Exhibit 10.1
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
iDial Networks, Inc.
AND
▇▇▇▇▇▇▇.▇▇▇, Inc.
October 12, 2000
TABLE OF CONTENTS
1. Definitions
2. Basic Transaction
(a) The Acquisition
(b) The Closing
(c) Actions at the Closing
(d) Effect of Acquisition
(e) Procedure for Transfer
3. Representations and Warranties of the Target
(a) Organization, Qualification, and Corporate Power
(b) Organization, Qualification, and Corporate Power as of the Closing
(c) Capitalization on the Closing Date
(d) Authorization of Transaction
(e) Noncontravention
(f) Broker's Fees
(g) Title to Tangible Assets
(h) Subsidiaries
(i) Financial Statements
(j) Events Subsequent to Most Recent Fiscal Month End
(k) Legal Compliance
(l) Tax Matters
(m) Real Property
(n) Intellectual Property
(o) Contracts
(p) Powers of Attorney
(q) No Undisclosed Liabilities
(r) Litigation
(s) Employee Benefits
(t) Environmental, Health and Safety Matters
(u) Target Shares
(v) Certain Securities Matters
(w) Disclaimer of Other Representations and Warranties
4. Representations and Warranties of the Buyer
(a) Organization
(b) Capitalization
(c) Authorization of Transaction
(d) Noncontravention
(e) Brokers' Fees
(f) Filings with the SEC
(g) Financial Statements
(h) Events Subsequent to Most Recent Fiscal Quarter End
(i) No Undisclosed Liabilities
(j) Litigation
(k) Compliance with Laws
(l) No Default
(m) Certain Securities Matters
(n) Market Manipulation
5. Covenants
(a) General
(b) Notices and Consents
(c) Regulatory Matters and Approvals
(d) Listing of Buyer Shares
(e) Operation of Business
(f) Full Access
(g) Notice of Developments
(h) Interest from Others
(i) Indemnification and Release
(j) Employment Agreement with Target's Key Employee
(k) Post-Closing Covenants of Buyer
6. Conditions to Obligation to Close
(a) Conditions to Obligation of the Buyer
(b) Conditions to Obligation of the Target
7. Termination
(a) Termination of Agreement
(b) Effect of Termination
8. Miscellaneous
(a) Survival
(b) Press Releases and Public Announcements
(c) No Third Party Beneficiaries
(d) Entire Agreement
(e) Succession and Assignment
(f) Counterparts
(g) Headings
(h) Notices
(i) Governing Law
(j) Amendments and Waivers
(k) Severability
(l) Expenses
(m) Construction
(n) Incorporation of Exhibits and Schedules
(o) Facsimile Signatures
AGREEMENT AND PLAN OF REORGANIZATION
Agreement entered into on November 5, 2001 by and among iDial
Networks, Inc., a Nevada corporation (the "Buyer"), and ▇▇▇▇▇▇▇.▇▇▇,
Inc., a Colorado corporation (the "Target. The Buyer and the Target are
referred to collectively herein as the "Parties."
This Agreement contemplates a stock-for-stock tax-free acquisitive
reorganization of the Target by the Buyer. The Target Stockholders will
receive common capital stock in the Buyer in exchange for all of their
common capital stock in the Target. The Parties expect that the
acquisition will further certain of their business objectives (including,
without limitation, significantly expanded markets for both Parties).
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as follows.
1. Definitions.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"Acquisition" means the stock-for-stock, tax-free acquisitive
reorganization of the Target by the Buyer and a contemporaneous transfer
of assets comprising the business of Reliant from Reliant to the Target
pursuant to Codess.368(a)(1) (B) and (C) as described inss.2(a) below.
"Buyer" has the meaning set forth in the preface above.
"Buyer Exchange Shares" have the meaning set forth inss.2(a) below.
"Buyer Share" means any share of the Common Stock, $0.001 par value
per share, of the Buyer.
"Closing" has the meaning set forth inss.2(b) below.
"Closing Date" has the meaning set forth inss.2(b) below.
"COBRA" means the requirements of Part 6 of Subtitle B of Title I
of ERISA and Codess.4980B.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of the Target and its Subsidiaries that is not
already generally available to the public.
"Conversion Ratio" has the meaning set forth inss.2(d)(ii) below.
"Disclosure Schedule" has the meaning set forth inss.3 below.
"Effective Time" has the meaning set forth inss.2(d)(i) below.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement, (b) qualified defined
contribution retirement plan or arrangement which is an Employee Pension
Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material
fringe benefit or other retirement, bonus, or incentive plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
ss.3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
ss.3(1).
"Environmental, Health, and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, and ordinances
concerning public health and safety, worker health and safety, and
pollution or protection of the environment, including without limitation
all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution,
labeling, testing, processing, discharge, release, threatened release,
control, or cleanup of any hazardous materials, substances or wastes, as
such requirements are enacted and in effect on or prior to the Closing
Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" means each entity that is treated as a single
employer with Seller for purposes of Codess.414.
"Exchange Agent" has the meaning set forth inss.2(e) below.
"Financial Statement" has the meaning set forth inss.3(i) below.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time.
"Income Tax" means any federal, state, local, or foreign income
tax, including any interest, penalty, or addition thereto, whether
disputed or not.
"Income Tax Return" means any return, declaration, report, claim
for refund, or information return or statement relating to Income Taxes,
including any schedule or attachment thereto.
"IRS" means the Internal Revenue Service.
"Knowledge" means actual knowledge without independent
investigation.
"Most Recent Financial Statements" has the meaning set forth in
ss.3(i) below.
"Most Recent Fiscal Month End" has the meaning set forth inss.3(i)
below.
"Most Recent Fiscal Quarter End" has the meaning set forth inss.3(i)
below.
