Exhibit 2.1
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT ("Agreement") has been made and entered into as of
this 15th day of March, 2004, between the shareholders of Pyramid Music Corp.,
listed on the signature page hereto (collectively, the "Sellers"), Pyramid Music
Corp. (the "Company") and Lexington Xxxxxx Technologies, Inc., a Colorado
Corporation (the "Purchaser").
R E C I T A L S:
A. The Company is authorized to issue 50,000,000 shares of common stock
("Company Shares"), par value $.01 per share, of which 4,726,076 shares are
presently issued and outstanding.
B. The Purchaser is authorized to issue 100,000,000 shares of common stock
("Purchaser Shares"), no par value, of which 4,230,616 are presently issued and
outstanding and 10,000,000 shares of non-voting preferred stock, no par value,
of which no shares are presently issued and outstanding.
C. The parties hereto desire to effect a Share Exchange (the "Share Exchange")
pursuant to which Purchaser will issue 16,922,464 shares of the 21,053,076 then
outstanding shares of the Purchaser (80% of the then outstanding Purchaser
Shares) to the Sellers in return for one hundred percent of the issued and
outstanding shares of the Company
D. The Share Exchange will be effected as a tax-free exchange pursuant to
Section 351 and/or Section 368 of the Internal Revenue Code of 1986, as amended
(the "Code").
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, the parties hereto agree as follows and do thereby adopt this
Agreement.
ARTICLE I.
DEFINITIONS
The terms defined in this Article (except as otherwise expressly provided in
this Agreement) for all purposes of this Agreement shall have the respective
meanings specified in this Article.
"AFFILIATE" shall mean any entity controlling or controlled by another person,
under common control with another person, or controlled by any entity which
controls such person.
"AGREEMENT" shall mean this Agreement, and all the exhibits, schedules and other
documents attached to or referred to in the Agreement, and all amendments and
supplements, if any, to this Agreement.
"CLOSING" shall mean the closing of the Transaction at which the Closing
Documents shall be exchanged by the parties, except for those documents or other
items specifically required to be exchanged at a later time.
"CLOSING DATE" shall mean five days from the date the last of the closing
conditions and closing deliveries in this Agreement are fulfilled or waived, or
such other date as agreed in writing to by the parties on which the Closing
occurs.
"CLOSING DOCUMENTS" shall mean the papers, instruments and documents required to
be executed and delivered at the Closing pursuant to this Agreement, including
specifically the Escrow Agreement governing the delivery and exchange of the
shares detailed herein.
"CODE" shall mean the Internal Revenue of 1986, or any successor law, and
regulations issued by the Internal Revenue Service pursuant to the Internal
Revenue Code or any successor law.
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"ENCUMBRANCE" shall mean any charge, claim, encumbrance, community property
interest, condition, equitable interest, lien, option, pledge, security
interest, right of first refusal, or restriction of any kind, including any
restriction on use, voting (in the case of any security), transfer, receipt of
income, or exercise of any other attribute of ownership other than (a) liens for
taxes not yet due and payable, or (b) liens that secure the ownership interests
of lessors of equipment.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"GAAP" shall mean United States generally accepted accounting principles applied
in a manner consistent with prior periods.
"INVESTMENT LETTER" shall mean the investment letter in the form attached hereto
as Appendix A.
"MATERIAL ADVERSE EFFECT" means any change (individually or in the aggregate) in
the general affairs, management, business, goodwill, results of operations,
condition (financial or otherwise), assets, liabilities or prospects (whether or
not the result thereof would be covered by insurance) that would be material and
adverse to the designated party.
"ORDINARY COURSE OF BUSINESS" shall mean actions consistent with the past
practices of the designated party which are similar in nature and style to
actions customarily taken by the designated party and which do not require, and
in the past have not received, specific authorization by the Board of Directors
of the designated party.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"TAXES" shall include federal, state and local income taxes, capital gains tax,
value-added taxes, franchise, personal property and real property taxes, levies,
assessments, tariffs, duties (including any customs duty), business license or
other fees, sales, use and any other taxes relating to the assets of the
designated party or the business of the designated party for all periods up to
and including the Closing Date, together with any related charge or amount,
including interest, fines, penalties and additions to tax, if any, arising out
of tax assessments.
"TRANSACTION" shall mean the Share Exchange contemplated by this Agreement.
The following appendices and schedules are attached to and form part of this
Agreement:
APPENDICES
DESCRIPTION
Appendix A Investment Letter
SCHEDULES
DESCRIPTION
Schedule 2.1 Selling Shareholder's Share Ownership
Schedule 3.1.12 Purchaser SEC Documents
Schedule 5.2.1 Directors of Purchaser upon Closing
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ARTICLE II.
THE TRANSACTION
2.1. SHARE EXCHANGE. Subject to the terms and conditions of the Closing
Documents, the Sellers hereby agree to transfer and deliver to Purchaser, and
Purchaser hereby agrees to accept, 100% of the issued and outstanding Company
Shares, in return for the delivery of 16,922,464 newly issued, restricted
Purchaser Shares to Sellers to be distributed pro-rata based on share ownership
of the Company as detailed in Schedule 2.1.
