Exhibit 2.4
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Plan") is made this 26th day
of April, 1996, among iMALL, INC., a Nevada corporation ("iMall"); Physicomp
Corporation, a California corporation, any and all of its subsidiaries and
fictitious names (hereinafter collectively referred to as "Physicomp") and its
shareholders (hereinafter "Shareholders").
iMall wishes to acquire all the issued and outstanding stock of Physicomp
for and in exchange for stock of iMall, in a stock for stock transaction
intending to qualify as a tax-free exchange pursuant to Section 368(a)(1)(B)
of the Internal Revenue Code of 1986, as amended. The parties intend for this
Plan to represent the terms and conditions of such tax-free reorganization,
which Plan the parties hereby adopt.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, IT IS AGREED:
Section 1
Terms of Exchange
1.1 Number of Shares. Upon the execution hereof, the Shareholders of
Physicomp agree to assign, transfer, and deliver to iMall, free and clear of
all liens, pledges, encumbrances, charges, restrictions or known claims of any
kind, nature or description, all of their shares of Physicomp stock, and iMall
agrees to acquire such shares on the date thereof, or as soon as practicable
thereafter, by issuing and delivering in exchange therefore solely common
shares of iMall's stock, par value $0.001, in the aggregate of 400,000 shares,
subject to the provisions of this Plan, which shall represent, as a result
thereof, approximately three percent (3%) of the then issued and outstanding
shares of iMall. Subsequent to the date hereof, the Shareholders shall, upon
the surrender of the Physicomp certificates representing their respective
beneficial and record ownership of all of the issued and outstanding shares of
Physicomp to iMall, as soon as practicable hereafter, and further provided an
exemption from the registration provisions of Section 5 of the Securities Act
of 1933 is available for the issuance thereof, the Shareholders shall be
entitled to receive a certificate(s) evidencing shares of the exchanged iMall
stock as provided for herein. Upon the consummation of the transaction
contemplated herein, iMall shall be the beneficial and record owner of all of
the issued and outstanding stock of Physicomp.
1.2 Anti-Dilution. For all relevant purposes of this Plan, the number
of iMall shares to be issued and delivered pursuant to this Plan shall be
appropriately adjusted to take into account any stock split, stock dividend,
reverse stock split, recapitalization, or similar change in iMall common
stock, which may occur between the date of the execution of this Plan and the
date of the delivery of such shares.
1.3 Delivery of Certificates. The Shareholders shall transfer to iMall
at the closing provided for in Section 2 (the "Closing") the shares of common
stock of Physicomp listed opposite their respective names on Exhibit A hereto
(the "Physicomp shares") in exchange for shares of the common stock of iMall
as outlined above in Section 1.1 hereof (the "iMall Stock"). All of such
shares of iMall common stock shall be issued at the closing to the
Shareholders, in the numbers shown opposite their respective names in Exhibit
"A." The transfer of Physicomp shares by the Shareholders shall be effected
by the delivery to iMall at the Closing of certificates representing the
transferred shares endorsed in blank or accompanied by stock powers executed
in blank, with all signatures guaranteed by a national bank and with all
necessary transfer taxes and other revenue stamps affixed and acquired at the
Shareholders' expense.
1.4 Further Assurances. Subsequent to the execution hereof, and from
time to time thereafter, the Shareholders shall execute such additional
instruments and take such other action as iMall may request in order to more
effectively sell, transfer and assign clear title and ownership in the
Physicomp shares to iMall.
1.5 Management Contracts. Subsequent to the execution hereof,
management contracts shall be entered into between iMall and the officers of
Physicomp.
Section 2
Closing
2.1 Closing. The Closing contemplated by Section 1.3 shall be held at
the law offices of Xxxxxx X. Xxxxxxx, Esq. on May 1, 1996 or at such other
time or place as may be mutually agreed upon in writing by the parties. The
Closing may also be accomplished by wire, express mail or other courier
service, conference telephone communications or as otherwise agreed by the
respective parties or their duly authorized representatives. In any event,
the closing of the transactions contemplated by this Plan shall be effected as
soon as practicable after all of the conditions contained herein have been
satisfied.
2.2 Closing Events. At the Closing, each of the respective parties
hereto shall execute, acknowledge and deliver (or shall cause to be executed,
acknowledged, and delivered) any agreements, resolutions, rulings, or other
instruments required by this Plan to be so delivered at or prior to Closing,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence
the transaction contemplated hereby.
Section 3
Representations, Warranties and Covenants of iMall
iMall represents and warrants to, and covenants with, the Shareholders
and Physicomp as follows:
3.1 Corporate Status. iMall is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. iMall
has full corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business on all material respects as it is now being conducted, and there is
no jurisdiction in which the character and location of the assets owned by it,
or the nature of the business transacted by it, requires qualification.
Included in the iMall schedules (defined below) are complete and correct
copies of its Articles of Incorporation and Bylaws as in effect on the date
hereof. The execution and delivery of this Plan does not, and the
consummation of the transactions contemplated hereby will not, violate any
provision of iMall's Articles of Incorporation or Bylaws. iMall has taken all
action required by law, its Articles of Incorporation, its Bylaws, or
otherwise, to authorize the execution and delivery of this Plan.
