AGREEMENT AND PLAN OF MERGER BY AND AMONG ZONE MINING LIMITED ZM ACQUISITION CORP. DRIVEITAWAY, INC. AND STONEWELL PARTNERS LLP Dated September 21, 2006
Exhibit
2.1
BY
AND AMONG
ZONE
MINING LIMITED
ZM
ACQUISITION CORP.
DRIVEITAWAY,
INC.
AND
STONEWELL
PARTNERS LLP
Dated
September 21, 2006
TABLE
OF CONTENTS
| ARTICLE I THE MERGER |
1
|
||
| 1.1 | The Merger. |
1
|
|
| 1.2 | Conversion of Shares. |
2
|
|
| 1.3 | Dissenters’ Rights. |
4
|
|
| 1.4 | Board and Shareholder Approval |
4
|
|
| 1.5 | Subsequent Actions. |
5
|
|
| 1.6 | Company Options and Warrants. |
5
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|
|
|
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| ARTICLE II THE CLOSING |
6
|
||
| 2.1 | Closing Date. |
6
|
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| 2.2 | Closing of the Merger. |
6
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|
| ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PRINCIPAL SHAREHOLDER |
8
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||
| 3.1 | Organization and Qualification. |
8
|
|
| 3.2 | Authorization; Validity and Effect of Agreement. |
9
|
|
| 3.3 | Company Subsidiaries. |
9
|
|
| 3.4 | No Conflict; Required Filings and Consents. |
10
|
|
| 3.5 | Capitalization. |
10
|
|
| 3.6 | Financial Statements. |
11
|
|
| 3.7 | Properties and Assets. |
11
|
|
| 3.8 | Intellectual Property. |
12
|
|
| 3.9 | No Undisclosed Liabilities. |
13
|
|
| 3.10 | Related Party Transactions. |
13
|
|
| 3.11 | Litigation. |
14
|
|
| 3.12 | Taxes. |
14
|
|
| 3.13 | Insurance. |
14
|
|
| 3.14 | Compliance. |
15
|
|
| 3.15 | Material Contracts. |
15
|
|
| 3.16 | Labor Relations. |
16
|
|
| 3.17 | Environmental Matters. |
16
|
|
| 3.18 | Absence of Certain Changes or Events. |
16
|
|
| 3.19 | Investment Intent. |
17
|
|
| 3.20 | Employee Benefit Matters. |
17
|
|
| 3.21 | Brokers and Finders Fees. |
18
|
|
| 3.22 | Company Information |
18
|
|
| 3.23 | Termination of Business Relationships |
19
|
|
i
| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB |
19
|
||
| 4.1 | Organization and Qualification. |
19
|
|
| 4.2 | Authorization; Validity and Effect of Agreement. |
19
|
|
| 4.3 | No Conflict; Required Filings and Consents. |
20
|
|
| 4.4 | Capitalization. |
20
|
|
| 4.5 | SEC Reports and Financial Statements. |
21
|
|
| 4.6 | Transaction Fees. |
21
|
|
| 4.7 | No Undisclosed Liabilities. |
21
|
|
| 4.8 | Related Party Transactions. |
21
|
|
| 4.9 | Litigation. |
22
|
|
| 4.10 | Taxes. |
22
|
|
| 4.11 | Compliance. |
22
|
|
| 4.12 | Material Contracts. |
23
|
|
| 4.13 | Absence of Certain Changes or Events. |
23
|
|
| 4.14 | Employee Benefit Matters. |
24
|
|
| 4.15 | Questionable Payments. |
24
|
|
| 4.16 | Certain Registration Matters. |
24
|
|
| 4.17 | Investment Company. |
24
|
|
| 4.18 | Listing and Maintenance Requirements. |
24
|
|
| ARTICLE V CERTAIN COVENANTS |
25
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||
| 5.1 | Conduct of Business by the Company and the Subsidiaries. |
25
|
|
| 5.2 | Access to Information. |
26
|
|
| 5.3 | Confidentiality; No Solicitation. |
27
|
|
| 5.4 | Best Efforts; Consents. |
27
|
|
| 5.5 | Further Assurances. |
28
|
|
| 5.6 | Public Announcements. |
28
|
|
| 5.7 | Notification of Certain Matters. |
28
|
|
| 5.8 | Prohibition on Trading in Company Securities. |
28
|
|
| 5.9 | Investment Letters. |
28
|
|
| 5.10 | Audited Financial Statements. |
29
|
|
| 5.11 | Additional Company Information. |
29
|
|
| 5.12 | Company Options and Warrants. |
29
|
|
| 5.13 | Parent and Company Capitalization. |
30
|
|
| 5.14 | Registration Rights. |
30
|
|
| 5.15 | Board of Directors. |
30
|
|
| 5.16 | Name Change. |
30
|
|
| 5.17 | Conduct of Business by Parent and its Subsidiaries. |
31
|
|
| 5.18 | Retirement of Parent Common Stock. |
32
|
|
| 5.19 | Stock Dividend. |
33
|
|
| 5.20 | Adoption of Stock Incentive Plan. |
33
|
|
| ARTICLE VI CONDITIONS TO CONSUMMATION OF THE MERGER |
33
|
||
| 6.1 | Conditions to Obligations of the Company and the Principal Shareholder. |
33
|
|
| 6.2 | Conditions to Obligations of Parent and Merger Sub. |
34
|
|
| 6.3 | Other Conditions to Obligations of the Company, the Principal Shareholder, Parent and Merger Sub. |
35
|
|
ii
| ARTICLE VII INDEMNIFICATION |
36
|
||
| 7.1 | Indemnification by the Principal Shareholder. |
36
|
|
| 7.2 | Indemnification Procedures for Third-Party Claim. |
36
|
|
| 7.3 | Indemnification Procedures for Non-Third Party Claims. |
37
|
|
| 7.4 | Limitations on Indemnification. |
37
|
|
| 7.5 | Exclusive Remedy. |
37
|
|
| ARTICLE VIII TERMINATION |
38
|
||
| 8.1 | Termination. |
38
|
|
| 8.2 | Procedure and Effect of Termination. |
48
|
|
| ARTICLE IX MISCELLANEOUS |
39
|
||
| 9.1 | Entire Agreement. |
39
|
|
| 9.2 | Amendment and Modifications. |
39
|
|
| 9.3 | Extensions and Waivers. |
39
|
|
| 9.4 | Successors and Assigns. |
39
|
|
| 9.5 | Survival of Representations, Warranties and Covenants. |
40
|
|
| 9.6 | Headings; Definitions. |
40
|
|
| 9.7 | Severability. |
40
|
|
| 9.8 | Specific Performance. |
40
|
|
| 9.9 | Expenses. |
40
|
|
| 9.10 | Notices. |
40
|
|
| 9.11 | Governing Law. |
41
|
|
| 9.12 | Arbitration. |
41
|
|
| 9.13 | Counterparts. |
41
|
|
| 9.14 | Certain Definitions. |
42
|
|
iii
Exhibits
|
Exhibit
3.1
|
Certificate
of Incorporation and Bylaws of the Company
|
|
Exhibit
3.6
|
Financial
Statements
|
|
Exhibit
3.22
|
Executive
Summary
|
|
Exhibit
5.9
|
Form
of Investment Letter
|
|
Exhibit
5.14
|
Form
of Registration Rights Agreement
|
iv
Schedules
|
Schedule
1.3(a)(iii)
|
Allocation
of Merger Consideration
|
|
Schedule
3.3
|
Subsidiaries
of the Company
|
|
Schedule
3.5(a)
|
Company
Shareholders and Capitalization of the Company
|
|
Schedule
3.5(b)
|
Capitalization
of the Subsidiaries
|
|
Schedule
3.7
|
Real
Property
|
|
Schedule
3.8
|
Company
Intellectual Property
|
|
Schedule
3.9
|
Undisclosed
Liabilities
|
|
Schedule
3.10
|
Related
Party Transactions
|
|
Schedule
3.11
|
Litigation
|
|
Schedule
3.12
|
Taxes
|
|
Schedule
3.13
|
Insurance
|
|
Schedule
3.14
|
Compliance
With Laws
|
|
Schedule
3.15
|
Material
Contracts
|
|
Schedule
3.16
|
Labor
Relations
|
|
Schedule
3.18
|
Certain
Changes or Events
|
|
Schedule
3.20
|
Employee
Benefit Matters
|
|
Schedule
4.7
|
Undisclosed
Liabilities
|
|
Schedule
4.8
|
Related
Party Transactions
|
|
Schedule
4.9
|
Litigation
|
|
Schedule
4.11
|
Compliance
With Laws
|
|
Schedule
4.12
|
Material
Contracts
|
|
Schedule
4.13
|
Certain
Changes or Events
|
|
Schedule
4.16
|
Registration
Rights
|
|
Schedule
5.1
|
Exceptions
to Conduct of Business of the Company in Ordinary Course
|
|
Schedule
5.17
|
Exceptions
to Conduct of Business of the Parent in Ordinary Course
|
|
Schedule
6.2(j)
|
Anti-Dilution
Warrants
|
v
THIS
AGREEMENT AND PLAN OF MERGER (this “Agreement”), is made and entered into this
21st day of September, 2006, by and among ZONE MINING LIMITED, a Nevada
corporation (“Parent”), ZM ACQUISITION CORP., a Delaware corporation (“Merger
Sub”), DRIVEITAWAY, INC., a Delaware corporation (the “Company”), and the
Principal Shareholder (as that term is defined in Section 9.14).
Recitals
WHEREAS,
the Boards of Directors of Parent, Merger Sub and the Company have approved,
and
deem it advisable and in the best interests of their respective companies and
shareholders to consummate a merger of Merger Sub with and into the Company
(the
“Merger”), with the Company as the surviving company in the Merger upon the
terms and subject to the conditions set forth in this Agreement;
and
WHEREAS,
pursuant to the terms of this Agreement, upon consummation of the Merger, each
issued and outstanding share (individually, a “Company Share”; and collectively,
the “Company Shares”) of common stock, $0.001 par value per share (“Company
Common Stock”), of the Company, shall represent the right to receive shares of
common stock, $0.00001 par value per share (the “Parent Common Stock”), of the
Parent.
NOW,
THEREFORE, in consideration of the foregoing premises and the representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
ARTICLE
I
THE
MERGER
1.1 The
Merger.
(a) The
Xxxxxx.Xx
the
Effective Time (as defined in Section 1.1(b)), the Merger shall be effected
and
Merger Sub shall be merged with and into the Company, upon the terms and subject
to the conditions set forth in this Agreement and in accordance with the
Delaware General Corporation Law (the “DGCL”), whereupon the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
surviving company in the Merger (the “Surviving Company”).
(b) Effective
Time.On
the
Closing Date (as defined in Section 2.1), the parties shall file certificates
of
merger (collectively, “Certificates of Merger”) with the Secretary of State of
the State of Delaware and make all other filings or recordings required by
the
DGCL in connection with the Merger. The Merger shall become effective at such
time as the Certificates of Merger are duly filed and accepted with the
Secretary of State of the State of Delaware, respectively, or at such later
time
as Parent, Merger Sub and the Company shall agree and specify in the
Certificates of Merger (the time the Merger becomes effective being the
“Effective Time”).
1
(c) Effects
of the Xxxxxx.Xx
the
Effective Time, the Merger shall have the effects set forth in this Agreement
and the DGCL. Without limiting the foregoing, and subject thereto, at the
Effective Time, all of the property, rights, powers, privileges and franchises
of the Company and Merger Sub shall be vested in the Surviving Company, and
all
of the debts, liabilities and duties of the Company and Merger Sub shall become
the debts, liabilities and duties of the Surviving Company.
(d) Certificate
of Incorporation and Bylaws.
(i) The
certificate of incorporation of the Company as in effect immediately prior
to
the Effective Time shall be the certificate of incorporation of the Surviving
Company until thereafter amended as provided therein or by applicable
law.
(ii) The
bylaws of the Company as in effect immediately prior to the Effective Time
shall
be the bylaws of the Surviving Company until thereafter amended as provided
therein or by applicable law.
(e) Officers
and Directors.
The
officers and directors of the Company immediately prior to the Effective Time
shall be the officers and directors of the Surviving Company, and shall hold
office in accordance with the certificate of incorporation and bylaws of the
Surviving Company until the earlier of the applicable officer’s or director’s
resignation or removal or until his or her respective successor is duly elected
and qualified, as the case may be.
1.2 Conversion
of Shares.
(a) Conversion
of Shares.
At
the
Effective Time, by virtue of the Merger and without any action on the part
of
the shareholders of the Company (the “Company Shareholders”):
(i) Merger
Sub Common Stock.Each
issued and outstanding share of common stock, $0.001 par value per share,
of
Merger Sub, shall be converted into and become one (1) validly issued, fully
paid and non-assessable share of common stock, $0.001 par value per share,
in
the Surviving Company;
(ii) Cancellation
of Treasury Securities and Parent-Owned Securities.All
Company Shares that are owned by the Company as treasury securities, all
Company
Shares owned by any subsidiary of the Company, and any Company Shares owned
by
Parent, Merger Sub or any other wholly-owned subsidiary of Parent, shall
be
canceled and retired and shall cease to exist and no consideration shall
be
delivered in exchange therefor; and
(iii) Conversion
of Company Shares.
All of
the Company Shares issued and outstanding at the Effective Time shall
be
converted into the right to receive an aggregate of Thirteen Million
Eighty Six
Thousand Three Hundred Ninety Eight (13,086,398) newly issued shares
of Parent
Common Stock (the “Parent Shares”). All such Company Shares, when so converted,
shall no longer be outstanding and shall automatically be canceled
and retired
and shall cease to exist, and each holder of a certificate representing
any such
Company Share shall cease to have any rights with respect thereto,
except the
right to receive the Parent Shares, without interest or dividends.
Schedule
1.3(a)(iii) attached hereto sets forth the allocation of the Merger
consideration payable to the Company Shareholders
hereunder.
2
(b) Exchange
of Certificates.
Each
Company Shareholder shall deliver to Parent any certificate evidencing a Company
Share and receive in exchange therefor that number of Parent Shares equal to
the
product of Thirteen Million Eighty Six Thousand Three Hundred Ninety Eight
(13,086,398) and a fraction, the numerator of which is the number of Company
Shares held by such Company Shareholder at the Effective Time and the
denominator of which is the total number of Company Shares issued and
outstanding at the Effective Time (such fraction, the “Company Ownership
Percentage”). If, after the Effective Time, certificates for the Company Shares
that were outstanding immediately prior to the Effective Time shall be delivered
to the Company or Parent, such Company Shares shall be exchanged for the Parent
Shares to be received in connection with the Merger as provided in Section
1.2(a)(iii).
(c) Distributions
With Respect to Unexchanged Shares.
No
interest or dividends or other distributions with respect to Parent Shares
with
a record date after the Effective Time shall be paid to the holder of any
unsurrendered certificate with respect to the Company Shares represented
thereby, and no cash payment in lieu of fractional Company Shares shall be
paid
to any such holder.
(d) No
Further Ownership Rights in Company Shares.
From
and after the Effective Time, the holders of certificates evidencing ownership
of Company Shares outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such Company Shares, except as
otherwise provided for herein or by applicable law.