"Multiemployer Plan" has the meaning set forth in ERISAss.3(37).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to
quantity and frequency), however in no event shall any transaction of
Target that involves the payment of or liability for any sum in excess of
$50,000 is not considered in the Ordinary Course of Business.
"Party" has the meaning set forth in the preface on page 1 above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"Public Report" has the meaning set forth inss.5(f) below.
"Registration Statement" has the meaning set forth inss.6(l) below.
"Reportable Event" has the meaning set forth in ERISAss.4043.
"Requisite Target Stockholder Approval" means the affirmative vote
of the holders of a majority of the Target Shares (voting and nonvoting)
in favor of this Agreement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for taxes not yet due and
payable or for taxes that the taxpayer is contesting in good faith
through appropriate proceedings, (c) purchase money liens and liens
securing rental payments under capital lease arrangements, and (d) other
liens arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common
stock or has the power to vote or direct the voting of sufficient
securities to elect a majority of the directors.
"Target" has the meaning set forth in the preface on page 1 above.
"Target's Key Employee" means ▇▇▇▇▇ ▇▇▇▇▇▇.
"Target Share" means any share of the Common Stock of Target.
"Target Shares" means the total number of issued and outstanding
shares, all of which are to be acquired by the Buyer pursuant to this
Agreement.
"Target Stockholders" means all of the shareholders of Target as
shown on the attached Target Shareholder's list, which shareholders
collectively own all of the issued and outstanding Target Shares.
2. Basic Transaction.
(a) The Reorganization and Acquisition. Subject to the terms and
conditions of this Agreement, at the Effective Time, the Target
Stockholders shall surrender to the Buyer all of the Target Shares
representing 100% of the ownership interest in the Target in exchange for
10,000,000 Buyer Shares (the "Buyer Exchange Shares") at the Effective
Time in a stock-for-stock, tax-free acquisitive reorganization of the
Target by the Buyer.
(b) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of the
Target in Denver, Colorado, commencing at 1:00 p.m. local time following
the satisfaction or waiver of all conditions to the obligations of the
Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will take at
the Closing itself) or such other date and/or time as the Parties may
mutually determine (the "Closing Date").
(c) Actions at the Closing. At the Closing, (i) the Target will
deliver to the Buyer the various certificates, instruments, and documents
referred to inss.7(a) below, (ii) the Buyer will deliver to the Target the
various certificates, instruments, and documents referred to inss.7(b)
below, and (iii) the Buyer will deliver to the Exchange Agent in the
manner provided below in thisss.2 the certificate evidencing the Buyer
Exchange Shares.
(d) Effect of Acquisition.
(i) General. The Acquisition shall become effective at the
time (the "Effective Time") that the Target Stockholders deliver to
the Buyer all of the Target Shares, properly endorsed to
effectively assign said shares to the Buyer, and the Buyer delivers
to the Target Stockholders the Buyer Exchange Shares, properly
endorsed to effectively assign said shares to the Target
Stockholders.
(ii) Conversion of Target Shares. At and as of the Effective
Time and assuming that the total number of issued and outstanding
Target Shares on a fully diluted basis at such time is 128,550,
each Target Share shall be exchanged for 32.6721 Buyer Shares (the
ratio of 32.6721 Buyer Shares to one Target Share is referred to
herein as the "Conversion Ratio"). The Conversion Ratio shall also
be subject to equitable adjustment in the event of any stock split,
stock dividend, reverse stock split, or other change in the number
of Target Shares outstanding. Immediately after the Closing, no
Target Share shall be deemed to be outstanding or to have any
rights other than those set forth above in thisss.2(d)(ii) after the
Effective Time.
(iii) Buyer Shares. Each Buyer Share issued and outstanding
at and as of the Effective Time will remain issued and outstanding.
(e) Procedure for Transfer.
(i) The transfer and exchange of the Target Shares for the
Buyer Exchange Shares may be effected through an Exchange Agent
upon the mutual consent of the Parties and pursuant to an agreement
with such Exchange Agent and the Parties.
(ii) The Buyer shall pay all charges and expenses of the
Exchange Agent.
3. Representations and Warranties of the Target and the Target
Stockholders. The Target and the Target Stockholders represent and
warrant to the Buyer that the statements contained in thisss.3 are correct
and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout
thisss.3), except as set forth in the disclosure schedule accompanying
this Agreement and initialed by the Parties (the "Disclosure Schedule").
The Disclosure Schedule will be arranged in paragraphs corresponding to
the lettered and numbered paragraphs contained in thisss.3. For purposes
of thisss.3, the representations and warranties regarding the Target shall
be deemed to apply equally to Reliant as the predecessor in interest to
the business of the Target.
(a) Organization, Qualification, and Corporate Power. The Target
is a privately held, corporation duly organized, validly existing, and in
good standing under the laws of the State of Colorado. The Target is duly
authorized to conduct business and is in good standing under the laws of
each jurisdiction where such qualification is required, except where the
lack of such qualification would not have a material adverse effect on
the financial condition of the Target taken as a whole. The Target has
corporate power and authority to carry on the businesses in which it is
engaged and to own and use the properties owned and used by it.ss.3(a) of
the Disclosure Schedule lists the stockholders, directors and officers of
the Target. By signing this Agreement, Buyer acknowledges receipt of a
copy of Target's Articles of Incorporation, bylaws, and minutes,
certified by Target's secretary to be a true copy of Target's Articles of
Incorporation, bylaws, and minutes.
(b) Organization, Qualification, and Corporate Power as of the
Closing. As of the Closing: (i) the Target shall be a corporation duly
organized, validly existing, and in good standing under the laws of the
State Florida ; (ii) the Target shall be duly authorized to conduct
business and shall be in good standing under the laws of each
jurisdiction where such qualification is required, except where the lack
of such qualification would not have a material adverse effect on the
financial condition of the Target taken as a whole; (iii) the Target
shall have full corporate power and authority to carry on the businesses
in which it is engaged and to own and use the properties owned and used
by it; and (iv)ss.3(b) of the Disclosure Schedule shall be amended to list
the directors and officers of each of the Target.