3.2 Capitalization. The authorized capital stock of iMall as of the
date hereof consists of 50,000,000 common shares, par value $0.001. The
common shares of iMall issued and outstanding are fully paid, non-assessable
shares. There are no outstanding options, warrants, or calls or any
understanding, agreements, commitments, contracts or promises with respect to
the issuance of iMall's common stock or with regard to any options, warrants
or other contractual rights to acquire any of iMall's authorized but unissued
common shares.
3.3 Financial Statements.
(a) iMall hereby warrants and covenants to Physicomp that the audited
financial statements for its year ended December 31, 1995, December 31, 1994
and 1993, fairly and accurately represent the financial condition of IMall and
that the same will be prepared along with the period ended as of the date of
Closing, for consolidation by an independent public accountant, which shall be
prepared in accordance with generally accepted accounting principles
consistently applied, on or before the expiration of forty-five days from the
date of Closing.
(b) iMall hereby warrants and represents that the audited financial
statements for the periods set forth in subparagraph (a), supra, fairly and
accurately represent the financial condition of iMall as submitted heretofore
to Physicomp for examination and review.
3.4 Subsidiaries. iMall has four subsidiaries: Cabot, Xxxxxxxx & Xxxx,
Inc., a Utah Corporation ("CR&R"), Madison York, Inc., a Utah Corporation
("Madison"), R&R Advertising, Inc., a California Corporation ("R&R"), and
Inter-active Marketing Group, Inc. ("IMG").
3.5 Conduct of Business. iMall, Inc. owns and operates a "shopping
mall" on the Internet. Through the Company's subsidiaries, Madison, CR&R and
R&R, the company provides consulting services to businesses interested in
marketing their products or services on the Internet.
3.6 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of iMall, threatened by or against or
effecting iMall at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
iMall does not have any knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, warrant, rule, or regulation of
any court, arbitrator, or governmental agency or instrumentality.
3.7 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, iMall and its present management will (i) give to
the Shareholders and Physicomp, or their duly authorized representatives, full
access, during normal business hours, to all of its books, records, contracts
and other corporate documents and properties so that the Shareholders and
Physicomp, or their duly authorized representatives, may inspect them; and
(ii) furnish such information concerning the properties and affairs of iMall
as the Shareholders and Physicomp, or their duly authorized representatives,
may reasonably request. Any such request to inspect iMall's books shall be
directed to iMall' counsel, Xxxxxx X. Xxxxxxx, at the address set forth herein
under Section 10.4 Notices.
3.8 Confidentiality. Until the Closing (and thereafter if there is no
Closing), iMall and its representatives will keep confidential any information
which they obtain from the Shareholders or from Physicomp concerning its
properties, assets and the proposed business operations of Physicomp. If the
terms and conditions of this Plan imposed on the parties hereto are not
consummated on or before 5:00 p.m. MST on May 1, 1996 or otherwise waived or
extended in writing to a date mutually agreeable to the parties hereto, iMall
will return to Physicomp all written matter with regard to Physicomp obtained
in connection with the negotiations or consummation of this Plan.
3.9 Conflict with Other Instruments. The transactions contemplated by
this Plan will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or there
material agreements or instrument to which iMall was or is a party, or to
which any of its assets or operations are subject, and will not conflict with
any provision of the Articles of Incorporation or Bylaws of iMall.
3.10 Corporate Authority. iMall has full corporate power and authority
to enter into this Plan and to carry out its obligations hereunder and will
deliver to the Shareholders and Physicomp, or their respective
representatives, at the Closing, a certified copy of resolutions of its Board
of Directors authorizing execution of this Plan by its officers and
performance thereunder.
3.11 Consent of Shareholders. iMall hereby warrants and represents that
the Shareholders of iMall, being the owners of a majority of the issued and
outstanding stock of the Corporation consented in writing to the authorization
to execute an Agreement and Plan of Reorganization as between iMall and
Physicomp pursuant to a stock-for-stock transaction in which iMall would
acquire all of the issued and outstanding shares of Physicomp in exchange for
the issuance of a total of 400,000 common shares of iMall.
3.12 Special Covenants and Representations Regarding the Exchanged iMall
Stock. The consummation of this Plan and the transactions herein contemplated
include the issuance of the exchanged iMall shares to the Shareholders, which
constitutes an offer and sale of securities under the Securities Act of 1933,
as amended, and applicable states' securities laws. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus
requirements of such statutes which depend interlace on the circumstances
under which the Shareholders acquire such securities. In connection with the
reliance upon exemptions from the registration and prospectus delivery
requirements for such transactions, at the Closing, Shareholders shall cause
to be delivered to iMall a Letter(s) of Investment Intent in the form attached
hereto as Exhibit C and incorporated herein by reference.
3.13 Undisclosed or Contingent Liabilities. iMall hereby represents and
warrants that it has no undisclosed or contingent liabilities which have not
been disclosed to Physicomp.
3.14 Information. The information concerning iMall set forth in this
Plan, and the iMall schedules attached hereto, are complete and accurate in
all material respects and do not contain, or will not contain, when delivered,
any untrue statement or a material fact or omit to state a material fact the
omission of which would be misleading to Physicomp in connection with this
Plan.
