply with such law or laws.
4:2:5 Inspection.
Allow ALPHA FIBRE and its directors officers and authorized representatives,
during normal business hours, to inspect its and each of its subsidiaries'
records and to consult with its and each of its subsidiaries' officers,
employees, attorneys, and agents for the purpose of determining the accuracy
of the representations and warranties made, and the compliance with covenants
contained,in this Agreement. ALPHA FIBRE agrees that it and its officers and
representatives shall hold all data and information obtained with respect to
the other parties hereto in strict confidence, and each further agrees that
it will not use such data or information or disclose the same to others,
except to the extent such data or information either is, or becomes,
published or a matter of public knowledge. In the event of a breach or
threatened breach by ALPHA FIBRE or its officers or representatives of
the provisions of this Section, OAK BROOK shall be entitled, in addition to
any other available remedy, to an injunction restraining any disclosure by
ALPHA FIBRE or its officers or representatives of any of such confidential
information.
4:2:6 Prohibition of Certain Contracts.
Give prompt written notice to ALPHA FIBRE of any material contracts of OAK
BROOK or any of its subsidiaries, except those entered into in the ordinary
course of business.
<PAGE>
In any event, OAK BROOK shall promptly give written notice to ALPHA FIBRE of any
stock or asset acquisition by OAK BROOK or any of its subsidiaries.
4:2:7 Prohibition of Loans.
Give prompt written notice to ALPHA FIBRE of any borrowings of OAK BROOK or
any of its subsidiaries, except those made in the usual and ordinary course of
business.
4:2:8 Disposal of Assets.
Give prompt written notice to ALPHA FIBRE of any sale, disposal of, or
Encumbrance on, any property or assets of OAK BROOK or any of its
subsidiaries, except in the usual and ordinary course of business.
4:2:9 Maintenance of Insurance.
Keep in full force and effect present insurance policies or other comparable
coverage on all of the assets of OAK BROOK and all of its subsidiaries.
4:2:10 No Amendments to Articles of Incorporation.
Not amend its Articles of Incorporation, or merge into any other corporation.
4:2:11 Notice of Material Developments.
Promptly notify ALPHA FIBRE in writing of any material adverse change in, or
any changes which in the aggregate would likely result in a material adverse
change in, the business, properties, condition (financial or otherwise),
results of operations or prospects of OAK BROOK or any of its subsidiaries,
whether or not occurring in the usual and ordinary course of business, but
only to the extent OAK BROOK or any of such subsidiaries has actual knowledge
of any such changes.
4:2:12 Performance of Contracts.
Perform and/or cause to be performed all material obligations of OAK BROOK or
any of its subsidiaries under agreements relating to or affecting their
respective assets, properties or rights.
ARTICLE V
ADDITIONAL COVENANTS OF THE PARTIES
<PAGE>
5:1 Filings and Consents.
As promptly as practicable after the execution of this Agreement, each party
to this Agreement (a)shall make all filings (if any) and give all notices (if
any) required to be made and given by such party in connection with the ALPHA
FIBRE Merger and the other transactions contemplated by this Agreement,
including, but not limited to, the Merger of OAK BROOK and JOVUS, LTD., a St.
Vincent corporation, and (b) shall use all commercially reasonable efforts to
obtain all Consents (if any) required to be obtained (pursuant to any
applicable Legal Requirement or Contract, or otherwise) by such party in
connection with the ALPHA FIBRE Merger and the other transactions
contemplated by this Agreement, other than those Consents identified on
Section 2.25 of the Disclosure Schedule. ALPHA FIBRE shall (upon request)
promptly deliver to OAK BROOK a copy of each such filing made, each such
notice given and each such Consent obtained by ALPHA FIBRE during the Pre
-Closing Period.
5:2 Public Announcements.
After the date hereof, (a) ALPHA FIBRE shall not (and ALPHA FIBRE shall not
permit any of its Representatives to) issue any press release or make any
public statement regarding this Agreement or the Merger, or regarding any of
the other transactions contemplated by this Agreement, without OAK BROOK's
prior written consent, and (b) OAK BROOK will use reasonable efforts to consult
with ALPHA FIBRE prior to issuing any press release or making any public
statement regarding the Merger.
5:3 Best Efforts.
During the Pre-Closing Period, OAK BROOK, and ALPHA FIBRE shall use their
best efforts to cause the conditions set forth in Section 6 to be satisfied
on a timely basis.
5:4 Employment and Consulting Agreements.
Omitted
5:5 FIRPTA Matters.