2.2. SECURITIES LAW MATTERS.
2.2.1. Private Offering. The Parties understand that the Company Shares
and Purchaser Shares (the "Exchanged Shares") to be acquired and delivered to
the respective parties pursuant to the terms of this Agreement will not be
registered under the Securities Act, but will be transferred in reliance upon
exemptions available for private transactions, and that each is relying upon the
truth and accuracy of the representations set forth in the Investment Letter
signed by each of the respective parties and delivered concurrently with the
execution of this Agreement. Each certificate representing the Exchanged Shares
in the name of the Sellers or Purchaser, as applicable, pursuant to the terms of
this Agreement shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED UNLESS THEY ARE SO
REGISTERED OR, IN THE OPINION OF COUNSEL ACCEPTABLE TO THIS
CORPORATION, SUCH TRANSFER IS EXEMPT FROM REGISTRATION.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each Seller, severally
and not jointly, hereby represents and warrants to Purchaser that:
3.1.1. Title to Company Shares. At the time of delivery of the
Company Shares to Purchaser hereunder, Sellers will be the lawful owners of the
Company Shares in the amounts set forth in Schedule 2.1 attached hereto.
3.1.2. Authority to Execute and Perform Agreements. Each Seller
which is a corporation or other type of legal entity is, and on the Closing Date
will be, a duly organized and validly existing corporation (or other entity) in
good standing under the laws of its state of incorporation (or organization).
3.2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Purchaser that:
3.2.1. Organization of the Company; Foreign Qualification. The
Company is duly organized, validly existing, and in good standing under the laws
of the state of Florida and has all requisite corporate power, franchises, and
licenses to own its property and conduct the business in which it is engaged.
Each of the Company and the Sellers have the full power and authority (corporate
or otherwise) to execute, deliver and perform their respective obligations under
this Agreement and the Closing Agreements to which it is a party. A complete set
of the Company's corporate records, including its Certificate of Incorporation,
Bylaws, minutes, transfer records, have been delivered or made available to
Purchaser. The Company is duly qualified and in good standing as a foreign
corporation in every jurisdiction in which such qualification is necessary,
except to the extent the failure to be so qualified is not reasonably expected
to result in a Material Adverse Effect.
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3.2.2. Capitalization; Ownership of Transferred Shares.
3.2.2.1. The Company has an authorized capital stock consisting of
50,000,000 shares of common stock, par value $.01 per share, of which
4,726,076 shares are issued and outstanding and 100,000 shares of
preferred stock of which 100,000 shares are outstanding. All of the shares
of Company Stock have been validly issued, fully paid, are non-assessable,
and were issued in compliance with any preemptive or similar rights and in
compliance with applicable federal and state securities laws. All shares
held by the Sellers were legally and validly issued in compliance with
appropriate and applicable securities laws.
3.2.2.2. The Company does not have any outstanding subscriptions,
options, preferred stock, rights, warrants, convertible securities or
other agreements or commitments to issue, or contracts or any other
agreements obligating the Company to issue, or to transfer from treasury,
any shares of its capital stock or membership interests, as applicable, of
any class or kind, or securities convertible into such stock or interests.
No persons who are now holders of Company Stock, and no persons who
previously were holders of Company Stock, are or ever were entitled to
preemptive rights other than persons who exercised or waived those rights.
3.2.2.3. There is no outstanding vote, plan, pending proposal or
right of any person to cause any redemption of Company Stock. Neither the
Company nor any of its Affiliates, is under any obligation, contract or
other arrangement to register (or maintain the registration of) any of its
or their securities under federal or state securities laws.
3.2.2.4. Neither the Company nor the Sellers is a party to any
agreement, voting trust, proxy or other agreement or understanding of any
character, whether written or oral, with any other stockholders of the
Company with respect to or concerning the purchase, sale or transfer or
voting of the Company Stock or any other security of the Company.
3.2.2.5. Neither the Company nor the Sellers has any legal
obligations, absolute or contingent, to any other person or entity to sell
the assets, or any capital stock or any other security of the Company or
any of its subsidiaries or affect any merger, consolidation or other
reorganization of the Company or any of its subsidiaries or to enter into
any agreement with respect thereto, except pursuant to this Agreement.
3.2.2.6. The Sellers are the sole beneficial and record holders of
the Transferred Shares. The Sellers hold the Transferred Shares free and
clear of any Encumbrance of any kind whatsoever. The Transferred Shares
represent all of the issued and outstanding common stock of the Company.
3.2.3. Subsidiaries. The Company does not have any subsidiaries (whether
held directly or indirectly) or any equity investment in any corporation,
partnership, joint venture or other business.
3.2.4. Real Estate. The Company does not own any real estate or any
interest in any real estate.
3.2.5. Authority Relative to the Closing Documents; Enforceability. The
Sellers are not suffering from any legal disability which would: (a) prevent
them from executing, delivering or performing their obligations under the
Closing Documents or consummating the Transaction, (b) make such execution,
delivery, performance or consummation voidable or subject to necessary
ratification, and (c) require the signature or consent of any third party in
connection therewith for the Transaction to be binding and enforceable against
the Sellers and their property. The Closing Documents have been duly and validly
executed and delivered by the Sellers and each constitutes the legal, valid and
binding obligation of the Sellers, enforceable against them in accordance with
their respective terms, except insofar as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditor's rights and remedies generally, the
remedies of specific performance and injunctive and other forms of equitable
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relief may be subject to equitable defenses and general principles of equity and
to the discretion of the court before which any proceeding therefore may be
brought, and the state and federal laws of public policy and how such laws
effect the rights of indemnity and contribution (the "Insolvency/Equity
Exceptions").
3.2.6. Title to Assets. The Company has good and marketable title free and
clear of any Encumbrance in and to all of the assets and properties identified
to Purchaser, as set forth in Schedule 3.1.6.
3.2.7. Material Contracts. Except as disclosed to Purchaser, the Company
is not a party to or bound by any material agreement or contract.