3.15 Title and Related Matters. iMall has good and marketable title to
all of its properties, interests in properties, and assets, real and personal,
which are reflected, or will be reflected, in the iMall balance sheets, free
and clear of any and all liens and encumbrances.
3.16 Contracts or Agreements. iMall is not bound by any material
contracts, agreements or obligations which it has not already disclosed to
Physicomp.
3.17 Governmental Authorizations. iMall has all licenses, franchises,
permits and other government authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof. iMall has obtained a listing in Xxxxx'x OTC Industrial Manual
which is recognized manual, recognized by the various states as an exemption
from registration provisions of any such state for the purposes of interstate
trading of iMall stock. Except for compliance with federal and state
securities laws, no authorization, approval, consent or order of, or
registration, declaration, or filing with, any court or other governmental
body is required in connection with the execution and delivery by iMall of
this Plan and the consummation by Physicomp of the transactions contemplated
hereby.
3.18 Compliance with Laws and Regulations. iMall has complied with all
applicable statutes and regulations of any federal, state, or other applicable
jurisdiction or agency thereof, except to the extent that noncompliance would
not materially and adversely effect the business, operations, properties,
assets, or condition of iMall or except to the extent that noncompliance would
not result in the occurrence of any material liability, not otherwise
disclosed to Physicomp.
3.19 Approval of Plan. The Board of Directors of iMall has authorized
the execution and delivery of this Plan by iMall and have approved the Plan
and the transactions contemplated hereby. iMall has full power, authority,
and legal right to enter into this Plan and to consummate the transactions
contemplated hereby.
3.20 Investment Intent. iMall is acquiring the Physicomp shares to be
transferred to it under this Plan for investment and no with a view to the
sale or distribution thereof, and iMall has no commitment or present intention
to liquidate Physicomp or to sell or otherwise dispose of the Physicomp
shares.
3.21 Unregistered Shares and Access to Information. iMall understands
that the offer and sale of the Physicomp shares have not been registered with
or reviewed by the Securities and Exchange Commission under the Securities Act
of 1933, as amended, or with or by any state securities law administrator, and
no federal, state securities law administrator has reviewed or approved any
disclosure or other material concerning Physicomp or the Physicomp shares.
iMall has been provided with and reviewed all information concerning
Physicomp, the Physicomp shares as it has considered necessary or appropriate
as a prudent and knowledgeable investor to enable it to make an informed
investment decision concerning the Physicomp shares. iMall has made an
investigation as to the merits and risks of its acquisition of the Physicomp
Shares and has had the opportunity to ask questions of, and has received
satisfactory answers from, the officers and directors of Physicomp concerning
Physicomp, the Physicomp shares and related matters, and has had an
opportunity to obtain additional information necessary to verify the accuracy
of such information and to evaluate the merits and risks of the proposed
acquisition of the Physicomp shares.
3.22 iMall Schedules. iMall has delivered to Physicomp the following
items listed below, hereafter referred to as the "iMall Schedules", which is
hereby incorporated by reference and made a part hereof. A certification
executed by a duly authorized officer of iMall on or about the date within the
Plan is executed to certify that the iMall Schedules are true and correct.
(a) Copy of Articles of Incorporation, as amended, and Bylaws;
(b) iMall Prospectus;
(c) Financial statements;
(d) Shareholder list;
(e) Resolution of Directors approving Plan;
(f) Officer's Certificate as required under Section 6.2 of the
Plan;
(g) Opinion of counsel as required under Section 6.4 of the Plan;
(h) Certificate of Good Standing;
(i) Consent of Shareholders approving Plan;
(j) Copy of listing in Xxxxx'x Over-the-Counter Industrial Manual.
Section 4
Representations, Warranties and Covenants of Physicomp
Physicomp represents and warrants to, and covenants with, the
Shareholders and iMall as follows:
4.1 Corporate Status. Physicomp is a corporation duly organized,
validly existing and in good standing under the laws of the State of
California incorporated on September 20, 1994. Physicomp has full corporate
power and is duly authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities to
own all of its properties and assets and to carry on its business on all
material respects as it is now being conducted, and there is no jurisdiction
in which the character and location of the assets owned by it, or the nature
of the business transacted by it, requires qualification. Included in the
Physicomp schedules (defined below) are complete and correct copies of its
Articles of Incorporation and Bylaws as in effect on the date hereof. The
execution and delivery of this Plan does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of
Physicomp's Articles of Incorporation or Bylaws. Physicomp has taken all
action required by law, its Articles of Incorporation, its Bylaws, or
otherwise, to authorize the execution and delivery of this Plan.
4.2 Capitalization. The authorized capital stock of Physicomp as of the
date hereof consists of 75,000,000 common shares. As of the date hereof all
common shares of Physicomp issued and outstanding are fully paid, non-
assessable shares. There are no outstanding options, warrants, or calls or
any understanding, agreements, commitments, contracts or promises with respect
to the issuance of Physicomp's common stock or with regard to any options,
warrants or other contractual rights to acquire any of Physicomp's authorized
but unissued common shares.
4.3 Subsidiaries. Physicomp has no subsidiaries.
4.4 Fictitous Names. In the course of its business, Physicomp has used
the fictitous name "emaNate", which has been registered with the County
Recorder for the county of Los Angeles, California.