(c) Capitalization on the Closing Date. As of the Closing, the
entire authorized capital stock of the Target shall consist of 300,000
Target Shares of no par stock of which 128,550 Target Shares shall be
issued and outstanding and no Target Shares shall be held in treasury.
All of the issued and outstanding Target Shares shall have been duly
authorized, validly issued, fully paid, and nonassessable, and shall be
held of record by the respective Target Stockholders as set forth in
ss.3(b) of the Disclosure Schedule. There shall be no outstanding or
authorized options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments
that could require the Target to issue, sell, or otherwise cause to
become outstanding any of its capital stock. There shall be no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Target.
(d) Authorization of Transaction. The Target has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the
Target, enforceable in accordance with its terms and conditions.
(e) Noncontravention. To the Knowledge of any of the Target
Stockholders, neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any of the Target and
its Subsidiaries is subject or any provision of the charter or bylaws of
any of the Target and its Subsidiaries. To the Knowledge of any of the
Target Stockholders, none of the Target and its Subsidiaries needs to
give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order
for the Parties to consummate the transactions contemplated by this
Agreement, except where the failure to give notice, to file, or to obtain
any authorization, consent, or approval would not have a material adverse
effect on the financial condition of the Target and its Subsidiaries
taken as a whole or on the ability of the Parties to consummate the
transactions contemplated by this Agreement. To the Knowledge of any of
the Target Stockholders, except as set forth inss.3(e) of the Disclosure
Schedule, neither the execution and the delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, cancel, or require any notice under any agreement, contract,
lease, license, instrument or other arrangement to which the Target is a
party or by which it is bound or to which any of its assets is subject.
(f) Brokers' Fees. None of the Target nor the Target Stockholders
has any liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by
this Agreement.
(g) Title to Tangible Assets. The Target has good title to, or a
valid leasehold interest in, the material tangible assets they use
regularly in the conduct of their businesses.
(h) Subsidiaries.ss.3(h) of the Disclosure Schedule sets forth for
each Subsidiary of the Target (i) its name and jurisdiction of
incorporation, (ii) the number of shares of authorized capital stock of
each class of its capital stock, (iii) the number of issued and
outstanding shares of each class of its capital stock, the names of the
holders thereof, and the number of shares held by each such holder, and
(iv) the number of shares of its capital stock held in treasury. All of
the issued and outstanding shares of capital stock of each Subsidiary of
the Target have been duly authorized and are validly issued, fully paid,
and nonassessable.
(i) Financial Statements. Attached hereto as Exhibit B are the
following financial statements (collectively the "Financial Statements"):
(i) audited consolidated balance sheets and statements of income, changes
in stockholders' equity, and cash flow for the period from inception
through June 30, 2000 (the "Most Recent Financial Statements") for the
Target. The Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby and present fairly the financial condition of
the Target as of such dates and the results of operations of the Target
for such periods; provided, however, that the Most Recent Financial
Statements are subject to normal year-end adjustments and lack footnotes
and other presentation items.
(j) Events Subsequent to Most Recent Financial Statements. Since
the Most Recent Financial Statements there has not been any material
adverse change in the financial condition of the Target taken as a whole.
Without limiting the generality of the foregoing, since that date the
Target has not engaged in any practice, taken any action, or entered into
any transaction outside the Ordinary Course of Business the primary
purpose or effect of which has been to generate or preserve Cash.
(k) Legal Compliance. To the Knowledge of any of the Sellers, the
Target has complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), except where the failure to
comply would not have a material adverse effect upon the financial
condition of the Target taken as a whole.
(l) Tax Matters.
(i) The Target has filed all Income Tax Returns that it was
required to file, and has paid all Income Taxes shown thereon as
owing, except where the failure to file Income Tax Returns or to
pay Income Taxes would not have a material adverse effect on the
financial condition of the Target taken as a whole.
(ii)ss.3(l) of the Disclosure Schedule lists all Income Tax
Returns filed with respect to the Target .
(iii) The Target has not waived any statute of limitations in
respect of Income Taxes or agreed to any extension of time with
respect to an Income Tax assessment or deficiency.
(iv) The Target is not a party to any Income Tax allocation
or sharing agreement.
(v) To the Knowledge of any of the Sellers, the Target has
not been a member of an Affiliated Group filing a consolidated
federal Income Tax Return (other than a group the common parent of
which was the Target).
(m) Real Property.
(i)ss.3(m)(i) of the Disclosure Schedule lists all real
property that the Target owns, which is none.
(ii)ss.3(m)(ii) of the Disclosure Schedule lists all real
property leased or subleased to the Target. The Sellers have
delivered to the Buyer correct and complete copies of the leases
and subleases listed inss.3(m)(ii) of the Disclosure Schedule (as
amended to date). To the Knowledge of any of the Sellers, each
lease and sublease listed inss.3(m)(ii) of the Disclosure Schedule
is legal, valid, binding, enforceable, and in full force and
effect, except where the illegality, invalidity, nonbonding nature,
unenforceability, or ineffectiveness would not have a material
adverse effect on the financial condition of the Target taken as a
whole.
(n) Intellectual Property. ss.3(n) of the Disclosure Schedule
identifies each patent or trademark registration which has been issued to
any of the Target with respect to any of its intellectual property,
identifies each pending patent application or application for
registration which the Target has made with respect to any of its
intellectual property, and identifies each license, agreement, or other
permission which any of the Target has granted to any third party with
respect to any of its intellectual property.
