Fill and Sign the Mississippi Merger Form

MERGER AGREEMENT This Merger Agreement ("Agreement") dated as of       day of       , 20       is made by and among       , a Mississippi corporation (hereinafter referred to as "       "),       (hereinafter "Guarantors"),       a Mississippi corporation (hereinafter referred to as "       "),       , a Mississippi limited liability company (hereinafter referred to as "       "), and       and       (hereinafter sometimes collectively referred to as the "       "). RECITALS: (a)       is a corporation duly organized and validly existing under the laws of the State of Mississippi operating a pallet manufacturing and distribution business in the States of Mississippi and Tennessee. (b)       is a corporation duly organized and validly existing under the laws of the State of Mississippi, all issued and outstanding shares of which are owned by the       . (c)       is a limited liability company duly organized and validly existing under the laws of the State of Mississippi, having as its members the       . (d)       operates a       and a       located at       ,       , Mississippi (the "Facilities").       owns the Facilities and the real properties on which the Facilities are located, as described in Exhibit "A" attached hereto and incorporated herein by reference (the "Premises"). (e) The       desire to ofer and sell to       all of the shares of       owned by the       (the "National Stock") in consideration of stock and obligations of       so that       shall be merged into       as hereinafter set forth. (f)       desires to lease to       the Facilities and Premises as hereinafter set forth. (g) The respective boards of directors of       ,       and       deem it advisable to enter into this Agreement and have, by resolutions duly adopted, approved this Agreement. NOW, THEREFORE, in consideration of the premises and the representations, covenants and agreements herein contained, the parties hereto hereby agree as follows: ARTICLE I PLAN OF MERGER OF       INTO       SECTION 1.1. Merger .       shall be merged into       pursuant to the terms hereinafter set forth (the "Merger"). SECTION 1.2. Terms of Merger . The terms of the Merger are: (a)       shall be merged into       in accordance with the statutory procedure set forth in Miss. Code Ann. §79-4-11.01, et seq. (b)       shall be the surviving corporation and the corporate identity, existence, purposes, powers, franchises, rights and immunities of       shall continue unafected and unimpaired by the Merger. The single corporation which shall so survive the Merger is hereinafter sometimes called the "Surviving Corporation." The Articles of Incorporation and the By- Laws, each as heretofore amended, of       shall remain in efect, unaltered by the Articles of Incorporation and the By-Laws of the Surviving Corporation. A copy of the Articles of Incorporation and By-Laws of the Surviving Corporation are attached hereto as Exhibit 1.2(b). (c) The directors and ofcers of the Surviving Corporation shall be the duly qualifed and acting directors and ofcers of       immediately prior to the Efective Date of the Merger. (d) The corporate identity, existence, purposes, powers, franchises, rights and immunities of       shall be merged into       , and       shall be fully vested therewith. (e) The separate existence of       , except insofar as specifcally otherwise provided by law, shall cease at the Efective Date, whereupon       and       shall become a single corporation. (f) The name of the Surviving Corporation shall be       . (g) At the Efective Date, all of the outstanding common shares of       shall be converted into shares and obligations of       as hereinafter set forth. SECTION 1.3. Basis of Exchange . The manner and basis of converting the shares of       into shares and obligations of       shall be as follows: (a) The outstanding shares of       shall not be changed or converted as a result of the Merger, and following the Efective Date, all shares of       heretofore authorized shall be authorized shares of the Surviving Corporation, and all shares of       then outstanding shall remain outstanding, shall be fully paid and non-assessable by       , and shall be subject to all the provisions of this Plan of Merger. (b) At the Efective Date, the shares of       of which the       are the holders of record, upon surrender to       of one or more certifcates of such shares for cancellation, shall thereupon be exchanged and/or converted as follows: i. The       common shares of       owned by       shall be entitled to receive       shares of Common Stock of       and an interest in the Initial Note; ii. The       common shares of       owned by       shall be entitled to receive       shares of Common Stock of       and an interest in the Initial Note; iii. The       common shares of       owned by       shall be entitled to receive       shares of Common Stock of       and an interest in the Initial Note; iv. The       common shares of       owned by       shall be entitled to receive an interest in the Initial Note, an interest in the Cash Payment and an interest in the Promissory Note; v. The       common shares of       owned by       shall be entitled to receive an interest in the Initial Note, an interest in the Cash Payment and an interest in the Promissory Note; and, vi. The       common shares of       owned by       shall be entitled to receive an interest in the Initial Note, an interest in the Cash Payment and an interest in the Promissory Note. When used in this Agreement, "Common Stock" shall mean common shares of       . SECTION 1.4. Shareholders Approval . Upon approving this Agreement, the Board of Directors of       and of       , respectively, shall, by resolution, direct that this Plan of Merger and Articles of Merger be submitted, pursuant to statute to a vote at special meetings of shareholders of       and       , respectively, to be held on or before             , 20       . The form of the Articles of Merger is attached hereto as Exhibit 1.4. SECTION 1.5. Stock of Surviving Corporation . On the Efective Date of the Merger, the total amount of Common Stock of the Surviving Corporation to be authorized, and the number and manner by which the issued and outstanding shares of Common Stock is to be held, will be as follows: SHAREHOLDER NUMBER OF SHARES (%)             (       %)             (       %) SECTION 1.6. Assumption of Equipment Leases . Under the terms and subject to the conditions herein,       agrees to assume liability for the outstanding leases relating to       (       )       used by       in its business (the "Equipment Leases"). On the Efective Date,       shall pay       Dollars ($       ) (the "Equipment Lease Payment") to the holder of the Equipment Leases in order to obtain the release of the       as personal guarantors of the Equipment Leases. The Equipment Lease Payment shall