4.5 Conduct of Business. Physicomp will use its best efforts to
maintain and preserve its business organization, employee relationships and
goodwill intact, and will not, without the prior written consent of iMall,
enter into any material commitments except in the ordinary course of business.
Physicomp agrees that Physicomp will conduct itself in the following
manner pending the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Certificate of Incorporation or Bylaws of Physicomp.
(b) Capitalization, etc. Physicomp will not make any change in its
authorized or issued shares of any class, declare or pay any dividend or other
distribution, or issue, encumber, purchase or otherwise acquire any of its
shares of any class.
4.6 Options, Warrants and Rights. Although Physicomp intends to enact
and put into effect various management and employee benefit plans in the near
future, as of the date hereof, Physicomp has no options, warrants or stock
appreciation rights related to the authorized but unissued Physicomp common
stock. There are no existing options, warrants, calls, or commitments of any
character relating to the authorized and unissued Physicomp common stock,
except options, warrants, calls, or commitments, if any, to which Physicomp is
not a party and by which it is not bound.
4.7 Title to Property. Physicomp has good and marketable title to all
of its properties and assets, real and personal, proprietary or otherwise, as
will be reflected in the balance sheets of Physicomp, and the properties and
assets of Physicomp are subject to no mortgage, pledge, lien or encumbrance,
unless as otherwise disclosed in its financial statements.
4.8 Litigation. On June 2, 1995, judgment was entered in the Superior
Court of the State of California in and for the County of Los Angeles in the
matter of The Titan Corporation vs. Physicomp Corporation, et al., whereby
Physicomp, Xxxxxx Xxxxxxxxxx, Xxxxxxx Xxxxxxxx and Xxxx Xxxxxx were
permanently enjoined from using certain technology. A copy of such judgment
is attached hereto as Exhibit D. Other than such judgment, there are no
material actions, suits, or proceedings, pending, or, to the best knowledge of
Physicomp, threatened by or against or effecting Physicomp at law or in
equity, or before any governmental agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind; Physicomp does not have any
knowledge of any default on its part with respect to any judgment, order,
writ, injunction, decree, warrant, rule, or regulation of any court,
arbitrator, or governmental agency or instrumentality.
4.9 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, Physicomp and its present management will (i) give
to the Shareholders and Physicomp, or their duly authorized representatives,
full access, during normal business hours, to all of its books, records,
contracts and other corporate documents and properties so that the
Shareholders and Physicomp, or their duly authorized representatives, may
inspect them; and (ii) furnish such information concerning the properties and
affairs of Physicomp as the Shareholders and Physicomp, or their duly
authorized representatives, may reasonably request. Any such request to
inspect Physicomp's books shall be directed to Physicomp's representative, at
the address set forth herein under Section 10.4 Notices.
4.10 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Physicomp and its representatives will keep confidential any
information which they obtain from the Shareholders or from Physicomp
concerning its properties, assets and the proposed business operations of
Physicomp. If the terms and conditions of this Plan imposed on the parties
hereto are not consummated on or before 5:00 p.m. MST on May 1, 1996 or
otherwise waived or extended in writing to a date mutually agreeable to the
parties hereto, Physicomp will return to iMall all written matter with regard
to iMall obtained in connection with the negotiations or consummation of this
Plan.
4.11 Investment Intent. The Shareholders represent and covenant that
they are acquiring the unregistered and restricted common shares of iMall to
be delivered to them under this Plan for investment purposes and not with a
view to the subsequent sale or distribution thereof, and as agreed, supra, the
Shareholders, their successors and assigns agree to execute and deliver to
iMall on the date of Closing or no later than the date on which the restricted
shares are issued and delivered to the Shareholders, their assigns, or
designees, an Investment Letter similar in form to that attached hereto as
Exhibit C.
4.12 Unregistered Shares and Access to Information. Physicomp and the
Shareholders understand that the offer and sale of iMall post-split shares to
be exchanged for the Physicomp shares have not been registered with or
reviewed by the securities and Exchange Commission under the Securities Act of
1933, as amended, or with or by any state securities law administrator, and no
federal or state securities law administrator has reviewed or approved any
disclosure or other material facts concerning iMall or iMall post-split stock.
Physicomp and the Shareholders have been provided with and reviewed all
information concerning iMall and iMall post-split shares, to be exchanged for
the Physicomp shares as they have considered necessary or appropriate as
prudent and knowledgeable investors to enable them to make informed investment
decisions concerning the iMall post-split shares, to be exchanged for the
Physicomp shares. Physicomp and the Shareholders have made an investigation
as to the merits and risks of their acquisition of the iMall post-split
shares, to be exchanged for the Physicomp shares and have had the opportunity
to ask questions of, and have received satisfactory answers from, the officers
and directors of iMall concerning iMall post-split shares to be exchanged for
the Physicomp shares and related matters, and have had an opportunity to
obtain additional information necessary to verify the accuracy of such
information and to evaluate the merits and risks of the proposed acquisition
of the iMall post-split shares to be exchanged for the Physicomp shares.
4.13 Title to Shares. The Shareholders are the beneficial and record
owners, free and clear of any liens and encumbrances, of whatever kind or
nature, of all of the shares of Physicomp of whatever class or series, which
the Shareholders have contracted to exchange.