At the Closing, (a) ALPHA FIBRE shall deliver to OAK BROOK a statement (in
such form as may be reasonably requested by counsel to OAK BROOK) conforming
to the requirements of Section 1.897 - 2(h)(1)(i) of the United States
Treasury Regulations, and (b) ALPHA FIBRE shall deliver to the IRS the
notification required under Section 1.897 - 2(h)(2) of the United States
Treasury Regulations.
<PAGE>
5:6 Investment Representation Letter.
At the Closing, each of the ALPHA FIBRE Shareholders shall execute and
deliver to ALPHA FIBRE an investment representation letter in the form
attached hereto at Appendix III (an "Investment Representation Letter").
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF
OAK BROOK, AND ALPHA FIBRE
The obligations of OAK BROOK, and ALPHA FIBRE to effect the ALPHA FIBRE
Merger and otherwise consummate the transactions contemplated by this
Agreement are subject to the satisfaction, at or prior to the Closing, of
each of the following conditions:
6:1 Accuracy of Representations.
Each of the representations and warranties made by OAK BROOK, and ALPHA
FIBRE in this Agreement and in each of the Transaction Documents and
instruments delivered to OAK BROOK, and ALPHA FIBRE in connection with the
transactions contemplated by this Agreement shall have been accurate in all
material respects as of the date of this Agreement (without giving effect to any
Material Adverse Effect or other materiality qualifications, or any similar
qualifications, contained or incorporated directly or indirectly in such
representations and warranties), and shall be accurate in all material
respects as of the Closing Date as if made at the Closing Date (without
giving effect to any update to the Disclosure Schedule, and without giving
effect to any Material Adverse Effect or other materiality qualifications, or
any similar qualifications, contained or incorporated directly or indirectly
in such representations and warranties).
6:2 Performance of Covenants.
All of the covenants and obligations that OAK BROOK, and ALPHA FIBRE are
required to comply with or to perform at or prior to the Closing shall have
been complied with and performed in all respects.
6:3 Consents.
All Consents required to be obtained in connection with the ALPHA FIBRE
Merger and the other transactions contemplated by this Agreement (other than
the Consents identified in Part 2.25 of the Disclosure Schedule) shall have
been obtained and shall be in full force and effect.
<PAGE>
6:4 Agreements and Documents.
OAK BROOK and ALPHA FIBRE shall have received the following agreements and
documents, each of which will be in full force and effect as of the Effective
Date:
(i) Articles of Merger
(ii) a Disclosure Schedule executed by OAK BROOK and ALPHA FIBRE;
(iii)Investment Representation Letters executed by each of
the ALPHA FIBRE Shareholders;
(iv) Legal Opinions of Nadeau & Simmons, P.C. and _________________
_____ dated as of the Closing Date, outstanding in the forms
attached hereto at Appendix;
(v) a certificate executed by both parties and containing the
representation and warranty of each party that each of the
representations and warranties set forth in Section 2 and
3 is accurate in all respects as of the Closing Date as if made on
the Closing Date and that the conditions set forth in Section 6
have been duly satisfied (the "Closing Certificate"); and
(vi) written resignations of all officers and directors of OAK
BROOK, effective as of the Effective Date.
6:5 FIRPTA Compliance.
ALPHA FIBRE shall have filed with the IRS the notification referred to in
Section 5.5(b).
6:6 No Restraints.
No temporary restraining order, preliminary or permanent injunction or other
order preventing the consummation of the ALPHA FIBRE Merger shall have been
issued by any court of competent jurisdiction and remain in effect, and there
shall not be any Legal Requirement enacted or deemed applicable to the ALPHA
FIBRE Merger that makes consummation of the ALPHA FIBRE Merger illegal.
6:7 No Legal Proceedings.
No Person shall have commenced or threatened to commence any Legal Proceeding
challenging or seeking the recovery of a material amount of damages in
connection with the ALPHA FIBRE Merger or seeking to prohibit or limit the
exercise by OAK BROOK of any material right pertaining to its ownership of
the assets of ALPHA FIBRE.
<PAGE>
6:8 Employees.
No more than one of the individuals identified on Appendix X shall have
ceased to be employed by, or expressed an intention to terminate their
employment with, ALPHA FIBRE.
ARTICLE VII
TERMINATION
7:1 Termination Events.