be used to reduce the balance of payments owed with respect to the Equipment Leases. The parties agree that, for the purposes of this Agreement, the Equipment Leases liability being assumed by       after payment of the Equipment Lease Payment will be       Dollars ($       )(the "Equipment Leases Assumption"). SECTION 1.7. Inventory Valuation and Note . The parties agree and acknowledge that       is now and on the Efective Date will be possessed of certain inventories of raw materials, supplies, work-in-progress and fnished products (the "Inventory"). The parties agree that, for the purposes of this Agreement, the value of the Inventory as of the Efective Date is and will be       Dollars ($       ) (the "Inventory Value"). The Inventory Value shall be paid as follows: (a)       shall execute a Promissory Note to       , or to such persons or entities as it may designate, in the principal amount of the Inventory Value, bearing interest at the rate of       percent (       %) per annum from and after the Efective Date, with principal and interest payable in three consecutive equal monthly installments with the frst installment being due forty-fve (45) days after the Efective Date (the "Inventory Note"). The Inventory Note shall be in the form of Exhibit "1.7(a)" attached hereto. SECTION 1.8. Note to all       .       shall execute and deliver a promissory note payable to all of the       , or to such entity owned by them as they may designate, in the principal amount of       Dollars ($       ), bearing interest at the rate of       percent (       %) per annum, and payable in ten (10) consecutive equal monthly installments of $       each, with the frst installment being due thirty (30 days after the Efective Date (the "Initial Note"). The Initial Note shall be in the form of Exhibit "1.8" attached hereto. SECTION 1.9. Cash Payment and Promissory Notes to       ,       . (a) As used herein, the term "Transaction Event" means (i) a merger or consolidation of       with or into any individual, partnership, joint venture, corporation, trust, unincorporated organization or a government or any agency thereof, if either (a)       is not the surviving entity of such merger or consulation or (b) the ownership percentage of       would be reduced or extinguished as a result of such merger or consolidation; (ii) a sale or disposition of all or substantially all of the assets of       in a single transaction or a series of transactions, including any liquidation or dissolution of       ; (ii) a sale or other disposition of all or substantially of the capital stock of       in a single transaction or a series of transactions; or (iv) a public ofering and sale pursuant of one or more efective registration statements under the Securities Act of 1933, as amended, of at least 50% of the number of then outstanding shares of common stock of       ; (v) any stock split, reverse stock split, recapitalization, redemption, reorganization or other action which reduces or extinguishes the percentage of stock ownership of       in       . (b)       shall pay       , and       the sum of       Dollars ($       ) (the "Cash Payment"), which sum shall be paid by       as follows: i.       shall pay the sum of       and       Dollars ($       ) to       , on the Efective Date; and, ii.       shall pay the sum of       and       Dollars ($       ) to       , on the Efective Date; and, iii.       shall pay the sum of       -one and       Dollars ($       ) to       , on the Efective Date; and, iv.       shall pay the sum of       and       Dollars ($       ) to       , within thirty (30) days after the Efective Date; and, v.       shall pay the sum of       and       Dollars ($       ) to       , within thirty (30) days after the Efective Date; and. vi.       shall pay the sum of       and       Dollars ($       ) to       , within thirty (30) days after the Efective Date. The parties agree that if the amounts provided for in Section 1.9(c)(iv) through (vi) shall not be paid when due, said amounts shall bear interest at the Default Rate, as defned herein, from the Efective Date until paid in full. (c)       shall execute and deliver a promissory note to       in the principal sum of       and       Dollars ($       ), bearing interest at the initial rate of       percent (       %) per annum but providing for interest at the Default Rate should any default occur, and payable in sixty (60) equal monthly installments, with the frst installment due thirty (30) days after the Efective Date (the "Dan Note"). The       n Note shall be substantially in the form of Exhibit "1.8(d)" attached hereto. (d)       shall execute and deliver a promissory note to       in the principal sum of       and       Dollars ($       ), bearing interest at the initial rate of eight percent (8%) per annum but providing for interest at the Default Rate should any default occur, and payable in sixty (60) equal monthly installments, with the frst installment due thirty (30) days after the Efective Date (the "       Note"). The       Note shall be substantially in the form of collective Exhibit "1.8(e)" attached hereto. (e)       shall execute and deliver a promissory note to       in the principal sum of       and       Dollars ($       ), bearing interest at the initial rate of eight percent (8%) per annum but providing for interest at the Default Rate should any default occur, and payable in sixty (60) equal monthly installments, with the frst installment due thirty (30) days after the Efective Date (the "       Note"). The       Note shall be substantially in the form of collective Exhibit "1.8(f)" attached hereto. (f) If a Transaction Event shall occur prior to the date that the fnal payments are due under the       Note,       Note and       Note, or any of them, all principal and interest payable pursuant to each of said promissory notes shall be immediately due and payable. (g)       ' obligations under the       Note,       Note and       Note shall be secured by a blanket security interest, in favor of the holders of said promissory notes, in and all goods, inventory, receivables, equipment, machinery, furniture, fxtures, vehicles, chattel, chattel paper, after acquired property and intangibles owned by       , wherever located, including any proceeds, products, substitutions, or accessions in connection therewith, which security interest shall be subordinated to the security interest in favor of       .       