3.2.8. Compliance with Other Instruments; Consents. Neither the execution
of any Closing Document nor the consummation of the Transaction will conflict
with, violate or result in a breach or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default), or result in
a termination of, or accelerate the performance required by, or result in the
creation of any Encumbrance upon any assets of the Company under any provision
of the Articles of Incorporation, Bylaws, indenture, mortgage, lien, lease,
agreement, contract, instrument, order, judgment, decree, statute, ordinance,
regulation or any other restriction of any kind or character to which the
Company is bound.
3.2.9. Litigation. There are no legal, administrative, arbitration or
other proceedings or claims pending against the Company, nor is the Company
subject to any existing judgment which might affect the financial condition,
business, property or prospects of the Company; nor has the Company received any
inquiry from an agency of the federal or of any state or local government about
the Transaction, or about any violation or possible violation of any law,
regulation or ordinance affecting its business or assets.
3.2.10. Taxes. The Company either: (a) has timely filed with the
appropriate taxing authority all Tax and information returns required to have
been filed by the Company or (b) has timely filed for any required extensions
with regard to such returns. All Taxes of the Company have been paid (or
estimated Taxes have been deposited) to the extent such payments are required
prior to the date hereof or accrued on the books of the Company. The returns
were correct when filed. There are no pending investigations of the Company
concerning any Tax returns by any federal, state or local Taxing authority, and
there are no federal, state, local or foreign Tax liens upon any of the
Company's assets.
3.2.11. Compliance with Law and Government Regulations. The Company is in
compliance with, and is not in violation of, applicable federal, state, local or
foreign statutes, laws and regulations (including without limitation, any
applicable environmental, building, zoning or other law, ordinance or
regulation) affecting the Company or its properties or the operation of its
business. The Company is not subject to any order, decree, judgment or other
sanction of any court, administrative agency or other tribunal.
3.2.12. Trade Names and Rights. Except as set forth on Schedule 3.1.12,
the Company does not own any trademarks, trademark registrations or
applications, trade names, service marks, copyrights, copyright registrations or
applications. No person owns any trademark, trademark registration or
application, service xxxx, trade name, copyright or copyright registration or
application, the use of which is necessary or contemplated in connection with
the operation of the Company's business.
3.2.13. Accuracy of Financial Statements. The Company and Sellers have
delivered interim financial statements of the Company ("Financial Statements").
The Company and Sellers also represent and warrant that the Financial Statements
fully and fairly present in all material respects the financial position of the
Company as at the date of the Financial Statements. The books and records of the
Company fully and fairly reflect in all material respects all of its
transactions, properties, assets and liabilities. The Company and Sellers
represent and warrant that there has been no material adverse change in the
financial condition of the Company from that stated in the financial statements.
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3.2.14. Full Disclosure. None of the representations and warranties made
by the Sellers herein, or in any Closing Document furnished or to be furnished
by them hereunder contain or will contain any untrue statement of material fact,
or omits any material fact, the omission of which would be misleading.
3.3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby
represents and warrants to Sellers and the Company that:
3.3.1. Organization of Purchaser; Foreign Qualification. Purchaser is duly
organized, validly existing, and in good standing under the laws of the state of
Colorado and has all requisite corporate power, franchises, and licenses to own
its property and conduct the business in which it is engaged. Purchaser has the
full power and authority (corporate or otherwise) to execute, deliver and
perform its obligations under this Agreement and the Closing Agreements to which
it is a party. A complete set of Purchaser's corporate records, including its
Certificate of Incorporation, Bylaws, minutes, transfer records, have been
delivered or made available to Sellers. Purchaser is duly qualified and in good
standing as a foreign corporation in every jurisdiction in which such
qualification is necessary, except to the extent the failure to be so qualified
is not reasonably expected to result in a Material Adverse Effect.
3.3.2. Capitalization; Ownership of Transferred Shares.
3.3.2.1. Purchaser has an authorized capital stock consisting
of 1000,000,000 shares of common stock, having no par value per
share, of which 4,230,616 are issued and outstanding (prior to the
Share Exchange) and 10,000,000 shares of preferred stock of which no
shares are outstanding. All of the shares of Company Stock have been
validly issued, fully paid, are non-assessable, and were issued in
compliance in compliance with applicable federal and state
securities laws. All shares held by the Sellers were issued in
compliance with federal and state securities laws.
3.3.2.2. Purchaser does not have any outstanding
subscriptions, options, preferred stock, rights, warrants,
convertible securities or other agreements or commitments to issue,
or contracts or any other agreements obligating Purchaser to issue,
or to transfer from treasury, any shares of its capital stock or
membership interests, as applicable, of any class or kind, or
securities convertible into such stock or interests. No persons who
are now holders of Purchaser's common stock, and no persons who
previously were holders of Purchaser's common stock, are or ever
were entitled to preemptive rights other than persons who exercised
or waived those rights.
3.3.2.3. There is no outstanding vote, plan, pending proposal
or right of any person to cause any redemption of Purchaser's common
stock. Neither Purchaser nor any of its Affiliates, is under any
obligation, contract or other arrangement to register (or maintain
the registration of) any of its or their securities under federal or
state securities laws. No shareholders of the Purchaser have a right
to receive dividends and no unpaid dividends are due and owing with
regard to the Purchaser's capital stock.
3.3.2.4. The Purchaser Shares shall be validly issued from the
Purchasers authorized common stock.
3.3.3. Subsidiaries. Purchaser does not have any subsidiaries (whether
held directly or indirectly) or any equity investment in any corporation,
partnership, joint venture or other business.
3.3.4. Real Estate. Purchaser does not own any real estate or any interest
in any real estate, except as disclosed in the SEC Documents.