This Agreement may be terminated prior to the Closing:
(a) by OAK BROOK if OAK BROOK reasonably determines that the timely
satisfaction of any condition set forth in Section 6 has become impossible
(other than as a result of any failure on the part of OAK BROOK to comply
with or perform any covenant or obligation of OAK BROOK set forth in this
Agreement);
(b) by ALPHA FIBRE if ALPHA FIBRE reasonably determines that the timely
satisfaction of any condition set forth in Section 6 has become impossible
(other than as a result of any failure on the part of ALPHA FIBRE to comply
with or perform any covenant or obligation set forth in this Agreement or in
any other agreement or instrument delivered to OAK BROOK);
(c) by OAK BROOK at or after the Scheduled Closing Time if any condition set
forth in Section 6 has not been satisfied by the Scheduled Closing Time;
(d) by ALPHA FIBRE at or after the Scheduled Closing Time if any condition
set forth in Section 6 has not been satisfied by the Scheduled Closing Time;
(e) by OAK BROOK if the Closing has not taken place on or before (other
than as a result of any failure on the part of OAK BROOK to comply with or
perform any covenant or obligation of OAK BROOK set forth in this Agreement);
(f) by ALPHA FIBRE if the Closing has not taken place on or before August
31, 2000 (other than as a result of the failure on the part of ALPHA FIBRE
to comply with or perform any covenant or obligation set forth in this
Agreement or in any other agreement or instrument delivered to OAK BROOK); or
(g) by the mutual consent of OAK BROOK and ALPHA FIBRE.
<PAGE>
7:2 Termination Procedures.
If OAK BROOK wishes to terminate this Agreement pursuant to Section 7:1(a),
Section 7:1(c) or Section 7:1(e), OAK BROOK shall deliver to ALPHA FIBRE a
written notice stating that OAK BROOK is terminating this Agreement and
setting forth a brief description of the basis on which OAK BROOK is
terminating this Agreement. If ALPHA FIBRE wishes to terminate this
Agreement pursuant to Section 7:1(b), Section 7:1(d) or Section 7:1(f), ALPHA
FIBRE shall deliver to OAK BROOK a written notice stating that ALPHA FIBRE is
terminating this Agreement and setting forth a brief description of the basis
on which ALPHA FIBRE is terminating this Agreement.
7:3 Effect of Termination.
If this Agreement is terminated pursuant to Section 7:1, all further
obligations of the parties under this Agreement shall terminate; provided,
however, that: (a) neither ALPHA FIBRE nor OAK BROOK shall be relieved of any
obligation or liability arising from any prior breach by such party of any
provision of this Agreement; (b) the parties shall, in all events, remain
bound by and continue to be subject to the provisions set forth in Section 9;
and (c) OAK BROOK and ALPHA FIBRE shall, in all events, remain bound by and
continue to be subject to Section 5:2.
ARTICLE VIII
INDEMNIFICATION, ETC.
8:1 Survival of Representations, Etc.
(a) The representations and warranties made by OAK BROOK, and ALPHA FIBRE
(including the representations and warranties set forth in Sections 2 and 3,
shall survive the Effective Date for a period of one (1) year, provided,
however, that if, at any time prior to the first anniversary of the Closing
Date, any Indemnitee (acting in good faith) delivers to either party a
written notice alleging the existence of an inaccuracy in or a breach of any
of the representations and warranties made by either party (and setting forth
in reasonable detail the basis for such Indemnitee's belief that such an
inaccuracy or breach may exist) and asserting a claim for recovery under
Section 8.2 based on such alleged inaccuracy or breach, then the claim
asserted in such notice shall survive the first anniversary of the Closing
until such time as such claim is fully and finally resolved. Notwithstanding
the foregoing, the representations and warranties set forth in Section 2.14
shall survive until the expiration of the applicable statutes of limitations,
including extensions thereof.
<PAGE>
(b) The representations, warranties, covenants and obligations of OAK BROOK,
and ALPHA FIBRE, and the rights and remedies that may be exercised by either
party, shall not be limited or otherwise affected by or as a result of any
information furnished to, or any investigation made by or knowledge of
either party or any of their Representatives.
(c) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made
by OAK BROOK, or ALPHA FIBRE in this Agreement.
8:2 Cross Indemnification.
From and after the Effective Time (but subject to Section 8.1(a)), OAK BROOK
and the and ALPHA FIBRE shall hold harmless and indemnify each other from and
against, and shall compensate and reimburse the other party for, any Damages
which are directly or indirectly suffered or incurred by either party or to
which either party may otherwise become subject (regardless of whether or
not such Damages relate to any third-party claim) and which arise from or as
a result of, or are directly or indirectly connected with: (i) any
inaccuracy in or breach of any representation or warranty set forth in
Sections 2 or 3 (without giving effect to any Material Adverse Effect or other
materiality qualification or any similar qualification contained or
incorporated directly or indirectly in such representation or warranty, but
giving effect to any update to the Disclosure Schedule delivered by OAK
BROOK and ALPHA FIBRE prior to the Closing); (ii) any breach of any covenant
or obligation of OAK BROOK, or ALPHA FIBRE (including the covenants set
forth in Sections 4 and 5); or (iii) any Legal Proceeding relating to any
inaccuracy or breach of the type referred to in clause "(i)" or "(ii)" above
(including any Legal Proceeding commenced by any Indemnitee for the purpose
of enforcing any of its rights under this Section 8).