(o) Contracts.ss.3(o) of the Disclosure Schedule lists all written
contracts and other written agreements to which the Target is a party,
the performance of which will involve consideration in excess of
$10,000. The Sellers have delivered to the Buyer a correct and complete
copy of each contract or other agreement listed inss.3(o) of the
Disclosure Schedule (as amended to date).
(p) Powers of Attorney. To the Knowledge of any of the Target
Stockholders, there are no outstanding powers of attorney executed on
behalf of the Target.
(q) No Undisclosed Liabilities. Except (i) to the extent
disclosed in the Disclosure Schedule and (ii) for liabilities and
obligations incurred in the ordinary course of business consistent with
past practice, the Target has not incurred any liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise, that
have, or would be reasonably likely to have, individually or in the
aggregate, a material adverse effect on the Target.
(r) Litigation.ss.3(r)(1) of the Disclosure Schedule sets forth each
instance in which any of the Target (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party
to any action, suit, proceeding, hearing, or investigation of, in, or
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction, except where the
injunction, judgment, order, decree, ruling, action, suit, proceeding,
hearing, or investigation would not have a material adverse effect on the
financial condition of the Target taken as a whole.
(s) Employee Benefits.
(i)ss.3(s) of the Disclosure Schedule lists each Employee
Benefit Plan that the Target maintains or to which the Target
contributes.
(A) To the Knowledge of any of the Parties , each such
Employee Benefit Plan (and each related trust, insurance
contract, or fund), if any, complies in form and in operation
in all respects with the applicable requirements of ERISA and
the Code, except where the failure to comply would not have a
material adverse effect on the financial condition of the
Target taken as a whole.
(B) All contributions (including all employer
contributions and employee salary reduction contributions),
if any, which are due have been paid to each such Employee
Benefit Plan, if any, that is an Employee Pension Benefit
Plan.
(C) Each such Employee Benefit Plan that is an Employee
Pension Benefit Plan, if any, has received a determination
letter from the Internal Revenue Service to the effect that
it meets the requirements of Codess.401(a).
(D) As of the last day of the most recent prior plan
year, the market value of assets under each such Employee
Benefit Plan which is an Employee Pension Benefit Plan (other
than any Multiemployer Plan), if any, equaled or exceeded the
present value of liabilities thereunder (determined in
accordance with then current funding assumptions).
(E) With respect to each Employee Benefit Plan that is
an Employee Pension Benefit Plan, if any, the Target has
delivered to the Buyer correct and complete copies of the
plan documents and summary plan descriptions, the most recent
determination letter received from the Internal Revenue
Service, the most recent Form 5500 Annual Report, and all
related trust agreements, insurance contracts, and other
funding agreements which implement each such Employee Benefit
Plan.
(ii) With respect to each Employee Benefit Plan that
the Target or any ERISA Affiliate, if any, maintains or has
maintained during the prior six years or to which any of them
contributes, or has been required to contribute during the
prior six years:
(A) No action, suit, proceeding, hearing, or
investigation with respect to the administration or the
investment of the assets of any such Employee Benefit Plan
(other than routine claims for benefits) is pending, except
where the action, suit, proceeding, hearing, or investigation
would not have a material adverse effect on the financial
condition of the Target taken as a whole.
(B) The Target has not incurred any liability to the
PBGC (other than PBGC premium payments) or otherwise under
Title IV of ERISA (including any withdrawal liability) with
respect to any such Employee Benefit Plan which is an
Employee Pension Benefit Plan.
(t) Environmental, Health, and Safety Matters.
(i) To the Knowledge of any of the Target Stockholders, the
Target is in compliance with Environmental, Health, and Safety
Requirements, except for such noncompliance as would not have a
material adverse effect on the financial condition of the Target
taken as a whole.
(ii) To the Knowledge of any of the Target Stockholders, the
Target has not received any written notice, report or other
information regarding any actual or alleged material violation of
Environmental, Health, and Safety Requirements, or any material
liabilities or potential material liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, relating to the
Target or its Subsidiaries or their facilities arising under
Environmental, Health, and Safety Requirements, the subject of
which would have a material adverse effect on the financial
condition of the Target taken as a whole.
(iii) This Section 3(t) contains the sole and exclusive
representations and warranties of the Target Stockholders with
respect to any environmental, health, or safety matters, including
without limitation any arising under any Environmental, Health, and
Safety Requirements.
(u) Target Shares. Target hereby represent and warrant to the
Buyer as follows:
(i) Authorization. Each Target Stockholder has all
requisite right, power and authority and full legal capacity to
execute and deliver this Agreement and to perform his or her
obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by such Target Stockholder, and this
Agreement constitutes a legal, valid and binding obligation
enforceable against such Target Stockholder in accordance with its
terms, except as may be limited by bankruptcy, reorganization,
insolvency and similar laws of general application relating to or
affecting the enforcement of rights of creditors. The failure of
the spouse of any Target Stockholder to be a party or signatory to
this Agreement shall not (A) prevent any such Target Stockholder
from performing his or her obligations and from consummating the
transactions contemplated hereunder and thereunder or (B) prevent
this Agreement from constituting the legal, valid and binding
obligation of any such Target Stockholder enforceable against any
such Target Stockholder in accordance with its terms.
(ii) No Conflict. The execution, delivery and performance
of this Agreement by each of the Target Stockholders does not and
will not conflict with or violate any law or governmental order,
applicable to such Target Stockholder, or conflict with, result in
any breach of, constitute a default (or event which with the giving
of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or
cancellation of, or result in the creation of any encumbrance on
any of the Target Shares or on any of the assets or properties of
such Target Stockholder pursuant to, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument, obligation or arrangement to which
such Target Stockholder is a party or by which any of the Target
Shares or any of such assets or properties is bound or affected.