3.3.5. Authority Relative to the Closing Documents; Enforceability.
Purchaser is not suffering from any legal disability which would: (a) prevent it
from executing, delivering or performing its obligations under the Closing
Documents or consummating the Transaction, (b) make such execution, delivery,
performance or consummation voidable or subject to necessary ratification, and
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(c) require the signature or consent of any third party in connection therewith
for the Transaction to be binding and enforceable against Purchaser and its
property. The Purchaser has and on the Closing Date will have the power and
authority to enter into this Agreement and the Closing Documents and to
consummate the transactions contemplated hereby and thereby. The Purchaser has
or will have prior to the Closing Date approved this Agreement and the
transactions contemplated hereby by appropriate corporate action. This Agreement
and the Closing Documents have been duly and validly executed and delivered and
each constitutes the legal, valid and binding obligation, enforceable against
Purchaser in accordance with their respective terms, except insofar as the
enforcement thereof may be limited by the Insolvency/Equity Exceptions.
3.3.6. Contracts. Purchaser has, and on the Closing Date will have, no
agreements, contracts or commitments to which it is or on the Closing Date will
be a party, except as described in Schedule 3.3.6.. Purchaser represents and
warrants that all of the contracts described on Schedule 3.3.6 are terminable
unilaterally by Purchaser without penalty or restriction or have already been
properly terminated.
3.3.7. Labor Matters. There are presently no employment or consulting
contracts with, or covenants against competition by, any present or former
employees of Purchaser. Purchaser has no employees other than its sole officer.
3.3.8. Compliance with Other Instruments; Consents. Neither the execution
of this Agreement or any Closing Document nor the consummation of the
Transaction will conflict with, violate or result in a breach or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default), or result in a termination of, or accelerate the
performance required by, or result in the creation of any Encumbrance upon any
assets of Purchaser under any provision of the Articles of Incorporation,
Bylaws, indenture, mortgage, lien, lease, agreement, contract, instrument,
order, judgment, decree, statute, ordinance, law, regulation or any other
restriction of any kind or character to which Purchaser is bound. The execution
and delivery of this Agreement or any Closing Document nor the consummation of
the Transaction contemplated by this Agreement, except as set forth on Schedule
3.3.8, require the consent of any governmental or administrative agency or any
other person not a party hereto.
3.3.9. Financial Statements. Purchaser's audited financial statements (the
"Purchaser Financial Statements") for the year ended December 31, 2002 and
unaudited quarterly financial statements for the nine month period ended
September 30, 2003, copies of which have been delivered to Purchaser, are true
and complete in all material respects, and have been prepared in accordance with
GAAP for the period covered by such statements, and fairly present, in
accordance with GAAP, the properties, assets and financial condition of
Purchaser, and results of its operations as of the dates and for the periods
covered thereby. Except as may be disclosed in the SEC Documents, there has been
no material adverse change in the business operations, assets, properties,
prospects or condition (financial or otherwise) of Purchaser, taken as a whole,
from that reflected in the Purchaser Financial Statements. As of the Closing
Date, Purchaser will not have any debts, liabilities (including tax liabilities)
or obligations or claims of any nature, whether accrued, absolute, un-matured,
contingent, or otherwise, whether due or to become due. There are, and will be
as of the Closing Date, no accounts payable and no liabilities owed by
Purchaser.
3.3.10. Litigation. There are no legal, administrative, arbitration or
other proceedings or claims pending against Purchaser, nor is Purchaser subject
to any existing judgment which might affect the financial condition, business,
property or prospects of Purchaser; nor has Purchaser received any inquiry from
an agency of the federal or of any state or local government about the
Transaction, or about any violation or possible violation of any law, regulation
or ordinance affecting its business or assets.
3.3.11. SEC Documents. Purchaser has furnished or made available to
Sellers a true and complete copy of each report, schedule, registration
statement and proxy statement filed by Purchaser with the SEC since the
inception of Purchaser (as such documents have since the time of their filing
been amended, the "SEC Documents"), a list of which is attached as Schedule
3.1.11. Purchaser has filed with the SEC all documents required to have been
filed pursuant to the Securities Act and the Exchange Act. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act, or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of a
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material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
3.3.12. Taxes. Purchaser either: (a) has timely filed with the appropriate
taxing authority all Tax and information returns required to have been filed by
Purchaser or (b) has timely filed for any required extensions with regard to
such returns. All Taxes of Purchaser have been paid (or estimated Taxes have
been deposited) to the extent such payments are required prior to the date
hereof or accrued on the books of Purchaser. The returns were correct when
filed. There are no pending investigations of Purchaser concerning any Tax
returns by any federal, state or local Taxing authority, and there are no
federal, state, local or foreign Tax liens upon any of Purchaser's assets.
3.3.13. Compliance with Law and Government Regulations. Purchaser is in
compliance with, and is not in violation of, applicable federal, state, local or
foreign statutes, laws and regulations (including without limitation, any
applicable environmental, building, zoning or other law, ordinance or
regulation) affecting Purchaser or its properties or the operation of its
business. Purchaser is not subject to any order, decree, judgment or other
sanction of any court, administrative agency or other tribunal.
3.3.14. Trade Names and Rights. Purchaser does not use any trademark,
service xxxx, trade name, or copyright in its business, nor does it own any
trademarks, trademark registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications. No person owns any
trademark, trademark registration or application, service xxxx, trade name,
copyright or copyright registration or application, the use of which is
necessary or contemplated in connection with the operation of Purchaser's
business. Purchaser is not infringing upon any intellectual property right of
any person.
3.3.15. Investment Company Act. Purchaser is not, and upon completion of
the Transaction will not be, subject to registration as an investment company
under the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
3.3.16. Affiliated Transactions. There are no loans, leases or other
contracts outstanding between Purchaser and any officer or director of Purchaser
or any person related to any officer or director of Purchaser.
