________________________________________
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
XXXXXXX CORPORATION
AND
INTERNET DEVELOPMENT, INC.
AND
XXXXXXXXX.XXX, INC.
Dated as of January 16, 2002
_________________________________________
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS.......................................................2
ARTICLE 2 THE MERGER........................................................4
2.1 The Merger........................................................4
2.2 Effective Time; Closing...........................................4
2.3 Effect of the Merger..............................................4
2.4 Organizational Documents..........................................5
2.5 Directors and Officers............................................5
2.6 Merger Consideration..............................................5
2.7 Surrender of Certificates.........................................6
2.8 No Further Ownership Rights in Company Stock......................8
2.9 Lost, Stolen or Destroyed Certificates............................8
2.10 Tax Consequences..................................................8
2.11 Taking of Necessary Action; Further Action........................8
2.12 Dissenters Rights.................................................8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................9
3.1 Authority.........................................................9
3.2 Due Organization..................................................9
3.3 Capital Stock.....................................................9
3.4 Subsidiaries.....................................................10
3.5 No Conflicts.....................................................10
3.6 Financial Statements.............................................11
3.7 Absence of Undisclosed Liabilities...............................11
3.8 Absence of Certain Changes.......................................11
3.9 Taxes............................................................11
3.10 Voting...........................................................12
3.11 Litigation.......................................................12
3.12 Intellectual Property............................................12
3.13 Material Contracts; No Defaults..................................13
3.14 No Finders.......................................................13
3.15 Employee Relations...............................................13
3.16 Transactions With Affiliates.....................................13
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3.17 Compliance with Securities Laws..................................14
3.18 Disclosure.......................................................14
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER Entity.......14
4.1 Authority........................................................14
4.2 Organization of Parent...........................................14
4.3 Organization of Merger Sub.......................................14
4.4 Capital Stock of Parent..........................................14
4.5 Capital Stock of Merger Sub......................................15
4.6 Subsidiaries.....................................................15
4.7 No Conflicts.....................................................15
4.8 SEC Reports; Financial Statements................................16
4.9 Absence of Undisclosed Liabilities...............................16
4.10 Absence of Certain Changes.......................................17
4.11 Taxes............................................................17
4.12 Litigation.......................................................17
4.13 Intellectual Property............................................17
4.14 Material Contracts; No Defaults..................................18
4.15 No Finders.......................................................18
4.16 Securities Law Compliance........................................18
4.17 Employee Relations...............................................18
4.18 Transactions With Affiliates.....................................18
4.19 Compliance with Securities Laws..................................19
4.20 Disclosure.......................................................19
ARTICLE 5 ADDITIONAL AGREEMENTS............................................19
5.1 Rights Agreement.................................................19
5.2 Voting Agreement.................................................19
5.3 Consent of Company Stockholders..................................19
5.4 Reasonable Efforts; Notification.................................20
ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER ENTITY..20
6.1 Representations and Warranties..................................20
6.2 Performance......................................................20
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6.3 Orders and Laws..................................................20
6.4 Regulatory Consents and Approvals; Third Party Consents..........21
6.5 Stockholder Approval.............................................21
6.6 Other Agreements.................................................21
ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF COMPANY21
7.1 Representations and Warranties...................................21
7.2 Performance......................................................21
7.3 Regulatory Consents and Approvals................................21
7.4 Orders and Laws..................................................22
7.5 StockholderApproval..............................................22
7.6 Additional Agreements............................................22
ARTICLE 8 COVENANTS........................................................22
8.1 Assumption of Liabilities and Obligations of Company by Parent...22
8.2 Indemnification..................................................22
8.3 Conduct of Business Pending Completion of Merger.................23
ARTICLE 9 TERMINATION OF REPRESENTATIONS AND WARRANTIES....................23
9.1 Termination of Representations, Warranties.......................23
ARTICLE 10 TERMINATION......................................................23
10.1 Termination......................................................23
10.2 Effect of Termination............................................23
ARTICLE 11 Certain Additional Matters.......................................24
11.1 Management.......................................................24
11.2 Redemption.......................................................24
ARTICLE 12 RESOLUTION OF CONTROVERSIES AND DISPUTES.........................24
12.1 Scope............................................................24
12.2 Situs............................................................24
12.3 Fees.............................................................24
ARTICLE 13 MISCELLANEOUS....................................................25
13.1 Notices..........................................................25
13.2 Entire Agreement.................................................25
13.3 Expenses.........................................................26
13.4 Waiver...........................................................26
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13.5 Amendment........................................................26
13.6 No Assignment; Binding Effect....................................26
13.7 Headings.........................................................26
13.8 Invalid Provisions...............................................26
13.9 Governing Law....................................................26
13.10 Counterparts....................................................26
13.11 No Negative Inference against Preparer..........................27
13.12 Third Parties...................................................27
13.13 No Admission of Liability.......................................27
TABLE OF EXHIBITS
Rights Agreement Exhibit A
Voting Agreement Exhibit B
Non Competition Agreement Exhibit C
(Xxxxx Xxxxx C-1 and Xxxxx Xxxxxxxx C-2)
Letter of Transmittal Exhibit D
Board of Directors Minutes Exhibit E
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AGREEMENT AND PLAN OF MERGER
This Agreement And Plan Of Merger (this "Agreement") is made and entered
into as of January, 15, 2002, among Xxxxxxx Corporation, a Nevada corporation
("Parent"), Internet Development, Inc., a Nevada corporation ("Merger Sub")
and xxxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), with
principal reference to the following facts:
RECITALS
A. When Parent, Merger Sub and the Company are referred to collectively
in this Agreement, they are the "Parties;" whenever the singular or masculine
is used in this Agreement the same shall be deemed to include the plural or
the feminine or the body corporate, as the context may require.
B. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law ("Delaware Law") and not
inconsistent with the Nevada Revised Statutes ("Nevada Law"), Parent, Merger
Sub, and the Company intend to enter into a business combination transaction
wherein Parent will acquire all of the outstanding stock of the Company
through the Merger Sub, with such transaction being structured as a merger.
C. The Board of Directors of the Company (i) has determined that the
Merger is fair and advisable to, and in the best interests of, the Company and
its stockholders, (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement and (iii) subject to the terms and
conditions of this Agreement, has determined to recommend that the
stockholders of the Company adopt and approve this Agreement and approve the
Merger.
D. The Board of Directors of Parent has determined that the Merger is
fair to, and in the best interests of Parent and Merger Sub and has approved
this Agreement, the Merger and the other transactions contemplated by this
Agreement.
E. The Parties intend, by executing this Agreement, to effect a
"forward triangular merger" by the applicable definition set forth in 26 CFR
1.358-6(b)(2)(i) of the Internal Revenue Code of 1986, as amended (the
"Code").
F. Contemporaneously with the execution and together with the delivery
of this Agreement, certain stockholders of Parent and certain stockholders of
the Company will enter into a Stockholders Rights Agreement, a copy of which
is attached hereto as Exhibit "A" (the "Rights Agreement").
G. Contemporaneously with the execution and delivery of this Agreement,
Xxxxx Xxxxx, an individual residing in the State of Utah ("Xxxxx"), Xxxxx
Xxxxxxxx, an individual residing in the State of Utah ("Xxxxxxxx"; and,
together with Xxxxx the "Principal Stockholders"), and those additional
stockholders of the Company referred to on the signature pages thereof will
enter into a deliver a voting agreement (hereinafter the "Voting Agreement"),
under which they will agree to vote in favor of this Agreement. A copy of the
Voting Agreement is attached hereto as Exhibit "B."
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H. Contemporaneously with the execution and delivery of this Agreement,
the Principal Stockholders will enter into and deliver a non-competition
agreement (hereinafter the "Non-competition Agreement"), copies of which are
attached hereto as Exhibit "C-1" (Xxxxx) and Exhibit "C-2" (Xxxxxxxx).
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties agree as follows:
ARTICLE 1
DEFINITIONS
Capitalized terms used in this Agreement and not otherwise defined have
the meanings set forth below. Unless the context otherwise requires, such
terms shall include the singular and plural and the conjunctive and
disjunctive forms of the terms defined.
"Actions or Proceedings" means any action, suit, proceeding, arbitration
or Governmental or Regulatory Authority investigation or audit.
"Affiliate" means any Person that directly, or indirectly through one of
more intermediaries, controls, or is controlled by, or is under common control
with the Person specified. For purposes of this definition, control of a
Person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such Person whether by Contract or otherwise
and, in any event and without limitation of the previous sentence, any Person
who is the beneficial owner (as such term is used under Section 13(d) of the
Exchange Act) of ten percent (10%) or more of the voting securities of another
Person shall be deemed to control that Person.