4.14 Contracts.
(a) Set forth in the Physicomp Schedules are copies or descriptions
of all material contracts which written or oral, all agreements, franchises,
licenses, or other commitments to which Physicomp is a party or by which
Physicomp or its properties are bound.
(b) Except as may be set forth in the Physicomp Schedules,
Physicomp is not a party to any contract, agreement, corporate restriction, or
subject to any judgment, order, writ, injunction, decree, or award, which
materially and adversely effect the business, operations, properties, assets,
or conditions of Physicomp.
(c) Except as set forth in the Physicomp Schedules, Physicomp is
not a party to any material oral or written (i) contract for employment of any
officer which is not terminable on 30 days (or less) notice; (ii) profit
sharing, bonus, deferred compensation, stock option, severance, or any other
retirement plan of arrangement covered by Title IV of the Employee Retirement
Income Security Act, as amended, or otherwise covered; (iii) agreement
providing for the sale, assignment or transfer of any of its rights, assets or
properties, whether tangible or intangible, except sales of its property in
the ordinary course of business with a value of less than $2,000; or (iv)
waiver of any right of any value which in the aggregate is extraordinary or
material concerning the assets or properties scheduled by Physicomp, except
for adequate value and pursuant to contract. Physicomp has not entered into
any material transaction which is not listed in the Physicomp Schedules or
reflected in the Physicomp financial statements.
4.15 Material Contract Defaults. Physicomp is not in default in any
material respect under the terms of any contract, agreement, lease or other
commitment which is material to the business, operations, properties or
assets, or condition of Physicomp, and there is no event of default or event
which, with notice of lapse of time or both, would constitute a default in any
material respect under any such contract, agreement, lease, or other
commitment in respect of which Physicomp has not taken adequate steps to
prevent such default from occurring, or otherwise compromised, reached a
satisfaction of, or provided for extensions of time in which to perform under
any one or more contract obligations, among others.
4.16 Conflict with Other Instruments. The consummation of the within
transactions will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or material
agreement or instrument to which Physicomp was or is a party, or to which any
of its assets or operations are subject, and will not conflict with any
provision of the Articles of Incorporation or Bylaws of Physicomp.
4.17 Governmental Authorizations. Physicomp has all licenses,
franchises, permits and other government authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date hereof. Except for compliance with federal and state
securities laws, no authorization, approval, consent or order of, or
registration, declaration, or filing with, any court or other governmental
body is required in connection with the execution and delivery by Physicomp of
this Plan and the consummation by Physicomp of the transactions contemplated
hereby.
4.18 Compliance with Laws and Regulations. Physicomp has complied with
all applicable statutes and regulations of any federal, state, or other
applicable jurisdiction or agency thereof, except to the extent that
noncompliance would not materially and adversely effect the business,
operations, properties, assets, or condition of Physicomp or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to iMall.
4.19 Approval of Plan. The Board of Directors of Physicomp have
authorized the execution and delivery of this Plan by Physicomp and have
approved the Plan and the transactions contemplated hereby. Physicomp has
full power, authority, and legal right to enter into this Plan and to
consummate the transactions contemplated hereby.
4.20 Information. The information concerning Physicomp set forth in
this Plan, and the Physicomp Schedules attached hereto, are complete and
accurate in all material respects and do not contain, or will not contain,
when delivered, any untrue statement or a material fact or omit to state a
material fact the omission of which would be misleading to iMall in connection
with this Plan.
4.21 Physicomp Schedules. Physicomp has delivered to iMall the
following items listed below, hereafter referred to as the "Physicomp
Schedules", which is hereby incorporated by reference and made a part hereof.
A certification executed by a duly authorized officer of Physicomp on or about
the date within the Plan is executed to certify that the Physicomp Schedules
are true and correct.
(a) Copy of Articles of Incorporation and Bylaws;
(b) Financial Statements
(c) Resolution of Board of Directors approving Plan;
(d) Consent of Shareholders approving Plan;
(e) A list of key employees, including current compensation,
with notation as to job description and whether or not such employee is
subject to written contract, and if subject to a contract or employment
agreement, a copy of the same;
(f) A schedule showing the name and location of each bank or
other institution with which Physicomp has an account and the names of the
authorized persons to draw thereon or having access thereto;
(g) A schedule setting forth the shareholders, together with the
number of shares owned beneficially or of record by each (also attached as
Exhibit A);
(h) Officer's Certificate as required by Section 7.2 of the
Plan;
(i) Certificate of Good Standing.
Section 5
Special Covenants
5.1 Physicomp Information Incorporated in iMall's Reports. Physicomp
represents and warrants to iMall that all the information furnished under this
Plan shall be true and correct in all material respects and that there is no
omission of any material fact required to make the information stated not
misleading. Physicomp agrees to indemnify and hold iMall harmless, including
each of its Directors and Officers, a and each person, if any, who controls
such party, under any applicable law from and against any and all losses,
claims, damages, expenses or liabilities to which any of them may become
subject under applicable law, or reimburse them for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such actions, whether or not resulting in liability, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based on any untrue statement, alleged untrue statement, or omission of a
material fact contained in such information delivered hereunder.