3.3.17. Sanctions. During the past five year period, no officer or
director of Purchaser has been subject of:
3.3.17.1. a petition under the federal bankruptcy laws or any other
insolvency or creditor's rights laws, nor has a receiver, fiscal agent or
similar officer been appointed by a court for the business or property of such
person, or any partnership in which he was a general partner at or within two
years before the time of such filing or such appointment, or any corporation or
business association of which he was an executive officer at or within two years
before the time of such filing or appointment;
3.3.17.2. a conviction in a criminal proceeding or a named subject
of a pending criminal proceeding;
3.3.17.3. any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining him from, or otherwise limiting, the following activities:
acting as a futures commission merchant, introducing broker, commodity trading
advisor, commodity pool operator, floor broker, leverage transaction merchant,
any other person regulated by the United States Commodity Futures Trading
Commission or any associate person of any of the foregoing, or as an investment
adviser, underwriter, broker or dealer in securities, or as an affiliated
person, director or employee of any investment company, bank, savings and loan
association or insurance company, or engaging in or continuing any conduct or
practice in connection with such activities; engaging in any type of business
activity; and engaging in any activity in connection with the purchase or sale
of any security or commodity or in connection with any violation or federal,
state or other securities laws or other laws.
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3.3.17.4. any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any federal, state or local authority barring,
suspending or otherwise limiting for more than 60 days the right of such person
to engage in any activity described in Section 3.3.17.3 above, or to be
associated with persons engaged in any such activity.
3.3.17.5. a finding by a court of competent jurisdiction in a civil
action or by the United States Securities and Exchange Commission to have
violated any federal commodities law, and the judgment in such civil action or
finding by the United State Securities and Exchange Commission has not been
subsequently reversed.
3.3.17.6. a finding by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed.
3.3.18. Purchaser Representation. Purchaser has not taken and will not
take and no officer, shareholder or director has taken, directly or indirectly,
any action designed to, or which has constituted, or which might reasonably be
expected to, cause or result in any violations of federal or state securities
laws.
3.3.19. Employee Benefit Plans. Purchaser has no pension plan, profit
sharing plan, stock option plan or similar employee benefit plan.
3.3.20. Broker's Fees. Purchaser nor any of its officers or directors has
engaged any broker or finder or incurred any liability for any broker's fees,
commissions or finder's fees in connection with any the Transaction.
3.3.21. Questionable Payments. Neither Purchaser, not any current or
former shareholder, director or officer of Purchaser, has (a) used any corporate
funds for any illegal contributions, gifts, entertainment or other unlawful
expenses related to political activity; (b) used any corporate funds for any
direct or indirect unlawful payments to any foreign or domestic government
officials or employees; (c) made any false or fictitious entries on Purchasers
books and records; (d) made any bribe, rebate, payoff, kickback, influence
payment or otherwise on behalf of Purchaser; or (e) made any favor or gift that
is not deductible for federal income tax purposes using corporate funds on
behalf of Purchaser.
3.3.22. Blank Check Company Status. Purchaser is not a "blank check
company" as defined in the Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, is not required to comply with Section 7(b) of the
Securities Act or Regulation 410 promulgated under the Securities Act.
3.3.23. Full Disclosure. None of the representations and warranties made
by Purchaser herein, or in any Closing Document furnished or to be furnished by
them hereunder contain or will contain any untrue statement of material fact, or
omits any material fact, the omission of which would be misleading.
ARTICLE IV.
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
4.1. FILING WITH SECURITIES AND EXCHANGE COMMISSION. Upon the consummation of
this Agreement, if required to do so by law, Purchaser shall file with the SEC
an Information Statement on Schedule 14F (the "Schedule 14F") or such other
documents as may be required, disclosing the anticipated resignation of the
current directors and appointment of the anticipated new directors as provided
herein, in a form that will satisfy the requirements of law. The parties agree
to cooperate in the preparation and filing of such report or any other filings
to be filed with the SEC.
4.2. BROKERS OR FINDERS. Each party agrees to hold the others harmless and to
indemnify them against the claims of any persons or entities claiming to be
entitled to any brokerage commission, finder's fee, advisory fee or like payment
from such other party based upon actions of the indemnifying party in connection
with the Transaction.
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ARTICLE V.
CLOSING DELIVERIES
5.1. THE CLOSING. The Closing shall take place on the Closing Date (unless such
date is extended by the mutual agreement of the parties) at such location as
agreed to by the parties. Notwithstanding the location of the Closing, each
party agrees that the Closing may be completed by the exchange of undertakings
between the respective legal counsel for the Sellers and Purchaser, provided
such undertakings are satisfactory to each party's respective legal counsel.
5.2. DELIVERIES BY THE PURCHASER. Purchaser hereby agrees to deliver, or cause
to be delivered, to Sellers the following items on Closing:
5.2.1. Certified Resolutions. Copies of the resolutions, certified by an
officer of the Company, of the Board of Directors of the Company approving the
terms of this Agreement, and a copy of the resolution of the shareholders of the
Company approving the Share Exchange.
5.2.2. Resignations. A copy of the resignations of the existing directors
and officers of Purchaser, to be effective as of the Closing Date.
5.2.3. Termination of Contracts. Evidence satisfactory to the Sellers that
all contracts and all payables and liabilities have been terminated, effective
as of the Closing Date without any payment by, or continuing liability to, the
Company.
5.2.4. Stock Certificates. A stock certificate or certificates
representing the Purchaser Shares issued in the name of Sellers.
5.2.5. SEC Filings. Evidence that all SEC filings have been properly
certified and filed with the SEC.