(e) No
Fractional Shares.
No
certificates or scrip representing fractional Parent Shares shall be issued
upon
the surrender for exchange of certificates representing Company Shares, no
dividend or distribution of Parent shall relate to such fractional interests
and
such fractional interests will not entitle the owner thereof to vote or to
any
rights of a shareholder of Parent. Each Company Shareholder who would otherwise
have been entitled to receive a fraction of a Parent Closing Share (after taking
into account all certificates delivered by such Company Shareholder) shall
receive that number of Parent Shares that such holder would have received if
such fractional Parent Closing Share was rounded up to the nearest whole
number.
(f) Lost,
Stolen or Destroyed Certificates.
In the
event any certificate shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the Person claiming such certificate to be
lost,
stolen or destroyed and, if required by Parent, the posting by such Person
of a
bond in such reasonable amount as Parent may direct as indemnity against any
claim that may be made against it with respect to such certificate, Parent
will
issue in exchange for such lost, stolen or destroyed certificate the Parent
Shares to which such Person is entitled pursuant to this Agreement.
3
(g) Transfer
Books.
The
stock transfer books of the Company shall be closed immediately at the Effective
Time and thereafter there shall be no further registration of transfers of
Company Shares on the records of the Company. If, after the Effective Time,
certificates are presented to the Surviving Company for any reason, they shall
be cancelled and exchanged as provided in this Section 1.2.
(h)
Adjustments.
If at
any time during the period between the date of this Agreement and the Effective
Time, any change in the number of issued and outstanding shares of Parent
Common
Stock shall occur, by reason of any reclassification, recapitalization, stock
split or combination, exchange or readjustment of shares, or any stock dividend
thereon with a record date during such period (other than the stock dividend
contemplated by Section 5.19), the number of Parent Shares shall be adjusted
appropriately.
1.3 Dissenters’
Rights.
Notwithstanding
any provision of this Agreement to the contrary, any Company Shares that are
issued and outstanding immediately prior to the Effective Time and that are
held
by a Company Shareholder that has not voted in favor of the Merger or consented
thereto in writing and who has properly delivered a written notice of demand
for
appraisal of such Company Shares in accordance with Section 262 of the DGCL,
if
Section 262 of the DGCL provides for appraisal rights for such Company Shares
in
the Merger (the “Dissenting Company Shares”), shall not be converted into the
right to receive Parent Shares unless and until such Company Shareholder fails
to perfect or effectively withdraws or loses its right to appraisal and payment
under Section 262 of the DGCL. The Company shall give Parent: (i)
prompt
notice of any notice or demands for appraisal or payment for Company Shares
received by the Company, and (ii)
the
opportunity to participate in and direct all negotiations and proceedings with
respect to any such demands or notices. The Company shall not, without the
prior
written consent of Parent, make any payment with respect to, or settle, offer
to
settle or otherwise negotiate, any such demands.
1.4 Board
and Shareholder Approval
(a) The
Company’s Board of Directors shall approve this Agreement and the Merger,
recommend that the Company Shareholders approve this Agreement and the Merger,
and submit this Agreement and the Merger to the Company Shareholders for
approval. Promptly after executing this Agreement, the Company, acting through
its Board of Directors, shall take all such action as may be necessary to seek
approval of this Agreement and the Merger by the Company Shareholders in
accordance with all applicable requirements of the DGCL. The Principal
Shareholder shall vote all shares of Company Common Stock held by it, and
exercise all contractual rights it may have to cause the other holders of the
Company Common Stock to approve this Agreement and the Merger. The Company
shall
provide a copy of this Agreement to all Company Shareholders, together with
the
form of investment letter attached hereto as Exhibit 5.9, informing each that
this Agreement and the Merger has been approved by the Board of Directors of
the
Company.
4
(b) The
Company and Merger Sub shall cause to occur all corporate action necessary
on
behalf of either of them to approve and effect the Merger and the other
transactions contemplated hereby and shall approve the Merger and this Agreement
in accordance with all applicable provisions of the DGCL. The Board of Directors
of the Merger Sub shall approve the Merger and this Agreement, declare its
advisability and submit it for approval to Parent as the sole shareholder of
Merger Sub by written consent in accordance with all applicable provisions
of
the DGCL. The Board of Directors of Parent shall approve the Merger and this
Agreement in accordance with all applicable provisions of the NGCL and, as
the
sole shareholder of Merger Sub, shall consent in writing to approve the Merger
and this Agreement in accordance with all applicable revisions of the
DGCL.
1.5 Subsequent
Actions.
If,
at
any time after the Effective Time, the Surviving Company shall determine, in
its
sole discretion, or shall be advised, that any deeds, bills of sale,
assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Company its right, title or interest in, to or under any of the property,
rights, powers, privileges, franchises or other assets of either of the Company
or Merger Sub acquired or to be acquired by the Surviving Company as a result
of, or in connection with, the Merger or otherwise to carry out this Agreement,
then the officers of the Surviving Company shall be authorized to execute and
deliver, and shall execute and deliver, in the name and on behalf of either
the
Company or Merger Sub, all such deeds, bills of sale, assignments, assurances,
and to take and do, in the name and on behalf of each such corporation or
otherwise, all such other actions and things as may be necessary or desirable,
to vest, perfect or confirm any and all right, title or interest in, to and
under such property, rights, powers, privileges, franchises or other assets
in
the Surviving Company or otherwise to carry out the transactions contemplated
by
this Agreement.
1.6 Company
Options and Warrants.
(a) As
of the
Effective Time, all Company Options and Warrants (as defined in Subsection
3.5(a) hereof), whether vested or unvested, including the Company’s 2000 Equity
Compensation Plan (the “2000 Stock Plan”) and the Company’s 2004 Stock Option
Plan (the “2004 Stock Plan”), insofar as they relate to options outstanding
under such plans as of the Closing, shall be assumed by Parent. Immediately
after the Effective Time, each Company Option and Warrant outstanding
immediately prior to the Effective Time shall be deemed to constitute an option
or warrant, as the case may be, to acquire, on the same terms and conditions
as
were applicable under such Company Option and Warrant at the Effective Time,
such number of shares of Parent Common Stock as is equal to the number of
Company Shares subject to the unexercised portion of such Company Option and
Warrant multiplied by 2.8877 (with any fraction resulting from such
multiplication to be rounded down to the nearest whole number). The exercise
price per share of each such assumed Company Option and Warrant shall be equal
to the exercise price of such Company Option and Warrant immediately prior
to
the Effective Time, divided by 2.8877 (rounded up to the nearest whole cent).
The term, exercisability, vesting schedule, status as an “incentive stock
option” under Section 422 of the Code, if applicable, and all of the other terms
of the Company Options and Warrants shall otherwise remain
unchanged.
5
(b) As
soon
as practicable after the Effective Time, Parent or the Surviving Company shall
deliver to the holders of Company Options and Warrants appropriate notices
setting forth such holders’ rights pursuant to such Company Options and
Warrants, as the case may be, as amended by this Section 1.6 and the agreements
evidencing such Company Options and Warrants shall continue in effect on the
same terms and conditions (subject to the amendments provided for in this
Section 1.6 and such notice).
(c) Parent
shall take all corporate action necessary to reserve for issuance a sufficient
number of shares of Parent Common Stock for delivery upon exercise of the
Company Options and Warrants assumed in accordance with this Section
1.6.
ARTICLE
II
THE
CLOSING
2.1 Closing
Date.
Subject
to satisfaction or waiver of all conditions precedent set forth in Article
VI of
this Agreement, the closing of the Merger (the “Closing”) shall take place at
the offices of the Company at 10:00 a.m., local time on (a)
the
later of: (i)
the
first Business Day following the day upon which all appropriate Parent and
Merger Sub corporate action and Company action has been taken in accordance
with
Articles I and V, respectively, of this Agreement; or (ii)
the day
on which the last of the conditions precedent set forth in Article VI of this
Agreement is fulfilled or waived; or (b)
at such
other time, date and place as the parties may agree, but in no event shall
such
date be later than October 31, 2006 (the “Outside Date”), unless such date is
extended by the requirements of law or the mutual agreement of the
parties.
2.2 Closing
of the Merger.
At
the
Closing, the following transactions shall occur, all of such transactions being
deemed to occur simultaneously:
(a) The
Company shall deliver or cause to be delivered to Parent and Merger Sub
the
following documents and/or shall take the following actions:
(i) A
true
and complete list of all holders of record of Company Shares issued and
outstanding on and as of the Closing setting forth the name, address,
and number
of Company Shares held by each and the number of Parent Shares to be
issued to
each holder at Closing;
(ii) Certificates
evidencing all of the Company Shares held by the Principal Shareholder and
by
any other Company Shareholder desiring to receive Parent Shares at the
Closing;
6
(iii) Any
agreements between the Company Shareholders and the Company relating to the
Company Shares;
(iv) The
officer’s certificate described in Section 6.2(c);
(v) An
incumbency certificate signed by all of the executive officers of the Company
dated at the Closing Date;
(vi) A
certificate of good standing from the Secretary of State of the State of
Delaware, dated at or about the Closing Date, to the effect that the Company
is
in good standing under the laws of the State of Delaware;
(vii) Certificate
of incorporation of the Company certified by the Secretary of State of the
State
of Delaware at or about the Closing Date and bylaws of the Company certified
by
the Secretary of the Company at or about the Closing Date;
(viii) Resolutions
of the board of directors and shareholders of the Company dated at or about
the
Closing Date authorizing the Merger, certified by the Secretary of the Company;
(ix) The
investment letters described in Section 5.9;
(x)
The
Audited Financial Statements (as defined in Section 5.10);
(xi) The
Additional Company Information (as defined in Section 5.11);
(xii) The
Registration Rights Agreement executed by the Company Shareholders described
in
Section 5.14;
(xiii) All
consents, authorizations, orders or approvals required in order to execute
and
deliver this Agreement and to effectuate the transactions contemplated hereby
in
form, scope and substance reasonably satisfactory to Parent; and
(xiv) All
approvals, consents, permits and waivers of Governmental Authorities and any
Person necessary for the consummation of the transactions contemplated by this
Agreement and no such approval, consent, permit or waiver of any Governmental
Authority or such other third party shall contain any term or condition that
Parent in its reasonable discretion determines to be unduly
burdensome.
(b) Parent
and Merger Sub shall deliver or cause to be delivered to the Company the
following documents and shall take the following actions:
(i) Certificates
evidencing all of the Parent Shares issuable with respect to the Company Shares
delivered pursuant to Section 2.2(a)(ii);
(ii) The
officer’s certificates described in Section 6.1(c);
7
(iii) An
incumbency certificate signed by all of the executive officers of Parent dated
at the Closing Date;
(iv) An
incumbency certificate signed by all of the executive officers of Merger Sub
dated at the Closing Date;
(v) A
certificate of good standing from the Secretary of State of the State of Nevada,
dated at or about the Closing Date, to the effect that Parent is in good
standing under the laws of the State of Nevada;
(vi) A
certificate of good standing from the Secretary of State of the State of
Delaware, dated at or about the Closing Date, to the effect that Merger Sub
is
in good standing under the laws of the State of Delaware;
(vii) Articles
of incorporation of Parent certified by the Secretary of State of the State
of
Nevada at or about the Closing Date and the bylaws of Parent certified by the
Secretary of Parent at or about the Closing Date;
(viii) Certificate
of incorporation of Merger Sub certified by the Secretary of State of the State
of Delaware at or about the Closing Date and bylaws of Merger Sub certified
by
the Secretary of Merger Sub at or about the Closing Date;
(ix) Resolutions
of the board of directors of Parent dated at or about the Closing Date
authorizing the Merger, certified by the Secretary of Parent; and
(x) Resolutions
of the board of directors and the sole shareholder of Merger Sub dated at or
about the Closing Date authorizing the Merger, certified by the Secretary of
Merger Sub.
(c) Each
of
the parties to this Agreement shall have otherwise executed whatever
documents
and agreements, provided whatever consents or approvals and shall have
taken all
such other actions as are required under this Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF
THE
COMPANY AND THE PRINCIPAL SHAREHOLDER
The
Company and the Principal Shareholder, jointly and severally, hereby make the
following representations and warranties to Parent and Merger Sub:
3.1 Organization
and Qualification.
The
Company is duly organized, validly existing and in good standing under the
laws
of the State of Delaware, with the corporate power and authority to own and
operate its businesses as presently conducted, except where the failure to
be or
have any of the foregoing would not have a Material Adverse Effect. The Company
is duly qualified as a foreign company or other entity to do business and is
in
good standing in each jurisdiction where the character of its properties owned
or held under lease or the nature of its activities makes such qualification
necessary, except for such failures to be so qualified or in good standing
as
would not, individually or in the aggregate, have a Material Adverse Effect.
True, correct and complete copies of the certificate of incorporation and bylaws
of the Company, as amended the date, are attached hereto as Exhibit
3.1.
8
3.2 Authorization;
Validity and Effect of Agreement.
(a) The
Company has the requisite corporate power and authority to execute, deliver
and
perform its obligations under this Agreement and to consummate the Merger.
The
execution and delivery of this Agreement by the Company and the performance
by
the Company of its obligations hereunder and the consummation of the
Merger have
been duly authorized by its board of directors and, subject to the approval
by
the Company Shareholders, all other necessary company action on the part
of the
Company and no other Company proceedings on the part of the Company are
necessary to authorize this Agreement and the Merger. This Agreement
has been
duly and validly executed and delivered by the Company and, assuming
that it has
been duly authorized, executed and delivered by the other parties hereto,
constitutes a legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar
laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and
an
implied covenant of good faith and fair dealing.
(b) The
Principal Shareholder has the full capacity, power and authority
to enter into
this Agreement and the other agreements contemplated hereby to
which the
Principal Shareholder is a party and to consummate the transactions
contemplated
hereby and thereby and to comply with the terms, conditions and
provisions
hereof and hereof. This Agreement and the other agreements contemplated
hereby
to which the Principal Shareholder is a party have been, or will
be, duly
authorized, executed and delivered by the Principal Shareholder
and are the
legal, valid and binding obligations of the Principal Shareholder,
enforceable
against the Principal Shareholder in accordance with its terms,
subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in
a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing. Except
for the approval of this Agreement and the Merger by the Company's
Shareholders,
no notices to, declaration, filing or registration with, approvals
or consents
of, or assignments by, any Persons (including Governmental Authorities)
are
necessary to be made or obtained by the Company or the Principal
Shareholder in
connection with the execution, delivery or performance by the Company
or the
Principal Shareholder of this Agreement.
3.3 Company
Subsidiaries.
Attached
hereto as Schedule 3.3 is a complete and accurate list of the Company’s
subsidiaries (the “Subsidiaries”). The Subsidiaries are duly organized, validly
existing and in good standing under the laws of their respective jurisdictions
of organization, with the requisite corporate power and authority to own and
operate their respective businesses as presently conducted, except where the
failure to be or have any of the foregoing would not have a Material Adverse
Effect. The Subsidiaries are duly qualified as foreign companies or other
entities to do business and are in good standing in each jurisdiction where
the
character of their respective properties owned or held under lease or the nature
of their respective activities makes such qualification necessary, except for
such failures to be so qualified or in good standing as would not, individually
or in the aggregate, have a Material Adverse Effect.