shall execute all documents necessary to grant the holders such security interest, including a security agreement, in a form satisfactory to       . That Security Agreement shall include a provision allowing       to substitute collateral of equal or greater value for collateral that becomes outdated, in need of repair, or otherwise not useful to       . SECTION 1.10 Default Rate. SECTION 1.11. Earnest Money Deposit . The parties acknowledge that       has delivered unto the       the sum of       ($       ) as earnest money deposit (the "Deposit"). In the event the transactions in the Agreement close, the Deposit shall be applied and credited to the frst installment due under the Initial Note. However, if the transactions contemplated by this Agreement fail to close in the time and manner provided herein due to no fault of       , then the Deposit shall be immediately returned to       . SECTION 1.12. Excluded Assets . The parties acknowledge and agree that the following assets of       , which have been relected on the fnancial statements provided to       by       will be transferred to       prior to or on the Efective Date (the "Excluded Assets"): (a) Cash on hand on the Efective Date; (b) Accounts receivable existing prior to Efective date; (c) Refundable taxes, utility deposits and prorated prepaid insurance premiums; (d) Any future rebates arising out of favorable loss experience, prior to the Efective Date, which may accrue to       from insurance policies, including, without limitation,       's participation in a self-insured worker's compensation fund. (e) All real property owned by       , including, without limitation, the Premises and the Facilities; (f) All life insurance owned by       . SECTION 1.13. Efective Date . The Merger shall become efective upon fling of the Articles of Merger with the Secretary of State of Mississippi (the "Efective Date").       shall cause such articles to be so fled and recorded within 48 hours after this Plan of Merger shall have been approved by the shareholders of both       and       , as provided by statute. If at any time before the Articles of Merger have been so fled and recorded, either       or       shall notify the other, pursuant to the provisions of Section 1.11 hereof, of its election to cancel the Merger, this Plan of Merger shall be null and void and the Merger shall not be efective, and       shall not thereafter fle or record the such Articles of Merger. SECTION 1.14. Cancellation of Plan .       or       may, in their sole discretion, cancel this Plan of Merger and abandon the Merger at anytime prior to the Efective Date (?Time), by delivering written notice thereof to the other party if it shall appear at such time that any of the statements or representations made by the other party is untrue or inaccurate in any material respect, or that any of the conditions or undertakings set forth in this Agreement are not met or fulflled. SECTION 1.15. Reason for Merger . The directors of       and       believe that the combination of       's business with       ' business will result with better integrated as well as more diversifed operations.       's business will provide an important supplement to       ' activities in       manufacturing and sales.       's       will also be benefcial to       ' manufacturing operations. Another important reason for the Merger is the common interest of       and       in pallet manufacturing and sales. SECTION 1.16. Further Instruments . From time to time, as and when reasonably requested by the Surviving Corporation,       and the       shall execute deliver, or cause to be executed and delivered, all such other instruments, and will take or cause to be taken such further or other action as the Surviving Corporation may deem necessary or desirable in order to vest in and confrm to the Surviving Corporation title to and possession of all property, rights, privileges, powers and franchises and otherwise to carry out the intent and purposes of this Agreement. ARTICLE II OTHER TRANSACTIONS SECTION 2.1. Employment Agreements . At Efective Date,       and       shall execute agreements for employment of said individuals by       in the forms attached hereto as collective Exhibit "2.1" (hereinafter collectively the "Employment Agreements"). SECTION 2.2. Lease Agreement . At Efective Date,       and       shall execute an agreement for lease of the Facilities and Premises by       in the form attached hereto as Exhibit "2.2". SECTION 2.3. Lease Agreement . At Efective Date, all shareholders of       shall execute a Shareholders' Agreement in the form attached hereto as Exhibit "2.3". ARTICLE III REPRESENTATIONS AND WARRANTIES OF       AND THE             and the       , jointly and severally, hereby represent and warrant to       that as of the date of this Agreement and at the Efective Date: SECTION 3.1. Organization and Good Standing .       is a corporation duly organized, validly existing and in good standing under the laws of the State of Mississippi, and has full corporate power and authority to own and hold the properties and assets owned and leased by it, to conduct its business as presently conducted, and to carry out the transactions described in this Agreement. SECTION 3.2. Capitalization . All shares of       are owned by the       free and clear of all liens, claims and encumbrances, and there are no outstanding subscriptions, calls, commitments, warrants or options for the purchase of any capital stock or other securities of       or any securities convertible into or exchangeable for shares of capital stock or other securities of       . The aggregate number of shares that       is authorized to issue is       , consisting of       common shares with a par value $       per share, of which       shares are issued and outstanding as follows: SHAREHOLDER NUMBER HELD                                     SECTION 3.3. Authority .       has the requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by       's Board of Directors, and no other corporate proceedings on the part of       are necessary to authorize this Agreement and the transactions contemplated hereby, except as set forth herein. This Agreement has been duly executed and delivered by and constitutes a valid and binding agreement of       . SECTION 3.4. Non-Contravention .       is not subject to or obligated under any charter, by-law or contract provision, or any license, franchise or permit, or any order or decree, which would be breached or violated or in respect of which a right of acceleration would be created by its executing and carrying out this Agreement. SECTION 3.5. Absence of Undisclosed Liabilities . Except as and to the extent refected in Exhibit "3.5" attached hereto,       has no known liabilities, claims, suits or obligations and       is not subject to any pending action, order, injunction, judgment, litigation, proceeding, arbitration action, governmental audit or investigation, nor is       , or any of its directors or ofcers, or the       , or any of them, aware of any threatened action, litigation, proceeding, arbitration action, governmental audit or investigation. The       , jointly and severally, hereby agree to indemnify and hold harmless       and its afliates, directors, ofcers and shareholders from and against any and all costs, losses, liabilities, damages, claims or expenses (including reasonable attorney fees) incurred by       arising out of or resulting from any liability, claim or obligation not specifcally refected in Exhibit "3.5" attached hereto or otherwise expressly assumed by       herein. SECTION 3.6. Freedom from Encumbrance . Consummation of the transactions herein contemplated and the fulfllment of the terms of this Agreement will not confict with, or result in a breach of, any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of       pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which       or the       is a party or by which either of them may be bound or to which any of the assets is subject. SECTION 3.7. Merchantable Title .       