PLAN OF REORGANIZATION AND MERGER AGREEMENT
This Plan of Reorganization and Merger Agreement (the
"Agreement") dated as of December 21, 2000 is made and
entered into by and between NEVER MISS A CALL, INC., a
Nevada corporation (the "Company"), NMC ACQUISITION CORP.,
a newly formed Florida corporation and wholly-owned
subsidiary of the Company (hereinafter "Company Sub"), and INTER-CALL-
NET TELESERVICES, INC., a Florida corporation. ("ICN").
WITNESSETH:
WHEREAS, the boards of directors of the Company,
Company Sub and ICN deem it advisable and in the best
interests of such corporations and their respective
stockholders that Company Sub merge with and into ICN
pursuant to this Agreement and the Articles of Merger in
the form attached hereto as Exhibit A and pursuant to
applicable provisions of law (such transaction hereinafter referred to
as the "Merger");
WHEREAS, the Company Sub has an authorized
capitalization consisting of 1,000 shares of common stock,
$0.0001 par value per share (the "Company Sub Stock"), of
which 1,000 shares are issued and outstanding and are owned
by the Company as of the date hereof; the Company has an
authorized capitalization consisting of 25,000,000 shares
of common stock, $0.001 par value per share (the "Company
Stock"), of which 1,700,000 shares are currently issued and
outstanding as of the date hereof; and ICN has an
authorized capitalization consisting of 20,000,000 shares of common
stock, $0.0001 par value per share (the "ICN Stock"), of
which 2,166,710 shares are currently issued and outstanding
as of the date hereof, 2,000,000 shares of blank check
preferred stock, $0.0001 par value per share of which none
are currently issued and outstanding as of the date hereof,
and warrants issued and outstanding to purchase 271,000
shares of ICN Stock;
NOW, THEREFORE, in consideration of the foregoing
premises and of the mutual covenants and undertakings
contained herein, and for such other good and valuable
consideration the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby
agree as follows:
ARTICLE I
MERGER
1.01 General. At the Effective Time (as defined in Article
X below) of the Merger and pursuant to the provisions of
this Agreement, the corporate existence of Company Sub will
be merged with and into ICN (hereinafter referred to as the
"Surviving Corporation" whenever reference is made to it as
of the Effective Time or thereafter) and continued in the
Surviving Corporation, and the Surviving Corporation shall
be deemed to be a continuation of the entities and
identities of the Company Sub and ICN.
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1.02. Name and Organization. The name of the
Surviving Corporation shall be "Inter-Call-Net
Teleservices, Inc." The Articles of Incorporation and bylaws of ICN
shall be the Articles of Incorporation and bylaws of the
Surviving Corporation. The established offices and facilities of ICN
shall become the established offices and facilities of the
Surviving Corporation.
1.03. Rights and Interests. At the Effective Time,
the Surviving Corporation shall become the owner, by
operation of law and without other transfer, of all the
right, title and interest that Company Sub and ICN now
have, or may have in the future, in and to all of their
respective properties (both real and personal) and assets
(both tangible and intangible) of every kind and nature
whatsoever, whether ▇▇▇▇▇▇ or inchoate, now existing or
arising in the future (the "Assets"). At the Effective
Time, all rights, franchises, and interests of Company Sub
and ICN in and to every type of intellectual property,
including all of their respective trademarks,
registrations, trademark applications, and goodwill associated therewith,
shall be transferred to and vested in the Surviving
Corporation by virtue of the Merger without any deed or
other transfer. The Surviving Corporation at the Effective
Time, and without any order or other action on the part of
any court or otherwise, shall hold and enjoy all rights of
property, franchises, and interests, including
appointments, powers, designations, and nominations, and all other rights
and interests as trustee, executor, administrator, agent,
transfer agent, registrar of stocks and bonds,
administrator of estates, assignee, and receiver, and in every other
fiduciary and agency capacity in the same manner and to the
same extent as such rights, franchises, and interests were
held or enjoyed by the Company Sub and ICN, respectively,
immediately prior to the Effective Time.