8:3 Threshold; Ceiling.
(a) OAK BROOK, or ALPHA FIBRE shall not be required to make any
indemnification payment pursuant to Section 8.2(a) for any inaccuracy in or
breach of any of their representations and warranties set forth in Sections 2
and 3 until such time as the total amount of all Damages (including the
Damages arising from such inaccuracy or breach and all other Damages arising
from any other inaccuracies in or breaches of any representations or
warranties) that have been directly or indirectly suffered or incurred by the
other party, exceeds $100,000 in the aggregate. (If the total amount of such
Damages exceeds $100,000, then the Indemnitee shall be entitled to be
indemnified against and compensated and reimbursed for all of such Damages,
including claims for Damages included in the initial $100,000.
<PAGE>
8:4 Satisfaction of Indemnification Claim.
In the event either party had any liability (for indemnification or
otherwise) to the other party under this Section 8, the indemnifying party
shall satisfy such liability first, by delivering to such Indemnitee the
number of shares of OAK BROOK determined by dividing (a) the aggregate dollar
amount of such liability by (b) the average closing price of OAK BROOK as
reported for the ten trading days preceding the date such liability is
satisfied, and second, to the extent shares of OAK BROOK are not available to
satisfy in full such liability, then such difference in cash.
8:5 No Contribution.
OAK BROOK, and ALPHA FIBRE waive, acknowledge and agree that they shall not
have and shall not exercise or assert (or attempt to exercise or assert), any
right of contribution, right of indemnity or other right or remedy against
each other in connection with any third party indemnification obligation or
any other liability to which either party may become subject under or
in connection with this Agreement.
8:6 Interest.
Any party who is required to hold harmless, indemnify, compensate or
reimburse any Indemnitee pursuant to this Section 8 with respect to any
Damages shall also be liable to such Indemnitee for interest on the amount of
such Damages (for the period commencing as of the date on which indemnifying
party first received notice of a claim for recovery by such Indemnitee and
ending on the date on which the liability of such indemnifying party to such
Indemnitee is fully satisfied by such indemnifying party) at a floating rate
equal to the rate of interest publicly announced by Bank of America, N.T. &
S.A. from time to time as its prime, base or reference rate.
8:7 Defense of Third Party Claims.
In the event of the assertion or commencement by any Person of any claim or
Legal Proceeding (whether against OAK BROOK, or ALPHA FIBRE) with respect to
which either party may become obligated to hold harmless, indemnify,
compensate or reimburse any third party Indemnitee pursuant to this Section
8, such party shall have the right, at its election,to proceed with the
defense of such claim or Legal Proceeding on its own.
<PAGE>
ARTICLE IX
MISCELLANEOUS PROVISIONS
9:1 Further Assurances.
Each party hereto shall execute and cause to be delivered to each other party
hereto such instruments and other documents, and shall take such other actions,
as such other party may reasonably request(prior to, at or after the Closing)
for the purpose of carrying out or evidencing any of the transactions
contemplated by this Agreement.
9:2 Fees and Expenses.
If the ALPHA FIBRE Merger is not consummated for any reason whatsoever, each
party to this Agreement shall bear and pay all fees, costs and expenses
(including legal fees and accounting fees) ("Fees and Expenses") that have
been incurred or that are incurred by such party in connection with the
transactions contemplated by this Agreement. If the ALPHA FIBRE Merger is
consummated,ALPHA FIBRE shall pay all Fees and Expenses of OAK BROOK.
9:3 Attorneys' Fees.
If any action or proceeding relating to this Agreement or the enforcement of
any provision of this Agreement is brought against any party hereto, the
prevailing party shall be entitled to recover reasonable attorneys' fees,
costs and disbursements (in addition to any other relief to which the
prevailing party may be entitled).
9:4 Notices.
All notices and other communications required or permitted under this
Agreement and the transactions contemplated hereby shall be in writing and
shall be deemed to have been duly given,made and received on the date when
delivered by hand delivery with receipt acknowledged, or upon the next
Business Day following receipt of facsimile transmission, or upon the fifth
day after deposit in the United States mail, registered or certified with
postage prepaid, return receipt requested, addressed as set forth below:
(a) If to OAK BROOK:
1250 Turks Head Building
Providence, RI 02903
Attention: Mark T. Thatcher
Telephone: 401-272-5800
Facsimile: 401-272-5858
with a copy (not constituting notice) to:
Nadeau & Simmons, P.C.