5.2.6. Transfer Agent Direction. A direction of Purchaser to its transfer
agent to register the Purchase Price Shares in the name of the Sellers with the
legend set forth in paragraph 2.2.1 of this Agreement or such legend as is
otherwise required by law.
5.2.7. Closing Certificate. The Purchaser shall deliver a certificate to
Sellers and Company confirming, as of the Closing Date, the matters set forth in
Article VII of this Agreement.
5.2.8. Opinion of Purchaser's Counsel. Sellers and the Company shall have
received a satisfactory opinion from Purchaser's counsel.
5.2.9. Investment Letter. The Investment Letter, executed by the
Purchaser.
5.3. DELIVERIES BY SELLERS AND COMPANY. Sellers and Company hereby agree to
deliver to the Purchaser the following items on Closing:
5.3.1. Certified Resolutions. Copies of the resolutions, certified by an
officer of the Company, of the Board of Directors of the Company approving the
terms of this Agreement, and a copy of the resolution of the shareholders of the
Company approving the sale of the Transferred Shares.
5.3.2. Stock Certificates. A stock certificate or certificates
representing the Company shares, together with such stock powers, legal opinions
and all other documentation required by the Company's transfer agent to reissue
such shares in the name of Purchaser.
5.3.3. Investment Letter. The Investment Letter, executed by the Sellers.
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PAGE 10
5.3.4. Transfer Agent Direction. A direction of the Company to the
Company's transfer agent to register the Transferred Shares in the name of the
Purchaser with the legend set forth in paragraph 2.2.1 of this Agreement or such
legend as is otherwise required by law.
ARTICLE VI.
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
Purchaser's obligation to perform under this is subject to the satisfaction, at
or prior to Closing, of each of the following conditions (any of which may be
waived by Purchaser, in whole or in part):
6.1. PERFORMANCE OF COVENANTS. The Sellers shall have performed all covenants
and agreements required to be completed prior to or on closing, including
completion of the deliveries required by this Agreement.
6.2. ACCURACY OF REPRESENTATIONS. All of Sellers' representations and warranties
in this Agreement (considered collectively), and each of Sellers'
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement, and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
ARTICLE VII.
CONDITIONS PRECEDENT TO SELLERS' AND COMPANY'S OBLIGATION TO CLOSE
The Sellers' and Company's obligations to perform under this Agreement are
subject to the satisfaction, at or prior to Closing, of each of the following
conditions (any of which may be waived by the Sellers, in whole or in part):
7.1. PERFORMANCE OF COVENANTS. Purchaser shall have performed all covenants and
agreements required to be completed prior to or on closing, including completion
of the deliveries required by Section 5.2 of this Agreement.
7.2. ACCURACY OF REPRESENTATIONS. All of Purchaser's representations and
warranties in this Agreement (considered collectively), and each of Purchaser's
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement, and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
7.3. NO MATERIAL ADVERSE EFFECT. There shall have been no Purchaser Material
Adverse Effect since the date of this Agreement.
7.4. APPROVALS. All action required to be taken by, or on the part of, Purchaser
to authorize the execution, delivery and performance of this Agreement by
Purchaser and the consummation of by Purchaser of the transactions contemplated
hereby shall have been duly and validly taken by the Board of Directors and
stockholders of the Purchaser.
7.5. AUTHORIZATIONS. Any and all permits, consents, waivers, clearances,
approvals and authorizations of all third parties with are necessary or
advisable in connection with the consummation of the Transaction shall have been
obtained.
7.6. DUE DILIGENCE. The satisfactory completion, as determined by the Sellers
and the Company, of the Sellers' and Company's due diligence regarding
Purchaser.
ARTICLE VIII.
SURVIVAL OF REPRESENTATIONS
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8.1. REPRESENTATIONS TO SURVIVE CLOSING. The representations and warranties of
the Sellers and Purchaser contained herein or in any document furnished pursuant
hereto shall survive the Closing of the Transaction for a period of one year
following the Closing. Each party acknowledges and agrees that, except as
expressly set forth in this Agreement or any Closing Document, no party has made
(and no party is relying on) any representation or warranties of any nature,
express or implied, regarding any or relating to any of the transactions
contemplated by this Agreement.
ARTICLE IX.
COVENANTS OF THE PARTIES
9.1. PURCHASER SPECIAL BOARD MEETING. On the Closing Date, Purchaser shall cause
a special meeting of the Board of Directors shall be held, at which meeting the
size of the Board of Directors shall be set at 5 members. Xxxxxxx Xxxxxxx, Xxxxx
Xxxx, Xxx Xxxxxxx, Xxxxx Xxxxxx and Xxxxxxx Xxxxxxxxx shall be appointed as new
directors of the Purchaser and all resignations of officers and directors
tendered on the Closing Date shall be accepted. Xxxxx Xxxx shall be appointed as
President, Secretary and Treasurer of the Purchaser.
9.2. SEC FILINGS. Purchaser agrees that prior to the Closing Date, it has or
will file all reports and filings required to be filed under the Exchange Act
and Securities Act.
9.3. NEGATIVE COVENANT OF PURCHASER. Purchaser shall not, prior to the Closing
Date, (a) change any provision of its certificate of incorporation or bylaws,
except to increase the authorized number of shares of common stock from
20,000,000 to 100,000,000 and of preferred stock from 5,000,000 to 10,000,000,
or (b) issue or grant any registration rights to any person which are superior
to those set forth in the Registration Agreement or which could otherwise
adversely affect the rights granted thereunder.