(iii) Governmental Consents and Approvals. Except as may
required by laws applicable because the Buyer is a public company,
the execution, delivery and performance of this Agreement by each
of the Target Stockholders does not and will not require any
consent, approval, authorization or other order of, action by,
filing with or notification to any governmental authority.
(iv) Ownership. Each of the Target Stockholders owns the
number of Target Shares set forth next to such Target Stockholder's
name on the Target Shareholders List. All of the Target Shares set
forth next to each Target Stockholder's name have been duly
authorized, validly issued, and are fully paid and nonassessable
and have been accorded full voting rights. There are no voting
trusts, stockholder agreements, proxies or other agreements or
understandings in effect with respect to the voting or transfer of
any of the Target Shares, or if there are, all votes and consents
necessary to authorize all of the Target Stockholders to enter into
and to perform this Agreement have been given, and all restrictions
encumbering the power and authority of the Target Stockholders to
perform this Agreement have been waived, and upon delivery of such
Target Shares at Closing as contemplated herein, the Buyer will own
the Target Shares free and clear of all encumbrances.
(v) Certain Securities Matters. Target hereby represents and
warrants to the Buyer as follows:
(i) Except for the Target Stockholder's resale rights as
set forth herein and the right of the Target Stockholder to
exercise such rights to their fullest extent, the Target
Stockholder: (A) is acquiring the Buyer Shares for the Target
Stockholder's own account and not with a view to, or for offer or
sale in connection with, any distribution thereof, and the Target
Stockholder is not participating and does not have a participation
in any such distribution or the underwriting of any such
distribution; (B) the Target Stockholder has sufficient knowledge
and experience in financial and business matters and is fully
capable of evaluating the merits and risks of purchasing the Buyer
Shares; and (C) the Target Stockholder has not been solicited to
acquire the Buyer Shares by means of general advertising or general
solicitation.
(ii) The Target Stockholder has been furnished with
information about and allowed access to Buyer's business and has
had the opportunity to investigate Buyer's business and to ask
questions of and receive answers from Buyer sufficient to satisfy
the Target Stockholder that Buyer's business is reasonably as
described by Buyer.
(iii) The Target Stockholder understands that at Closing: (A)
the Buyer Shares are not registered under any applicable federal or
state securities law in reliance upon certain exemptions
thereunder; (B) the Buyer Shares may not be sold, transferred or
otherwise disposed of without registration under the Securities Act
and compliance with applicable state securities laws or the
availability of an exemption therefrom; and (C) in the absence of
registration under the Securities Act and compliance with
applicable state securities laws or an exemption therefrom, the
Buyer Shares must be held indefinitely. The Target Stockholder
acknowledges that the reliance of the Buyer upon such exemption
from registration is predicated upon the foregoing representations.
(w) Disclaimer of other Representations and Warranties. Except as
expressly set forth in Section 2 and this Section 3, the Target
Stockholders make no representation or warranty, express or implied, at
law or in equity, in respect of the Target, its Subsidiaries, or any of
their respective assets, liabilities or operations, including, without
limitation, with respect to merchantability or fitness for any particular
purpose, and any such other representations or warranties are hereby
expressly disclaimed.
4. Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Target that the statements contained in
thisss.5 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then
and as though the Closing Date were substituted for the date of this
Agreement throughout thisss.5), except as set forth in the Disclosure
Schedule. The Disclosure Schedule will be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this
ss.5.
(a) Organization. The Buyer is a public corporation that trades on
the over-the-counter market and is duly organized, validly existing, and
in good standing under the laws of the State of Nevada. Each of the
Buyer and its Subsidiaries is duly authorized to conduct its business and
is in good standing under the laws of each jurisdiction where such
qualification is required, except where the lack of such qualification
would not have a material adverse effect on the financial condition of
the Buyer and its Subsidiaries taken as a whole. Each of the Buyer and
its Subsidiaries has full corporate power and authority to carry on the
businesses in which it is engaged and to own and use the properties owned
and used by it.ss.5(a) of the Disclosure Schedule lists the directors and
officers of each of the Buyer and its Subsidiaries.
(b) Capitalization. The entire authorized capital stock of the
Buyer consists of 100 million common shares and approximately 18,562,500
common shares are currently issued and outstanding. All of the Buyer
Shares to be issued pursuant to the Closing of this Agreement will be
duly authorized and, upon Closing, will be validly issued, fully paid,
and nonassessable.
(c) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the
Buyer, enforceable in accordance with its terms and conditions.
(d) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Buyer is
subject or any provision of the charter or bylaws of the Buyer or (ii)
conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument or other arrangement to which the
Buyer is a party or by which it is bound or to which any of its assets is
subject other than in connection with the provisions of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, the Nevada General Corporation Law, the Securities
Exchange Act, the Securities Act, and the state securities laws, the
Buyer does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement.
(e) Brokers' Fees. The Buyer does not have any liability or
obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.
(f) Filings with the SEC. The Buyer has made all filings with the
SEC that it has been required to make under the Securities Act and the
Securities Exchange Act (collectively the "Public Reports"). Each of the
Public Reports has complied with the Securities Act and the Securities
Exchange Act in all material respects. None of the Public Reports, as of
their respective dates, contained any untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they
were made, not misleading. The Buyer has delivered to the Target a
correct and complete copy of each Public Report (together with all
exhibits and schedules thereto and as amended to date).
(g) Financial Statements. The Buyer has filed Quarterly Reports on
Form 10-QSB for the fiscal quarter ended June 30, 2000 (the "Most Recent
Fiscal Quarter End"), and an Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1999. The financial statements included in or
incorporated by reference into these Public Reports (including the
related notes and schedules) have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby and
present fairly the financial condition of the Buyer as of the indicated
dates and the results of operations of the Buyer for the indicated
periods.