"Assets and Properties" of any Person means all assets and properties of
every kind, nature, character and description (whether real, personal or
mixed, whether tangible or intangible, whether absolute, accrued, contingent,
fixed or otherwise and wherever situated), including the goodwill related
thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, Investment Assets, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles, real
estate, equipment, inventory, goods and Intellectual Property.
"Business Day" means a day other than (i) Saturday, (ii) Sunday, or (iii)
any day on which banks located in the States of Nevada and Delaware are
authorized or obligated to close for business.
"Business or Condition" means the business, condition (financial or
otherwise), results of operations, Assets and Properties and prospects of the
referenced party taken as a whole.
"Code" is defined as the Internal Revenue Code of 1986, as amended.
"Company Disclosure Schedule" means the records delivered to Parent by
Company herewith, each containing the lists, descriptions, exceptions and
other information and materials as are required to be included therein
pursuant to this Agreement.
"Contract" means any agreement, lease, license, evidence of Indebtedness,
mortgage, indenture, security agreement or other contract (whether written or
oral).
"CFR" means the United States Code of Federal Regulations, as amended.
"Delaware Law" is defined as the applicable provisions of the General
Corporation Law of
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the State of Delaware, as amended, (i) as such statutes pertain to for-profit,
non-close corporations formed and organized in Delaware, and (ii) as such
statutes pertain to mergers between one or more domestic Delaware
corporations.
"Exchange Act" is defined as the Securities Exchange Act of 1934, as
amended.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality
of the United States, any foreign country or any domestic or foreign state,
county, city or other political subdivision.
"Intellectual Property" means: (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions, and re-examinations thereof; (b) all trademarks,
service marks, trade dress, logos, trade names, and corporate names, together
with all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith; (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all trade secrets and confidential business
information (including ideas, research and development, know-how, formulas,
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information, and business and marketing plans and proposals); (e) all
computer software (including source code, data and related documentation), (f)
all other proprietary rights; and (g) all copies and tangible embodiments
thereof in whatever form or medium
"Laws" means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"Licenses" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security interest, lease,
lien, adverse claim, levy, charge or other encumbrance of any kind, or any
conditional sale contract, title retention contract or other contract to give
any of the foregoing.
"Nevada Law" is defined as the applicable provisions of the Nevada
Revised Statutes (i) as such statutes apply to corporations formed and
organized within that state, or (ii) as said statutes apply to domestic
corporations entering into and performing contracts made and performed in
another jurisdiction within the United States; whereby, the terms and
provisions of any such contracts would encroach upon the assets of a Nevada
domestic corporation.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares
of capital stock of such Person or any security of any kind convertible into
or exchangeable or exercisable for any shares of capital stock of such Person
or (ii) receive or exercise any benefits or rights similar to any rights
enjoyed by or accruing to the holder of shares of capital stock of such
Person, including any rights to participate in the equity or income of such
Person or to participate in or direct the election of any directors or
officers of such Person or the manner in which any shares of capital stock of
such Person are voted.
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"Order" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"Parent Disclosure Schedule" means the records delivered to the Company
by Parent herewith, each containing the lists, descriptions, exceptions and
other information and materials as are required to be included therein
pursuant to this Agreement.
"Person" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust,
union, association or Governmental or Regulatory Authority.
"Subsidiary" means, with respect to any party, any corporation or other
organization, whether incorporated or unincorporated, of which more than fifty
percent (50%) of either the equity interests in, or the voting control of,
such corporation or other organization is, directly or indirectly through
Subsidiaries or otherwise, beneficially owned by such party.
ARTICLE 2
THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware Law, the Company shall be merged with and
into the Merger Sub (the "Merger"), the separate corporate existence of the
Company shall cease and the Merger Sub shall continue as the surviving entity.
The Merger Sub as the surviving entity after the Merger is hereinafter
sometimes referred to as the "Surviving Company."
2.2 Effective Time; Closing. Subject to the provisions of this
Agreement, the Parties hereto shall cause the Merger to be consummated by
filing a Certificate of Merger with the Secretary of State of the State of
Delaware and Articles of Merger with the Secretary of State of the State of
Nevada in accordance with the relevant provisions of Delaware Law and Nevada
Law (the "Certificates of Merger") (the time of such filing with the
Secretaries of State of the States of Delaware and Nevada (or such later time
as may be agreed in writing by the Company and Merger Sub and specified in the
Certificate of Merger) being the "Effective Time") as soon as practicable on
or after the Closing Date (as herein defined). Unless the context otherwise
requires, the term "Agreement" as used herein refers collectively to this
Agreement and Plan of Merger and the Certificate of Merger. The closing of
the Merger (the "Closing") shall take place at the offices of Xxxxxx X.
Xxxxxxx, 000 Xxxxx 000 Xxxx, Xxxx Xxxx Xxxx, Xxxx 00000, at a time and date to
be specified by the Parties, which shall be no later than the second Business
Day after the satisfaction or waiver of the conditions set forth in Articles 5
and 6, or at such other time, date and location as the Parties hereto agree in
writing (the "Closing Date").
2.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable provisions of
Delaware and Nevada Law. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of the Company and the Merger Sub shall vest
in the Surviving Company, and all of the several debts, duties and obligations
of the Company and the Merger Sub, respectively, shall become the debts,
liabilities, duties and obligations of the Surviving Company.
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2.4 Organizational Documents. Unless otherwise agreed to in writing by
the Company and Merger Sub prior to the Effective Time, the Articles of
Incorporation of the and Bylwas of the Merger Sub shall be the organizational
documents of the Surviving Company.
2.5 Directors and Officers. The directors and officers of the Company
shall be the directors and officers of the Surviving Company.
2.6 Merger Consideration. Subject to the terms and conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Merger Sub, the Company or the Principal Stockholders,
or, generally, the holders of any of the following securities, the following
shall occur:
(a) Conversion of Company Stock.
(i) Each share of Common Stock, par value $0.0001 per
share, of the Company ("Company Common Stock") issued and outstanding
immediately prior to the Effective Time will be cancelled and extinguished and
automatically converted into the right to receive .68415051 shares (the
"Common Stock Exchange Ratio") of the common stock of Parent, par value $.001
per share ("Parent Stock"), upon surrender of each certificate representing
such shares of Company Common Stock in the manner provided in Section 2.7 (or
in the case of a lost, stolen or destroyed certificate, upon delivery of an
affidavit (and bond, if required) in the manner provided in Section 2.9) and
compliance with the conditions set forth in Section 2.7(e).
(ii) If any shares of Company Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase
option, risk of forfeiture or other condition under any applicable restricted
stock purchase agreement or other agreement with the Company, then the shares
of Parent Stock issued in exchange for such shares of Company Stock will also
be unvested and subject to the same repurchase option, risk of forfeiture or
other condition, and the certificates representing such shares of Parent Stock
may accordingly be marked with appropriate legends. The Company shall take
all action that may be necessary to ensure that, from and after the Effective
Time, Parent is entitled to exercise any such repurchase option or other right
set forth in any such restricted stock purchase agreement or other agreement.
(b) Stock Options, Warrants and Convertible Securities.
(i) At the Effective Time, each outstanding employee or
director option to purchase shares of Company Common Stock ("Company Stock
Option") granted under the Company's plans or agreements pursuant to which
Company Stock Options or other stock-based awards of the Company have been or
may be granted (collectively, the "Company Stock Plans"), whether vested or
not vested, shall be deemed assumed by the Parent in accordance with the terms
(as in effect as of the
5
date thereof) of the Company Stock Plans. From and after the Effective Time,
(A) each Company Option assumed by Parent may be exercised solely for shares
of Parent Stock, (B) the number of shares of Parent Stock subject to each
Company Stock Option shall be equal to the number of shares of Company Common
Stock subject to such Company Stock Option immediately prior to the Effective
Date multiplied by the Exchange Ratio, rounding down to the nearest whole
share of Parent Stock, (C) the per share exercise price of such Company Stock
Option shall be adjusted by dividing the per share exercise price under each
such Company Stock Option by the Exchange Ratio and rounding up to the nearest
cent and (D) any restriction on the exercise of any Company Stock Option shall
continue in full force and effect and the term, exercisability, vesting
schedule and other provisions of such Company Stock Option shall otherwise
remain unchanged; provided, however, that each such Company Stock Option
shall, in accordance with its terms, be subject to further adjustment as
appropriate to reflect any stock split, stock dividend, subdivision,
reclassification, reorganization, stock split, combination or similar
transaction subsequent to the Effective Time. The Company shall take all
actions that may be necessary (under the Company Stock Plans) to effectuate
the provisions of this Section 2.6(b)(i) and to ensure that, from and after
the Effective Time, holders of Company Stock Options have no rights with
respect thereto other than those specifically provided herein. As soon as
practicable after the Effective Time, Parent shall issue to each holder of an
outstanding Company Stock Option, a document evidencing assumption of the
Company Stock Option by Parent.