1250 Turks Head Building
Providence, RI 02903
<PAGE>
Attention: Adam S. Clavell, Esq.
Telephone: 401-272-5800
Facsimile:
401-272-5858
(b) If to ALPHA FIBRE:
801 Falmouth Street
Thousand Oaks, CA 91362
Attention: Deborah Kern
Telephone: (805) 497-8900
Facsimile: (805) 497-6689
with a copy (not constituting notice) to:
Goldstein & Company
420128 4th Avenue South
Saskatoon, SK S7K178
Attention:
James Scharfstein, Esq.
Telephone:
(306) 653-2838
Facsimile:
(306) 652-4747
9:5 Confidentiality.
Without limiting the generality of anything contained in Section 5.2, on and
at all times after the Closing Date, each party shall keep confidential, and
shall not use or disclose to any other Person, any non-public document or
other non-public information in such party's possession that relates to
the business of ALPHA FIBRE or OAK BROOK.
9:6 Time of the Essence.
Time is of the essence of this Agreement.
9:7 Headings.
The bolded headings contained in this Agreement are for convenience of
reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of
this Agreement.
<PAGE>
9:8 Counterparts.
This Agreement may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall
constitute one agreement.
9:9 Governing Law.
This Agreement shall be construed in accordance with, and governed in all
respects by, the internal laws of the State of Colorado and (without giving
effect to principles of conflicts of laws).
9:10 Successors and Assigns.
The rights and obligations of OAK BROOK, or ALPHA FIBRE may not be assigned
without the prior written consent of both parties. Subject to the foregoing,
the provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs,personal
representatives, successors and assigns.
9:11 Remedies Cumulative; Specific Performance.
The rights and remedies of the parties hereto shall be cumulative (and not
alternative). The parties to this Agreement agree that, in the event of and
breach or threatened breach by any party to this Agreement of any covenant,
obligation or other provision set forth in this Agreement for the benefit
of any other party to this Agreement, such other party shall be entitled (in
addition to any other remedy that may be available to it) to (a) a decree or
order of specific performance or mandamus to enforce the observance and
performance of such covenant, obligation or other provision, and (b) an
injunction restraining such breach or threatened breach.
9:12 Waiver.
(a) No failure on the part of any Person to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or
remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy.
(b) No Person shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have
any effect except in the specific instance in which it is given.
<PAGE>
9:13 Amendments.
This Agreement may not be amended, modified, altered or supplemented other
than by means of a written instrument duly executed and delivered on behalf
of all of the parties hereto.
9:14 Severability.
In the event that any provision of this Agreement, or the application of any
such provision to any Person or set of circumstances, shall be determined to
be invalid, unlawful, void or unenforceable to any extent, the remainder of
this Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or otherwise affected
and shall continue to be valid and enforceable to the fullest extent
permitted by law.
9:15 Entire Agreement.
This Agreement and the other agreements referred to herein set forth the
entire understanding of the parties hereto relating to the subject matter
hereof and thereof and supersede all prior agreements and understandings
among or between any of the parties relating to the subject matter hereof and
thereof.
9:16 Construction.
(a) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender
shall include the masculine and neuter genders; and the neuter gender shall
include the masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this Agreement to
"Sections" and "Appendix" are intended to refer to Sections of this Agreement
and Appendices to this Agreement.
IN WITNESS WHEREOF, OAK BROOK and ALPHA FIBRE have signed this Agreement as
of the date first written above.
<PAGE>
OAK BROOK CORPORATION
a Colorado Corporation
By: _____________________________________
Mark T. Thatcher, President
ALPHA FIBRE MERGER, INC.
a Corporation
By: _____________________________________
Deborah Kern, President
<PAGE>
Exhibit A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
"Acquisition Transaction" means any transaction involving:
(a) the sale, license, disposition or acquisition of all or a
material portion OAK BROOK or ALPHA FIBRE's business or assets;
(b) the issuance, disposition or acquisition of (i) any
capital stock or other equity security of OAK BROOK or ALPHA
FIBRE, (ii) any option, call, warrant or right (whether or not
immediately exercisable) to acquire any capital stock
or other equity security of OAK BROOK or ALPHA FIBRE, or (iii)
any security, instrument or obligation that is or may become
convertible into or exchangeable for any capital stock or
other equity security of OAK BROOK or ALPHA FIBRE; or (c)
any merger, consolidation, business combination,
reorganization or similar transaction involving OAK BROOK or
ALPHA FIBRE.