has good, merchantable and insurable title to all the assets it owns or uses in its business or purports to own, including, without limitation, those refected in its books and records and in the fnancial statements and balance sheets provided by       to       . Except as and to the extent refected in Exhibit "3.7" attached hereto, none of such properties and assets of       are subject to any known mortgage, pledge, lien, charge, security interest, encumbrance, restriction, lease, license, easement, liability or adverse claim. SECTION 3.8. Business Activity of       . The sole business location of       is at       ,       , Mississippi and the sole business conducted by       is a       operation and a       facility. The       do not have an interest and are not involved in any other wooden pallet manufacturing and distribution business. SECTION 3.9. Compliance with Law . To the best knowledge of       and the       ,       has not violated and is in compliance with all laws, statutes, ordinances, regulations, rules and orders of any federal, state or local government and any other governmental department or agency, and any judgment, decision, decree or order of any court of governmental agency, department, or authority, including without limitation, environmental laws, relating to the assets of       , except where the violation or failure to comply, individually or in the aggregate, would not have a material adverse efect on       . Neither       nor the       has received any notice to the efect that, or otherwise been advised that,       is not in compliance with any such statutes, regulations, rules, judgments, decrees, orders, ordinances or other laws, and neither       nor the       has reason to anticipate that any existing circumstances are likely to result in violations of any of the foregoing which failure or violation could, in any one case or in the aggregate, have a material adverse efect on       . SECTION 3.10. No Agreements to Sell the Assets . Neither       nor the       has any commitment or legal obligation, absolute or contingent, to any other person or frm to, directly or indirectly, sell, assign, transfer or efect a sale of the property and assets of       or to enter into any agreement or cause the entering into of an agreement with respect to any of the foregoing. SECTION 3.11. Books and Records . None of the books, records and work papers of       which have been presented to       for review contain information which       or the       know to be untrue or materially incorrect or misleading. SECTION 3.12. Tax Matters . (a) To the best knowledge of       and the       , (i)       has duly and timely fled with the appropriate federal, state, local and other government agencies, all tax records and reports required to be fled; (ii) such returns and reports are accurate and complete, except for certain reports due on       , 20       , which will be fled by       on or before       , 20       ; and (iii)       has duly and timely paid in full or recorded adequate reserves for the payment of all taxes due with respect to its assets, income and operations for the fscal periods covered by such returns. For the purposes of this Agreement, the term "Tax" includes, without limitation, excise, income, franchise, real and personal property, sales, use, and employment taxes, assessments, defciencies, liabilities, ofsets by adjustments or credits, and all interest and penalties thereon, payable to federal, state, local or foreign tax authorities. To the best knowledge of       and the       ,       has made all withholdings of tax required to be made under all applicable federal, state and local tax regulations and such withholdings have either been paid to the respective government agencies or set aside in accounts for such purpose or accrued, reserved against and entered upon its books, as the case may be. (b)       has determined and, according to its calculations, fully paid or accrued its federal income tax liabilities for all fscal years prior to and including the fscal year ending             , 20       .       has not executed or fled with any taxing authority any writing having the efect of extending the period of assessment or collection of any taxes. With respect to the fscal year ended             , 20       ,       and the       are not aware of any tax liability other than that set forth in the records and books of       , or previously disclosed in writing to       . SECTION 3.13. Employment Matters . There are no material controversies pending or threatened between       and any of its employees. Without limiting the generality of any other representation, to the best knowledge of       and the       ,       has, and on the Efective Date will have, complied with all laws relating to the employment of labor, including any provisions thereof relating to wages, hours, collective bargaining and the payment of social security and similar taxes and benefts for employees and former employees, and       is not liable to any person or entity (including any governmental entity) for any arrears of wages, payments, taxes or penalties for failure to comply with any of the foregoing, or for any liability loss, claim or damage in connection with any employment beneft, pension, annuity, proft-sharing, retirement, deferred compensation, welfare, vacation or bonus plan, contract or arrangement. To the best knowledge of       and the       , none of the employees of       is a member of a labor union, and there is no organization efort currently being made or threatened involving any employee of       . On the Efective Date,       will not be a party to any employment contract which is not terminable at will. SECTION 3.14. Disclosure of Tangible Assets . To the extent reasonably feasible,       has heretofore delivered to       descriptions of all assets of       as of the date hereof. In the case of any asset leased by       , the disclosure also includes the current name and address of the Lessor and a copy of the lease agreement. SECTION 3.15. Unaudited Financial Statements . To the best knowledge of       and the       , the unaudited fnancial statements of       for the periods beginning             , 20       and ending             , 20       , present