9
3.4 No
Conflict; Required Filings and Consents.
Neither
the execution and delivery of this Agreement by the Company nor the performance
by the Company of its obligations hereunder, nor the consummation of the Merger,
shall: (i)
conflict
with the Company’s certificate of incorporation or bylaws; (ii)
conflict
with any Subsidiary’s articles of incorporation or bylaws; (iii)
violate
any statute, law, ordinance, rule or regulation applicable to the Company,
any
of its Subsidiaries or any of their respective assets or properties; or
(iv)
violate,
breach, be in conflict with or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or permit
the termination of any provision of, or result in the termination of, the
acceleration of the maturity of, or the acceleration of the performance of
any
obligation of the Company or its Subsidiaries under, or result in the creation
or imposition of any Liens upon any properties, assets or business of the
Company or its Subsidiaries under, any Material Contract or any order, judgment
or decree to which the Company or any of its Subsidiaries is a party or by
which
the Company, any of its Subsidiaries or any of their respective assets or
properties is bound or encumbered except, in the case of clauses (ii), (iii)
& (iv), for such violations, breaches, conflicts, defaults or other
occurrences which, individually or in the aggregate, would not have a Material
Adverse Effect.
3.5 Capitalization.
(a) Attached
hereto as Schedule 3.5(a) is a complete and accurate list of (i)
the
Company Shareholders and each holder (“Company Option Holder”) of options and
warrants (“Company Options and Warrants”) of the Company, (ii)
the
number and class of issued and outstanding Company Shares and Company
Options
and Warrants owned by such Company Shareholders or Company Option Holders,
as
applicable, on the date of this Agreement, and (iii)
the
exercise price, date of grant, vesting schedules and number of shares
of Company
Common Stock issuable upon the exercise of each of the Company Options
and
Warrants. The authorized capital stock of the Company consists of 75,000,000
shares of Company Common Stock and 7,000,0000 shares of preferred stock
(“Company Preferred Stock”). There are currently issued and outstanding
4,531,822 shares of Company Common Stock, and Company Options and Warrants
to
acquire 1,598,422 shares of Company Common Stock. No shares of Company
Preferred
Stock are currently outstanding. The Company Shares and Company Options
and
Warrants represent all of the outstanding equity interests in the Company.
All
of the Company Shares have been validly authorized and issued and are
fully paid
and non-assessable, and the Company has reserved on its books and records,
for
future issuance, the shares of Company Common Stock issuable under the
exercise
of the Company Options and Warrants. Except for this Agreement or as
set forth
on Schedule 3.5(a), there are no outstanding options, warrants, agreements,
conversion rights, preemptive rights, or other rights to subscribe for,
purchase
or otherwise acquire any Company Common Stock. Except for the Investors
Rights
Agreement, there are no voting trusts or other agreements or understandings
to
which the Company is a party with respect to the voting of Company Common
Stock,
and there is no indebtedness of the Company having general voting rights
issued
and outstanding. Except for this Agreement or as set forth on Schedule
3.5(a),
there are no outstanding obligations of any Person to repurchase, redeem
or
otherwise acquire outstanding Company Common Stock. Except as set forth
in this
Agreement or as set forth on Schedule 3.5(a), the Company has no Company
Common
Stock reserved for issuance.
10
(b) Attached
hereto as Schedule 3.5(b) is a complete and accurate list authorized
and
outstanding equity interests of the Subsidiaries. All equity interests
of the
Subsidiaries outstanding as of the date of this Agreement have been duly
authorized and validly issued, are fully paid and non-assessable, and
are free
of preemptive rights.
(c) The
Principal Shareholder owns and holds, beneficially and of record, the
entire
right, title, and interest in and to the Company Shares set forth opposite
the
Principal Shareholder’s name on Schedule 3.5(a), free and clear of all Liens and
Encumbrances, other than those arising under the Investors Rights Agreement.
The
Principal Shareholder has full power and authority to vote the Company
Shares
owned by him or her and to approve the transactions contemplated by this
Agreement. The Principal Shareholder has the full power and authority
to vote,
transfer and dispose of the Company Shares owned by it pursuant to this
Agreement, free and clear of any Lien or Encumbrance of any kind or nature
whatsoever other than restrictions under the Securities Act and applicable
state
securities laws. At the Closing, Parent will acquire good title to the
Company
Shares, free and clear of all Liens and Encumbrances. Other than the
transactions contemplated by this Agreement and the Share Repurchase
Agreement,
there is no outstanding vote, plan, pending proposal, or other right
of any
Person to acquire, or to cause the redemption of, the Company Shares
or to
effect the merger or consolidation of the Company with or into any other
Person.
3.6 Financial
Statements.
True
and
complete copies of the Company’s consolidated balance sheet at December 31, 2005
and June 30, 2006 and consolidated income statements and statements of cash
flows for the fiscal years ended December 31, 2004 and 2005 and the six months
ended June 30, 2006, are attached hereto as Exhibit 3.6 (collectively, the
“Financial Statements”). The Financial Statements (including the notes thereto)
present fairly in all material respects the financial position and results
of
operations and cash flows of the Company and its Subsidiaries at the dates
or
for the periods set forth therein. The Financial Statements were prepared from
and in accordance with the books and records of the Company and its
Subsidiaries, as applicable, but were not necessarily prepared in accordance
with GAAP.
3.7 Properties
and Assets.
The
Company and its Subsidiaries have good and marketable title to, valid leasehold
interests in, or the legal right to use, and hold free and clear of all Liens
and Encumbrances, all of the assets, properties and leasehold interests
reflected in the Financial Statements (the “Assets”), except for those sold or
otherwise disposed of since the date of the Financial Statements in the ordinary
course of business consistent with past practice and not in violation of this
Agreement, and except for Permitted Encumbrances. All Assets of the Company
and
its Subsidiaries that are material to the operations of their respective
businesses are in good operating condition and repair, subject to normal wear
and tear. The Company and its Subsidiaries have delivered to Parent or otherwise
made available, correct and complete copies of all leases, subleases and other
material agreements or other material instruments relating to all real property
used in conducting the businesses of the Company and the Subsidiaries to which
the Company or the Subsidiaries is a party (collectively, the “Real Property”),
all of which are identified on Schedule 3.7. There are no pending or, to the
Knowledge of the Company or any of the Subsidiaries, threatened condemnation
proceedings relating to any of the Real Property. Except as set forth on
Schedule 3.7, none of the real property improvements (including leasehold
improvements), equipment and other Assets owned or used by the Company or its
Subsidiaries is subject to any commitment or other arrangement for their sale
or
use by any Affiliate of the Company or its Subsidiaries, or by third parties.
To
the
Knowledge of the Principal Shareholder, the Company’s leased real estate is free
and clear of any zoning or use or building restriction or any pending, proposed
or threatened zoning or use or building restriction which would interfere with
the present or any intended use by the Company of any of such leased real
estate. Such leases are valid and binding and in full force and effect, and
the
Company is not in default thereunder as to the payment of rent or otherwise.
The
consummation of the transactions contemplated by this Agreement will not
constitute an event of default under any of said leases and the continuation,
validity and effectiveness of such leases will not be adversely affected by
the
transactions contemplated by this Agreement.
11
3.8 Intellectual
Property.
(a) Schedule
3.8 lists all Intellectual Property used in or relied upon and directly
or
indirectly in the conduct of the Company’s or any of Subsidiaries’ business or
operations in the ordinary course consistent with past practice (the
“Company
Intellectual Property”). Except as disclosed in Schedule 3.8, (i)
the
Company or its Subsidiaries are the owners of all of the Company Intellectual
Property free and clear of any royalty or other payment obligation,
lien or
charge, or have sufficient rights to use such Company Intellectual
Property
under a valid and enforceable license agreement, (ii)
there
are no agreements that restrict or limit the use of the Company Intellectual
Property by the Company or its Subsidiaries, (iii)
to the
extent that the Company Intellectual Property owned or held by the
Company or
its Subsidiaries are registered with the applicable authorities, record
title to
such Company Intellectual Property is registered or applied for in
the name of
the Company or of its Subsidiaries, and (iv) the Principal Shareholder
has no
interest in the Company Intellectual Property.
(b) The
Company’s and Subsidiaries’ rights to the Company Intellectual Property are
valid and enforceable, and the Company Intellectual Property and the
products
and services of the Company and its Subsidiaries do not infringe upon
Intellectual Property rights of any person or entity in any country.
Except
where reasonable business decisions to allow rights to lapse have been
made, all
maintenance taxes, annuities and renewal fees have been paid and all
other
necessary actions to maintain the Company Intellectual Property rights
have been
taken through the date hereof. There exists no impediment that would
impair the
Company’s rights to conduct its business or the business of its Subsidiaries
after the Effective Time as it relates to the Company Intellectual
Property.
(c) The
Company and its Subsidiaries have taken all reasonable and appropriate
steps to
protect the Company Intellectual Property which is material to their
respective
businesses and, where applicable, to preserve the confidentiality of
the Company
Intellectual Property.
12
(d) Neither
the Company nor any of its Subsidiaries has received any notice of claim
that
any of such Company Intellectual Property has expired, is not valid or
enforceable in any country or that it infringes upon or conflicts with the
intellectual property rights of any third party, and no such claim or
infringement or conflict, whenever filed or threatened, currently
exists.
(e) Neither
the Company nor any of the Subsidiaries has given any notice of infringement
to
any third party with respect to any of the Company Intellectual Property
or has
become aware of facts or circumstances evidencing the infringement by any
third
party of any of the Company Intellectual Property, and no claim or controversy
with respect to any such alleged infringement currently exists.
(f) The
execution, delivery and performance of this Agreement by the Company and
the
consummation by the Company of the Merger will not: (i)
constitute a breach by the Company or the Subsidiaries of any instrument
or
agreement governing any Company Intellectual Property owned by or licensed
to
the Company or any of the Subsidiaries; (ii)
pursuant
to the terms of any license or agreement relating to any Company Intellectual
Property, cause the modification of any terms of any such license or agreement,
including, but not limited to, the modification of the effective rate of
any
royalties or other payments provided for in any such license or agreement;
(iii)
cause
the forfeiture or termination of any Company Intellectual Property under
the
terms thereof; (iv)
give
rise to a right of forfeiture or termination of any Company Intellectual
Property under the terms thereof; or (v)
impair
the right of the Company, the Subsidiaries, the Surviving Company or Parent
to
make, have made, offer for sale, use, sell, export or license any Company
Intellectual Property or portion thereof pursuant to the terms
thereof.
3.9 No
Undisclosed Liabilities.
Except
as
disclosed in the Financial Statements or Schedule 3.9, neither the Company
nor
any of its Subsidiaries has any material liabilities, indebtedness or
obligations, except those that have been incurred in the ordinary course of
business, whether known or unknown, absolute, accrued, contingent or otherwise,
and whether due or to become due, and to the Knowledge of the Company, there
is
no existing condition, situation or set of circumstances that could reasonably
be expected to result in such a liability, indebtedness or obligation.
3.10 Related
Party Transactions.
Except
as
provided on Schedule 3.10:
(a) There
is
no indebtedness between the Company or any of its Subsidiaries, on the one
hand,
and any officer, director or Affiliate (other than the Company or any of
its
Subsidiaries) of the Company or the Subsidiaries, on the other hand, other
than
usual and customary advances made in the ordinary course of
business;
(b) No
officer, director or Affiliate of the Company or any of its Subsidiaries
provides or causes to be provided any assets, services (other than services
as
an, officer, manager, director or employee) or facilities to the Company
or any
of its Subsidiaries;
13
(c) Neither
the Company nor any of its Subsidiaries provides or causes to be provided
any
assets, services or facilities to any officer, director or Affiliate of the
Company or any of its Subsidiaries (other than as reasonably necessary for
them
to perform their duties as officers, directors or employees);
(d) Neither
the Company nor any of its Subsidiaries beneficially owns, directly or
indirectly, any investment in or issued by any such officer, director or
Affiliate of the Company or any of its Subsidiaries; and
(e) No
officer, director or Affiliate of the Company or any of its Subsidiaries
has any
direct or indirect ownership interest in any Person with which the Company
or
any of its Subsidiaries competes or has a business relationship other than
an
ownership interest that represents less than five percent (5%) of the
outstanding equity interests in a publicly traded company.
3.11 Litigation.
Except
for the matters set forth in Schedule 3.11, there is no action, claim, suit,
litigation, proceeding, or governmental investigation (“Action”) instituted,
pending or threatened against the Company or any of its Subsidiaries that,
individually or in the aggregate, directly or indirectly, would be reasonably
likely to have a Material Adverse Effect, nor is there any outstanding judgment,
decree or injunction, in each case against the Company or its Subsidiaries,
that, individually or in the aggregate, has or would be reasonably likely to
have a Material Adverse Effect.
3.12 Taxes.
Except
as
set forth in Schedule 3.12, the Company and its Subsidiaries have timely filed
(or have had timely filed on their behalf) with the appropriate tax authorities
all tax returns required to be filed by them or on behalf of them, and each
such
tax return was complete and accurate in all material respects, and the Company
and its Subsidiaries have timely paid (or have had paid on their behalf) all
material Taxes due and owing by it, regardless of whether required to be shown
or reported on a tax return, including Taxes required to be withheld by it.
No
deficiency for a material Tax has been asserted in writing or otherwise, to
the
Company’s Knowledge, against the Company or any Subsidiary or with respect to
any Assets, except for asserted deficiencies that either (i)
have
been resolved and paid in full or (ii)
are
being contested in good faith. There are no material Liens for Taxes upon the
Assets.
3.13 Insurance.
Schedule
3.13 sets forth a list of all of the Company’s key-man life insurance policies
and other insurance policies material to the current and proposed business
of
the Company. The Company maintains insurance covering its assets, business,
equipment, properties, operations, employees, officers, directors and managers
with such coverage, in such amounts, and with such deductibles and premiums
as
are consistent with insurance coverage provided for other companies of
comparable size and in comparable industries. All of such policies are in full
force and effect and all premiums payable have been paid in full and the Company
is in full compliance with the terms and conditions of such policies. The
Company has not received any notice from any issuer of such policies of its
intention to cancel or refusal to renew any policy issued by it or of its
intention to renew any such policy based on a material increase in premium
rates
other than in the ordinary course of business. None of such policies are subject
to cancellation by virtue of the consummation of the Merger. There is no claim
by the Company pending under any of such policies as to which coverage has
been
questioned or denied.
14
3.14 Compliance.
Except
as
disclosed on Schedule 3.14, the Company and its Subsidiaries are in compliance
with all foreign, federal, state and local laws and regulations of any
Governmental Authority applicable to its operations or with respect to which
compliance is a condition of engaging in the business thereof, except to the
extent that failure to comply would not, individually or in the aggregate,
have
a Material Adverse Effect. Neither the Company nor any of its Subsidiaries
have
received any notice asserting a failure, or possible failure, to comply with
any
such law or regulation, the subject of which notice has not been resolved as
required thereby or otherwise to the satisfaction of the party sending the
notice, except for such failure as would not, individually or in the aggregate,
have a Material Adverse Effect. The Company and its Subsidiaries hold all
permits, licenses and franchises from Governmental Authorities required to
conduct its business as it is now being conducted, except for such failures
to
have such permits, licenses and franchises that would not, individually or
in
the aggregate, have a Material Adverse Effect.