(c) Fractional Shares. No fraction of a share of Parent Stock
will be issued by virtue of the Merger. The declaration of the fractional
values that reflect the calculation of the Exchange Ratio shall not be
interpreted to indicate fractional conversion values. Upon the application of
the Exchange Ratio, holders of Company Stock entitled to receive Parent Stock
pursuant to the operation of the Merger will be entitled to that number of
shares, in the aggregate, then rounded upward to the nearest one-whole share.
(d) Adjustments to Exchange Ratio. The Exchange Ratio shall be
adjusted to reflect fully the appropriate effect of any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into, or exchangeable or exercisable for, directly or
indirectly, Parent Stock or Company Stock), reorganization, recapitalization,
reclassification or other like change with respect to Parent Stock or Company
Stock occurring on or after the date hereof and prior to the Effective Time.
2.7 Surrender of Certificates.
(a) Exchange Procedures. Promptly after the Effective Time,
Parent shall make available for exchange in accordance with this Article 2,
the shares of Parent Stock issuable pursuant to Section 2.6 in exchange for
outstanding shares of Company Stock. Each holder of record (as of the
Effective Time) of a certificate or certificates (the "Certificates") which,
as of such record date and immediately prior to the Effective Time,
represented the total issued and outstanding shares of Company Stock, whose
shares will be converted into the right to receive shares of Parent Stock
shall surrender its certificate or certificates, and shall be entitled to
receive in exchange therefore, a
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certificate or certificates representing the number of whole shares of Parent
Stock with respect to the shares of Company Stock represented by such
Certificate and the Certificates so surrendered shall forthwith be canceled.
(b) Distributions With Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the date of this
Agreement with respect to Parent Stock with a record date after the Effective
Time will be paid to the holders of any Certificates that have not been
properly surrendered in respect of the shares of Parent Stock represented
thereby until the holders of record of such Certificates shall surrender such
Certificates.
(c) Transfers of Ownership. If certificates for shares of Parent
Stock are to be issued in a name other than that in which the Certificates
surrendered in exchange therefore are registered, it will be a condition of
the issuance thereof that the Certificates so surrendered will be properly
endorsed and otherwise in proper form for transfer and that the Persons
requesting such exchange will have paid to Parent or any agent designated by
it, any transfer or other taxes and any fees payable to the Parent's stock
transfer agent, required by reason of the issuance of certificates for shares
of Parent Stock in any name other than that of the registered holder of the
Certificates surrendered, or established to the satisfaction of Parent or any
agent designated by it that such tax has been paid or is not payable.
(d) Company Stockholder Representations. The right of each
Company stockholder to receive a certificate representing the Parent Stock to
which a Company stockholder is entitled shall be subject to the execution and
delivery of a Letter of Transmittal ("Letter of Transmittal"), a form of which
is attached hereto as Exhibit "D".
(e) Legends. The certificates evidencing the shares of Parent
Stock shall bear the legend set forth below (or substantially equivalent
legends), together with other legends required by the laws of the State of
Nevada:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933 AS AMENDED, HAVING
BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TO REDISTRIBUTE. THEY MAY NOT BE SOLD
OR OFFERED FOR IN ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SHARES UNDER THE SECURITIES ACT OF
1933 AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY
TO THE CORPORATION AND AN EXEMPTION FROM THE SECURITIES
ACT OF 1933 AS AMENDED, IS AVAILABLE AND THAT SUCH
REGISTRATION IS NOT REQUIRED, OR IN THE ALTERNATIVE THAT
SUCH SHARES MAY BE SOLD UNDER RULE 144 AS PROMULGATED BY
THE SECURITIES AND EXCHANGE COMMISSION OF THE UNITED STATES.
The legend set forth above shall be removed by Parent from any certificate
evidencing the shares upon delivery to Parent of an opinion by counsel, which
opinion and counsel shall be reasonably
7
satisfactory to Parent, that a registration statement under the Securities Act
of 1933 (the "Act") is at that time in effect with respect to the
legend-bearing security or that the transfer of such security is exempt from
registration under the Act. In addition, those shares of Parent Stock issued
to the Company's stockholders which are a party to the Rights Agreement shall
be entitled to the benefits and subject to the terms and conditions of the
Rights Agreement.
2.8 No Further Ownership Rights in Company Stock. All shares of Parent
Stock issued upon the surrender for exchange of shares of Company Stock in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Stock. There
shall be no further registration of transfers on the records of the Company or
the Surviving Company of shares of Company Stock, which were outstanding
immediately prior to the Effective Time. If after the Effective Time
certificates evidencing ownership on the Company are presented to the
Surviving Company or Parent for any reason, they shall be canceled and
exchanged as provided in this Article 2.
2.9 Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent
shall issue in exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the holder thereof, such shares of
Parent Stock, provided, however, that Parent may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Parent or the Company with respect to the Certificates alleged to have been
lost, stolen or destroyed.
2.10 Tax Consequences. It is intended by the Parties hereto that the
Merger shall constitute a reorganization within the meaning of Section 368 of
the Code, and in particular a triangular merger within the definition rendered
by 26 CFR 1.358-6(b)(2)(i). The Parties hereto adopt this Agreement in order
to effect a transaction that qualifies as a "plan of reorganization" and in
particular a "triangular merger" under Section 368(a)(1)(A) or under Section
368(a)(1)(G) of the Code by reason of the application of Section 368(a)(2)(D)
of the Code.
2.11 Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Entity with full
right, title and possession to all assets, property, rights, privileges,
powers and franchises of the Company and Merger Sub, the officers and
directors of the Company and Merger Sub will take all such lawful and
necessary action, so long as such action is consistent with this Agreement.
Parent shall cause Merger Sub to perform fully all of its obligations relating
to this Agreement and the transactions contemplated hereby.
2.12 Dissenters Rights. Notwithstanding anything in this Agreement to
the contrary, any issued and outstanding shares of Company Common Stock held
by a person who has neither voted in favor of nor consented to the Merger and
who complies with all of the provisions of Delaware Law concerning the right
of holders of such stock to dissent from the Merger and require an appraisal
of their shares, shall not be converted as described in this Article 2 but
shall have, at the Effective Time, by virtue of the Merger and without any
further action, the right to receive such consideration as may be determined
to be due to such stockholder in accordance with the Delaware Law; provided,
however, that shares of Company Common Stock outstanding immediately prior to
the Effective Time and held by a stockholder who shall, after the Effective
8
Time, withdraw his or her demand for appraisal or lose his or her right of
appraisal, in either case pursuant to Delaware Law, shall be deemed to be
converted as of the Effective Time into the right to receive Parent Stock.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Company Disclosure Schedule, the Company
represents and warrants to Parent and to Merger Sub as follows:
3.1 Authority. The Company has all requisite corporate power and
authority to enter into and deliver this Agreement, to perform its obligations
hereunder and, subject to authorization of the Merger and the transactions
contemplated hereby by the stockholders of the Company, to consummate the
transactions contemplated by this Agreement. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby by
the Company have been duly authorized by all necessary corporate action on the
part of the Company, subject to authorization of the Merger and the
transactions contemplated hereby by the stockholders of the Company. This
Agreement has been duly and validly executed and delivered by the Company,
constitutes a legal, valid and binding obligation of the Company, and is
enforceable against Company in accordance with its terms.
3.2 Due Organization. The Company and Internet Development, Inc., a
Utah corporation ("IDI"), are each corporations duly organized, validly
existing and in good standing under the laws of their respective jurisdictions
of incorporation and each of them is duly authorized, qualified and licensed
under all applicable laws, regulations, ordinances and orders of public
authorities to own, operate and lease its properties and assets and to carry
on their business in the places and in the manners they have been and are now
being conducted except for such failures to be so authorized, qualified and
licensed as could not reasonably be expected, in the aggregate, to have a
material adverse effect on the business, operations or financial condition of
the Company and IDI taken as a whole. Except as set forth in Section 3.2 of
the Company Disclosure Schedule, the Company and IDI are each duly qualified,
licensed or admitted to do business and are in good standing in each
jurisdiction in which the ownership, use or leasing of their assets and
properties, or the conduct or nature of their business, makes such
qualification, licensing or admission necessary, except for those
jurisdictions in which the adverse effects of all such failures by the Company
or IDI taken together could not be reasonably expected to have a material
adverse effect on their businesses or on the transactions contemplated by this
Agreement. The Company and IDI have, prior to the execution of this
Agreement, delivered to Parent true and complete copies of their Certificates
of Incorporation, bylaws, and other charter documents as in effect on the date
hereof.