"Affiliate" means, with respect to any specified Person, any other
Person in which the specified Person has a direct or indirect interest
(except through ownership of less than 5% of the outstanding shares of
any entity whose securities are listed on a national securities
exchange or traded in the national over-the-counter market).
"Agreement" shall have the meaning specified in the preamble to the
Agreement.
"OAK BROOK" shall have the meaning specified in the preamble to the
Agreement.
"OAK BROOK Common Stock" shall have the meaning specified in Section
1:7:2(i) of the Agreement.
"OAK BROOK SEC Documents" shall have the meaning specified in Section
3:1:5(a) of the Agreement.
<PAGE>
"Balance Sheet" shall have the meaning specified in Section 2:1:7 of the
Agreement.
"Business Day" means a day, other than a Saturday or a Sunday, or a
federal holiday upon which offices of the federal government are not
open for business.
"Closing" and "Closing Date" shall have the meanings specified in
Section 1:1:3 of the Agreement.
"Code" shall have the meaning specified in the recitals to the Agreement.
"ALPHA FIBRE" shall have the meaning specified in the preamble to the
Agreement.
"ALPHA FIBRE Common Stock" shall have the meaning specified in the
recitals to the Agreement.
"ALPHA FIBRE Contract" means any Contract: (a) to which ALPHA FIBRE is
a party; (b) by which ALPHA FIBRE or any of its assets is or may become
bound or under which ALPHA FIBRE has, or may become subject to, any
obligation; or (c) under which ALPHA FIBRE has or may acquire any right
or interest.
"ALPHA FIBRE Financials" shall have the meaning specified in Section
2:1:7 of the Agreement.
"ALPHA FIBRE Proprietary Asset" means any Proprietary Asset owned by or
licensed to ALPHA FIBRE or otherwise used by ALPHA FIBRE.
"ALPHA FIBRE Returns" shall have the meaning specified in Section 2:1:7
of the Agreement.
"ALPHA FIBRE Stock Certificate" shall have the meaning specified in
Section 1:8 of the Agreement.
"Consent" means any approval, consent, ratification, permission, waiver
or authorization (including any Governmental Authorization).
"Contract" means any written, oral or other agreement, contract,
subcontract, lease, understanding, instrument, note, warranty, insurance
policy, benefit plan or legally binding commitment or undertaking of any
nature.
"Damages" shall include any loss, damage, injury, decline in value, lost
opportunity, liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including reasonable attorneys' fees), charge,
cost (including costs of investigation) or expense of any nature.
<PAGE>
"Disclosure Schedule" means the schedule (dated as of the date of the
Agreement) delivered to OAK BROOK on behalf of ALPHA FIBRE and the
Stockholders.
"Effective Date" shall have the meaning specified in Section 1:1:3 of
the Agreement.
"Employment Agreements" shall have the meaning specified in Section
2:1:9:7 of the Agreement.
"Encumbrance" means any lien, pledge, hypothecation, charge, mortgage,
security interest, encumbrance, claim, infringement, interference,
option, right of first refusal, preemptive right, community property
interest or restriction of any nature (including any restriction on
the voting of any security, any restriction on the transfer of any
security or other asset, any restriction on the receipt of any income
derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other
attribute of ownership of any asset).
"Entity" means any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, ALPHA FIBRE (including any limited
liability ALPHA FIBRE or joint stock ALPHA FIBRE), firm or other
enterprise, association, organization or entity.
"Environmental Law" means any federal, state, local or foreign Legal
Requirement relating to pollution or protection of human health or the
environment (including ambient air, surface water, ground water, land
surface or subsurface strata), including any law or regulation relating
to emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Materials of Environmental Concern.
"ERISA" shall have the meaning specified in Section 2:1:19 of the
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fees and Expenses" shall have the meaning specified in Section 9:2 of
the Agreement.
"First Anniversary" shall have the meaning specified in Section 8:1 of
the Agreement.
"GAAP" means generally accepted accounting principles.
<PAGE>
"Governmental Authorization" means any: (a) permit, license,
certificate, franchise, permission, clearance, registration,
qualification or authorization issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or pursuant
to any Legal Requirement; or (b) right under any Contract with any
Governmental Body.
"Governmental Body" means any: (a) nation, state, commonwealth,
province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal,
foreign or other government; or (c) governmental or quasi-governmental
authority of any nature (including any governmental division,
department, agency, commission, instrumentality, official, organization,
unit, body or Entity and any court or other tribunal).