3.15 Material
Contracts.
Except
as
set forth in Schedule 3.15, neither the Company nor any of its Subsidiaries
is a
party to or bound by any Material Contract. The Material Contracts constitute
all of the material agreements and instruments that are necessary and desirable
to operate the business as currently conducted by the Company and its
Subsidiaries and as contemplated to be conducted. True, correct and complete
copies of each Material Contract described and listed on Schedule 3.15 will
be
made available to Parent within ten (10) Business Days prior to the Closing.
All
of the Material Contracts are valid, binding and enforceable against the
respective parties thereto in accordance with their respective terms. All
parties to all of the Material Contracts have performed all obligations required
to be performed to date under such Material Contracts, and neither the Company
or its Subsidiaries, nor, to the best of its Knowledge, any other party, is
in
default or in arrears under the terms thereof, and no condition exists or event
has occurred which, with the giving of notice or lapse of time or both, would
constitute a default thereunder. The consummation of this Agreement and the
Merger will not result in an impairment or termination of any of the rights
of
the Company or any of its Subsidiaries under any Material Contract. None of
the
terms or provisions of any Material Contract materially and adversely affects
the business, prospects, financial condition or results of operations of the
Company.
15
3.16 Labor
Relations.
Except
as
described on Schedule 3.16, as of the date of this Agreement (i)
there
are no activities or proceedings of any labor union to organize any
non-unionized employees of the Company or any of its Subsidiaries; (ii)
there
are no unfair labor practice charges and/or complaints pending against the
Company or any of its Subsidiaries before the National Labor Regulations Board,
or any similar foreign labor relations governmental bodies, or any current
union
representation questions involving employees of the Company or any of its
Subsidiaries; and (iii)
there is
no strike, slowdown, work stoppage or lockout, or threat thereof, by or with
respect to any employees of the Company or any of its Subsidiaries. As of the
date of this Agreement, neither the Company nor any of its Subsidiaries is
a
party to any collective bargaining agreements. There are no controversies
pending or threatened between the Company and its Subsidiaries and any of their
respective employees, except for such controversies that would not be reasonably
likely to have a Material Adverse Effect.
3.17 Environmental
Matters.
Except
for such matters that, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect, the Company and its Subsidiaries
(i)
have
obtained all applicable permits, licenses and other authorizations that are
required to be obtained under all applicable Environmental Laws by the Company
and its Subsidiaries in connection with their respective businesses;
(ii)
are in
compliance with all terms and conditions of such required permits, licenses
and
authorizations, and with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in or arising from applicable Environmental Laws in connection with
their respective businesses; (iii)
have not
received notice of any part or present violations of Environmental Laws in
connection with their respective businesses, or of any spill, release, event,
incident, condition or action or failure to act in connection with their
respective businesses that is reasonably likely to prevent continued compliance
with such Environmental Laws, or which would give rise to any common law
environmental liability or liability under Environmental Laws, or which would
otherwise form the basis of any Action against the Company or its Subsidiaries
based on or resulting from the manufacture, processing, use, treatment, storage,
disposal, transport, or handling, or the emission, discharge or release into
the
environment, of any hazardous material by any Person in connection with the
Company’s or its Subsidiaries’ respective businesses; and (iv)
have
taken all actions required under applicable Environmental Laws to register
any
products or materials required to be registered by the Company or its
Subsidiaries thereunder in connection with their respective businesses.
3.18 Absence
of Certain Changes or Events.
Except
as
set forth on Schedule 3.18 or as otherwise contemplated by this Agreement,
since
December 31, 2005, (i)
there
has been no change or development in, or effect on, the Company or any of its
Subsidiaries that has or could reasonably be expected to have a Material Adverse
Effect, (ii)
neither
the Company nor any of its Subsidiaries has sold, transferred, disposed of,
or
agreed to sell, transfer or dispose of, any material amount of Assets other
than
in the ordinary course of business, (iii)
neither
the Company nor any of its Subsidiaries any has paid any dividends or
distributed any Assets to any officer, director or shareholder of the Company,
(iv)
neither
the Company nor any of its Subsidiaries has acquired any material amount of
Assets except in the ordinary course of business, nor acquired or merged with
any other business, (v)
neither
the Company nor any of its Subsidiaries has waived or amended any of their
respective material contractual rights except in the ordinary course of
business, and (vi)
neither
the Company nor any of its Subsidiaries has entered into any agreement to take
any action described in clauses (i) through (v) above.
16
3.19 Investment
Intent.
The
Parent Shares being acquired by the Principal Shareholder in connection with
the
Merger are being acquired for the Principal Shareholder’s own account for
investment purposes only and not with a view to, or with any present intention
of, distributing or reselling any of such Parent Shares. The Principal
Shareholder acknowledges and agrees that the Parent Shares have not been
registered under the Securities Act or under any state securities laws, and
that
the Parent Shares may not be, directly or indirectly, sold, transferred, offered
for sale, pledged, hypothecated or otherwise disposed of without registration
under the Securities Act and applicable state securities laws, except pursuant
to an available exemption from such registration. The Principal Shareholder
also
acknowledges and agrees that neither the SEC nor any securities commission
or
other Governmental Authority has (a)
approved
the transfer of the Parent Shares or passed upon or endorsed the merits of
the
transfer of the Parent Shares, this Agreement or the Merger; or (b)
confirmed the accuracy of, determined the adequacy of, or reviewed this
Agreement. The Principal Shareholder has such knowledge, sophistication and
experience in financial, tax and business matters in general, and investments
in
securities in particular, that it is capable of evaluating the merits and risks
of this investment in the Parent Shares, and the Principal Shareholder has
made
such investigations in connection herewith as it deemed necessary or desirable
so as to make an informed investment decision without relying upon Parent for
legal or tax advice related to this investment.
3.20 Employee
Benefit Matters.
Except
as
set forth in Schedule 3.20, neither the Company nor any Subsidiaries are a
party
to, or since their respective inceptions have been a party to, any Employee
Benefit Plans, programs, arrangements or agreements, whether formal or informal,
whether in writing or otherwise, with respect to which the Company or a
Subsidiary has or may have any obligation or that are maintained, contributed
to
or sponsored by the Company or the Subsidiary for the benefit of any current
or
former director, officer or employee of the Company or the Subsidiary. Neither
the Company nor any Subsidiary has a current or projected liability in respect
of post-employment or post-retirement health, medical or life insurance benefits
for any of its retired, former or current employees. There is no contract,
plan
or arrangement, written or otherwise, covering any employee or former employee
of the Company or any Subsidiary that, individually or collectively, could
give
rise to the payment of any amount that would not be deductible pursuant to
the
terms of Section 280G of the Code and, except as contemplated by this Agreement,
no employee or former employee of the Company or any Subsidiary will become
entitled to any bonus, retirement, severance, job security or similar benefit
or
enhancement of such benefit (including acceleration of vesting or exercise
of an
incentive award) as a result of the Merger. Neither the Company nor any
Subsidiary has any express or implied commitment to: (i)
create,
incur liability with respect to or cause to exist any Employee Benefit Plan,
program, arrangement or agreement; or (ii)
enter
into any contract or agreement to provide compensation or benefits to any
individual.
17
3.21 Brokers
and Finders Fees.
Neither
the Company or any of its Subsidiaries nor any of their respective officers,
directors, employees or managers has employed any broker or finder or incurred
any liability for any investment banking fees, brokerage fees, commissions
or
finders fees in connection with the Merger for which the Company or any of
its
Subsidiaries has or could have any liability.
3.22 Company
Information
(a) The
Company has provided Parent with an executive summary (the “Executive Summary”)
describing the Company’s current and proposed business, principal customers,
market opportunity, products and financial projections. The Company has also
provided Parent with information regarding its directors and officers (including
involvement in any legal proceedings, or being the subject of any investigation
by, or proceeding of, any Governmental Authority or self regulatory organization
such as the NASD). A true and correct copy of the Executive Summary is attached
hereto as Exhibit 3.22. The Company and the Principal Shareholder understand
that the Executive Summary will be used by Parent in connection with the offer
and sale of securities of Parent, that Parent will rely upon the Executive
Summary without independent investigation or verification thereof, that Parent
will assume no responsibility for the accuracy or completeness of the Executive
Summary, and that the Company and the Principal Shareholder will be solely
responsible for the contents of the information contained therein.
(b) The
Company and the Principals Shareholder represent and warrant that the Executive
Summary does not, as of the date of this Agreement, contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, that no representation and warranty is made
that
the Executive Summary contains all of the information that would be relevant
to
an investor in deciding whether to purchase securities of Parent, Merger Sub,
or
the Company; provided further, that, while the financial projections were
prepared by the Company in good faith on the basis of the assumptions set forth
therein, the Company does not represent or warrant that the financial condition,
results of operations or cash flows contained in the financial projections
will
be realized. If at any time prior to the Closing an event occurs as a result
of
which the Executive Summary (as then amended or supplemented) would or might
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, the Company will
notify Parent promptly; provided, that the Company shall have no obligation
to
update any financial projections contained in the Executive Summary. The Company
and the Principal Shareholder authorize Parent to provide the Executive Summary
to potential investors.
18
3.23 Termination
of Business Relationships.
No
supplier of the Company which cannot be replaced on commercially reasonable
terms has evidenced to the Company or the Principal Shareholder any intention
to
cancel or terminate its business relationship with the Company. No key employee
of the Company has notified the Company or the Principal Shareholder of his
or
her intent or desire to terminate employment with the Company.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Parent
and Merger Sub, jointly and severally, hereby make the following representations
and warranties to the Company and the Principal Shareholder:
4.1 Organization
and Qualification.
Parent
and Merger Sub are duly organized, validly existing and in good standing under
the laws of their respective jurisdiction of organization, with the corporate
power and authority to own and operate their respective business as presently
conducted, except where the failure to be or have any of the foregoing would
not
have a Material Adverse Effect. Parent and Merger Sub are duly qualified as
foreign corporations or other entities to do business and are in good standing
in each jurisdiction where the character of their properties owned or held
under
lease or the nature of their activities makes such qualification necessary,
except for such failures to be so qualified or in good standing as would not
have a Material Adverse Effect.
4.2 Authorization;
Validity and Effect of Agreement.
Parent
and Merger Sub have the requisite corporate power and authority to execute,
deliver and perform their respective obligations under this Agreement and to
consummate the Merger. The execution and delivery of this Agreement by the
Company and Merger Sub and the performance by Parent and Merger Sub of their
respective obligations hereunder and the consummation of the Merger have been
duly authorized by their respective boards of directors and all other necessary
corporate action on the part of the Company and Merger Sub and no other
corporate proceedings on the part of Parent or Merger Sub are necessary to
authorize this Agreement and the Merger. This Agreement has been duly and
validly executed and delivered by Parent and Merger Sub and, assuming that
it
has been duly authorized, executed and delivered by the other parties hereto,
constitutes a legal, valid and binding obligation of Parent and Merger Sub,
in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
19
4.3 No
Conflict; Required Filings and Consents.
Neither
the execution and delivery of this Agreement by Parent or Merger Sub nor the
performance by Parent or Merger Sub of their respective obligations hereunder,
nor the consummation of the Merger, will: (i)
conflict
with Parent’s articles of incorporation or bylaws; (ii)
conflict
with Merger Sub’s certificate of incorporation or bylaws; (iii)
violate
any statute, law, ordinance, rule or regulation, applicable to Parent or any
of
the properties or assets of Parent; or (iv)
violate,
breach, be in conflict with or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or permit
the termination of any provision of, or result in the termination of, the
acceleration of the maturity of, or the acceleration of the performance of
any
obligation of Parent or Merger Sub, or result in the creation or imposition
of
any Lien upon any properties, assets or business of Parent or Merger Sub under,
any Material Contract or any order, judgment or decree to which Parent is a
party or by which it or any of its assets or properties is bound or encumbered
except, in the case of clauses (ii), (iii) and (iv), for such violations,
breaches, conflicts, defaults or other occurrences which, individually or in
the
aggregate, would not have a Material Adverse Effect on its obligation to perform
its covenants under this Agreement.
4.4 Capitalization.
(a) The
authorized capital stock of Parent consists of 100,000,000 shares of common
stock, $0.00001 par value per share, and 100,000,000 shares of preferred
stock,
$0.00001 par value per share, There are issued and outstanding 3,250,000
shares
of Parent Common Stock. No shares of preferred stock are currently outstanding.
All shares of capital stock of Parent outstanding as of the date of this
Agreement have been duly authorized and validly issued, are fully paid
and
non-assessable, and are free of preemptive rights. The Parent Common Stock
represents all of the outstanding equity interests in Parent. There are
no
outstanding options, warrants, agreements, conversion rights, preemptive
rights,
or other rights to subscribe for, purchase or otherwise acquire any Parent
Common Stock or preferred stock of Parent. There are no voting trusts or
other
agreements or understandings to which Parent is a party with respect to
the
voting of Parent Common Stock, and there is no indebtedness of Parent having
general voting rights issued and outstanding. Except for this Agreement,
there
are no outstanding obligations of any Person to repurchase, redeem or otherwise
acquire outstanding Parent Common Stock. Except as set forth in Agreement,
Parent has no Parent Common Stock reserved for issuance.
(b) The
authorized capital stock of Merger Sub consists solely of 1,000 shares
of common
stock, $0.001 par value per share, of which 100 shares are issued
and
outstanding and owned of record and beneficially by Parent. All shares
of
capital stock of Merger Sub outstanding as of the date of this Agreement
have
been duly authorized and validly issued, are fully paid and non-assessable,
and
are free of preemptive rights. There are no outstanding options,
warrants,
agreements, conversion rights, preemptive rights, or other rights
to subscribe
for, purchase or otherwise acquire any common stock or preferred
stock of Merger
Sub. There are no voting trusts or other agreements or understandings
to which
Merger Sub is a party with respect to the voting of common stock
of Merger Sub,
and there is no indebtedness of Merger Sub having general voting
rights issued
and outstanding. There are no outstanding obligations of any Person
to
repurchase, redeem or otherwise acquire outstanding shares of common
stock of
Merger Sub. Merger Sub has no common stock reserved for issuance.
20
4.5 SEC
Reports and Financial Statements.
Parent
has filed with the SEC, and has heretofore made available to the Company true
and complete copies of, all forms, reports, schedules, statements and other
documents required to be filed by it under the Exchange Act or the Securities
Act (as such documents have been amended since the time of their filing,
collectively, the “Parent SEC Documents”). As of their respective dates or, if
amended, as of the date of the last such amendment, the Parent SEC Documents,
including any financial statements or schedules included therein: (a)
did not
contain any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary in order to make the statements
made
therein, in light of the circumstances under which they were made, not
misleading; and (b)
complied
in all material respects with the applicable requirements of the Exchange Act
and the Securities Act, as the case may be, and the applicable rules and
regulations of the SEC thereunder. All of the financial statements included
in
the Parent SEC Documents have been prepared from, and are in accordance with,
the books and records of Parent, comply in all material respects with applicable
accounting requirements and with the published rules and regulations of the
SEC
with respect thereto, have been prepared in accordance with GAAP applied on
a
consistent basis during the periods involved (except as may be indicated in
the
notes thereto) and fairly present the financial positions and the results of
operations and cash flows of Parent as of the dates thereof or for the periods
presented therein (subject, in the case of unaudited statements, to normal
year-end audit adjustments not material in amount).