fairly the fnancial position and results of operations and changes in fnancial position of       at the date and for the period to which they apply. Said statements and related notes have been prepared in accordance with generally accepted accounting principles applied on a basis which is consistent during the period involved. To the extent such statements have not been prepared in accordance with       , such variances have been fully explained and or documented to the satisfaction of the chief executive ofcer of       . SECTION 3.16. Change in Condition . Except as disclosed herein, subsequent to             , 20       , the latest period for which the fnancial statements have been prepared,       has not incurred any material liabilities or material obligations, direct or contingent, not in the ordinary course of business, or entered into any transaction not in the ordinary course of business, or any adverse change or any development involving, so far as       or the       can now reasonable foresee, a perspective adverse change in the condition (fnancial or other), net worth, results of operations, business, key personnel, customers, suppliers of equipments, inventories or services or properties which would be material to its business or fnancial condition other than as disclosed to the chief executive ofcer of       . SECTION 3.17. Environmental Matters . Except as and to the extent refected in Exhibit 3.17 attached hereto: (a) To the best knowledge of       and the       , all Federal, State and local permits, licenses and authorization required for the use and operation of       's business have been obtained and are presently in efect. (b) To the best knowledge of       and the       , none of       's assets or the Facilities or the Premises have been used by       to handle, treat, store or dispose of any hazardous or toxic waste or substance other than in the ordinary course of business, nor are any of       's assets or the Facilities or the Premises, including all soils, ground waters and surface waters located on, in or under the Facilities or the Premises, contaminated with pollutants, or other substances which contamination may give rise to a clean-up obligation under any Federal, State or local law, rule, regulation or ordinance, including, but not limited to, the Federal Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq., and the common law. (c) To the best knowledge of       and       , all underground storage tanks located in, on or under the Premises are in a state of good condition and repair and have not leaked. (d) To the best knowledge of       and       , there are no outstanding violations or any consent decrees entered against       or       regarding environment and use matters, including, but not limited to, matters efecting the emission of air pollutants, the discharge of water pollutants, the management of hazardous or toxic substances or waste, or noise. (e) To the best knowledge of       and       , there are no claimed, threatened or alleged violations with respect to any Federal, State or local environmental law, rule, regulation, ordinance, permit, license or authorization, and there are no present discussions with any Federal, State or local governmental agency concerning any alleged violation of environmental laws, rules, regulations, ordinances, permits, licenses or authorizations. (f) To the best knowledge of       and       , all operations conducted by       and       on the Facilities and the Premises have been and are in compliance with all Federal, State and local statutes, rules, regulations, ordinances, permits, licenses and authorizations pertaining to environmental control and compliance. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF             and the       jointly and severally represent and warrant to       that as of the date of this Agreement and at the Efective Date: SECTION 4.1. Organization and Good Standing .       is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Mississippi, and has full power and authority to own and hold the Premises and assets owned and leased by it, and to conduct its business as presently conducted. SECTION 4.2. Authority .       has the requisite power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized. This Agreement has been duly executed and delivered by and constitutes a valid and binding agreement of       . SECTION 4.3. Non-Contravention .       is not subject to or obligated under any contract provision, or any license, franchise or permit, or any order or decree, which would be breached or violated or in respect of which a right of acceleration would be created by its executing and carrying out this Agreement. SECTION 4.4. Title to Premises .       has, and on the Efective Date shall have, good, absolute and clear title to the Facilities and the Premises so that       shall be able to lease the Facilities and Premises to       under the terms and conditions set forth in the Lease Agreement attached hereto as Exhibit "2.1". ARTICLE V REPRESENTATIONS AND WARRANTIES OF             represents and warrants to       and the       that as of the date of this Agreement and at the Efective Date: SECTION 5.1. Organization and Good Standing .       is a corporation duly organized, validly existing and in good standing under the laws of the State of Mississippi, and has full corporate power and authority to own and hold the properties and assets owned and leased by it, and to conduct its business as presently conducted.       is a duly qualifed, validly existing and in good standing under the laws of each state in which where it does business, including without limitation, the State of Tennessee. SECTION 5.2. Capitalization . All shares of       are owned by       and       free and clear of all liens, claims and encumbrances, and there are no outstanding subscriptions, calls, commitments, warrants or options for the purchase of any capital stock or other securities of       or any securities convertible into or exchangeable for shares of capital stock or other securities of       , except that       each have options to acquire    percent (     %) each of the shares of       . As of the date of this Agreement, the aggregate number of shares that       is authorized to issue is       , consisting of       common shares, par value $       per share, of which       shares are issued and outstanding as follows: SHAREHOLDER NUMBER HELD                                     SECTION 5.3. Authority .       has the requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by       Board of Directors, and no other corporate proceedings on the part of       are necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly executed and delivered by and constitutes a valid and binding agreement of       . SECTION 5.4. Non-Contravention .       