"Indemnitees" means the following Persons: (a) OAK BROOK or ALPHA FIBRE;
(b) OAK BROOK or ALPHA FIBRE=s current and future affiliates; (c) the
respective Representatives of the Persons referred to in clauses "(a)"
and "(b)" above; and (d) the respective successors and assigns of the
Persons referred to in clauses "(a)", "(b)" and "(c)" above; provided,
however, that the Stockholders shall not be deemed to be "Indemnitees."
"Investment Representation Letter" shall have the meaning specified in
Section 5.6 of the Agreement.
"IRS" means the Internal Revenue Service.
"Legal Proceeding" means any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative
or appellate proceeding), hearing, inquiry, audit, examination or
investigation commenced, brought, conducted or heard by or before,
or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
"Legal Requirement" means any federal, state, local, municipal, foreign
or other law, statute, constitution, principle of common law,
resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented
or otherwise put into effect by or under the authority of any
Governmental Body.
"Material Adverse Effect" means a violation or other matter will be
deemed to have "Material Adverse Effect" on ALPHA FIBRE if such
violation or other matter (considered together with all other matters
that would constitute exceptions to the representations and warranties
set forth in the Agreement but for the presence of "Material Adverse
Effect" or other materiality qualifications, or any similar
qualifications, in such representations and warranties) would have a
material adverse effect on ALPHA FIBRE's business, condition,
assets, liabilities, operations, financial performance or prospects.
<PAGE>
"Material Contracts" shall have the meaning specified in Section 2:1:9:9
of the Agreement.
"Materials of Environmental Concern" means chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products
and any other substance that is now or hereafter regulated by any
Environmental Law or that is otherwise a danger to health, reproduction
or the environment.
"Merger" shall have the meaning specified in the recitals to the Agreement.
"Person" means any individual, Entity or Governmental Body.
"Pre-Closing Period" shall have the meaning specified in Section 5:1 of
the Agreement.
"Proprietary Asset" means any: (a) patent, patent application, trademark
(whether registered or unregistered), trademark application, trade name,
fictitious business name, service mark (whether registered or
unregistered), service mark application, copyright(whether registered or
unregistered), copyright application, maskwork, maskwork application,
trade secret, know-how, client list, franchise, system, computer software,
computer program, invention, design, blueprint, engineering drawing,
proprietary product technology, proprietary right or other intellectual
property right or intangible asset; or (b) right to use or exploit any of
the foregoing.
"Registration Statement" shall have the meaning specified in Section
3:1:5 of the Agreement.
"Related Party" means: (i) the Stockholders; (ii) each individual who
is, or who has at any time since October 15, 1997 been, an officer of
ALPHA FIBRE; (iii) each member of the immediate family of each of the
individuals referred to in clauses "(i)" and "(ii)" above; and
(iv) any trust or other entity (other than ALPHA FIBRE) in which any one
of the individuals referred to in clauses "(i)", "(ii)" and "(iii)"
above holds (or in which more than one of such individuals collectively
hold), beneficially or otherwise, a material voting, proprietary or
equity interest).
"Representatives" means officers, directors, employees, agents,
attorneys, accountants, advisors and representatives.
"Scheduled Closing Time" shall have the meaning specified in Section
7:1(c) of the Agreement.
"SEC" means the United States Securities and Exchange Commission.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" shall have the meaning specified in Section 1:6:1 of the
Agreement.
"Stockholders" shall have the meaning specified in the preamble to the
Agreement.
"Tax" means any tax (including any income tax, franchise tax, capital
gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax,
business tax, withholding tax or payroll tax), levy, assessment, tariff,
duty (including any customs duty), deficiency or fee, and any related
charge or amount (including any fine, penalty or interest), imposed,
assessed or collected by or under the authority of any Governmental Body.
"Tax Return" means any return (including any information return),
report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any
Legal Requirement relating to any Tax.
<PAGE>
AGREEMENT AND PLAN OF MERGER
AND REORGANIZATION
among:
OAK BROOK CAPITAL III, INC.,
a Colorado corporation;
ALPHA FIBER MERGER CORPORATION,
a corporation;
___________________________
Dated as of June __, 2000
___________________________
EXHIBITS
Exhibit Document
(I) Articles of Merger
(II) a Disclosure Schedule to be executed by OAK BROOK
and ALPHA FIBRE; at closing
(III) Investment Representation Letters to be executed by
each of the ALPHA FIBRE Shareholders; at closing
(IV) Legal Opinions of Nadeau & Simmons, P.C. and _______
______________ dated as of the Closing Date,
substantially in the forms attached hereto at
Exhibit I;
(V) Certificate of Board of Directors ALPHA FIBRE
FIBERS, INC.