1.04. Liabilities and Obligations. At the Effective
Time, the Surviving Corporation shall be liable for all
liabilities of the Company Sub and ICN. All debts,
liabilities, obligations, and contracts of Company Sub,
matured or unmatured, whether accrued, absolute,
contingent, or otherwise, and whether or not reflected or reserved
against on the balance sheets, books of account, or records
of Company Sub, as the case may be, shall be those of, and
are hereby expressly assumed by, the Surviving Corporation
and shall not be released or impaired by the Merger. All
rights of creditors and other obligees and all liens on
property of either Company Sub or ICN shall be preserved
unimpaired.
1.05 Directors and Officers. The directors
and officers of the Surviving Corporation and of the
Company at the Effective Time shall be the same persons who
constitute the directors and officers of ICN as of the date
hereof pursuant to resolutions adopted by the Board of
Directors of Company Sub and of the Company and the
directors and officers of both Company Sub and of the
Company immediately prior to the Effective Time shall, as
of the Effective Time, resign all such capacities.
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1.06. Adoption. Unless contrary to the laws of the
State of Florida, the United States of America, or other
applicable laws, all corporate acts, plans, policies,
applications, agreements, orders, registrations, licenses,
approvals, and authorizations of Company Sub and ICN, their
respective shareholders, boards of directors, committees
elected or appointed by their boards of directors or
officers, and agents that were valid and effective
immediately before the Effective Time shall be taken for
all purposes at and after the Effective Time as the acts,
plans, policies, applications, agreements, orders, registrations,
licenses, approvals, and authorizations of the Surviving
Corporation and shall be effective and binding thereon as
the same were with respect to Company Sub and ICN
immediately before the Effective Time.
1.07. Accounting Treatment; Federal Income Tax
Treatment. The parties hereby agree that it is their
intention that the Merger will be treated as a reverse-
merger "purchase" for accounting purposes with ICN being
the accounting survivor under applicable U.S. accounting
standards. The parties further agree that it is their
intention that the Merger will be treated as a tax-free
reorganization for federal income tax purposes under
Section 368 of the Internal Revenue Code of 1986, as amended. The
parties hereby mutually agree that they will give such
notices, file such instruments, give such consents, and
take or cause to have taken such actions as are reasonably
necessary to ensure the accounting treatment and federal
income tax treatment described herein.
1.08. Post-Merger Matters. Following the Merger, the
Company will utilize its best efforts to effect: (a) a
3.5:1 forward stock split applicable to all of the Company's then
issued and outstanding securities; and (b) a change of the
Company's name to "Intercallnet, Inc." or similar name.
ARTICLE II
CONVERSION AND CANCELLATION OF ICN STOCK
2.01. General. The manner of exchanging and
converting the issued and outstanding shares of ICN Stock
shall be as hereinafter provided in this Article II.
2.02. Conversion of ICN Stock. At the Effective Time
and without any action on the part of the Company, Company
Sub, ICN, or the holders of any of the securities of any of
these corporations:
(a) each outstanding share of ICN Stock held or of
record held shall be converted into 1.25 shares of Company
Stock. All such shares of ICN Stock shall no longer be
outstanding, and shall automatically be canceled and
retired and shall cease to exist, and each certificate
previously evidencing any such shares shall thereafter
represent the right to receive, upon the surrender of such
certificates, in accordance with the provisions of Article
II hereof, certificates evidencing such number of shares of
Company Stock into which such shares of ICN Stock were
converted. The holders of such certificates previously
evidencing such shares of ICN Stock outstanding immediately
prior to the Effective Time shall cease to have any rights
with respect to such shares of ICN Stock except as
otherwise provided herein or by law;
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(b) any shares of ICN Stock held in the treasury of
ICN immediately prior to the Effective Time shall
automatically be canceled and extinguished without any
conversion thereof and no payment of any type shall be made
with respect thereto;
(c) each share of Company Sub Stock issued and
outstanding immediately prior to the Effective Time shall
be converted into one share of common stock of the Surviving
Corporation and thereafter, each stock certificate of
Company Sub shall evidence ownership of shares of common
stock of the Surviving Corporation;
(d) each warrant and option to purchase shares of ICN
Stock (collectively, the "Assumed Securities") shall
become, without further action, exercisable for 1.25 shares of
Company Stock for each one (1) share of ICN Stock to which
each such warrant and/or option relates, with a
corresponding adjustment in the exercise price per share,
as may be appropriate. The Company shall assume all of ICN's
obligations relating to the Assumed Securities, in
accordance with such conversion ratio and corresponding
adjustment in the exercise price per share, as may be
appropriate, and otherwise be subject to the other terms
and conditions as set forth in such security.