4.6 Transaction
Fees.
Neither
Parent or Merger Sub, nor any of their respective officers, directors, employees
or managers, has employed any broker, finder, advisor or consultant, or incurred
any liability for any investment banking fees, brokerage fees, commissions
or
finders’ fees, advisory fees or consulting fees in connection with the Merger
for which Parent or Merger Sub has or could have any liability.
4.7 No
Undisclosed Liabilities.
Except
as
disclosed in the Parent SEC documents or on Schedule 4.7, neither Parent nor
any
of its subsidiaries has any material liabilities, indebtedness or obligations,
except those that have been incurred in the ordinary course of business, whether
known or unknown, absolute, accrued, contingent or otherwise, and whether due
or
to become due, and to the Knowledge of Parent, there is no existing condition,
situation or set of circumstances that could reasonably be expected to result
in
such a liability, indebtedness or obligation.
4.8 Related
Party Transactions.
Except
as
provided on Schedule 4.8:
(a) There
is
no indebtedness between Parent or any of its subsidiaries, on the one hand,
and
any officer, director or Affiliate of Parent or the subsidiaries, on the
other
hand, other than usual and customary advances made in the ordinary course
of
business;
21
(b) No
officer, director or Affiliate of Parent or any of its subsidiaries provides
or
causes to be provided any assets, services (other than services as an, officer,
manager, director or employee) or facilities to the Parent or any of its
subsidiaries;
(c) Neither
Parent nor any of its subsidiaries provides or causes to be provided any
assets,
services or facilities to any officer, director or Affiliate of Parent or
any of
its subsidiaries (other than as reasonably necessary for them to perform
their
duties as officers, directors or employees);
(d) Neither
Parent nor any of its subsidiaries beneficially owns, directly or indirectly,
any investment in or issued by any such officer, director or Affiliate of
Parent
or any of its subsidiaries; and
(e) No
officer, director or Affiliate of Parent or any of its subsidiaries has any
direct or indirect ownership interest in any Person with which Parent or
any of
its subsidiaries competes or has a business relationship other than an ownership
interest that represents less than five percent (5%) of the outstanding equity
interests in a publicly traded company.
4.9 Litigation.
Except
for the matters set forth in Schedule 4.9, there is no Action instituted,
pending or threatened against Parent or any of its subsidiaries that,
individually or in the aggregate, directly or indirectly, would be reasonably
likely to have a Material Adverse Effect, nor is there any outstanding judgment,
decree or injunction, in each case against Parent or its subsidiaries, that,
individually or in the aggregate, has or would be reasonably likely to have
a
Material Adverse Effect.
4.10 Taxes.
Parent
and its subsidiaries have timely filed (or have had timely filed on their
behalf) with the appropriate tax authorities all tax returns required to be
filed by them or on behalf of them, and each such tax return was complete and
accurate in all material respects, and Parent and its subsidiaries have timely
paid (or have had paid on their behalf) all material Taxes due and owing by
it,
regardless of whether required to be shown or reported on a tax return,
including Taxes required to be withheld by it. No deficiency for a material
Tax
has been asserted in writing or otherwise, to Parent’s Knowledge, against Parent
or any subsidiary or with respect to any Assets, except for asserted
deficiencies that either (i) have been resolved and paid in full or (ii) are
being contested in good faith. There are no material Liens for Taxes upon the
Assets.
4.11 Compliance.
Except
as
disclosed on Schedule 4.11, Parent and its subsidiaries are in compliance with
all foreign, federal, state and local laws and regulations of any Governmental
Authority applicable to its operations or with respect to which compliance
is a
condition of engaging in the business thereof, except to the extent that failure
to comply would not, individually or in the aggregate, have a Material Adverse
Effect. Neither Parent nor any of its subsidiaries have received any notice
asserting a failure, or possible failure, to comply with any such law or
regulation, the subject of which notice has not been resolved as required
thereby or otherwise to the satisfaction of the party sending the notice, except
for such failure as would not, individually or in the aggregate, have a Material
Adverse Effect. Parent and its subsidiaries hold all permits, licenses and
franchises from Governmental Authorities required to conduct its business as
it
is now being conducted, except for such failures to have such permits, licenses
and franchises that would not, individually or in the aggregate, have a Material
Adverse Effect.
22
4.12 Material
Contracts.
Except
as
set forth in the Parent SEC Documents or on Schedule 4.12, neither Parent nor
any of its subsidiaries is a party to or bound by any Parent Material Contract.
The Parent Material Contracts constitute all of the material agreements and
instruments that are necessary and desirable to operate the business as
currently conducted by Parent and its subsidiaries and as contemplated to be
conducted. True, correct and complete copies of each Parent Material Contract
described and listed on Schedule 4.12 will be made available to the Company
within ten (10) Business Days prior to the Closing. All of the Parent Material
Contracts are valid, binding and enforceable against the respective parties
thereto in accordance with their respective terms. All parties to all of the
Parent Material Contracts have performed all obligations required to be
performed to date under such Parent Material Contracts, and neither Parent
or
its subsidiaries, nor, to the best of its Knowledge, any other party, is in
default or in arrears under the terms thereof, and no condition exists or event
has occurred which, with the giving of notice or lapse of time or both, would
constitute a default thereunder. The consummation of this Agreement and the
Merger will not result in an impairment or termination of any of the rights
of
Parent or any of its subsidiaries under any Parent Material Contract. None
of
the terms or provisions of any Parent Material Contract materially and adversely
affects the business, prospects, financial condition or results of operations
of
Parent or its subsidiaries.
4.13 Absence
of Certain Changes or Events.
Except
as
set forth on Schedule 4.13 or as otherwise contemplated by this Agreement,
since
the date of the most recent audited financial statements included in the Parent
SEC Documents, (i) there has been no change or development in, or effect on,
Parent or any of its subsidiaries that has or could reasonably be expected
to
have a Material Adverse Effect, (ii) neither Parent nor any of its subsidiaries
has sold, transferred, disposed of, or agreed to sell, transfer or dispose
of,
any material amount of their assets, properties or other leasehold interests
("Parent Assets") other than in the ordinary course of business, (iii) neither
Parent nor any of its subsidiaries any has paid any dividends or distributed
any
Parent Assets to any officer, director or shareholder of Parent or its
subsidiary, (iv) neither Parent nor any of its subsidiaries has acquired any
material amount of Parent Assets except in the ordinary course of business,
nor
acquired or merged with any other business, (v) neither Parent nor any of its
subsidiaries has waived or amended any of their respective material contractual
rights except in the ordinary course of business, and (vi) neither Parent nor
any of its subsidiaries has entered into any agreement to take any action
described in clauses (i) through (v) above.
23
4.14 Employee
Benefit Matters.
Neither
Parent nor any subsidiaries are a party to, or since their respective inceptions
have been a party to, any employee benefit plans, programs, arrangements or
agreements, whether formal or informal, whether in writing or otherwise, with
respect to which Parent or a subsidiary has or may have any obligation or that
are maintained, contributed to or sponsored by Parent or the subsidiary for
the
benefit of any current or former director, officer or employee of Parent or
the
subsidiary.
4.15 Questionable
Payments.
Neither
Parent, nor its subsidiaries, nor, to the Knowledge of Parent, any director,
officer, agent, employee or other Person associated with or acting on behalf
of
Parent or its subsidiaries, has used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; made any direct or indirect unlawful payments to government
officials or employees from corporate funds; established or maintained any
unlawful or unrecorded fund of corporate monies or other assets; made any false
or fictitious entries on the books of record of any such corporations; or made
any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
4.16 Certain
Registration Matters.
Except
as
set forth on Schedule 4.16 attached hereto, Parent has not granted or agreed
to
grant to any Person any rights (including "piggy-back" registration rights)
to
have any securities of Parent registered with the SEC or any other Governmental
Authority that have not been satisfied.
4.17 Investment
Company.
Parent
is
not, and is not an affiliate of, and immediately following the Closing will
not
have become, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.
4.18 Listing
and Maintenance Requirements.
Parent
is
in compliance with the listing and maintenance requirements for continued
listing of the Parent Common Stock on the trading market on which the shares
of
Parent Common Stock are currently listed or quoted. The issuance of the Parent
Shares under this Agreement does not contravene the rules and regulations of
the
trading market on which the shares of Parent Common Stock are currently listed
or quoted, and no approval of the stockholders of Parent is required for Parent
to issue and deliver the Parent Shares to the holders of the Company Shares
as
contemplated by this Agreement.
24
ARTICLE
V
CERTAIN
COVENANTS
5.1 Conduct
of Business by the Company and the Subsidiaries.
(a) Except
(i)
as
expressly permitted by this Agreement, (ii)
as
required by applicable law or any Material Contract to which the Company
or any
of its Subsidiaries is a party or by which any Asset is bound, (iii)
with the
consent of Parent or (iv)
as set
forth on Schedule 5.1, during the period commencing with the date of this
Agreement and continuing until the Closing Date, the Company and its
Subsidiaries shall conduct their business in all material respects in the
ordinary and usual course consistent with past practice and use their
commercially reasonable efforts to preserve intact their respective business
organizations and relationships with third parties and keep available the
services of their respective present officers and employees.
(b) Without
limiting the generality of Section 5.1(a), during the period commencing
with the
date of this Agreement and continuing until the Closing Date, neither
the
Company nor any of its Subsidiaries shall, without the consent of
the
Parent:
(i) adopt
or
propose any change in their respective certificates of incorporation, bylaws
or
other constitutional documents, except for changes which would not have Material
Adverse Effect;
(ii) (A)
issue, authorize or sell any equity or debt securities, (B) issue, authorize
or
sell any securities convertible into, or options with respect to, or warrants
to
purchase or rights to subscribe for, any equity or debt securities, (C) split,
combine, reclassify or make any other change in their respective issued and
outstanding equity or debt securities, (D) redeem, purchase or otherwise acquire
any of their respective equity or debt securities, or (E) declare any dividend
or make any distribution with respect to their equity or debt
securities;
(iii) (A)
increase in any manner the compensation of, or enter into any new bonus or
incentive agreement or arrangement with, any of their respective directors,
officers, employees or managers other than increases in compensation in the
ordinary course of business and consistent with past practice and that are
not
material in the aggregate, (B) pay or agree to pay any pension, retirement
allowance or other employee benefit to any director, officer, employee or
manager, whether past or present, other than as required by applicable law,
contracts or plan documents in effect on the date of this Agreement, (C) enter
into any new employment, severance, consulting, or other compensation agreement
with any director, officer, employee or manager or other person other than
in
connection with any new hires or promotions in the ordinary course and
consistent with past practice, or (D) commit themselves to any additional
pension, profit-sharing, deferred compensation, group insurance, severance
pay,
retirement or other employee benefit plan, fund or similar arrangement, or
adopt
or amend or commit themselves to adopt or amend any of such plans, funds or
similar arrangements in existence on the date hereof;
(iv) (A)
enter
into, extend, renew or terminate any Material Contract, or make any change
in
any Material Contracts, (B) reclassify any assets or liabilities, or (C) do
any
other act that (x) would cause any representation or warranty of the Company
in
this Agreement to be or become untrue in any material respect, or (y) could
reasonably be expected to have a Material Adverse Effect;
25
(v) (A)
sell,
transfer, lease or otherwise dispose of any Assets other than in the ordinary
course of business consistent with prior practice, (B) create or permit to
exist
any new Lien or Encumbrance on any Assets, (C) assume, incur or guarantee any
obligation for borrowed money other than in the ordinary course of business
consistent with past practices, (D) enter into any joint venture, partnership
or
other similar arrangement, (E) make any investment in or purchase any securities
of any Person, (F) incur any indebtedness or issue or sell any new debt
securities, enter into any new credit facility, (G) make any capital
expenditures other than in the ordinary course of business consistent with
past
practice, or (H) merge or consolidate with any other Person or acquire any
other
Person or a business, division or product line of any other Person (except
as
provided for in this Agreement);
(vi) make
any
change in any method of accounting or accounting practice except as required
(a)
by reason of a concurrent change in law, SEC guidelines or GAAP, or (b) by
reason of a change in the Company’s or any of its Subsidiaries’ method of
accounting practices that, due to law, SEC guidelines or requirements, or GAAP,
requires a change in any method of accounting or accounting practice;
or
(vii) settle
or
compromise any material Tax liability, make or change any material Tax election,
or file any tax return other than a tax return filed in the ordinary course
of
business and prepared in a manner consistent with past practice.
5.2 Access
to Information.
At
all
times prior to the Closing or the earlier termination of this Agreement in
accordance with the provisions of Article VIII, and in each case subject to
Section 5.3 below, each party hereto shall provide to the other party (and
the
other party’s authorized representatives) reasonable access during normal
business hours and upon reasonable prior notice to the premises, properties,
books, records, assets, liabilities, operations, contracts, personnel, financial
information and other data and information of or relating to such party
(including without limitation all written proprietary and trade secret
information and documents, and other written information and documents relating
to intellectual property rights and matters), and will cooperate with the other
party in conducting its due diligence investigation of such party, provided
that
the party granted such access shall not interfere unreasonably with the
operation of the business conducted by the party granting access, and provided
that no such access need be granted to privileged information or any agreements
or documents subject to confidentiality agreements.
26
5.3 Confidentiality;
No Solicitation.
(a) Confidentiality.
Each
party shall hold, and shall cause its respective Affiliates and representatives
to hold, all Confidential Information made available to it in connection with
the Merger in strict confidence, shall not use such information except for
the
sole purpose of evaluating the Merger and shall not disseminate or disclose
any
of such information other than to its directors, officers, managers, employees,
shareholders, interest holders, Affiliates, agents and representatives, as
applicable, who need to know such information for the sole purpose of evaluating
the Merger (each of whom shall be informed in writing by the disclosing party
of
the confidential nature of such information and directed by such party in
writing to treat such information confidentially). If this Agreement is
terminated pursuant to the provisions of Article VIII, each party shall
immediately return to the other party all such information, all copies thereof
and all information prepared by the receiving party based upon the same. The
above limitations on use, dissemination and disclosure shall not apply to
Confidential Information that (i)
is
learned by the disclosing party from a third party entitled to disclose it;
(ii)
becomes
known publicly other than through the disclosing party or any third party who
received the same from the disclosing party, provided that the disclosing party
had no Knowledge that the disclosing party was subject to an obligation of
confidentiality; (iii)
is
required by law or court order to be disclosed by the parties; or (iv)
is
disclosed with the express prior written consent thereto of the other party.
The
parties shall undertake all necessary steps to ensure that the secrecy and
confidentiality of such information will be maintained in accordance with the
provisions of this subsection (a). Notwithstanding anything contained herein
to
the contrary, in the event a party is required by court order or subpoena to
disclose information which is otherwise deemed to be confidential or subject
to
the confidentiality obligations hereunder, prior to such disclosure, the
disclosing party shall: (i) promptly notify the non-disclosing party and, if
having received a court order or subpoena, deliver a copy of the same to the
non-disclosing party; (ii) cooperate with the non-disclosing party, at the
expense of the non-disclosing party, in obtaining a protective or similar order
with respect to such information; and (iii) provide only that amount of
information as the disclosing party is advised by its counsel is necessary
to
strictly comply with such court order or subpoena.