3.3 Capital Stock.
(a) The authorized capital stock of the Company consists of:
42,000,000 shares of Company Common Stock, of which 10,962,500 shares had been
issued and were outstanding as of the date hereof, and 8,000,000 shares of
Class A Preferred Stock, of which no shares were issued and outstanding as of
the date hereof. As of the date of this Agreement, there are no shares of
Company Common Stock or Company Preferred Stock held in treasury by the
Company. No shares of the
9
Company Common Stock are the subject of any registration statement required to
be filed, or having been filed, with the Securities and Exchange Commission.
(b) As of the date of this Agreement the Company has granted
2,820,000 Company Stock Options pursuant to Company Stock Plans and such stock
has been reserved for issuance upon the exercise or conversion of such Company
Stock Options. Section 3.3(b) of the Company Disclosure Schedule sets forth
the following information with respect to each Company Stock Option
outstanding as of the date of this Agreement: (i) the name of the optionee and
(ii) the number of shares of Company Common Stock subject to such Company
Stock Option.
(c) As of the date of this Agreement, except for the Company
Stock Options and except as set forth in Section 3.3(b) of the Company
Disclosure Schedule, there are no outstanding subscriptions, options,
warrants, equity securities, or similar ownership interests, calls, rights
(including preemptive rights), commitments or agreements of any character
("Equity Equivalents") to which the Company or any of its Subsidiaries is a
party or by which it is bound obligating the Company or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition of, any shares of capital stock, or similar
ownership interests of the Company or any of its Subsidiaries or obligating
the Company or any of its Subsidiaries to grant, extend, accelerate the
vesting of or enter into any such subscription, option, warrant, equity
security, call, right, commitment or agreement. As of the date of this
Agreement, except as contemplated by this Agreement, there are no registration
rights and there is no voting trust, proxy, rights plan, anti-takeover plan or
other agreement or understanding to which the Company or any of its
Subsidiaries is a party or by which any of them is bound with respect to any
equity security of any class of the Company or with respect to any equity
security, partnership interest or similar ownership interest of any class of
any of its Subsidiaries.
3.4 Subsidiaries. The Company's only Subsidiary is IDI. IDI is a
wholly owned Subsidiary of the Company. IDI does not have, nor has it ever
had, any Subsidiaries.
3.5 No Conflicts. The execution and delivery by the Company of this
Agreement does not, and the performance by it of its obligations under this
Agreement and the consummation of the transactions contemplated hereby will
not:
(a) conflict with or result in a material violation or breach of
any of the terms, conditions or provisions of any article contained in the
Certificate of Incorporation or by-laws of the Company or the Articles of
Incorporation or by-laws of IDI;
(b) conflict with or result in a material violation or breach of
any term or provision of any Law or Order applicable to Company or IDI or any
of their respective Assets and Properties; or
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require the Company or IDI to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of, (iv) result in or give to any Person any right of termination,
cancellation,
10
acceleration or modification in or with respect to, (v) result in or give to
any Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under, or (vi) result in the creation or
imposition of any Lien upon any of the Assets or Properties of the Company or
IDI pursuant to, any Contract or License to which either the Company or IDI is
a party or by which any of their respective Assets and Properties is bound,
except for any of the foregoing which, taken together, would not reasonably be
expected to have a material adverse effect on the business, operations or
financial condition of the Company and IDI taken as a whole.
3.6 Financial Statements. The Company has provided to Parent (a) its
audited, consolidated balance sheets as of December 31, 1999 and December 31,
2000 and its related consolidated statements of income and cash flows for the
fiscal years then ended and (b) the unaudited (pro-forma basis) balance sheet
and related consolidated statements of income and cash flows for the one year
period ended December 31, 2001 (all such statements, are sometimes referred to
herein as the "Company Financial Statements"). The balance sheets as of
December 31, 1999 and December 31, 2000 included in the consolidated Company
Financial Statements present fairly the consolidated financial position of the
Company as of the dates indicated and the consolidated income statements and
consolidated statements of cash flows included therein for the fiscal years
ended December 31, 1999 and December 31, 2000 present fairly the consolidated
results of operations and cash flows of the Company for the periods then
ended. The financial statements included in the Company Financial Statements
as of and for the one year period ended December 31, 2001 are management
information accounts prepared from the Company's books and records in
accordance with its established practices and procedures for interim financial
statements and do not include normal recurring year end adjustments.
3.7 Absence of Undisclosed Liabilities. To the knowledge of the
Company, except (i) as and to the extent reflected or disclosed in the Company
Financial Statements and (ii) to the extent of reserves taken, neither the
Company nor IDI has any material liabilities or obligations of a nature
required by GAAP, as consistently applied by the Company, to be reflected on a
balance sheet except for liabilities or obligations which were incurred in the
ordinary course of business.
3.8 Absence of Certain Changes. To the knowledge of the Company, since
June 30, 2001, the Company and IDI have conducted their business in the
ordinary course and there has not been any material adverse change in the
business, operations or financial condition of the Company and IDI taken as a
whole except as a result of general economic or industry-wide conditions. To
date the Company has not declared any dividends with respect to its capital
stock.
3.9 Taxes.
(a) Except as set forth in Section 3.9 of the Company Disclosure
Schedule, the Company and IDI have (i) duly filed with the appropriate
federal, state, local and foreign taxing authorities all Tax Returns (as
hereinafter defined) required to be filed by or with respect to the Company
and IDI other than those Tax Returns the failure of which to file would not
have a material adverse effect on the business, operations or financial
condition of the Company and the IDI taken as a whole, and such Tax Returns
are true, correct and complete in all material respects, and (ii) paid in full
or have made adequate provision on their consolidated balance sheet (in
accordance with generally accepted accounting principles) for all material
Taxes (as hereinafter defined) shown to be
11
due on such tax returns. There are no material liens for Taxes upon the
assets of either the Company or IDI except for statutory liens for current
taxes not yet due. Except as set forth in Section 3.9 of the Company
Disclosure Schedule, neither the Company nor IDI has received any notice of
deficiency or assessment from any federal, state, local or foreign taxing
authority with respect to liabilities or Taxes of the Company or IDI which has
not been fully paid or finally settled, and any such deficiency or assessment
shown on such the Company Disclosure Schedule is either being contested in
good faith through appropriate proceedings or, in the Company's opinion, is
immaterial.
(b) "Taxes" shall mean all taxes, charges, fees, levies,
penalties or other assessments imposed by any United States federal, state,
local, or foreign taxing authority, including, but not limited to income,
excise, property, sales, transfer, franchise, payroll, withholding, social
security or other taxes, including any interest, penalties or additions
attributable thereto.
(c) "Tax Return" shall mean any return, report, information
return or other document (including any related or supporting information)
with respect to Taxes.
3.10 Voting. The affirmative vote of the holders of a majority of the
outstanding shares of the Company Stock is the only vote of the holders of any
class or series of the Company capital stock necessary to approve this
Agreement and the transactions contemplated hereby.
3.11 Litigation. Except as set forth in Section 3.11 of the Company
Disclosure Schedule, there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened against
it (a) which could reasonably be expected to result in a material adverse
effect on the business, operations or financial condition of the Company and
IDI taken as a whole, or (b) that in any manner calls into question the
validity or enforceability of this Agreement or any action taken or to be
taken in connection herewith. Neither the Company nor IDI is a party or
subject to the provisions of any order, injunction, judgment or decree of any
court or government agency or instrumentality (other than government decrees
of general applicability) which could reasonably be expected to have a
material adverse effect on their businesses, operations and financial
conditions, taken as a whole.
3.12 Intellectual Property.
(a) The Company or IDI owns or has a license to use all
trademarks, service marks, trade names, and copyrights used in or required for
their businesses as presently conducted, free from any liens or security
interests other than liens and security interests in favor of Parent. No
royalty payments, license fees, or other similar payments with respect to any
third party trademark, service xxxx, trade name or copyright is past due
except for any such payments which are being contested in good faith.
(b) To the best of the Company's knowledge, (i) neither the
Company nor IDI has infringed upon and neither of them is currently infringing
upon any third party copyright or trademark and (ii) neither of them has
misappropriated or engaged in the unauthorized use of any trade secret or
similar confidential information of a third party except for such
infringements, misappropriations and unauthorized use as would not, when taken
together, be reasonably expected to have a material adverse effect on the
business, operations or financial condition of the Company
12
and IDI taken as a whole. Except as set forth in Section 3.12(b) of the
Company Disclosure Schedule, there are no claims or proceedings pending or, to
the Company's knowledge, threatened in writing within the past twelve months,
against the Company or IDI asserting that the Company or IDI is infringing or
engaging in the unauthorized use of any intellectual property of any person or
entity.
3.13 Material Contracts; No Defaults. All of the Company's and IDI's
executory Contracts have been entered into in the ordinary course of business
and except as described in Section 3.13 of the Company Disclosure Schedule and
except as could not reasonably be expected to have a material adverse effect
on the Company and IDI, taken as a whole, neither the Company nor IDI has
received a notice of breach or termination with respect to any such Contract.