(h) Events Subsequent to Most Recent Fiscal Quarter End. Since the
Most Recent Fiscal Quarter End, there has not been any material adverse
change in the business, financial condition, operations, results of
operations, or future prospects material adverse change in the financial
condition of the Buyer and its Subsidiaries taken as a whole.
(i) No Undisclosed Liabilities. Except (i) to the extent disclosed
in the Public Reports and (ii) for liabilities and obligations incurred
in the ordinary course of business consistent with past practice, the
Buyer has not incurred any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that have, or would be
reasonably likely to have, individually or in the aggregate, a material
adverse effect on the Buyer.
(j) Litigation. Except as disclosed to the contrary in the Public
Reports, there is no suit, claim, action, proceeding, review or
investigation pending or, to the knowledge of the Buyer, threatened
against or affecting the Buyer which, individually or in the aggregate,
is reasonably likely to have a material adverse effect on the Buyer or
would, or would be reasonably likely to, materially impair the ability of
the Buyer to consummate the transaction contemplated by this Agreement.
(k) Compliance with Laws. Except as disclosed to the contrary in
the Public Reports, the Buyer has complied with all laws, statutes,
regulations, rules, ordinances and judgments, decrees, orders, writs and
injunctions, of any court or governmental entity relating to any of the
property owned, leased or used by them, or applicable to their business,
including, but not limited to, equal employment opportunity,
discrimination, occupational safety and health, environmental, insurance,
regulatory, antitrust laws, ERISA and laws relating to taxes, except to
the extent that any such non-compliance would not have a material adverse
effect on the Buyer.
(l) No Default. The business of the Buyer is not being conducted
in default or violation of any term, condition or provision of (i) its
certificate of incorporation or bylaws or similar organizational
documents, or (ii) agreements to which the Buyer is a party, excluding
from the foregoing clause (iii) defaults or violations that would not
have a material adverse effect on the Buyer and would not, or would not
be reasonably likely to, materially impair the ability of the Buyer to
consummate transactions contemplated by this Agreement.
(m) Certain Securities Matters.
(i) The Buyer represents and warrants that (A) the Target
Shares are being acquired by the Buyer for its own account and not
with a view to, or for offer or sale in connection with, any
distribution thereof, and it is not participating and does not have
a participation in any such distribution or the underwriting of any
such distribution; (B) the Buyer has sufficient knowledge and
experience in financial and business matters and is fully capable
of evaluating the merits and risks of purchasing the Target Shares;
and (C) the Buyer has not been solicited to acquire the Target
Shares by means of general advertising or general solicitation.
(ii) The Buyer has been furnished with information about and
allowed access to Target's business, books, records, files, and
properties and properties and has had the opportunity to
investigate Target's business and assets and to ask questions of
and receive answers from Target sufficient to satisfy the Buyer
that Target's business is reasonably as described by Target.
(iii) Buyer understands that (A) the Target Shares are not
registered under any applicable federal or state securities law in
reliance upon certain exemptions thereunder, (B) the Target Shares
may not be sold, transferred or otherwise disposed of without
registration under the Securities Act and compliance with
applicable state securities laws or the availability of an
exemption therefrom; and (C) in the absence of registration under
the Securities Act and compliance with applicable state securities
laws or an exemption therefrom, the Target Shares must be held
indefinitely. The Buyer acknowledges that the reliance of the
Target upon such exemption from registration is predicated upon the
foregoing representations.
(n) Market Manipulation. The Buyer has not, directly or
indirectly, taken any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of its common stock to
facilitate the sale or resale of its common stock, in any case in
violation of any federal or state securities laws.
5. Covenants. The Parties agree as follows with respect to the
period from and after the execution of this Agreement.
(a) General. Each of the Parties will use its reasonable best
efforts to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver,
of the closing conditions set forth inss.7 below).
(b) Notices and Consents. The Target will give any notices (and
will cause each of its Subsidiaries to give any notices) to third
parties, and will use its reasonable best efforts to obtain (and will
cause each of its Subsidiaries to use its reasonable best efforts to
obtain) any third party consents, that the Buyer reasonably may request
in connection with the matters referred to inss.3(d) above.
(c) Regulatory Matters and Approvals. Each of the Parties will (and
the Target will cause each of its Subsidiaries to) give any notices to,
make any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental
agencies in connection with the matters referred to inss.3(d) andss.45(d)
above.
(d) Public Market for Buyer Shares. The Buyer will use its best
efforts to remain current in its periodic reports required to be filed
with the SEC, so that the Buyer Shares (including without limitation, the
Buyer Exchange Shares and underlying shares with respect to warrants and
options to be issued pursuant to this Agreement) remain eligible for
quotation on the National Association of Securities Dealer's Over the
Counter Electronic Bulletin Board (the "OTC-BB").
(e) Operation of Business. The Target will not (and will not cause
or permit any of its Subsidiaries to) engage in any practice, take any
action, or enter into any transaction outside the Ordinary Course of
Business without the prior approval of Buyer. Without limiting the
generality of the foregoing:
(i) none of the Target and its Subsidiaries will authorize or
effect any change in its charter or bylaws, except with respect to
the conversion of the Target from a limited liability company to a
corporation as provided inss.3(b), (c) and (d) above.
(ii) none of the Target and its Subsidiaries will grant any
options, warrants, or other rights to purchase or obtain any of its
capital stock or issue, sell, or otherwise dispose of any of its
capital stock (except upon the conversion or exercise of options,
warrants, and other rights currently outstanding);
(iii) none of the Target and its Subsidiaries will declare,
set aside, or pay any dividend or distribution with respect to its
capital stock (whether in cash or in kind), or redeem, repurchase,
or otherwise acquire any of its capital stock, in either case
outside the Ordinary Course of Business.