9.4. ACCESS TO RECORDS; CONFIDENTIALITY
9.0.1. During the period from the date of this Agreement to the
Closing Date, Purchaser and the Company shall permit the other party and its
representatives, agents and designees reasonable access to its properties and
those of its subsidiaries (if any), and shall disclose and make available to
them all books, papers and records relating to the assets, stock, ownership,
properties, operations, obligations and liabilities of it an its subsidiaries
(if any), including, but not limited to, all books of accounts, tax records,
minute books, organizational documents, bylaws, material contracts and
agreements, regulatory filings, accountants records and work papers, litigation
files, business plans, plans affecting employees, and any other business
activities or prospects in with Purchaser or the Company, as applicable, may
have an interest.
9.0.2. All information furnished by Purchaser to the Company and by
the Company to the Purchaser pursuant hereto shall be treated as the sole
property of the furnishing party and, if the Share Exchange shall not occur, the
receiving party shall return to the furnishing party, all information, documents
(in whatever form including electronic) or other materials containing reflecting
or referring to such information, shall use best efforts to keep confidential
all such information, and shall not directly or indirectly use such information
for any competitive or other commercial purpose. The obligation to keep such
information confidential shall not apply to (i) any information which: the
receiving party can establish was already in it possession prior to the
disclosure thereof by the furnishing party, that was then generally know in the
public domain, became known to the public through no fault of the party
receiving the information; or was disclosed to the receiving party by a third
party not bound by an obligation of confidentiality or (ii) disclosures in
accordance with an order of a court of competent jurisdiction.
9.1. EXCLUSIVITY. So long as this Agreement remains in effect, Purchaser shall
not and Purchaser shall not authorize or permit any of its directors, officers,
employees or agents to directly or indirectly (i) respond to, solicit, initiate
or encourage any inquiries related to, or the making of any proposal relating
to, an Acquisition Transaction (as defined below), (ii) recommend or endorse an
Acquisition Transaction (iii) participate in any discussions or negotiations
regarding an Acquisition Transaction, (iv) provide any third party any
non-public information relating to an Acquisition Transaction or (v) enter into
an agreement with any other party with regard to an Acquisition Transaction.
Purchaser will immediately cease all activity, discussions or negotiations
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PAGE 12
previously conducted by any parties other than the Company with regard to an
Acquisition Transaction. Purchaser will immediately notify the Company in
writing if any inquiries or proposals relating to an Acquisition Transaction are
received. "Acquisition Transaction" means (i) a merger, consolidation, share
exchange, or any similar transaction, involving Purchaser, (ii) a purchase,
lease or other acquisition of all or a substantial portion of the assets or
liabilities of Purchaser or (iii) a purchase or other acquisition of a
substantial interest in any class or series of equity securities of Purchaser.
9.2. FURTHER ASSURANCES. In case at any time after the Closing Date any further
action is necessary or desirable to carry out the purposes of this Agreement,
each party to this Agreement shall take such necessary action, including but not
limited to responding to SEC comments on any filings made with the SEC and
working diligently to have all comments cleared by the SEC.
ARTICLE X.
TERMINATION AND AMENDMENT
10.1. TERMINATION. This Agreement may be terminated at any time prior to the
Closing Date: (a) by mutual written consent of the parties; (b) by the Sellers,
Company or Purchaser, if the Closing Date shall not have occurred on or prior to
February 15, 2004, unless the failure of such occurrence shall be due to the
failure of the party seeking to terminate this Agreement to perform or observe
its agreements, conditions and obligations set forth herein; (c) by the Sellers
or the Company, if there shall have been any material breach of any of the
Purchaser's obligations hereunder and such breach shall not have been remedied
within 10 days after receipt by Purchaser of specific written notice of such
breach, or (d) by the Purchaser, if there shall have been any material breach of
any of the Sellers' or Company's obligations hereunder and such breach shall not
have been remedied within 10 days after receipt by the Sellers or Company of
specific written notice of such breach.
10.2. EFFECT OF TERMINATION. In the event of termination of this Agreement by
any party hereto as provided above, this Agreement shall become void (other than
Sections 9.4 and 11.3 which remain in full force and effect) and there shall be
no further liability (except for liability under Sections 9.4 and 11.3) on the
parties. Nothing in this section shall relieve any party hereto from liability
for any breach of this Agreement.
10.3. AMENDMENT. This Agreement may only be amended by an instrument in writing
signed by each of the parties hereto.
ARTICLE XI.
MISCELLANEOUS
11.1. NOTICES. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed delivered if delivered by hand, by
telecopier, by courier or mailed by certified or registered mail, postage
prepaid, addressed to the following persons at their last know or provided
address:
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PAGE 13
IF TO THE SELLERS:
Pyramid Music Corp.
00000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxx, XX 00000
Attn: Xxxxx Xxxx
IF TO THE COMPANY:
Pyramid Music Corp.
00000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxx, XX 00000
Attn: Xxxxx Xxxx
IF TO PURCHASER:
Xxxxxxx X. Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
11.2. ASSIGNABILITY AND PARTIES IN INTEREST. This Agreement shall not be
assignable by any of the parties hereto without the consent of all other parties
hereto. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors. Nothing in this Agreement is
intended to confer, expressly or by implication, upon any other person any
rights or remedies under or by reason of this Agreement.
11.3. EXPENSES. Each party shall bear its own expenses and costs, including the
fees of any attorney retained by it, incurred in connection with the preparation
of the Closing Documents and consummation of the Transaction.
11.4. GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Florida. Each of the
parties hereto consents to the personal jurisdiction of the federal and state
courts in the State of Florida in connection with any action arising under or
brought with respect to this Agreement.
11.5. COUNTERPARTS. This Agreement may be executed as of the same effective date
in one or more counterparts, each of which shall be deemed an original.