(b) No
Solicitation.
Except
as otherwise contemplated in this Agreement, neither the Company nor any
Subsidiary shall, directly or indirectly, solicit any inquiries or proposals
for, or enter into or continue or resume any discussions with respect to or
enter into any negotiations or agreements relating to, the sale or exchange
of
all or a substantial part of the Assets. The Company shall promptly notify
Parent if any such proposal or offer, or any inquiry or contact with any Person
or entity with respect thereto, is made.
5.4 Best
Efforts; Consents.
Subject
to the terms and conditions herein provided, each of Parent, Merger Sub and
the
Company agrees to use all reasonable efforts to take, or cause to be taken,
all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as practicable the Merger
and to cooperate with the others in connection with the foregoing, including
using its reasonable efforts to (i)
obtain
all waivers, consents and approvals from other parties to loan agreements,
leases, mortgages and other contracts necessary for the consummation of the
Merger, (ii)
make all
filings with, and obtain all consents, approvals and authorizations that are
required to be obtained from, Governmental Authorities, (iii)
lift or
rescind any injunction, restraining order, decree or other order adversely
affecting the ability of the parties hereto to consummate the Merger,
(iv)
effect
all necessary registrations and filings and submissions of information requested
by Governmental Authorities, and (v)
fulfill
all conditions to this Agreement. Each of Parent, Merger Sub and the Company
shall use all reasonable efforts to prevent the entry, enactment or promulgation
of any threatened or pending preliminary or permanent injunction or other order,
decree or ruling or statute, rule, regulation or executive order that would
adversely affect the ability of the parties hereto to consummate the Merger.
27
5.5 Further
Assurances.
Subject
to Section 5.4, each of the parties hereto agrees to use its reasonable best
efforts before and after the Closing Date to take or cause to be taken all
action, to do or cause to be done, and to assist and cooperate with the other
party hereto in doing, all things necessary, proper or advisable under
applicable laws to consummate and make effective, in the most expeditious manner
practicable, the Merger, including, but not limited to: (i)
the
satisfaction of the conditions precedent to the obligations of any of the
parties hereto; (ii)
to the
extent consistent with the obligations of the parties set forth in Section
5.4,
the defending of any lawsuits or other legal proceedings, whether judicial
or
administrative, challenging this Agreement or the performance of the obligations
hereunder; and (iii)
the
execution and delivery of such instruments, and the taking of such other
actions, as the other party hereto may reasonably require in order to carry
out
the intent of this Agreement.
5.6 Public
Announcements.
Parent,
Merger Sub and the Company shall consult with each other before issuing any
press release or otherwise making any public statements with respect to the
Merger or this Agreement, and shall not issue any other press release or make
any other public statement without the prior written consent of the other
parties, except as may be required by law or, with respect to Parent, by
obligations pursuant to rule or regulation of the Exchange Act, the Securities
Act, any rule or regulation promulgated thereunder or any rule or regulation
of
the National Association of Securities Dealers.
5.7 Notification
of Certain Matters.
Each
party hereto shall promptly notify the other party in writing of any events,
facts or occurrences that would result in any breach of any representation
or
warranty or breach of any covenant by such party contained in this
Agreement.
5.8 Prohibition
on Trading in Company Securities.
The
Company and the Principal Shareholder acknowledge that information concerning
the matters that are the subject matter of this Agreement may constitute
material non-public information under United States federal securities laws,
and
that United States federal securities laws prohibit any Person who has received
material non-public information relating to Parent from purchasing or selling
securities of Parent, or from communicating such information to any Person
under
circumstances in which it is reasonably foreseeable that such Person is likely
to purchase or sell securities of Parent. Accordingly, until such time as any
such non-public information has been adequately disseminated to the public,
neither the Company nor the Principal Shareholder shall purchase or sell any
securities of Parent, or communicate such information to any other Person.
5.9 Investment
Letters.
Prior
to
the Closing, the Company shall request investment letters in the form attached
hereto as Exhibit 5.9 (the "Investment Letters") from each Company Shareholder
listed on Schedule 3.5(a).
28
5.10 Audited
Financial Statements.
At
the
Closing, the Company shall deliver to Parent a consolidated balance sheet at
December 31, 2005 and consolidated income statements and statements of cash
flows for the fiscal years ended December 31, 2005 and
2004, audited
by an SEC-registered independent accountant, and shall have its consolidated
balance sheets, income statements and statements of cash flows for each interim
period subsequent to December 31, 2005, reviewed by an SEC-registered
independent accountant (collectively, the “Audited Financial Statements”). The
Audited Financial Statements (including the notes thereto) shall present fairly
in all material respects the financial position and results of operations and
cash flows of the Company at the dates or for the periods set forth therein,
in
each case in accordance with GAAP applied on a consistent basis throughout
the
periods involved and in accordance with all applicable SEC rules and regulations
(except as otherwise indicated therein). The Audited Financial Statements shall
be prepared from and in accordance with the books and records of the Company.
The Company shall cause its independent accountant to consent to Parent’s use of
and reliance on the Audited Financial Statements as may be required in
connection with any filings made by Parent under the United States federal
securities laws.
5.11 Additional
Company Information.
At
the
Closing, the Company shall deliver to Parent, written information regarding
the
Company, its business, properties, liquidity and capital resources, officers,
directors, principal shareholders, material pending litigation and any and
all
such other matters as Parent shall request (collectively, the “Additional
Company Information”) and that Parent is required file with the SEC under
applicable United States federal securities laws including, but not limited
to,
Items 2.01(f) and 5.01(a)(8) of SEC Form 8-K.
5.12 Company
Options and Warrants.
The
Company covenants and agrees that:
(a) All
shares of Company Common Stock subject to issuance under the Company Options
and
Warrants, upon issuance on the terms and conditions specified in the instruments
pursuant to which they are issuable, shall be duly authorized and validly
issued, fully paid and non-assessable, and free of preemptive
rights;
(b) At
and
immediately prior to the Closing, with the exception of this Agreement and
the
Company Options and Warrants, there shall be no outstanding (i)
options,
warrants, agreements, conversion rights, preemptive rights, or other rights
to
purchase or otherwise acquire any Company Common Stock, or (ii)
obligations of any Person to repurchase, redeem or otherwise acquire any
Company
Common Stock; and
29
(c) At
and
immediately prior to the Closing, there shall be no (i)
voting
trusts or other agreements or understandings to which any Company Shareholder
shall be a party with respect to the voting of the Company Common Stock,
or
(ii)
issued
and outstanding indebtedness of the Company having general voting
rights.
(d) Prior
to
the Closing, the Company shall take all actions reasonably necessary to
amend
the 2000 Stock Plan and the 2004 Stock Plan to limit the number of shares
available for issuance under each such plan to that number of shares that
have
been granted by the Company as of the date hereof.
5.13 Parent
and Company Capitalization.
(a) Immediately
prior to the Closing, the Company shall update Section 3.5(a) to reflect
any
changes in the capitalization of the Company occurring after the date hereof
and
prior to the Closing.
(b) Immediately
prior to the Closing, Parent shall update Section 4.4 to reflect any changes
in
the capitalization of the Parent occurring after the date hereof and prior
to
the Closing.
5.14 Registration
Rights.
The
Parent Shares to be issued to the Company Shareholders shall have the
registration rights set forth in a registration rights agreement, substantially
in the form attached hereto as Exhibit 5.14 (the “Registration Rights
Agreement”).
5.15 Board
of Directors.
On
or
before the Closing, Parent shall take all necessary action to (i) increase
the
size of its Board of Directors to three (3) and to appoint Xxxxx X. Xxxx, Xxxx
X. Xxxxxxxxx and Xxxxx X. Xxxxx (the “Company Designees”) to serve as directors
of Parent, effective as of the Closing; and (ii) obtain the resignation of
all
of its directors and officers, and appoint Xxxxx X. Xxxx, Xxxx X. Xxxxxxxxx
and
Xxxxxxx X. Xxxxxx to serve as Parent’s Chief Executive Officer, President and
Chief Financial Officer, respectively, effective as of the Closing. Parent
shall
comply with and immediately take all actions required pursuant to Section 14(f)
of the Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill
its obligations under this Section 5.15, including mailing to its shareholders,
the information required by such Section 14(f) and Rule 14f-1 as is necessary
to
enable the Company Designees to be appointed to Parent’s Board of Directors on
or before the Closing (the “Information Statement”). The Company shall supply
Parent with all information with respect to, and be solely responsible for
all
information with respect to, the Company, the Company Designees and its
officers, directors and affiliates required by such Section 14(f) and Rule
14f-1.
5.16 Name
Change.
On
or
before the Closing, Parent shall take all such action to change the name of
Parent to Driveitaway, Inc., effective as of the Closing Date.
30
5.17 Conduct
of Business by Parent and its Subsidiaries.
(a) Except
(i) as expressly permitted by this Agreement, (ii) as required by applicable
law
or any Parent Material Contract to which Parent or any of its subsidiaries
is a
party or by which any Parent Asset is bound, (iii) with the consent of
the
Company or (iv) as set forth on Schedule 5.17, during the period commencing
with
the date of this Agreement and continuing until the Closing Date, Parent
and its
subsidiaries shall conduct their business in all material respects in
the
ordinary and usual course consistent with past practice and use their
commercially reasonable efforts to preserve intact their respective business
organizations and relationships with third parties and keep available
the
services of their respective present officers and employees.
(b) Without
limiting the generality of Section 5.17(a), during the period commencing
with
the date of this Agreement and continuing until the Closing Date, neither
Parent
nor any of its subsidiaries shall:
(i) adopt
or
propose any change in their respective articles of incorporation, bylaws or
other constitutional documents, except for changes which would not have Material
Adverse Effect;
(ii) (A)
issue, authorize or sell any equity or debt securities, (B) issue, authorize
or
sell any securities convertible into, or options with respect to, or warrants
to
purchase or rights to subscribe for, any equity or debt securities, (C) split,
combine, reclassify or make any other change in their respective issued and
outstanding equity or debt securities, (D) redeem, purchase or otherwise acquire
any of their respective equity or debt securities, or (E) declare any dividend
or make any distribution with respect to their equity or debt
securities;
(iii) (A)
increase in any manner the compensation of, or enter into any new bonus or
incentive agreement or arrangement with, any of their respective directors,
officers, employees or managers other than increases in compensation in the
ordinary course of business and consistent with past practice and that are
not
material in the aggregate, (B) pay or agree to pay any pension, retirement
allowance or other employee benefit to any director, officer, employee or
manager, whether past or present, other than as required by applicable law,
contracts or plan documents in effect on the date of this Agreement, (C) enter
into any new employment, severance, consulting, or other compensation agreement
with any director, officer, employee or manager or other person other than
in
connection with any new hires or promotions in the ordinary course and
consistent with past practice, or (D) commit themselves to any additional
pension, profit-sharing, deferred compensation, group insurance, severance
pay,
retirement or other employee benefit plan, fund or similar arrangement, or
adopt
or amend or commit themselves to adopt or amend any of such plans, funds or
similar arrangements in existence on the date hereof;
(iv) (A)
enter
into, extend, renew or terminate any Parent Material Contract, or make any
change in any Parent Material Contracts, (B) reclassify any assets or
liabilities, or (C) do any other act that (x) would cause any representation
or
warranty of Parent in this Agreement to be or become untrue in any material
respect, or (y) could reasonably be expected to have a Material Adverse
Effect;
31
(v) (A)
sell,
transfer, lease or otherwise dispose of any Parent Assets other than in the
ordinary course of business consistent with prior practice, (B) create or permit
to exist any new Lien or Encumbrance on any Parent Assets, (C) assume, incur
or
guarantee any obligation for borrowed money other than in the ordinary course
of
business consistent with past practices, (D) enter into any joint venture,
partnership or other similar arrangement, (E) make any investment in or purchase
any securities of any Person, (F) incur any indebtedness, issue or sell any
new
debt securities, enter into any new credit facility or make any capital
expenditures, or (G) merge or consolidate with any other Person or acquire
any
other Person or a business, division or product line of any other Person (except
as provided for in this Agreement);
(vi) make
any
change in any method of accounting or accounting practice except as required
(a)
by reason of a concurrent change in law, SEC guidelines or GAAP, or (b) by
reason of a change in Parent’s or any of its subsidiaries’ method of accounting
practices that, due to law, SEC guidelines or requirements, or GAAP, requires
a
change in any method of accounting or accounting practice; or
(vii) settle
or
compromise any material Tax liability, make or change any material Tax election,
or file any tax return other than a tax return filed in the ordinary course
of
business and prepared in a manner consistent with past practice.
(c) Notwithstanding
anything contained herein to the contrary, Parent shall be expressly
permitted
to take any and all actions reasonably necessary to consummate the
following
activities:
(i) the
issuance of secured convertible debentures and warrants to Trident Growth Fund,
L.P. for an aggregate purchase price of $1,000,000 upon terms and conditions
reasonably satisfactory to the Company (the “Trident Financing”);
(ii) a
private
placement of Parent’s securities to certain accredited investors for an
aggregate investment amount of at least $1,000,000 upon terms and conditions
reasonably satisfactory to the Company (the “Private Placement”);
and
(iii) the
declaration and payment of the stock dividend contemplated by Section
5.19.
5.18 Retirement
of Parent Common Stock.
On
or
before the Closing, but prior to declaring the stock dividend as contemplated
in
Section 5.19 hereof, Parent shall take such action as may be necessary to retire
or surrender for cancellation 650,000 shares of Parent Common Stock upon terms
which create no liability or continuing obligation of Parent for the payment
of
consideration as of the Closing.
32
5.19 Stock
Dividend.
Parent
shall promptly take such action as may be reasonably necessary to have its
Board
of Directors declare a dividend of three (3) shares of Parent Common Stock
for
every one (1) share of Parent Common Stock, such dividend to have a record
date
preceding the Closing Date.
5.20 Adoption
of Stock Incentive Plan.
On
or
before the Closing, Parent shall adopt a stock incentive plan (the “2006 Stock
Plan”) providing for the issuance of options, restricted shares, stock
appreciation rights and/or other equity incentive awards (collectively,
“Awards”) to acquire an aggregate of up to 4,135,390 shares of Parent Common
Stock after the Closing. Of such Awards, Three Million One Hundred Sixty Two
Thousand Five Hundred (3,162,500) (the "Performance Awards") shall only become
exercisable in the event the Company achieves EBIT of at least $2,000,000 during
the fiscal year ending December 31, 2007. For the purpose of this Section 5.20,
“EBIT” shall mean the Company’s earnings before interest (including, for the
avoidance of doubt, before amortization expenses incurred in connection with
the
Company’s financing activities) and taxes derived from the audited financial
statements as reported by Parent in its annual report with the SEC for the
fiscal year ending December 31, 2007.
ARTICLE
VI
CONDITIONS
TO CONSUMMATION OF THE MERGER
6.1 Conditions
to Obligations of the Company and the Principal
Shareholder.