(iv) none of the Target and its Subsidiaries will issue any
note, bond, or other debt security or create, incur, assume, or
guarantee any indebtedness for borrowed money or capitalized lease
obligation outside the Ordinary Course of Business;
(v) none of the Target and its Subsidiaries will impose any
Security Interest upon any of its assets outside the Ordinary
Course of Business;
(vi) none of the Target and its Subsidiaries will make any
capital investment in, make any loan to, or acquire the securities
or assets of any other Person outside the Ordinary Course of
Business; and
(vii) none of the Target and its Subsidiaries will commit to
any of the foregoing.
(f) Full Access. The Target will (and will cause each of its
Subsidiaries to) permit representatives of the Buyer to have full access
at all reasonable times, and in a manner so as not to interfere with the
normal business operations of the Target and its Subsidiaries, to all
premises, properties, personnel, books, records (including tax records),
contracts, and documents of or pertaining to each of the Target and its
Subsidiaries. The Buyer will treat and hold as such any Confidential
Information it receives from any of the Target and its Subsidiaries in
the course of the reviews contemplated by thisss.6(f), will not use any of
the Confidential Information except in connection with this Agreement,
and, if this Agreement is terminated for any reason whatsoever, agrees to
return to the Target all tangible embodiments (and all copies) thereof
which are in its possession.
(g) Notice of Developments. Each Party will give prompt written
notice to the other of any material adverse development causing a breach
of any of its own representations and warranties inss.3 andss.4 above. No
disclosure by any Party pursuant to thisss.5(g), however, shall be deemed
to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
(h) Interest from Others. Prior to the satisfaction by the Buyer of
the conditions to the Target's obligations to close this transaction, the
Target, its Subsidiaries, and their directors and officers will remain
free to participate in any discussions or negotiations regarding any
proposal or offer from any Person relating to the acquisition of all or
substantially all of the capital stock or assets of any of the Target and
its Subsidiaries (including any acquisition structured as a merger,
consolidation, or share exchange) and to furnish any information with
respect to, assist or participate in, or facilitate in any other manner
any effort or attempt by any Person to do or seek any of the foregoing;
provided, however, that the Target, its Subsidiaries and the Target
Stockholders shall not enter into any agreement with any Person other
than the Buyer for the acquisition of the Target and/or its Subsidiaries
or any part thereof unless such agreement is clearly designated as a
"back-up contract," subordinated to this Agreement and to be activated
only in the event that this Agreement is canceled without Closing by one
or both Parties for failure to fulfill the conditions of Closing within
the time allowed hereunder.
(i) Indemnification and Release.
(ii) During the term of the Employment Agreements with the
Key Executives of the Target, the Buyer will observe any
indemnification provisions now existing in the certificate of
incorporation or bylaws of the Target and/or its Subsidiaries for
the benefit of any Key Executive who served as a member, director
or officer of the Target and/or its Subsidiaries at any time prior
to the Effective Time.
(iii) The Buyer will release and forever discharge each of
the Target Stockholders who served as a director or officer of the
Target at any time prior to the Effective Time from any and all
actions, suits, proceedings, hearings, investigations, charges,
complaints, claims, demands, injunctions, judgments, orders,
decrees, rulings, damages, dues, penalties, fines, costs, amounts
paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including all court costs and attorneys' fees
and expenses, resulting from, arising out of, relating to, in the
nature of, or caused by this Agreement or any of the transactions
contemplated herein, except that the Buyer will not release any of
the foregoing individuals from any of the foregoing to the extent
that same also constitutes a breach of such individual's
representations and warranties underss.3.
(j) Employment Agreement with Target's Key Employee. Buyer hereby
agrees to execute an employment agreement with Target's Key Employee on
mutually agreeable terms that include a covenant not to compete.
(k) Post-Closing Covenants of the Buyer.
(i) The Target's Key Employee will be treated fairly
relative to the Buyer's other executives at the comparable
level of employment with respect to salaries, benefits and
stock options.
(ii) Upon Closing, the Buyer's board of directors shall
appoint ▇▇▇▇▇ ▇▇▇▇▇▇ to the Buyer's board of directors.
(iii) The Buyer shall not merge or liquidate or dispose of
the Target during the first 12 months after the Closing.
(iv) Buyer shall not change the board of directors of the
Target, as it existed immediately prior to the Closing Date
during the first 12 months after the Closing without the
prior written consent of the Target Stockholders.
(v) Buyer shall not effect a reverse split of Buyer's Shares
for the first 12 months after Closing.
6. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) The representations and warranties set forth inss.3 above
shall be true and correct in all material respects at and as of the
Closing Date;
(ii) The Target shall have performed and complied with all of
its covenants hereunder in all material respects through the
Closing;
(iii) There shall not be any judgment, order, decree,
stipulation, injunction, or charge in effect preventing
consummation of any of the transactions contemplated by this
Agreement;
(iv) The Target and the Target Stockholders shall have
delivered to the Buyer a certificate to the effect that each of the
conditions specified above inss.6(a)(i)-(iii) is satisfied in all
respects;
(v) The Buyer shall have received from counsel to the Target
an opinion in form and substance reasonably satisfactory to Buyer,
addressed to the Buyer, and Dated as of the Closing Date;
(vi) All actions to be taken by the Target in connection with
consummation of the transactions contemplated in this Agreement and
all certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Buyer; and
(vii) The Buyer shall be reasonably satisfied with the
opinion expressed in the completed audit of Target by the Buyer's
auditors at the Buyer's expense, that the results are not
materially adversely at variance with the unaudited financial
information provided to the Buyer by the Target and that the audit
meets the requirements of Regulation S-X of the Securities Act and
the Securities Exchange Act.
(viii) The Target shall use its best efforts to raise capital
to meet the needs of Target and the Buyer and to release the
officers of Buyer from any contingent liabilities or guarantees
that they may have for the benefit of Buyer.