The Termination Agreement, by and between the Company and Worldwide Financial
Holdings, Inc., a Nevada corporation ("WWFI"), terminating the Agreement and
Plan of Merger by and between WWFI and the Company as well as all other
documents related to the transactions contemplated by the Agreement and Plan
of Merger, is in full force and effect. A true, correct and complete copy of
which has been provided to Parent.
3.14 No Finders. Neither the Company nor IDI will be liable directly
or indirectly to pay any brokerage fee, commission, finder's fee or financial
advisory or similar fee by reason of the transactions contemplated by this
Agreement to any person claiming such compensation by reason of any agreement
or relationship with the Company or IDI or any affiliate thereof or with the
Company or IDI or any of their shareholders or any affiliate thereof.
3.15 Employee Relations. The Company and IDI have complied in all
material respects with all applicable laws, rules and regulations that relate
to prices, wages, hours, harassment, access by disabled persons,
discrimination in employment and collective bargaining and neither of them is
liable for (i) any arrears of wages, except to the extent that such arrears
are being contested in good faith, or (ii) for any taxes or penalties for
failure to comply with any of the foregoing, except for such taxes or
penalties as are not reasonably expected, in the aggregate, to have a material
adverse effect on the business, operations or financial condition of the
Company or IDI taken as a whole.
3.16 Transactions With Affiliates. Section 3.16 of the Company
Disclosure Schedule hereto lists each material contract, agreement or
arrangement between the Company or IDI and any person who is or has ever been
an officer or director of the Company or IDI, or a person owning of record or
known by the Company or IDI to own beneficially 10% or more of the issued and
outstanding Company Common Stock (an "Affiliated Person"), and which either
(i) is to be performed in whole or in part after the date hereof or (ii) was
entered into within one year before the date hereof. Each such contract,
agreement or arrangement required to be so listed was entered into for a bona
fide business purpose and either (i) the amount paid or received, whether in
cash, in services or in kind, was, in the then reasonable business judgment of
the Company or IDI, as the case may be, no less favorable to the Company or
IDI, than terms available from otherwise unrelated parties in arm's-length
transactions or (ii) a comparable arrangement was not, in the then reasonable
business judgment of the Company or IDI, as the case may be, available from a
third party. Except as disclosed in Section 3.16 of the Company Disclosure
Schedule hereto or otherwise disclosed herein, no Affiliated Person has, or
has had during the preceding year, to the knowledge of the Company, any
interest, directly or indirectly, in any material transaction with the Company
or IDI.
13
3.17 Compliance with Securities Laws. Except as set forth in Section
3.17 of the Company Disclosure Schedule, all of the securities issued by the
Company within the three years prior to the date of this Agreement were issued
in transactions exempt from registration under the Securities Act of 1933, as
amended, and applicable state securities laws.
3.18 Disclosure. Without limiting any of the representations and
warranties contained herein, no representation or warranty of the Company
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements made not misleading, in light
of the circumstances under which they were made.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth on the Parent Disclosure Schedule, Parent and Merger Sub
represent and warrant to Company and Principal Stockholders as follows:
4.1 Authority. Each of Parent and Merger Sub has all requisite
corporate and other power and authority to enter into and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated by this Agreement. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby by
each of Parent and Merger Sub have been duly authorized by all necessary
corporate action on the part of each of them. This Agreement has been duly
and validly executed and delivered by each of Parent and Merger Sub,
constitutes a legal, valid and binding obligation of each such party and is
enforceable against each such party in accordance with its terms.
4.2 Organization of Parent. Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada.
Parent has full corporate power and authority to conduct its business as and
to the extent now conducted and to own, use and lease its Assets and
Properties. Parent has prior to the execution of this Agreement delivered to
Company true and complete copies of its charter documents as in effect on the
date hereof. Parent is not an "Issuing Corporation" within the meaning of NRS
78.3788.
4.3 Organization of Merger Sub. Merger Sub is a wholly owned
subsidiary of Parent, organized and validly existing under the laws of the
State of Nevada. Merger Sub has full power and authority to conduct its
business to the extent of its obligations hereunder. Parent will deliver true
and complete copies of Merger Sub's charter documents to the Company and
Principal Stockholders prior to the Effective Date. Merger Sub is formed for
the purpose of participating in this transaction and prior to the effective
date Merger Sub will not enter into any agreements, contracts or
understandings other than with respect to the issuance of its capital stock or
other similar ownership units to Parent.
4.4 Capital Stock of Parent. The authorized capital stock of Parent
consists of 50,000,000 authorized shares, par value $.001 per share. The
total number of issued and outstanding shares of Parent Stock prior to the
completion of the Merger is 4,000,000. After the closing of the Merger, the
total number of issued and outstanding shares shall be 11,500,000, which
number shall include 7,500,000 shares of Parent Stock issued to the
Stockholders of the Company pursuant to this
14
Agreement. Except as set forth in Section 4.4 of the Parent Disclosure
Schedule, there are no subscriptions, options, warrants, equity securities, or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which Parent is a party or by
which it is bound obligating Parent to issue, deliver or sell, or cause to be
issued, delivered or sold, or repurchase, redeem or otherwise acquire, or
cause the repurchase, redemption or acquisition of, any shares of capital
stock, or similar ownership interests of Parent or obligating Parent to grant,
extend, accelerate the vesting of or enter into any such subscription, option,
warrant, equity security, call, right, commitment or agreement, except for the
issuance and delivery of those shares of its stock, contemplated to occur in
accordance with the terms and conditions hereunder. As of the date of this
Agreement, except as contemplated by this Agreement, there are no registration
rights and there is no voting trust, proxy, rights plan, anti-takeover plan or
other agreement or understanding to which Parent is a party or by which it is
bound with respect to any equity security of any class of Parent. The Parent
Stock is not the subject of any registration statement which was required to
be filed with the Securities and Exchange Commission or with any state's
securities commissioner.
4.5 Capital Stock of Merger Sub. The authorized capital stock or
ownership units of Merger Sub consists solely of 1,000 shares of common stock,
par value .001 per share. The total number of issued and outstanding shares
of common stock is one (1) share, which share is owned by the Parent. Merger
Sub does not have, nor has it ever had, any Subsidiaries. At the Effective
Time, there shall be no subscriptions, options, warrants, equity securities,
or similar ownership interests, calls, rights (including preemptive rights),
commitments, or agreements of any character to which Parent or Merger Sub will
be a party, or by which it will be bound obligating Merger Sub to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchased,
redeemed or to otherwise acquire, or cause the repurchase, redemption, or
acquisition of, any shares of capital stock of Merger Sub or that will
obligate Parent or Merger Sub to grant, extend, accelerate the vesting of or
enter into any such subscription, option, warrant, equity security, call,
right, commitment or agreement, except for those commitments for the sale,
exchange, and subsequent amalgamation of its stock, as is contemplated to
occur in accordance with the terms and conditions hereunder. As of the date
of this Agreement, except as contemplated by this Agreement, there are no
registration rights and there is no voting trust, proxy, rights plan,
anti-takeover plan or other agreement or understanding to which Parent or
Merger Sub is a party or by which it is bound with respect to any equity
security of any class or other similar ownership interest of Merger Sub.
4.6 Subsidiaries. The Parent's only Subsidiary is the Merger Sub.
Merger Sub is directly and wholly owned by the Parent. Merger Sub does not
have, nor has it ever had, any Subsidiaries.
4.7 No Conflicts. The execution and delivery by Parent of this
Agreement does not, and the performance of its obligations under this
Agreement and the consummation of the transactions contemplated hereby will
not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the articles of incorporation or
by-laws (or other comparable corporate charter documents) of Parent or Merger
Sub;
15
(b) conflict with or result in a violation or breach of any term
or provision of any Law or Order applicable to Parent, Merger Sub or any of
their respective Assets and Properties; or
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require Parent or Merger Sub to obtain any consent, approval or action
of, make any filing with or give any notice to any Person as a result or under
the terms of, (iv) result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, (v) result
in or give to any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under, or (vi) result in the
creation or imposition of any Lien upon Parent, or any of its respective
Assets and Properties pursuant to, any Contract or License to which it is a
party or by which any of its Assets and Properties is bound except for any of
the foregoing which, taken together, would not reasonably be expected to have
a material adverse effect on the business, operations or financial condition
of Parent or Merger Sub.