5.2 Special Covenants and Representations Regarding the Exchanged iMall
Stock. The consummation of this Plan and the transactions herein
contemplated, including the issuance of the iMall shares in exchange for all
of the issued and outstanding shares of Physicomp to the Shareholders
constitutes the offer and sale of securities under the Securities Act and the
applicable state statutes, which depend, inter alia, on the circumstances
under which the Shareholders acquire such securities. iMall intends to rely
on the exemption of the registration provision of Section 5 of the Securities
Act as provided for under Section 4.2 of the Securities Act of 1933, which
states "transactions not involving a public offering", among others. Each
Shareholder upon submission of his Physicomp shares and the receipt of the
iMall post-split shares exchanged therefor, shall execute and deliver to iMall
a letter of investment invent to indicate, among other representations, that
the Shareholder is exchanging the Physicomp shares for iMall post-split shares
for investment purposes and not with a view to the subsequent distribution
thereof. A proposed Investment Letter is attached hereto as Exhibit B and
incorporated herein by reference for the general use by the Shareholders, as
they may determine.
5.3 Action Prior to Closing. Upon the execution hereof until the
Closing date, and the completion of the consolidated audited financials,
(a) Physicomp and iMall will (i) perform all of its obligations
under material contracts, leases, insurance policies and/or documents relating
to its assets and business; (ii) use its best efforts to maintain and preserve
its business organization intact, to retain its key employees, and to maintain
its relationship with existing potential customers and clients; and (iii)
fully comply with and perform in all material respects all duties and
obligations imposed on it by all federal and state laws and all rules,
regulations, and orders imposed by all federal or state governmental
authorities.
(b) Neither Physicomp nor iMall will (i) make any change in its
Articles of Incorporation or Bylaws except and unless as contemplated pursuant
to Section 3 of this Plan; (ii) enter into or amend any contract, agreement,
or other instrument of the types described in the parties' schedules, except
that a party may enter into or amend any contract or other instrument in the
ordinary course of business involving the sale of goods or services, provided
that such contract does not involve obligations in excess of $10,000.
Section 6
Conditions Precedent to Obligations of
Physicomp and the Shareholders
All obligations of Physicomp and the Shareholders under this Plan are
subject to the satisfaction, on or before the Closing date, except as
otherwise provided for herein, or waived or extended in writing by the parties
hereto, of the following conditions:
6.1 Accuracy of Representations. The representations and warranties
made by iMall in this Plan were true when made and shall be true as of the
Closing date (except for changes therein permitted by this Plan) with the same
force and effect as if such representations and warranties were made at and as
of the Closing date; and, iMall shall have performed and complied with by
iMall prior to the Closing, unless waived or extended in writing by the
parties hereto. Physicomp shall have been furnished with a certificate,
signed by a duly authorized executive officer of iMall and dated the Closing
date, to the foregoing effect.
6.2 Officers' Certificate. Physicomp and the Shareholders shall have
been furnished with a certificate dated the Closing date and signed by a duly
authorized executive officer of iMall, to the effect that no litigation,
proceeding, investigation, or inquiry is pending, or to the best knowledge of
iMall, threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Plan, or which might
result in any material adverse change in the assets, properties, business, or
operations of iMall.
6.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the final condition, business
or operations of iMall, nor shall any event have occurred which, with lapse of
time or the giving of notice or both, may cause or create any material adverse
change in the financial condition, business or operations of iMall, except as
otherwise disclosed to Physicomp.
6.4 Opinion of Counsel of iMall. iMall shall furnish to Physicomp and
the Shareholders an opinion dated as of the Closing date and in form and
substance satisfactory to Physicomp and the Shareholders to the effect that:
(a) iMall is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Nevada, and with all requisite
corporate power to perform its obligations under this Plan.
(b) The business of iMall, as presently conducted, including, upon
the consummation hereof, the ownership of all of the issued and outstanding
shares of Physicomp, does not require it to register it to do business as a
foreign corporation on any jurisdiction other than under the jurisdiction of
its Articles of Incorporation or Bylaws and iMall has complied to the best of
its knowledge in all material respects with all the laws, regulations,
licensing requirements and orders applicable to its business activities and
has filed with the proper authorities, including the Department of Commerce,
Division of Corporations, and Secretary of State for the State of Nevada, all
statements and reports required to be filed.
(c) The authorized and outstanding capital stock of iMall as set
forth in Section 3.2 above, and all issued and outstanding shares have been
duly and validly authorized and issued and are fully paid and non-assessable.
(d) There are no material claims, suits or other legal proceedings
pending or threatened against iMall of any court or before or by any
governmental body which might materially effect the business of iMall or the
financial condition of iMall as a whole and no such claims, suits or legal
proceedings are contemplated by governmental authorities against iMall.
(e) iMall's initial public offering file declared effective by the
Utah Securities Commission on May 7, 1985, and was offered and sold in
accordance with and in compliance with the rules and regulations of the
Securities Act of 1933, as amended. Subsequent to the termination of iMall's
public offering, no stop orders suspending the effectiveness of the
distribution is or was in effect, and no proceedings since the termination
thereof for that purpose are pending before or threatened by any state or
federal agency or authority.