is not subject to or obligated under any charter, by-law or contract provision, or any license, franchise or permit, or any order or decree, which would be breached or violated or in respect of which a right of acceleration would be created by its executing and carrying out this Agreement. SECTION 5.5. Books and Records . None of the books, records and work papers of       which have been presented to       for review contain information which       knows to be untrue or materially incorrect or misleading. SECTION 5.6. Unaudited Financial Statements . The unaudited fnancial statements for the periods beginning             , 20       and ending             , 20       , present fairly the fnancial position and results of operations and changes in fnancial position of       at the date and for the period to which they apply. Said statements and related notes have been prepared in accordance with generally accepted accounting principles applied on a basis which is consistent during the period involved. To the extent such statements have not been prepared in accordance with       , such variances have been disclosed on Exhibit 5.6 and fully explained and documented to the satisfaction of the President of       . SECTION 5.7. Change in Condition . Subsequent to             , 20       , the latest period for which the fnancial statements have been prepared,       has not incurred any material liabilities or material obligations, direct or contingent, not in the ordinary course of business, or entered into any transaction not in the ordinary course of business, or any adverse change or any development involving, so far as       and GUARANTORS can now reasonable foresee, a perspective adverse change in the condition (fnancial or other), net worth, results of operations, business, key personnel, customers, suppliers of equipments, inventories or services or properties which would be material to its business or fnancial condition other than as disclosed on Exhibit 5.7. SECTION 5.8. Absence of Undisclosed Liabilities . Except as and to the extent refected in Exhibit 5.8 attached hereto,       has no known liabilities, claims, suits or obligations and       is not subject to any pending action, order, injunction, judgment, litigation, proceeding, arbitration action, governmental audit or investigation, nor is       , or any of its directors or ofcers, or GUARANTORS, or any of them, aware of any threatened action, litigation, proceeding, arbitration action, governmental audit or investigation.       and GUARANTORS, jointly and severally, hereby agree to indemnify and hold harmless the       and       , including its afliates, partners and managers from and against any and all costs, losses, liabilities, damages, claims or expenses (including reasonable attorney fees) incurred by the       or       arising out of or resulting from any liability, claim or obligation assumed by       herein. SECTION 5.9. Freedom from Encumbrance . Consummation of the transactions herein contemplated and the fulfllment of the terms of this Agreement will not confict with, or result in a breach of, any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of       pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which       or GUARANTORS are a party or by which either of them may be bound. SECTION 5.10. Merchantable Title .       has good, merchantable and insurable title to all the assets it owns or uses in its business or purports to own, including, without limitation, those refected in its books and records and in the fnancial statements and balance sheets provided by       to       . Except as and to the extent refected in Exhibit 5.10 attached hereto, none of such properties and assets of       are subject to any known mortgage, pledge, lien, charge, security interest, encumbrance, restriction, lease, license, easement, liability or adverse claim. SECTION 5.11. Business Activity of       . The sole business locations of       are at       ,       , Mississippi and       ,       , Tennessee. SECTION 5.12. Compliance with Law . To the best knowledge of       and GUARANTORS,       has not violated and is in compliance with all laws, statutes, ordinances, regulations, rules and orders of any federal, state or local government and any other governmental department or agency, and any judgment, decision, decree or order of any court of governmental agency, department, or authority, including without limitation, environmental laws, relating to the business operations and assets of       , except where the violation or failure to comply, individually or in the aggregate, would not have a material adverse efect on       . Neither       nor GUARANTORS has received any notice to the efect that, or otherwise been advised that,       is not in compliance with any such statutes, regulations, rules, judgments, decrees, orders, ordinances or other laws, and neither       nor GUARANTORS has reason to anticipate that any existing circumstances are likely to result in violations of any of the foregoing which failure or violation could, in any one case or in the aggregate, have a material adverse efect on       . SECTION 5.13. No Agreements to Sell the Assets . Other than in the ordinary course of business,       does not have any commitment or legal obligation, absolute or contingent, to any other person or frm to, directly or indirectly, sell, assign, transfer or efect a sale of the property and assets of       or to enter into any agreement or cause the entering into of an agreement with respect to any of the foregoing. SECTION 5.14. Books and Records . None of the books, records and work papers of       which have been presented to       for review contain information which       or the       know to be untrue or materially incorrect or misleading. SECTION 5.15. Tax Matters . (a) To the best knowledge of       and GUARANTORS, (i)       has duly and timely fled with the appropriate federal, state, local and other government agencies, all tax records and reports required to be fled; (ii) such returns and reports are accurate and complete, except for certain reports due on       , 20       , which will be fled by       on or before       , 20       ; and (iii)       has duly and timely paid in full or recorded adequate reserves for the payment of all taxes due with respect to its assets, income and operations for the fscal periods covered by such returns. For the purposes of this Agreement, the term "Tax" includes, without limitation, excise, income, franchise, real and personal property, sales, use, and employment taxes, assessments, defciencies, liabilities, ofsets by adjustments or credits, and all interest and penalties thereon, payable to federal, state, local or foreign tax authorities. To the best knowledge of       and GUARANTORS,       has made all withholdings of tax required to be made under all applicable federal, state and local tax regulations and such withholdings have either been paid to the respective government agencies or set aside in accounts for such purpose or accrued, reserved against and entered upon its books, as the case may be. (b)       has determined and, according to its calculations, fully paid or accrued its federal income tax liabilities for all fscal years prior to and including the fscal year ending             , 20       .       