4.8 SEC Reports; Financial Statements. Parent has filed all forms,
reports and documents with the SEC required under the Securities Act and the
Exchange Act and each SEC Report filed by it (the "SEC Reports") complies with
the Securities Act and the Exchange Act. None of the SEC Reports contained,
when filed, any untrue statement of a material fact or omitted to state a
material fact required to be stated or incorporated by reference therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except to the extent
amended prior to the date hereof by a subsequently filed SEC Report. The
consolidated financial statements of Parent included in the SEC Reports
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC in respect
thereof and fairly presented, in conformity with United States generally
accepted accounting principles applied on a consistent basis during the
periods involved ("GAAP") (except as may be indicated in the notes thereto),
the consolidated financial position of Parent and its consolidated
subsidiaries, if any, in each case of the dates thereof and their consolidated
results of operations and changes in financial position for the periods then
ended (subject, in the case of unaudited interim financial statements, to the
absence of complete footnote disclosure and to normal year-end adjustments).
For purposes of this Agreement, "Parent Balance Sheet" means the consolidated
balance sheet of Parent as of December 31, 2000, as set forth in the Parent's
Annual Report on Form 10-K for the fiscal year ended December 31, 2000, and
"Parent Balance Sheet Date" means December 31, 2000. Since the Parent Balance
Sheet Date, there has not been any change, or any application or request for
any change, by the Parent or Merger Sub in accounting principles, methods or
policies for financial accounting or Tax purposes, other than as a result of
any changes under GAAP or other relevant accounting principles or changes
required by any applicable Tax rule or regulation.
4.9 Absence of Undisclosed Liabilities. To the knowledge of Parent,
except (i) as and to the extent reflected or disclosed in the Parent Financial
Statements and (ii) to the extent of reserves taken, neither Parent nor Merger
Sub has any material liabilities or obligations of a nature required by GAAP,
as consistently applied by Parent, to be reflected on a balance sheet except
for liabilities or obligations which were incurred in the ordinary course of
business.
16
4.10 Absence of Certain Changes. Except as set forth in Section 4.10
of the Parent Disclosure Schedule and to the knowledge of Parent, since
December 31, 2000, Parent and Merger Sub has conducted their businesses in the
ordinary course and there has not been any material adverse change in the
business, operations or financial condition of Parent or Merger Sub as a
whole, except as a result of general economic or industry-wide conditions.
Since December 31, 2000, Parent has not declared any dividends with respect to
its capital stock.
4.11 Taxes.
(a) Except as set forth in Section 4.11 of the Parent Disclosure
Schedule, Parent and Merger Sub have each (i) duly filed with the appropriate
federal, state, local and foreign taxing authorities all Tax Returns (as
hereinafter defined) required to be filed by or with respect to Parent and
Merger Sub other than those Tax Returns the failure of which to file would not
have a material adverse effect on the business, operations or financial
condition of Parent and Merger Sub taken as a whole, and such Tax Returns are
true, correct and complete in all material respects, and (ii) paid in full or
have made adequate provision on its balance sheet (in accordance with
generally accepted accounting principles) for all material Taxes (as
hereinafter defined) shown to be due on such tax returns. There are no
material liens for Taxes upon the assets of either Parent or Merger Sub except
for statutory liens for current taxes not yet due. Except as set forth in
Section 4.11 of the Parent Disclosure Schedule, neither Parent nor Merger Sub
has received any notice of deficiency or assessment from any federal, state,
local or foreign taxing authority with respect to liabilities or Taxes of
Parent or Merger Sub which has not been fully paid or finally settled, and any
such deficiency or assessment shown on such Schedule is being contested in
good faith through appropriate proceedings.
4.12 Litigation. Except as set forth in Section 4.12 of the Parent
Disclosure Schedule, there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of Parent, threatened against it or
Merger Sub (a) which could reasonably be expected to result in a material
adverse effect on the business, operations or financial condition of Parent
and Merger Sub taken as a whole, or (b) that in any manner calls into question
the validity or enforceability of this Agreement or any action taken or to be
taken in connection herewith. Neither Parent nor Merger Sub is a party or
subject to the provisions of any order, injunction, judgment or decree of any
court or government agency or instrumentality (other than government decrees
of general applicability) which could reasonably be expected to have a
material adverse effect on their businesses, operations and financial
conditions, taken as a whole.
4.13 Intellectual Property.
(a) Parent owns or has a license to use all trademarks, service
marks, trade names, and copyrights used in or required for its business or the
business of Merger Sub as presently conducted, free from any liens or security
interests. No royalty payments, license fees, or other similar payments with
respect to any third party trademark, service xxxx, trade name, or copyright
is past due except for any such payments which are being contested in good
faith.
(b) To the best of Parent's knowledge, (i) neither Parent nor
Merger Sub has infringed upon and neither of them is currently infringing
upon, any third party copyright or
17
trademark and (ii) none of them has misappropriated or engaged in the
unauthorized use of trade secret or similar confidential information of any
third party except for such infringements, misappropriations and unauthorized
use as would not, when taken together, be reasonably expected to have a
material adverse effect on the business, operations or financial condition of
Parent and Merger Sub taken as a whole. Except as set forth in Section
4.13(b) of the Parent Disclosure Schedule, there are no claims or proceedings
pending or, to Parent's knowledge, threatened in writing within the one year
prior to the Closing Date, against Parent or Merger Sub asserting that Parent
or Merger Sub is infringing or engaging in the unauthorized use of any
intellectual property or any person or entity.
4.14 Material Contracts; No Defaults. All of the Parents and Merger
Sub's executory Contracts have been entered into in the ordinary course of
business and except as described in Section 4.14 of the Parent Disclosure
Schedule and except as could not reasonably be expected to have a material
adverse effect on Parent and Merger Sub, taken as a whole, neither Parent or
Merger Sub has received a notice of breach or termination with respect to any
such Contract.
4.15 No Finders. Neither Parent nor the Merger Sub will be liable
directly or indirectly to pay any brokerage fee, commission, finder's fee or
financial advisory or similar fee by reason of the transactions contemplated
by this Agreement to any person claiming such compensation by reason of any
agreement or relationship with Parent or the Merger Sub or any affiliate
thereof or with Parent or the Merger Sub or any of their shareholders or any
affiliate thereof.
4.16 Securities Law Compliance. Provided that the Surviving
Corporation obtains the appropriate information from each of the holders of
Company Stock pursuant to a Letter of Transmittal in form attached hereto and
in reliance upon and subject to the accuracy of the information set forth
therein, the Parent Stock issuable upon conversion of the Company Stock
pursuant to this Agreement will be exempt from the registration requirements
of the Securities Act pursuant to Section 4(2) of such Act or another
exemption from registration thereunder and will also be exempt from state law
registration requirements.
4.17 Employee Relations. Parent and the Merger Sub have complied in
all material respects with all applicable laws, rules and regulations that
relate to prices, wages, hours, harassment, access by disabled persons,
discrimination in employment and collective bargaining and neither of them is
liable for (i) any arrears of wages, except to the extent that such arrears
are currently be contested in good faith, or (ii) any taxes or penalties for
failure to comply with any of the foregoing, except for such taxes or
penalties as are not reasonably expected, in the aggregate, to have a material
adverse effect on the business, operations or financial condition of Parent or
the Merger Sub taken as a whole.
4.18 Transactions With Affiliates. Section 4.18 of the Parent
Disclosure Schedule hereto lists each material contract, agreement or
arrangement between Parent or the Merger Sub and any person who is or has ever
been an officer, director or manager of Parent or Merger Sub, or person owning
of record or known by Parent or Merger Sub to own beneficially 10% or more of
the issued and outstanding common stock of Parent or Merger Sub (a "Parent
Affiliated Person"), and which either (i) is to be performed in whole or in
part after the date hereof or (ii) was entered into within one year before the
date hereof. Each such contract, agreement or arrangement required to be so
18
listed was entered into for a bona fide business purpose and either (i) the
amount paid or received, whether in cash, in services or in kind, was, in the
then reasonable business judgment of Parent or Merger Sub, as the case may be,
no less favorable to Parent or Merger Sub, than terms available from otherwise
unrelated third parties in arm's-length transactions or (ii) a comparable
arrangement was not, in the then reasonable business judgment of Parent or
Merger Sub, as the case may be, available from a third party. Except as
disclosed in Section 4.17 of the Parent Disclosure Schedule hereto or
otherwise disclosed herein, since September 31, 2000, no Parent Affiliated
Person has, or has had, any interest, directly or indirectly, in any material
transaction with Parent or Merger Sub.
4.19 Compliance with Securities Laws. Except as set forth in Section
4.19 of the Parent Disclosure Schedule, all of the securities issued by Parent
within the three years prior to the date of this Agreement were issued in
transactions exempt from registration under the Securities Act of 1933, as
amended, and applicable state securities laws.
4.20 Disclosure. Without limiting any of the representations and
warranties contained herein, no representation or warranty of Parent contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements made not misleading, in light of the
circumstances under which they were made.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 Rights Agreement. Simultaneously with the execution of this
Agreement, certain of the stockholders of Parent and certain of the
stockholders of the Company are entering into the Rights Agreement.