(VI) Certificate of Board of Directors OAKBROOK CAPITAL
III, INC.
<PAGE>
Table of Contents
SECTION 1. Description of Transaction 1
1.1 Merger of ALPHA FIBRE into OAK BROOK 1
1.2 Effect of the Merger 1
1.3 Closing; Effective Time 1
1.4 Conversion of Shares 2
1.5 Piggy Back Registration Rights 4
1.6 Closing of ALPHA FIBRE's Transfer Books 5
1.7 Exchange of Certificates 6
1.8 Stockholder Approval; Dissenting Shares 7
1.10 Tax Consequences 7
1.11 Accounting Treatment 7
1.12 Further Action 7
SECTION 2. Representations and Warranties of ALPHA FIBRE 7
2.1 Due Organization; Good Standing; No Subsidiaries 8
<PAGE>
2.2 Certificate of Incorporation and Bylaws; Records 8
2.3 Capitalization; Title to Shares 8
2.4 Financial Statements 8
2.5 Absence of Changes 9
2.6 Title to Assets 10
2.7 Bank Accounts; Receivables 11
2.8 Equipment; Leasehold 11
2.9 Proprietary Assets 11
2.10 Contracts 13
2.11 Liabilities 15
2.12 Compliance with Legal Requirements 15
2.13 Governmental Authorizations 15
2.14 Tax Matters 15
2.15 Employee and Labor Matters; Benefit Plans 15
2.16 Environmental Matters 16
2.17 Insurance 18
2.18 Related Party Transactions 19
2.19 Legal Proceedings; Orders 19
2.20 Clients 19
2.21 Material Relationships 20
2.22 Sales Policies; Warranties 20
2.23 Brokers and Finders 20
2.24 Authority; Binding Nature of Agreement 20
2.25 Non-Contravention; Consents 20
2.26 Database Backup 21
2.27 Full Disclosure 21
<PAGE>
3. Representations and Warranties of OAK BROOK 21
3.1 SEC Filings; Financial Statements 21
3.2 Authority; Binding Nature of Agreement 22
3.3 Valid Issuance 22
SECTION 4. Certain Covenants of ALPHA FIBRE and the
Stockholders 22
4.1 Access and Investigation 22
4.2 Operation of ALPHA FIBRE's Business 22
4.3 Notification; Updates to Disclosure Schedule 24
4.4 No Negotiation
SECTION 5. Additional Covenants of the Parties
5.1 Filings and Consents 25
5.2 Public Announcements 25
5.3 Best Efforts 25
5.4 Employment and Noncompetition Agreements 26
5.5 FIRPTA Matters 26
5.6 Release 26
5.7 Investment Representation Letter 26
5.8 Proprietary Information 26
SECTION 6. Conditions Precedent to Obligations of
OAK BROOK 27
6.1 Accuracy of Representations 27
6.2 Performance of Covenants 27
6.3 Consents 27
6.4 Agreements and Documents 27
<PAGE>
6.5 FIRPTA Compliance 28
6.6 No Restraints 28
6.7 No Legal Proceedings 28
6.8 Employees 28
6.9 Stockholder Approval 28
SECTION 7. Termination 29
7.1 Termination Events 29
7.2 Termination Procedures 30
7.3 Effect of Termination 30
7.4 Termination Fee 30
SECTION 8. Indemnification, Etc.
8.1 Survival of Representations, Etc. 30
8.2 Indemnification by Principal Stockholders 31
8.3 Threshold; Ceiling 31
8.4 Satisfaction of Indemnification Claim 32
8.5 No Contribution 32
8.6 Interest 32
8.7 Defense of Third Party Claims 32
8.8 Exercise of Remedies by Indemnitees Other Than
OAK BROOK
<PAGE>
SECTION 9. Miscellaneous Provisions 33
9.1 Stockholders' Agent 33
9.2 Further Assurances 33
9.3 Fees and Expenses 33
9.4 Attorneys' Fees 33
9.5 Notices 34
9.6 Confidentiality 35
9.7 Time of the Essence 35
9.8 Headings 35
9.9 Counterparts 35
9.10 Governing Law 35
9.11 Successors and Assigns 35
9.12 Remedies Cumulative; Specific Performance 35
9.13 Waiver 36
9.14 Amendments 36
9.15 Severability 36
9.16 Entire Agreement 36
9.17 Construction 36
An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of Contents
/Authorities. Deleting this break will cause Table of Contents/Authorities
headers and footers to appear on any pages following the Table of Contents
/Authorities.