The
obligations of the Company and the Principal Shareholder to consummate the
Merger shall be subject to the fulfillment, or written waiver by the Company
or
the Principal Shareholder, at or prior to the Closing, of each of the following
conditions:
(a) The
representations and warranties of Parent and Merger Sub set out in
this
Agreement shall be true and correct in all material respects at and
as of the
time of the Closing as though such representations and warranties
were made at
and as of such time, except that the representations and warranties
set forth in
Section 4.4 shall be updated as provided in Section 5.13(b);(c) Notwithstanding
anything contained herein to the contrary, Parent shall be expressly
permitted
to take any and all actions reasonably necessary to consummate the
following
activities:
(b) Parent
and Merger Sub shall have performed and complied in all
material respects with
all covenants, conditions, obligations and agreements
required by this Agreement
to be performed or complied with by Parent and Merger
Sub, respectively, on or
prior to the Closing Date;
(c) Parent
shall have delivered to the Company an officer’s certificate of each of Parent
and Merger Sub to the effect that the conditions set forth in Section
6.1(a) and
(b) have been satisfied;
(d) Parent
shall have delivered to the Company Shareholders any certificates
evidencing the
Parent Shares in accordance with Section
2.2(b)(i);
33
(e) Parent
shall have filed all reports and other documents required to be filed
by Parent
under the U.S. federal securities laws through the Closing Date;
(f) Parent
shall have maintained its status as a Company whose common stock
is quoted on
the Over-the-Counter Bulletin Board and no reason shall exist as
to why such
status shall not continue immediately following the Closing;
(g) Parent
shall have consummated the Trident Financing and loaned a portion
of the net
proceeds of that financing to the Company upon mutually acceptable
terms and
conditions;
(h) At
least
$1,000,000 shall have been deposit into an escrow account for the
benefit of
Parent in connection with the Private Placement;
(i) Parent
shall have adopted the 2006 Stock Plan;
and
(j) The
Company Shareholders shall have approved the Merger in accordance with the
DGCL.
6.2 Conditions
to Obligations of Parent and Merger Sub.
The
obligations of Parent and Merger Sub to consummate the Merger shall be subject
to the fulfillment or written waiver by Parent or Merger Sub, at or prior to
the
Closing, of each of the following conditions:
(a) The
representations and warranties of the Company and the Principal
Shareholder set
out in this Agreement shall be true and correct in all material
respects at and
as of the time of the Closing as though such representations and
warranties were
made at and as of such time, except that the representations and
warranties set
forth in Section 3.5(a) shall be updated as provided in Section
5.13(a);
(b) The
Company and the Principal Shareholder shall have performed and complied
in all
material respects with all covenants, conditions, obligations and
agreements
required by this Agreement to be performed or complied with by the
Company or
the Principal Shareholder on or prior to the Closing Date;
(c) The
Company shall have delivered to Parent and Merger Sub a certificate
of the
Secretary of the Company and the Principal Shareholder to the effect
that the
conditions set forth in Section 6.2(a) and (b) hereof have been satisfied;
(d) The
Company shall have delivered to Parent and Merger Sub any certificates
evidencing the Company Shares and any agreement relating to the Company
Shares
in accordance with 2.2(a)(i) &
(ii);
(e) The
Company shall have delivered to Parent and Merger Sub the Audited Financial
Statements described in Section 5.10;
34
(f) The
Company shall have delivered to Parent and Merger Sub the Additional
Company
Information described in Section 5.11;
(g) Parent
and Merger Sub shall have completed a due diligence review of the
business,
operations, financial condition and prospects of the Company and
shall have been
satisfied with the results of their due diligence review in their
sole and
absolute discretion;
(h) The
Company Shareholders shall have approved the Merger in accordance
with the
DGCL;
(i) No
Company Shareholder shall have asserted any dissenters’ rights under the
DGCL;
(j) The
Company shall have caused those warrants identified on Schedule 6.2(j)
to be
terminated;
(k) The
Company shall have caused that certain Share Repurchase Agreement
to be
terminated;
(l) The
Company shall have obtained the consent from each holder of a Company
Option or
Warrant to the amendment of such Company Option or Warrant pursuant
to Section
1.6 of this Agreement (unless such consent is not required under
the terms of
the applicable agreement, instrument or plan); and
(m) The
Company shall have delivered to Parent Investment Letters from each
of the
Company Shareholders identified in Schedule 3.5(a).
6.3 Other
Conditions to Obligations of the Company, the Principal Shareholder, Parent
and
Merger Sub.
The
obligations of Parent, Merger Sub and the Company to consummate the Merger
shall
be subject to the fulfillment, or written waiver by each of Parent, Merger
Sub
and the Company, at or prior to the Closing, of each of the following
conditions:
(a) All
director, shareholder, lender, lessor and other parties’ consents and approvals,
as well as all filings with, and all necessary consents or approvals
of, all
federal, state Governmental Authorities, as are required under this
Agreement,
applicable law or any applicable contract or agreement (other than
as
contemplated by this Agreement) to complete the Merger shall have
been secured;
and
(b) No
statute, rule, regulation, executive order, decree, preliminary or
permanent
injunction, or restraining order shall have been enacted, entered,
promulgated
or enforced by any Governmental Authority that prohibits or restricts
the
consummation of the Merger.
35
ARTICLE
VII
INDEMNIFICATION
7.1 Indemnification
by the Principal Shareholder.
During
the period commencing on the Closing Date and ending on the date that is the
later of (x) six (6) months after the Closing Date and (y) the date on which
Parent files its Form 10-KSB (including audited financial statements) for the
year ending December 31, 2006 with the SEC, the Principal Shareholder shall
indemnify and hold harmless Parent and Merger Sub (each an “Indemnified Party”),
from and against any and all demands, claims, actions or causes of action,
judgments, assessments, losses, liabilities, damages or penalties and reasonable
attorneys’ fees and related disbursements (collectively, “Claims”) suffered by
such Indemnified Party resulting from or arising out of any knowing (i)
inaccuracy in or breach of any of the representations or warranties made by
the
Company or the Principal Shareholder at the time they were made, and, except
for
representations and warranties that speak as of a specific date or time (which
need only be true and correct as of such date or time), on and as of the Closing
Date, (ii) breach or nonfulfillment of any covenants or agreements made by
the
Company or the Principal Shareholder, and (iii) misrepresentation made by the
Company or the Principal Shareholder, in each case as made herein or in the
Schedules or Exhibits annexed hereto or in any closing certificate, schedule
or
any ancillary certificates or other documents or instruments furnished by the
Company or the Principal Shareholder pursuant hereto or in connection with
the
Merger.
7.2 Indemnification
Procedures for Third-Party Claim.
(a) Upon
obtaining knowledge of any Claim by a third party that has given
rise to, or is
expected to give rise to, a claim for indemnification hereunder,
Parent shall
give written notice (“Notice of Claim”) of such claim or demand to the Principal
Shareholder, specifying in reasonable detail such information as
the Indemnified
Party may have with respect to such indemnification claim (including
copies of
any summons, complaint or other pleading that may have been served
on it and any
written claim, demand, invoice, billing or other document evidencing
or
asserting the same). Subject to the limitations set forth in Section
7.2(b)
hereof, no failure or delay by Parent in the performance of the foregoing
shall
reduce or otherwise affect the obligation of the Principal Shareholder
to
indemnify and hold the Indemnified Party harmless, except to the
extent that
such failure or delay shall have actually adversely affected the
Principal
Shareholder’s ability to defend against, settle or satisfy any Claims for which
the Indemnified Party is entitled to indemnification hereunder; provided,
however,
that in
no event shall such failure or delay extend the period in which a
claim for
indemnification can be made by an Indemnified Party
hereunder.
(b) If
the
claim or demand set forth in the Notice of Claim given by Parent
pursuant to
Section 7.2(a) hereof is a claim or demand asserted by a third party,
the
Principal Shareholder shall have fifteen (15) days after the date
on which the
Notice of Claim is delivered to notify Parent in writing of its election
to
defend such third party claim or demand on behalf of the Indemnified
Party. If
the Principal Shareholder elects to defend such third party claim
or demand,
Parent shall make available to the Principal Shareholder and its
agents and
representatives all records and other materials that are reasonably
required in
the defense of such third party claim or demand and shall otherwise
cooperate
with, and assist the Principal Shareholder in the defense of, such
third party
claim or demand, and so long as the Principal Shareholder is defending
such
third party claim in good faith, the Indemnified Party shall not
pay, settle or
compromise such third party claim or demand. If the Principal Shareholder
elects
to defend such third party claim or demand, the Indemnified Party
shall have the
right to participate in the defense of such third party claim or
demand at the
Principal Shareholder’s expense. In the event, however, that such Indemnified
Party reasonably determines that representation by counsel to the
Principal
Shareholder of both the Principal Shareholder and such Indemnified
Party could
reasonably be expected to present counsel with a conflict of interest,
then the
Indemnified Party may employ separate counsel to represent or defend
it in any
such action or proceeding and the Principal Shareholder will pay
the fees and
expenses of such counsel. If the Principal Shareholder does not elect
to defend
such third party claim or demand or does not defend such third party
claim or
demand in good faith, the Indemnified Party shall have the right,
in addition to
any other right or remedy it may have hereunder, at the Principal
Shareholder’s
expense, to defend such third party claim or demand; provided, however,
that (i)
such Indemnified Party shall not have any obligation to participate
in the
defense of or defend any such third party claim or demand; (ii) such
Indemnified
Party’s defense of or its participation in the defense of any such third
party
claim or demand shall not in any way diminish or lessen the obligations
of the
Principal Shareholder under the agreements of indemnification set
forth in this
Article VII; and (iii) such Indemnified Party may not settle any
claim without
the consent of the Principal Shareholder, which consent shall not
be
unreasonably withheld or delayed.
36
(c) The
Company and the Principal Shareholder, and Parent, Merger Sub and
the other
Indemnified Parties, if any, shall cooperate fully in all aspects
of any
investigation, defense, pre-trial activities, trial, compromise,
settlement or
discharge of any claim in respect of which indemnity is sought pursuant
to this
Article VII, including, but not limited to, by providing the other
party with
reasonable access to employees and officers (including as witnesses)
and other
information.
7.3 Indemnification
Procedures for Non-Third Party Claims.
In
the
event any Indemnified Party should have an indemnification claim against the
Principal Shareholder under this Agreement that does not involve a claim by
a
third party, the Indemnified Party shall promptly deliver notice of such claim
to the Principal Shareholder in writing and in reasonable detail. The failure
by
any Indemnified Party to so notify the Principal Shareholder shall not relieve
the Principal Shareholder from any liability that it may have to such
Indemnified Party, except to the extent that the Principal Shareholder has
been
actually prejudiced by such failure; provided,
however,
that in
no event shall such failure extend the period in which a claim for
indemnification can be made by an Indemnified Party hereunder. If the Principal
Shareholder does not notify the Indemnified Party within fifteen (15) Business
Days following its receipt of such notice that the Principal Shareholder
disputes such claim, such claim specified by the Principal Shareholder in such
notice shall be conclusively deemed a liability of the Principal Shareholder
under this Article VII. If the Principal Shareholder disputes their liability
with respect to such claim in a timely manner, the Principal Shareholder and
the
Indemnified Party shall proceed in good faith to negotiate a resolution of
such
dispute and, if not resolved through negotiations, such dispute shall be
submitted to arbitration pursuant to Section 9.12.
7.4 Limitations
on Indemnification.
(a) No
claim
for indemnification under this Article VII shall be asserted by an
Indemnified
Party, and no liability for such indemnify shall be enforced against
the
Principal Shareholder, to the extent the Indemnified Party has theretofore
received indemnification or otherwise been compensated for such Claim.
In the
event that an Indemnified Party shall later collect any such amounts
recovered
under insurance policies with respect to any Claim for which it has
previously
received payments under this Article VII from the Principal Shareholder,
such
Indemnified Party shall promptly repay to the Principal Shareholder
such amount
recovered; provided, however, that in no event shall the amount repaid
to the
Principal Shareholder exceed the amount paid by the Principal Shareholder
under
this Article VII.
(b) The
aggregate liability of the Principal Shareholder under this Article
VII shall be
limited to ten percent (10%) of the Parent Shares issued to the Principal
Shareholder hereunder. The Principal Shareholder's liability with
respect to any
Claim under this Article VII shall be limited to the obligation to
surrender to
the Parent for cancellation such number of Parent Shares as is equal
to the
amount obtained by dividing (i) the dollar amount of such Claim by
(ii) the
price per share for Parent Common Stock paid by the investors in
the Private
Placement (which price per share shall be, in the case of securities
convertible
into or exchangeable for, shares of Parent Common Stock, the effective
price per
share determined by mutual agreement of Parent and the Company).
7.5 Exclusive
Remedy.
The
indemnification provisions of this Article VII (i) shall be the exclusive remedy
following the Closing with respect to breaches of the representations and
warranties set forth in this Agreement, (ii) shall apply without regard to,
and
shall not be subject to, any limitation by reason of set-off, limitation or
otherwise, and (iii) are intended to be comprehensive and not to be limited
by
any requirements of law concerning prominence of language or waiver of any
legal
right under any law (including, without limitation, rights under any workers
compensation statute or similar statute conferring immunity from suit). The
obligations of the parties set forth in this Article VII shall be conditioned
upon the Closing having occurred.
37
ARTICLE
VIII
TERMINATION
8.1 Termination.
This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual
consent of Parent, Merger Sub, the Company and the Principal
Shareholder;
(b) by
any of
Parent, Merger Sub, the Company or the Principal Shareholder if the
Closing
shall not have occurred on or before the Outside Date;
(c) by
Parent, Merger Sub, the Company or the Principal Shareholder if any
Governmental
Authority shall have issued an injunction, order, decree or ruling
or taken any
other action restraining, enjoining or otherwise prohibiting any
material
portion of the Merger and such injunction, order, decree, ruling
or other action
shall have become final and nonappealable;
(d) by
Parent, Merger Sub, the Company or the Principal Shareholder upon
written notice
to the other party if any of the conditions to the Closing set forth
in Section
6.3 shall have become incapable of fulfillment by the Outside Date
and shall not
have been waived in writing by Parent, Merger Sub, the Company, or
the Principal
Shareholder, respectively;
(e) by
Parent
or Merger Sub upon written notice to the Company if any of the conditions
to the
Closing set forth in Section 6.2 shall have become incapable of fulfillment
by
the Outside Date and shall not have been waived in writing by Parent;
or
(f) by
the
Company or the Principal Shareholder upon written notice to Parent
if any of the
conditions to the Closing set forth in Section 6.1 shall have become
incapable
of fulfillment by the Outside Date and shall not have been waived
in writing by
the Company or the Principal Shareholder.
8.2 Procedure
and Effect of Termination.
In
the
event of termination of this Agreement pursuant to Section 8.1 hereof, written
notice thereof shall forthwith be given by the terminating party to the other
party, and, except as set forth below, this Agreement shall terminate and be
void and have no effect and the Merger shall be abandoned without any further
action by the parties hereto; provided,
however,
that if
such termination shall result from the failure of a party to perform a covenant,
obligation or agreement in this Agreement or from the breach by Parent, Merger
Sub, the Company or the Principal Shareholder of any representation or warranty
contained herein, such party shall be fully liable for any and all damages
incurred or suffered by the other party as a result of such failure or breach.