2.03. Transmittal Instructions. As soon as is
practical after the Effective Time, shareholders of ICN
will be sent transmittal forms for use in forwarding for
surrender their stock certificates representing ICN Stock
for the purpose of exchanging them for certificates
representing Company Stock. The transmittal forms and
certificates must be sent to Transfer Online, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, who is the
transfer agent (the "Transfer Agent") and registrar for the
Company Stock. The provisions of Section 2.02 and this
Section 2.03 shall not apply to any share of ICN Stock in
respect of which the holder thereof pursues the remedy of
dissent in accordance with applicable Florida law, unless
and until such holder has exhausted his/her right of
dissent thereunder, at which time the provisions of Sections 2.02
and 2.03 shall apply in their entirety thereto.
2.04. Issued in Name Other than Current Ownership.
If any share of Company Stock is to be issued in a name other
than that in which the certificate surrendered in exchange
therefor is registered, it shall be a condition of the
issuance thereof that the certificate so surrendered shall
be properly endorsed and otherwise in proper form for
transfer and that the person requesting such exchange shall
pay to the Transfer Agent any transfer or other taxes
required by reason of the issuance of a share of Company
Stock in any name other than that of the registered holder
of the certificate surrendered, or shall establish to the
satisfaction the Transfer Agent that such tax has been paid
or is not payable.
2.05. Consideration in Full Satisfaction. All rights
to receive Company Stock for which shares of ICN Stock
shall have been converted pursuant to this Article II shall be
deemed to have been issued in full satisfaction of all
rights pertaining to such exchanged shares of ICN Stock.
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2.06. Subsequent Transfer of Stock. After the
Effective Time, there shall be no further registration of
transfers on the stock transfer books of the Surviving
Corporation of the shares of ICN Stock that were
outstanding immediately prior to the Effective Time. If after the
Effective Time certificates representing such shares are
presented to the Surviving Corporation, they shall be
canceled and exchanged for Company Stock as provided in
this Article II.
2.07 Adjustments. If between the date of
this Agreement and the Effective Time, the outstanding
shares of Company Stock or ICN Stock shall have been changed
into a different number of shares or a different class by
reason of any reclassification, recapitalization, split-up,
combination, exchange of shares, readjustment, or stock
dividend declared thereon with a record date within such
period, the exchange rate described in Section 2.02 above
for each share of ICN Stock shall be adjusted so that the
total fair market value of the shares of Company Stock that
would have been issued for ICN Stock, in the absence of such
reclassification, recapitalization, split-up, combination,
exchange of shares, readjustment, or stock dividend, will be
preserved. No such adjustments shall be made without the
prior written consent of all of the parties hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND COMPANY SUB
The Company and Company Sub hereby jointly and
severally represent and warrant to and with ICN as of the
date hereof, which shall also be true through the Closing
Date (as defined in Article X below), as follows:
3.01. Organization and Qualification. The Company
and Company Sub (a) are each duly organized, (1) validly
existing and in good standing as to the Company under the
laws of the jurisdiction of its incorporation; and (2)
validly existing as to Company Sub under the laws of the
jurisdiction of its incorporation whose status is active;
(b) each has all requisite corporate power and authority to
own, operate, and lease its properties and to carry on its
business as it is currently being conducted; and (c) are
each qualified to do business in every jurisdiction in which
the character and location of the assets owned by it or the
nature of its business require such qualification.
3.02. Licenses and Permits. The Company and Company
Sub each have all licenses, permits, consents, orders,
approvals, and other authorizations necessary for the
conduct of its business as now being conducted and proposed
to be conducted. Except as provided in Section 6.04 herein,
no approval, consent, authorization, or other order of, and
no designation, filing, registration, qualification, or
recording with any governmental authority, domestic or
foreign, is required for the Company's or Company's Sub's
performance of this Agreement or the consummation of the
transactions contemplated hereby.
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3.03. Capitalization.
(a) The authorized capital stock of the
Company consists of 25,000,000 shares of Company Stock,
$0.001par value per share, of which 1,700,000 shares are
currently issued and outstanding. The authorized capital
stock of Company Sub consists of 1,000 shares of Company Sub
Stock, $0.0001 par value per share, of which 1,000 shares
are currently issued and outstanding, all of which are owned
by the Company, free and clear of all liens, claims, and
encumbrances. All outstanding shares of capital stock of
the Company and Company Sub are validly issued, fully paid
and nonassessable.