11.6. HEADINGS. The headings and subheadings contained in this Agreement are
included solely for ease of reference, and are not intended to give a full
description of the contents of any particular Section and shall not be given any
weight whatever in interpreting any provision of this Agreement.
11.7. PRONOUNS, ETC. Use of male, female and neuter pronouns in the singular or
plural shall be understood to include each of the other pronouns as the context
requires. The word "and" includes the word "or". The word "or" is disjunctive
but not necessarily exclusive.
11.8. COMPLETE AGREEMENT. This Agreement, the Schedules and Appendices hereto,
and the documents delivered pursuant hereto or referred to herein or therein
contain the entire agreement between the parties with respect to the Transaction
and, except as provided herein, supersede all previous negotiations, commitments
and writings.
11.9. MODIFICATIONS, AMENDMENTS AND WAIVERS. This Agreement shall not be
modified or amended except by a writing signed by each of the parties hereto.
Prior to the Closing, the Sellers may amend any of the disclosure schedules
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PAGE 14
referenced herein by giving the other party notice of such amendments. If such
amended disclosures reveal material adverse information about the Company,
Purchaser may terminate this Agreement without liability to the Sellers.
11.10. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the Transaction is not affected in any manner adverse to any party hereto. Upon
any such determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the parties hereto will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in any acceptable manner to the end that the Transaction are
consummated to the extent possible.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
PURCHASER:
Lexington Xxxxxx Technologies, Inc.
By:
Name/Title:
---------------------------------
SELLERS:
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Company:
By:
-----------------------------------------
Name/Title:
---------------------------------
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PAGE 16
APPENDIX A
INVESTMENT LETTER
[CLOSING DATE]
------------
------------
Dear Sir:
In connection with the transfer of _____ shares of the common stock (the
"Shares") of _______________________ (the "Company") by
_________________________________(the "Stockholder") pursuant to a share
exchange agreement dated the ___th day of December 2003 (the "Share Exchange
Agreement"), the undersigned Stockholder, hereby makes the following
acknowledgments, representations and warranties:
1. INVESTMENT INTENT. The Stockholder is acquiring the Shares for
investment solely for his/her/its own account and not with a present view to any
distribution, transfer or resale to others, including any "distribution" within
the meaning of Securities Act of 1933, as amended, (the "Securities Act"). The
Stockholder understands that the Shares have not and will not be registered
under the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends on, among
other things, the bona fide nature of the investment intent and the accuracy of
my representations made herein.
2. FINANCIAL ABILITY. The Stockholder is financially able to bear the
economic risks of an investment in the Corporation and has no need for liquidity
in this investment. Furthermore, the financial capacity of the Stockholder is of
such a proportion that the total cost of the Stockholder's commitment is not
material when compared with his total committed capital. The Stockholder is
financially able to suffer a complete loss of this investment.
3. EXPERIENCE. The Stockholder has such knowledge and experience in
financial and business matters in general and with respect to investments of a
nature similar to that evidenced by the Shares so as to be capable, by reason of
such knowledge and experience, of evaluating the merits and risks of, and making
an informed business decision with regard to, and protecting his own interests
in connection with, the acquisition of the Shares.
4. REVIEW OF PROSPECTUS AND FINANCIAL STATEMENTS. The Stockholder has been
provided with and had the opportunity to review all filings made by the Company
with the United States Securities and Exchange Commission, as disclosed in the
Share Exchange Agreement and available at the SEC's web site at xxx.xxx.xxx.
5. NO PUBLIC MARKET. The Stockholder understands that no public market now
exists for any of the securities of the Company and that the Company has made no
assurances that any public market will ever exist for the Company's securities.
6. RESTRICTED LEGEND. The Stockholder acknowledges that certificates
representing the Shares will bear a legend substantially as follows:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED UNLESS
THEY ARE SO REGISTERED OR, IN THE OPINION OF COUNSEL ACCEPTABLE TO
THE CORPORATION, SUCH TRANSFER IS EXEMPT FROM REGISTRATION.
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PAGE 17
7. STOCK TRANSFER. The Stockholder is aware that stop-transfer
instructions will be given to the transfer agent of the common stock of the
Company to prevent any unauthorized or illegal transfer of the Shares.
8. RELIANCE FOR EXEMPTIONS. The Stockholder understands that the Shares
are being transferred to him pursuant to exemptions from the registration
requirements of federal and applicable state securities laws and acknowledges
that he is relying upon the investment and other representations made herein as
the basis for such exemptions.
9. ACCURACY OF PURCHASER REPRESENTATIONS. The Stockholder represents that
the information and representations contained in this letter are true, correct
and complete.
Dated: [CLOSING DATE]
---------------------------------
Stockholder
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PAGE 18
SCHEDULE 2.1
SELLERS' SHARE OWNERSHIP
Company Adjusted Purchaser
Shareholder No. of Shares Percentage No. of Shares
----------- ------------- ---------- -------------
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PAGE 19
SCHEDULE 3.1.6
LIST OF ASSETS AND PROPERTIES
SCHEDULE 3.1.12
TRADEMARKS, TRADENAMES AND RIGHTS
SCHEDULE 3.2.11
COMPANY SEC DOCUMENTS
FILING DATE OF FILING
------ --------------
Form SB-2 (as amended) Originally: April 15, 2002
Last Pre-Effective Amendment: November 8, 2002
Form NT 10-K March 31, 2003
Form 10-KSB May 1, 2003
Form 10-QSB June 6, 2003
Form NT 10-Q August 14, 2003
Form 10-QSB August 27, 2003
Form 10-QSB [December 10, 2003]