(f) To the best knowledge of such counsel, the consummation of the
transactions contemplated by this Plan will not violate or contravene the
provisions of the Certificate of Incorporation or Bylaws of iMall, or any
contract, agreement, indenture, mortgage, or order by which iMall is bound.
(g) This Plan constitutes a legal, valid and binding obligation of
iMall enforceable in accordance with its terms, subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium, or similar law effecting
creditors' rights generally and general principles of equity (regardless of
whether such principles are considered in a proceeding in equity or law).
(h) The execution and delivery of this Plan and the consummation of
the transactions contemplated hereby have been ratified by a majority of the
Shareholders of iMall and have been duly authorized by its Board of Directors.
6.5 Good Standing. Physicomp shall have received a Certificate of Good
Standing from the State of California, dated within sixty (60) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that iMall is in good standing as a corporation in the State
of California.
6.6 Other Items. Physicomp and the Shareholders shall have received
such further documents, certifications or instruments relating to the
transactions contemplated hereby as Physicomp and the Shareholders may
reasonably request.
Section 7
Conditions Precedent to Obligations of iMall
All obligations of iMall under this Plan are subject, at its option, to
the fulfillment, before the Closing, of each of the following conditions:
7.1 Accuracy of Representations. The representations and warranties
made by Physicomp and the Shareholders under this Plan were true when made and
shall be true as of the Closing date (except for changes therein permitted by
this Plan) with the same force and effect as if such representations and
warranties were made at and as of the Closing date; and, iMall shall have
performed and complied with by Physicomp prior to the Closing, unless waived
or extended in writing by the parties hereto. iMall shall have been furnished
with a certificate, signed by a duly authorized executive officer of Physicomp
and dated the Closing date, to the foregoing effect.
7.2 Officers' Certificate. iMall shall have been furnished with a
certificate dated the Closing date and signed by a duly authorized executive
officer of Physicomp, to the effect that no litigation, proceeding,
investigation, or inquiry is pending, or to the best knowledge of Physicomp,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Plan, or which might
result in any material adverse change in the assets, properties, business, or
operations of Physicomp.
7.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the final condition, business
or operations of iMall, nor shall any event have occurred which, with lapse of
time or the giving of notice or both, may cause or create any material adverse
change in the financial condition, business or operations of Physicomp, except
as otherwise disclosed to iMall.
7.4 Good Standing. iMall shall have received a Certificate of Good
Standing from the State of Utah, dated within sixty (60) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that Physicomp is in good standing as a corporation in the
State of Utah.
7.5 Dissenters' Rights Waived. The Shareholders of Physicomp, and each
of them, have agreed and hereby waive any dissenters' rights, if any, under
the laws of the State of Utah in regards to any objection to this Plan as
outlined herein and otherwise consent to and agree and authorize the execution
and consummation of the within Plan in accordance to the terms and conditions
of this Plan by the management of Physicomp.
7.6 Other Items. iMall shall have received such further documents,
certifications or instruments relating to the transactions contemplated hereby
as iMall may reasonably request.
7.7 Registration of Physicomp Shares. In connection with the exchange
of iMall shares for Physicomp shares, iMall agrees, if practicable, and
subject to the consent of an underwriter(s) in the event iMall undertakes to
file a Registration Statement under the Securities Act of 1933, as amended,
for the purpose of raising money from the public through the sale of its
equity, to ensure that the iMall shares issued in connection with the within
Plan will be included as part of a general Registration Statement and "piggy
back" any such offering for the purpose of registering the same for sale by
the Shareholders, as they may determine. iMall shall execute and deliver to
the Shareholders the Registration Rights Agreement in form attached hereto as
Exhibit B.
7.8 Execution of Investment Letter. The Shareholders shall have
executed and delivered copies of Exhibit C to iMall.
Section 8
Termination
8.1 Termination by Physicomp or the Shareholders. This Plan may be
terminated at any time prior to the Closing date by action of Physicomp or the
Shareholders, if iMall shall fail to comply in any material respect with any
of the covenants or agreements contained in this Plan, or if any of its
representations and warranties contained herein shall be inaccurate in any
material respect.
8.2 Termination by iMall. This Plan may be terminated at any time prior
to the Closing date by action of iMall if Physicomp shall fail to comply in
any material respect with any of the covenants or agreements contained in this
Plan, or if any of its representations or warranties contained herein shall be
inaccurate in any material respect.
8.3 Termination by Mutual Consent
(a) This Plan may be terminated at any time prior to the Closing
date by mutual consent of iMall, expressed by action of its Board of
Directors, Physicomp or the Shareholders.
(b) If this Plan is terminated pursuant to Section 8, this Plan
shall be of no further force and effect and no obligation, right or liability
shall arise hereunder. Each party shall bare its own costs in connection
herewith.
Section 9
Shareholders' Representative
The Shareholders hereby irrevocably designate and appoint Xxxxxx
Xxxxxxxxxx as their agent and attorney in fact (the "Shareholders'
Representative") with full power and authority until the Closing to execute,
deliver and receive on their behalf all notices, requests and other
communications hereunder; to fix and alter on their behalf the date, time and
place of the Closing; to waive, amend or modify any provisions of this Plan
and to take such other action on their behalf in connection with this Plan,
the Closing and the transactions contemplated hereby as such agent deems
appropriate; provided, however, that no such waiver, amendment or modification
may be made if it would decrease the number of shares to be issued to the
Shareholders under Section 1 hereof or increase the extent of their obligation
to iMall hereunder, unless agreed in writing by the Shareholders.