has not executed or fled with any taxing authority any writing having the efect of extending the period of assessment or collection of any taxes. With respect to the fscal year ended             , 20       ,       and GUARANTORS are not aware of any tax liability other than that set forth in the records and books of       , or previously disclosed in writing to       and the       . SECTION 5.16. Employment Matters . There are no material controversies pending or threatened between       and any of its employees. Without limiting the generality of any other representation, to the best knowledge of       and GUARANTORS,       has, and on the Efective Date will have, complied with all laws relating to the employment of labor, including any provisions thereof relating to wages, hours, collective bargaining and the payment of social security and similar taxes and benefts for employees and former employees, and       is not liable to any person or entity (including any governmental entity) for any arrears of wages, payments, taxes or penalties for failure to comply with any of the foregoing, or for any liability loss, claim or damage in connection with any employment beneft, pension, annuity, proft-sharing, retirement, deferred compensation, welfare, vacation or bonus plan, contract or arrangement. To the best knowledge of       and GUARANTORS, none of the employees of       is a member of a labor union, and there is no organization efort currently being made or threatened involving any employee of       . SECTION 5.17. Disclosure of Tangible Assets . To the extent reasonably feasible,       has heretofore delivered to       descriptions of all assets of       as of the date hereof. In the case of any asset leased by       , the disclosure also includes the current name and address of the Lessor and a copy of the lease agreement. SECTION 5.18. Unaudited Financial Statements . To the best knowledge of       and GUARANTORS, the unaudited fnancial statements of       for the periods beginning             , 20       and ending             , 20       , present fairly the fnancial position and results of operations and changes in fnancial position of       at the date and for the period to which they apply. Said statements and related notes have been prepared in accordance with generally accepted accounting principles applied on a basis which is consistent during the period involved. To the extent such statements have not been prepared in accordance with       , such variances have been fully explained and or documented to the satisfaction of the President of       . SECTION 5.19. Change in Condition . Except as disclosed herein, subsequent to             , 20       , the latest period for which the fnancial statements have been prepared,       has not incurred any material liabilities or material obligations, direct or contingent, not in the ordinary course of business, or entered into any transaction not in the ordinary course of business, or any adverse change or any development involving, so far as       or GUARANTORS can now reasonable foresee, a perspective adverse change in the condition (fnancial or other), net worth, results of operations, business, key personnel, customers, suppliers of equipments, inventories or services or properties which would be material to its business or fnancial condition other than as disclosed to the President of       . SECTION 5.20. Environmental Matters . Except as and to the extent refected in Exhibit 5.20 attached hereto: (a) To the best knowledge of       and GUARANTORS, all Federal, State and local permits, licenses and authorization required for the use and operation of       ' business have been obtained and are presently in efect. (b) To the best knowledge of       and GUARANTORS, none of       ' assets have been used by       to handle, treat, store or dispose of any hazardous or toxic waste or substance other than in the ordinary course of business, nor are any of       assets, including all soils, ground waters and surface waters located on, in or under any real property on which any of       ' assets are located or on which       conducts any of its business operations, contaminated with pollutants, or other substances which contamination may give rise to a clean-up obligation under any Federal, State or local law, rule, regulation or ordinance, including, but not limited to, the Federal Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq., and the common law. (c) To the best knowledge of       and GUARANTORS, all underground storage tanks located in, on or under any real property on which any of       ' assets are located or on which       conducts any of its business operations are in a state of good condition and repair and have not leaked. (d) To the best knowledge of       and GUARANTORS, there are no outstanding violations or any consent decrees entered against       or GUARANTORS regarding environment and use matters, including, but not limited to, matters efecting the emission of air pollutants, the discharge of water pollutants, the management of hazardous or toxic substances or waste, or noise. (e) To the best knowledge of       and GUARANTORS, there are no claimed, threatened or alleged violations with respect to any Federal, State or local environmental law, rule, regulation, ordinance, permit, license or authorization, and there are no present discussions with any Federal, State or local governmental agency concerning any alleged violation of environmental laws, rules, regulations, ordinances, permits, licenses or authorizations. (f) To the best knowledge of       and GUARANTORS, all operations conducted by       on any real property which it owns or on which any of       ' assets are located have been and are in compliance with all Federal, State and local statutes, rules, regulations, ordinances, permits, licenses and authorizations pertaining to environmental control and compliance. SECTION 15.21. "As is" Condition . Except as otherwise provided herein to the contrary,       accepts all assets of       and       acquired through the transactions provided for in this Agreement, including, without limitation, equipment, whether refected in       's fnancial statements or otherwise, on an "as is, where is" basis and no warranties, either express or implied, are made by       ,       or the       . ARTICLE VI TERMINATION, AMENDMENT AND WAIVER SECTION 6.1. Termination . This Agreement may be terminated at any time prior to the Efective Date: (a) By mutual consent of the       , the Board of Directors of       and the Board of Directors of       ; or (b) By       , if at the time of or prior to Efective Date       determines, in its sole discretion, that any representation or warranty of       or the       contained herein is untrue or incorrect in any material respect. (c) By       or the       , if at the time of or prior to Efective Date either       or the       determine, in their sole discretion, that any representation or warranty of       or GUARANTORS contained herein is untrue or incorrect in any material respect. SECTION 6.2. Efect of Termination . In the event of termination of this Agreement as provided in this Agreement, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto, except for the provisions of Sections 8.1, 8.2, 10.3 and 12.8 which shall survive such termination. SECTION 6.3. Amendment . This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. ARTICLE VII COVENANTS SECTION 7.1.       