If this Agreement is terminated as provided herein:
(a) each
party hereto shall redeliver, and shall cause its agents (including,
without
limitation, attorneys and accountants) to redeliver, all documents,
work papers
and other material of each party hereto relating to the Merger, whether
obtained
before or after the date hereof; and
(b) each
party agrees that all Confidential Information received by Parent
and Merger
Sub, on the one hand, or the Company and the Principal Shareholder,
on the other
hand, with respect to the other party, this Agreement or the Merger
shall be
kept confidential notwithstanding the termination of this
Agreement.
38
ARTICLE
IX
MISCELLANEOUS
9.1 Entire
Agreement.
This
Agreement and the Schedules and Exhibits hereto contain the entire agreement
between the parties and supersede all prior agreements and understandings,
both
written and oral, between the parties with respect to the subject matter hereof.
9.2 Amendment
and Modifications.
This
Agreement may not be amended, modified or supplemented except by an instrument
or instruments in writing signed by the party against whom enforcement of any
such amendment, modification or supplement is sought. This Agreement may be
amended by the Boards of Directors of Parent, Merger Sub and the Company at
any
time prior to the filing of the Certificates of Merger with the Secretary of
State of the State of Delaware, subject to the limitations set forth in Section
251(d) of the DGCL.
9.3 Extensions
and Waivers.
At
any
time prior to the Closing, the parties hereto entitled to the benefits of a
term
or provision may (a) extend the time for the performance of any of the
obligations or other acts of the parties hereto, (b) waive any inaccuracies
in
the representations and warranties contained herein or in any document,
certificate or writing delivered pursuant hereto, or (c) waive compliance with
any obligation, covenant, agreement or condition contained herein. Any agreement
on the part of a party to any such extension or waiver shall be valid only
if
set forth in an instrument or instruments in writing signed by the party against
whom enforcement of any such extension or waiver is sought. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty, covenant or agreement.
9.4 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided, however, that no party
hereto may assign its rights or delegate its obligations under this Agreement
without the express prior written consent of the other parties hereto;
provided,
that
Stonewell Partners LLP may, prior to the Closing, assign its rights and delegate
its obligations under this Agreement to Stonewell Ventures, LP, a UK limited
partnership, or to another Affiliate to which it has transferred all of its
Company Shares, in each case without the consent of the other parties to this
Agreement, provided,
that
Stonewell Ventures, LP or such other Affiliate delivers to the other parties
to
this Agreement an agreement to be bound by this Agreement as the Principal
Shareholder. In such event, Stonewell Partners LLP shall have no further rights
or obligations under this Agreement. Except as provided in Article VII, nothing
in this Agreement is intended to confer upon any person not a party hereto
(and
their successors and assigns) any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
39
9.5 Survival
of Representations, Warranties and Covenants.
The
representations and warranties contained herein shall survive the Closing and
shall thereupon terminate on the later of (i) six (6) months after the Closing
Date and (ii) the date on which Parent files its Form 10-KSB (including audited
financial statements) for the year ending December 31, 2006 with the SEC. All
covenants and agreements contained herein which by their terms contemplate
actions following the Closing shall survive the Closing and remain in full
force
and effect in accordance with their terms. All other covenants and agreements
contained herein shall not survive the Closing and shall thereupon
terminate.
9.6 Headings;
Definitions.
The
section and article headings contained in this Agreement are inserted for
convenience of reference only and will not affect the meaning or interpretation
of this Agreement. All references to sections or articles contained herein
mean
sections or articles of this Agreement unless otherwise stated. All capitalized
terms defined herein are equally applicable to both the singular and plural
forms of such terms.
9.7 Severability.
If
any
provision of this Agreement or the application thereof to any Person or
circumstance is held to be invalid or unenforceable to any extent, the remainder
of this Agreement shall remain in full force and effect and shall be reformed
to
render the Agreement valid and enforceable while reflecting to the greatest
extent permissible the intent of the parties.
9.8 Specific
Performance.
The
parties hereto agree that in the event the Company fails to consummate the
Merger in accordance with the terms of this Agreement, irreparable damage would
occur, no adequate remedy at law would exist and damages would be difficult
to
determine. It is accordingly agreed that Parent and Merger Sub shall be entitled
to specific performance in such event, without the necessity of proving the
inadequacy of money damages as a remedy, in addition to any other remedy at
law
or in equity.
9.9 Expenses.
Whether
or not the Merger is consummated, and except as otherwise expressly set forth
herein, all legal and other costs and expenses incurred in connection with
the
Merger, including any legal and other costs and expenses incurred in compliance
with the terms of this Agreement, shall be paid by the party incurring such
expenses.
9.10 Notices.
All
notices hereunder shall be sufficiently given for all purposes hereunder if
in
writing and delivered personally, sent by documented overnight delivery service
or, to the extent receipt is confirmed, telecopy, telefax or other electronic
transmission service to the appropriate
address or number as set forth below.
40
|
If
to the Company or Merger Sub:
|
with
a copy to:
|
|
Zone
Mining Limited
C202
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxx,
Xxxxxxx Xxxxxxxx
Xxxxxx
X0X 0X0
Attention:
Chief Executive Officer
|
Fox
Rothschild LLP
000
Xxxxx Xxxxx, Xxxxxxxx 0
Xxxxxxxxxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxx, Esquire
|
|
If
to the Company or the Principal Shareholders:
|
with
a copy to:
|
|
Driveitaway,
Inc.
000
Xxxx Xxxxxxxxx Xxxxx
Xxxxxxx,
XX 00000
Attention:
Chief Executive Officer
|
Xxxxxxxx
Ingersoll & Rooney PC
0000
Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx,
XX 00000
Attention:
Xxxxx X. North, Esq.
|
9.11 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware, without regard to the laws that might otherwise govern under
applicable principles of conflicts of laws thereof, except to the extent that
the DGCL shall apply to the internal corporate governance of the Company or
Merger Sub and to the extent that the NGCL shall apply to the internal corporate
governance of Parent.
9.12 Arbitration.
If
a
dispute arises as to the interpretation of this Agreement, it shall be decided
in an arbitration proceeding conforming to the Rules of the American Arbitration
Association applicable to commercial arbitration then in effect at the time
of
the dispute. The arbitration shall take place in the State of Delaware. The
decision of the Arbitrators shall be conclusively binding upon the parties
and
final, and such decision shall be enforceable as a judgment in any court of
competent jurisdiction. The parties shall share equally the costs of the
arbitration.
9.13 Counterparts.
This
Agreement may be executed in two or more counterparts and delivered via
facsimile, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
41
9.14 Certain
Definitions.
As
used
herein:
(a) “Affiliate”
shall
have the meanings ascribed to such term in Rule 12b-2 of the Exchange
Act;
(b) “Business
Day”
shall
mean any day other than a Saturday, Sunday or a day on which federally
chartered
financial institutions are not open for business in New York
City;
(c) “Confidential
Information”
shall
mean the existence and contents of this Agreement and the schedules
and exhibits
hereto, and all proprietary technical, economic, environmental, operational,
financial and/or business information or material of one party that,
prior to or
following the Closing Date, has been disclosed by the Company or
any Subsidiary,
on the one hand, or Parent or Merger Sub, on the other hand, in written,
oral
(including by recording), electronic, or visual form to, or otherwise
has come
into the possession of, the other;
(d) “Employee
Benefit Plan”
shall
mean: (i) each bonus, stock option, stock purchase, incentive compensation,
deferred compensation and other equity compensation plan, program,
agreement or
arrangement; (ii) each severance or termination pay, medical, surgical,
hospitalization, life insurance and other “welfare” plan, fund or program within
the meaning of Section 3(1) of ERISA (whether or not subject to ERISA);
(iii)
each profit-sharing, stock bonus or other “pension” plan, fund or program
(within the meaning of Section 3(2) of ERISA); (iv) each “employee benefit plan”
within the meaning of Section 3(3) of ERISA (whether or not subject
to ERISA);
(v) each employment, retention, termination, severance, change of
control or
compensation agreement; and (vi) each other employee benefit plan,
fund,
program, agreement or arrangement that is, in each case, sponsored,
maintained
or contributed to or required to be contributed to by the Company,
any
Subsidiary or any third party, or to which the Company, any Subsidiary
or any
third party is party, whether written or otherwise, for the benefit
of any
director, employee or former employee of the Company or any
Subsidiary;
(e) “Encumbrances”
shall
mean any security or other property interest or right, claim, lien, pledge,
option, charge, security interest, contingent or conditional sale, or other
title claim or retention agreement, interest or other right or claim of third
parties, whether perfected or not perfected, voluntarily incurred or arising
by
operation of law, and including any agreement (other than this Agreement) to
grant or submit to any of the foregoing in the future;
(f) “Environmental
Law”
shall
mean any applicable statute, rule, regulation, law, bylaw, ordinance or
directive of any Governmental Authority dealing with the pollution or protection
of natural resources, the indoor or ambient environment, or the protection
of
human health or safety;
(g) “ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as
amended.
(h) “Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended, and the rules
and
regulations promulgated
thereunder;
42
(i) “GAAP”
shall
mean United States generally accepted accounting principles as in
effect on the
date or for the period with respect to which such principles are
applied;
(j) “Governmental
Authority”
shall
mean any nation or government, any state, municipality or other political
subdivision thereof and any entity, body, agency, commission or court,
whether
domestic, foreign or multinational, exercising executive, legislative,
judicial,
regulatory or administrative functions of or pertaining to government
and any
executive official thereof;
(k) “Intellectual
Property”
shall
mean all of the following: (i) inventions (whether patentable or
unpatentable
and whether or not reduced to practice), all improvements thereto
and all
patents, patent applications and patent disclosures, together with
all
reissuances, continuations, continuations-in-part, revisions, extensions
and
reexaminations thereof, (ii) trademarks, service marks, trade dress,
domain
names, maskworks, logos, trade names and corporate names, including
all goodwill
associated therewith and all applications, registrations and renewals
in
connection therewith, (iii) copyrightable works, copyrights and all
applications, registrations and renewals in connection therewith,
(iv) trade
secrets and confidential business information (including ideas, research
and
development, know-how, formulas, compositions, manufacturing and
production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information and business
and
marketing plans and proposals), (v) computer software, together with
all
translations, adaptations, derivations and combinations thereof (including
data
and related documentation), (vi) all other proprietary rights, and
(vii) all
copies and tangible embodiments thereof (in whatever form or
medium);
(l) "Investors
Rights Agreement"
shall
mean the Second Amended and Restated Investors Rights Agreement dated as of
September 23, 2005 by and among the Common Stockholders identified therein,
Ben
Franklin Technology Partners of Southeastern Pennsylvania, Stonewell Partners
LLP, and the Company, as amended from time to time.
(m) “Knowledge”
shall
mean (i) with respect to an individual, knowledge of a particular fact or other
matter, if such individual is aware of such fact or other matter, and (ii)
with
respect to a Person that is not an individual, knowledge of a particular fact
or
other matter if any individual who is serving, or who has at any time served,
as
a director, officer, partner, executor, or trustee of such Person (or in any
similar capacity) has, or at any time had, knowledge of such fact or other
matter;
(n) “Liens”
shall
mean liens, pledges, charges, claims, security interests, purchase agreements,
options, title defects, restrictions on transfer or other encumbrances, or
any
agreements (other than this Agreement) to do any of the foregoing, of any nature
whatsoever, whether consensual, statutory or otherwise;
(o) “Material
Adverse Effect”
shall
mean any adverse effect on the business, condition (financial or otherwise)
or
results of operation of the applicable entity and its subsidiaries, if any,
which is material to the applicable entity and its subsidiaries, if any, taken
as a whole;
43
(p) “Material
Contract”
shall
mean any oral, written or implied contracts, agreements,
leases, powers of
attorney, guaranties, surety arrangements, employment agreements,
consulting
agreements or other commitments, the liabilities or commitments
associated
therewith exceed, in the case of the Company and its Subsidiaries
collectively,
$10,000 individually or $25,000 in the aggregate;
(q) “Parent
Material Contract”
shall
mean any oral, written or implied contracts, agreements, leases,
powers of
attorney, guaranties, surety arrangements, employment agreements,
consulting
agreements or other commitments, the liabilities or commitments associated
therewith exceed, in the case of Parent and its subsidiaries collectively,
$10,000 individually or $25,000 in the aggregate;
(r) “Permitted
Encumbrance”
shall
mean a Lien or Encumbrance (i) for Taxes not yet due or delinquent
or being
contested in good faith by appropriate proceedings for which adequate
reserves
have been established in the Company’s financial statements, (ii) arising in the
ordinary course of business by statute with respect to a liability
that is not
yet due or delinquent, (iii) created by operation of law, such as
materialmen’s
liens, mechanics’ liens and other similar liens, arising in the ordinary course
of business with respect to a liability that is not yet due or delinquent
or
that are being contested in good faith by appropriate proceedings,
(iv) securing
purchase money debt or capital lease obligations which extend only
to the
interests in property, equipment, or other assets acquired with such
purchase
money debt or capital lease obligations or other indebtedness; or
(v) which does
not materially detract from the value or use of the asset to which
it
relates.
(s) “Person”
shall
mean any individual, corporation, partnership, association, trust
or other
entity or organization, including a governmental or political subdivision
or any
agency or institution thereof;
(t) "Principal
Shareholder"
shall
mean, as of the date of this Agreement, Stonewell Partners LLP, a United Kingdom
limited liability partnership, the principal shareholder of the Company or,
in
the event that Stonewell Partners LLP transfers its Company shares to an
Affiliate prior to the Closing, such Affiliate.
(u) “SEC”
shall
mean the Securities and Exchange Commission;
(v) “Securities
Act”
shall
mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder;
(w) "Share
Repurchase Agreement"
shall
mean the Share Repurchase Agreement dated September 23, 2005 by and
among R
Capital II, Ltd, Xxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx, XX Xxxx
Trust,
Xxxxxx Xxxxx, and the Company.
(x) “Taxes”
shall
mean all taxes (whether U.S. federal, state, local or non-U.S.) based
upon or
measured by income and any other tax whatsoever, including, without
limitation,
gross receipts, profits, sales, levies, imposts, deductions, charges,
rates,
duties, use, occupation, value added, ad valorem, transfer, franchise,
withholding, payroll and social security, employment, excise, stamp
duty or
property taxes, together with any interest, penalties, charges or
fees imposed
with respect thereto.
44
IN
WITNESS WHEREOF, Parent, Merger Sub, the Company and the Principal Shareholder
have caused this Agreement to be signed by their respective officers hereunto
duly authorized, all as of the date first written above.
| ZONE MINING LIMITED | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |
|
Xxxxxxx X. Xxxxxxxxxx
President
|
||
|
ZM
ACQUISITION CORP.
|
||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |
|
Xxxxxxx X. Xxxxxxxxxx
President
|
||
|
DRIVEITAWAY,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxx | |
|
Xxxxx X. Xxxx
Chief
Executive Officer
|
||
|
STONEWELL
PARTNERS LLP.
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxx | |
|
Xxxxx X. Xxxx
Managing
Partner
|
||
[Signature
Page to Agreement and Plan of Merger]
45