Section 10
General Provisions
10.1 Further Assurances. At any time, and from time to time, after the
Closing date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of the Plan.
10.2 Payments of Estimated Costs and Fees. iMall and Physicomp mutually
determine and agree that Physicomp shall pay the estimated costs and fees
incurred in connection with the execution and consummation of the Plan.
10.3 Press Release and Shareholders' Communications. On the date of
Closing, or as soon thereafter as practicable, Physicomp and the Shareholders
shall cause to have promptly prepared and disseminated a news release
concerning the execution and consummation of the Plan, such press release and
communication to be released promptly and within the time required by the
laws, rules and regulations as promulgated by the United States Securities and
Exchange Commission, and concomitant therewith to cause to be prepared a full
and complete letter to iMall's shareholders which shall contain information
required by Regulation 240.14f-1 as promulgated under Section 14(f) as
mandated under the Securities and Exchange Act of 1934, as amended.
10.4 Notices. All notices and other communications required or
permitted hereunder shall be sufficiently given if personally delivered, sent
by registered mail, or certified mail, return receipt requested, postage
prepaid, or by facsimile transmission addressed to the following parties
hereto or at such other addresses as follows:
If to iMall: iMall, Inc.
0000 Xxxxx Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxx 00000
With a copy to: Xxxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxx #0000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Physicomp: Physicomp Corporation
00000 Xxxxxxxxx Xxxxxx, #000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
If to the Shareholders: Xxxx Xxxxxx
00000 Xxxxxxxxx Xxxxxx, #000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
with a copy to: Xxxxxxx Xxxxxx
00000 Xxxxxxx Xxxxxxxxx, #000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
or at such other addresses as shall be furnished in writing by any party in
the manner for giving notices hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered, mailed, sent
by facsimile transmission, or telegraphed.
10.5 Entire Agreement. This Plan represents the entire agreement
between the parties relating to the subject matter hereof, including any
previous letters of intent, understandings, or agreements between iMall,
Physicomp and the Shareholders with respect to the subject matter hereof, all
of which are hereby merged into this Plan, which alone fully and completely
expresses the agreement of the parties relating to the subject matter hereof.
Excepting the foregoing agreement, there are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.
10.6 Governing Law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the State of Utah, except to the
extent preempted by federal law, in which event (and to that extent only)
federal law shall govern.
10.7 Tax Treatment. The transaction contemplated by this Plan is
intended to qualify as a "tax-free" reorganization under the provisions of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
Physicomp and iMall acknowledge, however, that each are being represented by
their own tax advisors in connection with this transaction, and neither has
made any representations or warranties to the other with respect to treatment
of such transaction or any part or effect thereof under applicable tax laws,
regulations or interpretations; and no attorney's opinion or tax revenue
ruling has been obtained with respect to the tax consequences of the
transactions contemplated by the within Plan.
10.8 Attorney Fees. In the event that any party prevails in any action
or suit to enforce this Plan, or secure relief from any default hereunder or
breach hereof, the nonprevailing party or parties shall reimburse the
prevailing party or parties for all costs, including reasonable attorney fees,
incurred in connection therewith.
10.9 Amendment of Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law or in equity, and may be enforced concurrently or separately, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, therefore, or
thereafter occurring or existing. Any time prior to the expiration of thirty
(30) days from the date hereof, this Plan may be amended by a writing signed
by all parties hereto, with respect to any of the terms contained herein, and
any term or condition of this Plan may be waived or the time for performance
thereof may be extended by a writing signed by the party or parties for whose
benefit the provision is intended.
10.10 Counterparts. This Plan may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which together shall constitute one and the same
instruments.
10.11 Headings. The section and subsection headings in this Plan are
inserted for convenience only and shall not effect in any way the meaning or
interpretation of the Plan.
10.12 Parties in Interest. Except as may be otherwise expressly
provided herein, all terms and provisions of this Plan shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, personal and legal representatives, and assigns.
IN WITNESS WHEREOF, the parties have executed this Plan and Agreement of
Reorganization effective the day and year first set forth above.
iMall, INC.
Attest:
/s/Xxxxxxx Xxxxxxxxx /s/ Xxxxx Xxxxxxxxx
--------------------- ------------------------
By: /s/Xxxxx Xxxxxxxxx
Its President
PHYSICOMP CORPORATION
Attest:
/s/ Xxxxxxx Xxxxxxxxx /s/ Xxxxxx Xxxxxxxxxx
--------------------- -------------------------
By :/s/ Xxxxxx Xxxxxxxxxx
Its President
SHAREHOLDERS:
Attest:
/s/Xxxxxxx Xxxxxxxxx By /s/ Xxxxxx Xxxxxxxxxx
----------------------- -----------------------
Attest:
/s/ Xxxxxxx Xxxxxxxxx By /s/ Xxxx Xxxxxx
--------------------- ---------------------
Attest:
/s/ Xxxxxxx Xxxxxxxxx By /s/ Xxxxxxx Xxxxxxxxx
---------------------- -----------------------