Covenants .       hereby covenants and agrees as follows: (a) That       will at or prior to the Efective Date enter into Employments Agreements with       with terms substantially similar to those shown in Exhibit "2.1" attached hereto. (b)       shall use its best eforts to secure before the Efective Date all necessary consents and approvals needed to satisfy all the conditions precedent to the obligations of       and the       hereunder. (c)       will take all necessary corporate and other actions and use its best efort to obtain all consents, approvals and amendments of agreements required of it to carry out the transactions contemplated by this Agreement and to satisfy the conditions specifed herein. (d)       will promptly provide       and the       upon reasonable request any information or documents reasonably necessary for       and the       to make an informed judgment as to the advisability of consummating the transactions contemplated hereby or to verify the representations and warranties of       herein. Until the Efective Date,       shall notify       and the       of any matter which may be materially adverse to       and shall keep       and the       fully informed of such events. (e) That       will, at or prior to the Efective Date, enter into the Shareholder Agreement on the terms set forth in Exhibit 7.1 attached hereto. (f) That       will, at or prior to the Efective Date, enter into the Lease Agreements on the terms set forth in Exhibit 7.1(f) attached hereto. (g) That       will, at or prior to the Efective Date, provide the       will a full and absolute release from       , releasing the       from all liability, costs and expense related to the Equipment Leases. SECTION 7.2. GUARANTORS Covenants . GUARANTORS hereby covenant and agree: (a) That they will, at or prior to the Efective Date, enter into the Shareholder Agreement on the terms set forth in Exhibit 7.1 attached hereto. (B) That they will, at or prior to the Efective Date, execute the Guaranty Agreement on the terms set forth in Exhibit 7.2 attached hereto. SECTION 7.3.       and the       .       and the       , jointly and severally, covenant and agree as follows: (a)       and the       shall use their best eforts (i) to ensure an orderly transition with respect to       's business, customers, suppliers and employees and (ii) to preserve for       the goodwill of the suppliers and customers having business relations with       relating to the assets of       or the business conducted at the Facility. (b)       and the       shall use their best eforts to secure before the Efective Date all necessary consents and approvals needed to satisfy all the conditions precedent to the obligations of       and GUARANTORS hereunder. (c)       and the       will take all necessary corporate and other actions and use its best efort to obtain all consents, approvals and amendments of agreements required of it to carry out the transactions contemplated by this Agreement and to satisfy the conditions specifed herein. (d)       and the       will provide       upon reasonable request any information or documents reasonably necessary for       to make an informed judgment as to the advisability of consummating the transactions contemplated hereby or to verify the representations and warranties of       and the       herein. Until the Efective Date,       and the       shall notify       of any matter which may be materially adverse to       and the       and shall keep       fully informed of such events. SECTION 7.3.       .       covenants and agrees that at or prior to the Efective Date,       will enter into Lease Agreements with       on the terms set forth in Exhibit 2.2 attached hereto. ARTICLE VIII ACCESS AND EXCLUSIVE NEGOTIATING RIGHTS SECTION 8.1. Access of       . During the period from the date of the execution of this Agreement until the Efective Date,       and its representative shall have access to all facilities, equipment, building, personnel, computers, books and records of       relating to       's business and the Premises, and       shall furnish       fnancial and other data and information requested for the completion of       ' investigation of       's business. In the event the transactions herein contemplated do not take place,       agrees to keep confdential and not to use for any purpose any proprietary confdential information provided to       by       , excluding any information which is otherwise known by or becomes known to       outside of its due diligence investigation of       or of       's business or such as is made public. SECTION 8.2. Access of       and the       . During the period from the date of the execution of this Agreement until the Efective Date,       and the       , and their representatives shall have access to all facilities, equipment, building, personnel, computers, books and records of       relating to       ' business, and       shall furnish       fnancial and other data and information requested for the completion of       and the       ' investigation of       ' business. In the event the transactions herein contemplated do not take place,       and the       agree to keep confdential and not to use for any purpose any proprietary confdential information provided to       and the       by       , excluding any information which is otherwise known by or becomes known to       or the       outside of its due diligence investigation of       or of       ' business or such as is made public. SECTION 8.3. Exclusive Negotiating Rights . In consideration of the expenditures of time, efort and expense by       in connection with its review of       's operations,       and the       agree that between the date of the execution of this Agreement and the Efective Date they will not enter into nor conduct any discussions with any other prospective purchaser of       's business or the       ' stock in       . ARTICLE IX INDEMNIFICATION SECTION 9.1. Indemnifcation of       .       and the       , jointly and severally, hereby agree to indemnify and hold harmless       and its afli