The Buyer may waive any condition specified in thisss.6(a) if
it executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Target. The obligation of the
Target to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth inss.4 above
shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Buyer shall have performed and complied with all of
its covenants hereunder in all material respects through the
Closing;
(iii) there shall not be any judgment, order, decree,
stipulation, injunction, or charge in effect preventing
consummation of any of the transactions contemplated by this
Agreement;
(iv) The full execution of employment agreements with the
Target's Key Employee acceptable to Target, Buyer and the
employee.
(v) the Buyer shall have delivered to the Target and the
Target Stockholders a certificate to the effect that each of the
conditions specified above inss.6(b)(i)-(vii) is satisfied in all
respects;
(vii) the Target and Target Stockholders shall have received
from counsel to the Buyer an opinion in form and substance
reasonably satisfactory to Target and Target Stockholders,
addressed to the Target and Target Stockholders, and dated as of
the Closing Date;
(viii) all actions to be taken by the Buyer in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Target and the Target
Stockholders.
The Target may waive any condition specified in thisss.6(b) if it
executes a writing so stating at or prior to the Closing.
7. Termination.
------------
(a) Termination of Agreement. Either of the Parties may terminate
this Agreement with the prior authorization of its board of directors
(whether before or after stockholder approval) as provided below:
(i) the Parties may terminate this Agreement by mutual
written consent at any time prior to the Effective Time.
(ii) the Buyer may terminate this Agreement by giving written
notice to the Target at any time prior to the Effective Time (A) in
the event the Target or the Target Stockholders has breached any
material representation, warranty, or covenant contained in this
Agreement in any material respect, the Buyer has notified the
Target of the breach, and the breach has continued without cure for
a period of 30 days after the notice of breach or (B) if the
Closing shall not have occurred on or before October 11 2000, by
reason of the failure of any condition precedent underss.6(a) hereof
(unless the failure results primarily from the Buyer breaching any
representation, warranty, or covenant contained in this Agreement).
(iii) the Target may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Effective Time
(A) in the event the Buyer has breached any material
representation, warranty, or covenant contained in this Agreement
in any material respect, the Target has notified the Buyer of the
breach, and the breach has continued without cure for a period of
30 days after the notice of breach or (B) if the Closing shall not
have occurred on or before September 30, 2000, by reason of the
failure of any condition precedent underss.6(b) hereof (unless the
failure results primarily from the Target breaching any
representation, warranty, or covenant contained in this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement
pursuant toss.7(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other
Party (except for any liability of any Party then in breach); provided,
however, that the confidentiality provisions contained inss.5(g) above
shall survive any such termination.
8. Miscellaneous.
(a) Survival. The representations and warranties of the Parties
will survive the Effective Time for a period of two years. The covenants
of the Parties shall survive the Effective Time for two years, unless a
longer period is required by the terms of the particular covenant for it
to be fully performed, in which case the covenant shall survive for such
period plus 6 months.
(b) Press Releases and Public Announcements. No Party shall issue
any press release or make any public announcement relating to the subject
matter of this Agreement without the prior written approval of the other
Party; provided, however, that any Party may make any public disclosure
it believes in good faith is required by applicable law or any listing or
trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise
the other Party prior to making the disclosure).
(c) No Third Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and the
Target Stockholders and their respective successors and permitted
assigns; provided, however, that (i) the provisions inss.2 above
concerning issuance of the Buyer Shares and certain other provisions
concerning certain requirements for a tax-free reorganization are
intended for the benefit of the Target Stockholders and (ii) the
provisions inss.5(i) above concerning indemnification and release are
intended for the benefit of the individuals specified therein and their
respective legal representatives.
(d) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties
and supersedes any prior understandings, agreements, or representations
by or between the Parties, written or oral, to the extent they related in
any way to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and the Target
Stockholders and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of its rights, interests,
or obligations hereunder without the prior written approval of the other
Party.
(f) Counterparts. This Agreement may be executed in one or more
facsimile counterparts, each of which shall be deemed an original but all
of which together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing and will be effective when
hand-delivered or upon delivery if sent by commercial courier service
such as Federal Express or Airborne or on the day of delivery or first
attempted delivery if sent by first class, postage prepaid, certified
United States mail, return receipt requested (whether or not the return
receipt is subsequently received), and addressed by the sender:
If to the Target: Copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Buyer: Copy to:
▇▇▇▇ WoodsChairman ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
IDial Networks, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication
shall be deemed to have been duly given unless and until it actually is
received by the intended recipient. Regardless of the method of delivery,
any written notice, request, demand, claim, or other communication
actually received by a party hereto shall be effective on the date of
receipt. Any party hereto, from time to time, may change his or her or
its address to which notice is to be sent pursuant hereto by sending a
notice of such change in conformity with the foregoing requirements to
the other parties to the other parties to this Agreement.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Nevada
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Nevada or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
State of Nevada.
(j) Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time with
the prior authorization of their respective boards of directors;
provided, however, that any amendment effected subsequent to stockholder
approval will be subject to the restrictions contained in the Nevada
General Corporation Law. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by both of
the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term
or provision in any other situation or in any other jurisdiction.
(l) Expenses. Each of the Parties will bear its own costs and
expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.
(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue
of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local, or foreign statute or law shall
be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires. The word "including"
shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(o) Facsimile Signatures. Execution and delivery of this Agreement
by exchange of facsimile copies bearing the facsimile signature of a
party hereto shall constitute a valid and binding execution and delivery
of this Agreement by such party. Such facsimile copies shall constitute
enforceable original documents.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
on the date first above written.
iDial Networks, Inc.
By:_____________________________________________
▇▇▇▇ ▇▇▇▇, Chairman
▇▇▇▇▇▇▇.▇▇▇, Inc.
By:_____________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