5.2 Voting Agreement. Simultaneously with the execution of this
Agreement, the Principal Stockholders and Parent are entering into the Voting
Agreement.
5.3 Consent of Company Stockholders.
(a) Promptly after the date hereof, the Company will take all
action necessary in accordance with Delaware Law and its Certificate of
Incorporation and bylaws to solicit from its stockholders their written
consent in favor of the adoption and approval of this Agreement and the
approval of the Merger, and will take all other action necessary or advisable
to secure the consent of its stockholders required by Delaware Law and to
obtain such approvals. In connection therewith the Company shall promptly
complete the preparation of a consent solicitation and otherwise comply with
all legal requirements applicable to obtaining approvals by its stockholders
of this Agreement and the transactions contemplated hereby. The Company shall
provide Parent with sufficient opportunity to comment upon the form and
substance of the solicitation statement (including any amendments or
supplements thereto) prior to distributing it to the Company's stockholders
and the Company shall use its reasonable best efforts to incorporate Parent's
reasonable comments into the solicitation statement (including any amendments
or supplements thereto) except to the extent that such comments include
information that contains an untrue statement of a material fact or
information that omits to state a material fact necessary in order to make the
statements made therein not misleading, in light of the circumstances under
which they were made.
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(b) The Board of Directors of the Company shall unanimously
recommend that the Company's stockholders vote in favor of and adopt and
approve this Agreement and approve the Merger. Neither the Board of Directors
of the Company nor any committee thereof shall withdraw, amend or modify, or
propose or resolve to withdraw, amend or modify in a manner adverse to Parent
or Merger Sub, the unanimous recommendation of the Board of Directors of the
Company that the Company's stockholders vote in favor of, adopt, and approve
the ensuing plan of reorganization and this Merger. For purposes of this
Agreement, said recommendation of the Board of Directors shall be deemed to
have been modified in a manner adverse to Parent if said recommendation shall
no longer be unanimous, provided that, for all purposes of this Agreement, an
action by any Board of Directors or committee thereof shall be unanimous if
each member of such Board of Directors or committee has approved such action
other than (i) any such member who has appropriately abstained from voting on
such matter because of an actual or potential conflict of interest and (ii)
any such member who is unable to vote in connection with such action as a
result of death or disability.
5.4 Reasonable Efforts; Notification. Upon the terms and subject to
the conditions set forth in this Agreement, each of the Parties agrees to use
all reasonable efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other Parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and the
other transactions contemplated by this Agreement.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS
OF PARENT AND MERGER ENTITY
The obligation of Parent and Merger Sub to consummate the Merger is
subject to the fulfillment, at or before the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by Parent in
its sole discretion):
6.1 Representations and Warranties. Each of the representations and
warranties made by Company in this Agreement (other than those made as of a
specified date earlier than the Closing Date) shall be true and correct in all
material respects on and as of the Closing Date as though such representation
or warranty was made on and as of the Closing Date, and any representation or
warranty made as of a specified date earlier than the Closing Date shall have
been true and correct in all material respects on and as of such earlier date.
6.2 Performance. The Company shall have performed and complied with,
in all material respects, each agreement, covenant and obligation required by
this Agreement to be so performed or complied with by such Parties at or
before the Closing.
6.3 Orders and Laws. There shall not be in effect on the Closing Date
any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or which could reasonably be expected to otherwise result in a
material diminution of the benefits of the transactions contemplated by this
Agreement to Parent, and there shall not be pending on the Closing Date any
Action or Proceeding in, before or by any Governmental or Regulatory Authority
which could reasonably be expected to result in the
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issuance of any such Order or the enactment, promulgation or deemed
applicability, the Company or the transactions contemplated by this Agreement
of any such Law.
6.4 Regulatory Consents and Approvals; Third Party Consents. All
consents (or in lieu thereof waivers) to the performance by the Company of its
obligations under this Agreement or to the consummation of the transactions
contemplated hereby as are required under any Contract to which Company is a
party or by which its Assets and Properties are bound (a) shall have been
obtained, (b) shall be in form and substance reasonably satisfactory, (c)
shall not be subject to the satisfaction of any condition that has not been
satisfied or waived and (d) shall be in full force and effect, except where
the failure to obtain any such consent (or in lieu thereof waiver) could not
reasonably be expected, individually or in the aggregate with other such
failures, to materially adversely affect Parent or the Business or Condition
of the Company.
6.5 Stockholder Approval. The written approval of the Merger by a
majority of the stockholders of Company (a) shall have been obtained, (b)
shall be in form and substance reasonably satisfactory to Parent, and (c)
shall not be subject to the satisfaction of any condition that has not been
satisfied or waived and notice thereof shall have been provided in accordance
with Delaware Law.
6.6 Other Agreements. The Rights Agreement, the Voting Agreement and
the Non-competition Agreements shall be in full force and effect.
ARTICLE 7
CONDITIONS PRECEDENT TO
OBLIGATIONS OF COMPANY
The obligation of the Company to consummate the Merger is subject to the
fulfillment, at or before the Closing, of each of the following conditions to
the satisfaction of the separate counsels of the Company and the Principal
Stockholders (all or any of which may be waived in whole or in part by Company
in its sole discretion):
7.1 Representations and Warranties. Each of the representations and
warranties made by Parent and Merger Sub in this Agreement (other than those
made as of a specified date earlier than the Closing Date) shall be true and
correct in all material respects on and as of the Closing Date as though such
representation or warranty was made on and as of the Closing Date, and any
representation or warranty made as of a specified date earlier than the
Closing Date shall have been true and correct in all material respects on and
as of such earlier date.
7.2 Performance. Parent and Merger Sub shall have performed and
complied with, in all material respects, each agreement, covenant and
obligation required by this Agreement to be so performed or complied with by
Parent or Merger Sub, respectively, at or before the Closing.
7.3 Regulatory Consents and Approvals. All consents, approvals and
actions of, filings with and notices to any Governmental or Regulatory
Authority necessary to permit Parent and Merger Sub to perform their
obligations under this Agreement and to consummate the transactions
contemplated hereby (a) shall have been duly obtained, made or given, (b)
shall be in form and substance reasonably satisfactory, (c) shall not be
subject to the satisfaction of any condition that has
21
not been satisfied or waived and (d) shall be in full force and effect, and
all terminations or expirations of waiting periods imposed by any Governmental
or Regulatory Authority necessary for the consummation of the transactions
contemplated by this Agreement shall have occurred.
7.4 Orders and Laws. There shall not be in effect on the Closing Date
any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or which could reasonably be expected to otherwise result in a
material diminution of the benefits of the transactions contemplated by this
Agreement to the Company, and there shall not be pending on the Closing Date
any Action or Proceeding in, before or by any Governmental or Regulatory
Authority which could reasonably be expected to result in the issuance of any
such Order or the enactment, promulgation or deemed applicability to Parent or
Merger Sub or the transactions contemplated by this Agreement of any such Law.
7.5 Stockholder Approval. The approval of the Merger by a majority of
the stockholders of the Company (a) shall have been obtained, (b) shall be in
form and substance reasonably satisfactory to the Company, and (c) shall not
be subject to the satisfaction of any condition that has not been satisfied or
waived and notice thereof shall have been provided in accordance with Delaware
Law.
7.6 Additional Agreements. The Guarantee, (as defined in Section 8.1),
and an Indemnification Agreement (as defined in Section 8.2) with respect to
the obligations referred to on the Company Disclosure Schedule 8.2 in form and
substance satisfactory to the Company, shall be in full force and effect . In
addition, the Rights Agreement, the Voting Agreement, the Contribution
Agreement by and between the Company, Xxxxx Xxxxxxxx and Xxxxx Xxxxx
("Contribution Agreement") and the Non-competition Agreements shall be in full
force and effect.
ARTICLE 8
COVENANTS
8.1 Assumption of Liabilities and Obligations of Company by Parent.
Prior to the Closing, Parent agrees to negotiate an assumption, settlement,
conversion or liquidation of the obligations of the Company to Xxxxx Xxxxxxxx
and Xxxxx Xxxxxx in amounts equal to approximately $800,000 in total pursuant
to a Guarantee, a copy of which is attached hereto as Exhibit "E".
8.2 Indemnification. At the Closing, Parent and Merger Sub will each
execute and deliver an indemnification agreement in the form attached hereto
as Exhibit "F"("Indemnification Agreement") in favor of the stockholders,
directors, and officers of the Company and IDI, with regard to any and all
liabilities and obligations of the Company or IDI for which they may be
personally liable as set forth in the Indemnification Agreement.
8.3 Conduct of Business Pending Completion of Merger. Prior to the
closing of the Merger, as contemplated by this Agreement, and except as
described hereafter at paragraph 11.2, Parent and the Company each agrees (i)
to conduct its business diligently and substantially in the same manner as
previously conducted, (ii) that it will not issue, sell, encumber or deliver,
or agree to issue, sell, encumber or deliver, any shares of any class of their
capital stock or any securities convertible into any securities in turn so
convertible, or any options, warrants, or other rights calling
22
for the issuance, sale or delivery of any such shares or convertible
securities or authorize or propose any change in its equity capitalization
other than upon the exercise of Company Options, (iii) that it will not issue
any Equity Equivalents, (iv) that it will not amend its articles of
incorporation or bylaws, except as contemplated by this Agreement and (v) that
it will not take any action that would or would reasonably be expected to
prevent, impair or materially delay its ability to consummate the transactions
contemplated by this Agreement. Parent and the Company will each use
commercially reasonable efforts to preserve intact its business organization
and assets and to maintain its existing relations with customer, employees and
business associates.
ARTICLE 9
TERMINATION OF REPRESENTATIONS AND WARRANTIES
9.1 Termination of Representations, Warranties. The respective
representations and warranties of Company, Parent and Merger Sub contained
herein, or in any certificates or other documents delivered in connection
herewith prior to or at the Closing, shall expire on and shall not survive the
Closing and the Effective Time; provided, however, that the covenants set
forth herein intended to be performed after the Closing and the Effective Time
shall continue in full force and effect in accordance with their terms.
ARTICLE 10
TERMINATION
10.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written agreement
of Company, Merger Sub, and Parent;
(b) at any time before the Closing, by Company or Parent, (i) in
the event of a material breach hereof by the non-terminating party if such
non-terminating party fails to cure such breach within five (5) Business Days
following notification thereof by the terminating party or (ii) upon
notification of the non-terminating party by the terminating party that the
satisfaction of any condition to the terminating party's obligations under
this Agreement becomes impossible or impracticable with the use of
commercially reasonable efforts if the failure of such condition to be
satisfied is not caused by a breach hereof by the terminating party;
(c) in the event that the transactions contemplated by this
Agreement shall not have been consummated on or before three months following
the date of this Agreement, and such delay has not been the result of a breach
by the terminating party.
10.2 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 10.1, this Agreement will forthwith become null and void,
and there will be no liability or obligation on the part of the Company,
Merger Sub, Principal Stockholders, or Parent (or any of their respective
officers, directors, employees, agents or other representatives or
Affiliates), except as provided in the next succeeding sentence and except
that the provisions with respect to expenses in Section 13.3 will continue to
apply following any such termination. Notwithstanding any other
23
provision in this Agreement to the contrary, termination of this Agreement
shall not relieve a party of liability for any breach of this Agreement
existing at the time of such termination, and the Company or Parent may seek
such remedies, including damages and fees of attorneys, against the other with
respect to any such breach as are provided in this Agreement or as are
otherwise available at Law or in equity.
ARTICLE 11
CERTAIN ADDITIONAL MATTERS
11.1 Management. Parent's Board of Directors shall take all such
action as may be necessary, including amending its Articles of Incorporation
and Bylaws, to cause the number of directors on the Board of Directors to be
increased to three (3) as of the Effective Time and to cause to be appointed
to Board of Directors of the Parent as of the Effective Time three (3)
designees of the Company stockholders. Each such director shall serve in
accordance with the terms and conditions set forth in the amended Articles of
Incorporation and Bylaws of Parent.
11.2 Redemption. Company's board of directors shall, prior to or at the
time of closing, take all such action as may be necessary, to cause the
co-founders of the Company to redeem, cancel or otherwise return to the
Company shares of the Company's common stock necessary to comply with the
exchange ratio set forth herein and repay, retire or otherwise reduce the
outstanding debts and obligations of the Company by a minimum of three hundred
thousand dollars ($300,000). The resolution(s) and duly authorized and
executed minutes of the Company's board of directors meeting regarding these
matters is attached hereto as Exhibit "E".
ARTICLE 12
RESOLUTION OF CONTROVERSIES AND DISPUTES.
12.1 Scope. The Parties hereby agree that any and all claims (except
only for requests for injunctive or other equitable relief) whether existing
now, in the past or in the future, as to which the Parties or any of their
Subsidiaries, successors (including the succession resulting from the effect
of the Merger and this Agreement), or affiliates may be adversarial parties,
and whether arising out of this Agreement or from any other cause or action,
will first be submitted to a qualified mediator. If a claim has been
submitted to a qualified mediator and the Parties are unable to reach an
agreeable resolution of the claim within thirty days of the submission of the
claim, the Parties shall be free to pursue further legal action.
12.2 Situs. The situs of mediation shall be chosen by the party
against whom mediation is sought, provided only that mediation shall be held
at a place in the reasonable vicinity of such party's place of business and
shall be within the State of Utah. The situs of counterclaims will be the
same as the situs of the original mediation. The mediator will decide any
disputes concerning situs.
12.3 Fees. Each party to the mediation shall pay its own costs and
counsel fees.
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ARTICLE 13
MISCELLANEOUS.
13.1 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class
postage prepaid) to the Parties at the following addresses or facsimile
numbers:
If to Company, addressed to:
xxxxxxxxx.xxx, Inc.
000 Xxxx 000 Xxxxx
Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
With a copy to:
Xxxxxxx Xxxxx & Xxxxxxx, P.C.
One Utah Center
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxx, III
If to Parent, addressed to:
Xxxxxxx Corporation
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
With a copy to:
Xxxxxx X. Xxxxxxx, Esq.
000 Xxxxx 000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number
as provided in this Section, be deemed given upon sending, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section, be deemed given upon receipt (in each case regardless of whether
such notice, request or other communication is received by any other Person to
whom a copy of such notice, request or other communication is to be delivered
pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.
13.2 Entire Agreement. This Agreement supersedes all prior discussions
and agreements between the Parties with respect to the subject matter hereof,
and together with the Rights Agreement, the Voting Agreements, the Non-compete
Agreements, the Indemnification Agreement and the Guarantee contains the
entire agreement between the Parties with respect to the subject matter
hereof.
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13.3 Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated hereby are
consummated, each party will pay its own costs and expenses incurred in
connection with the negotiation, execution and closing of this Agreement and
the Operative Agreements and the transactions contemplated hereby and thereby.
13.4 Waiver. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No
waiver by any party of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by Law or otherwise afforded, will be
cumulative and not alternative.
13.5 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
13.6 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except for assignments and transfers by operation of Law.
Notwithstanding the preceding sentence, this Agreement is binding upon, inures
to the benefit of and is enforceable by the Parties hereto and their
respective successors and assigns. In addition, the covenants, obligations
and agreements made under this Agreement by the Parent shall inure to the
benefit of and be binding upon any successor corporation or acquirer that
merges with or acquires Parent, whether by way of a stock purchase, asset
purchase, merger, consolidation, reorganization, or similar business
combination.
13.7 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
13.8 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part
hereof, and (c) the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom.
13.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to a contract
executed and performed in such State, without giving effect to the conflicts
of laws principles thereof.
13.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Signatures may be
exchanged by telecopy, with original signatures to follow. Each of the
Parties hereto agrees that it will be bound by its own telecopied signature
and that it accepts the telecopied signatures of the other Parties to this
Agreement. The original signature pages shall be
26
forwarded to Parent or its counsel and Parent or its counsel will provide all
of the Parties hereto with a copy of the entire Agreement.
13.11 No Negative Inference against Preparer. This Agreement is the
result of negotiations between the Parties, each of which is represented by
counsel of their own choosing. All Parties shall be deemed to have drawn this
Agreement and no negative inference or interpretation shall be made by a court
of competent jurisdiction, or by a mediator, against the party whose counsel
drafted this Agreement.
13.12 Third Parties. Any provision herein, to the contrary
notwithstanding, shall not be enforceable by any party other than a party to
this Agreement.
13.13 No Admission of Liability. Neither this Agreement nor the
negotiation, preparation, or submission hereof, shall be, or shall be deemed
or construed to be (i) an admission of (a) any liability by any of the
Parties, or (b) the validity of any claims; or (ii) the basis for any lawsuit
or mediation other than an action to enforce, or to seek damages, or other
remedy at law or equity for the breach of this Agreement.
[The Remainder of this Page Is Blank by Intention,
Signatures on following page]
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In Witness Whereof, this Agreement has been duly executed and delivered by the
duly authorized officer of each party hereto as of the date first above
written.
PARENT: Xxxxxxx Corporation
By:
Name: /s/ Xxxxxx Xxxx
Title: President
MERGER SUB: Internet Development, Inc.
(Wholly Owned
Subsidiary of Parent) By:
Name: /s/ Xxxxxx Xxxx
Title: President
COMPANY: xxxxxxxxx.xxx, Inc.,
a Delaware corporation
By:
Name: /s/ Xxxxxx X. Xxxxx
Title: Chief Executive Office