3.04. Options, Warrants, and Subscriptions.
(a) Except as set forth in 3.03 above,
neither the Company or Company Sub has outstanding (i) any
other shares of any class of capital stock other than the
common stock of each of the Company and Company Sub,
respectively, (ii) no options, warrants, subscription, or
other rights to purchase from the Company or Company Sub any
capital stock of the Company or of Company Sub; (iii) no
securities convertible into or exchangeable for capital
stock of the Company or of Company Sub; and (iv) no other
commitments of any kind for the issuance of additional
shares of capital stock or options, warrants, or other
securities of the Company or of Company Sub.
(b) No Person, including, but not limited to,
any officer or director of the Company, has any right
(preemptive or otherwise) to acquire any capital stock of
the Company or of Company Sub.
3.05. Subsidiaries. There is presently no
corporation, partnership, limited liability company, or
other business enterprise in which the Company has any
direct or indirect equity interest other than Company Sub.
In connection with this Agreement, the Company has filed
Articles of Incorporation with the Office of the Secretary
of State of Florida and formed a new corporation, NMC
Acquisition Corp., which shall be an operating, wholly-owned
subsidiary of the Company immediately prior to completion of
the Merger.
3.06. Authorization, Execution, and Delivery. The
Company and Company Sub each has all requisite power and
authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. No
proceedings on the part of the Company or Company Sub are
necessary to authorize the execution and delivery of this
Agreement and, except as provided in Section 6.04 herein,
the consummation of such transactions. This Agreement and
all other agreements herein contemplated to be executed by
the Company and Company Sub have been duly authorized by the
respective Boards of Directors of the Company and Company
Sub, duly executed and delivered by the Company and Company
Sub and constitute legal, valid, and binding obligations of
the Company and Company Sub enforceable against each of the
Company and Company Sub in accordance with their respective
terms, subject as to enforceability to applicable
bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors' rights
generally and to the application of equitable principles and
judicial discretion. The execution and performance of this
Agreement by the Company and Company Sub will not, with the
passing of time or otherwise, constitute a material breach
of any agreement, indenture, mortgage, license, or other
instrument or document to which the Company or Company Sub
is a party or otherwise bound. The execution and
performance of this Agreement will not, with the passing of
time, or otherwise, violate or conflict with any provision
of the respective articles of incorporation or bylaws of the
Company or Company Sub. No dissenters' or other similar
rights have been or will be created for the shareholders of
the Company and/or of Company Sub as a result of or arising
from the execution of this Agreement by the Company and/or
Company Sub or the consummation by the Company and/or
Company Sub of the transactions contemplated hereby.
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3.07. No Conflict With Judgments and Decrees. The
consummation of the Merger in accordance with the terms,
conditions, and provisions of this Agreement will not
conflict with, or result, with the passing of time, or
otherwise, in a breach of, any term, condition, or provision
of any judgment, order, injunction, decree, writ, or ruling
of any court, tribunal, or regulatory or self-regulatory
authority, either domestic or foreign, to which either the
Company or Company Sub is subject.
3.08. Government Approvals. Except for the approvals
to be obtained pursuant to Section 6.04 below, no consent,
approval, order, or authorization of, or registration,
declaration, or filing with, any federal, state, local or
foreign governmental authority, either domestic or foreign,
is required to be made or obtained by the Company or Company
Sub in connection with the execution and delivery of this
Agreement by the Company and Company Sub or the consummation
by the Company and Company Sub of the transactions
contemplated hereby.
3.09. Financial Statements. The Company has
previously delivered to ICN true, correct, and complete
copies of the following financial statements (the
"Financial Statements"):
(a) audited financial statements of the
Company for the period from inception to
December 31, 1999 and for the period ended January 31,
2000;
(b) unaudited financial statements as filed by
the Company with the U.S. Securities and Exchange Commission
(the "SEC") for the periods ended March 31, 2000, June 30,
2000 and September 30, 2000.
The Company's fiscal year end is December 31.
Except as set forth in this Section 3.09, the Financial
Statement (a) are and will continue to be a true and correct
reflection of the financial condition of the Company as of
the dates therein; (b) were and will continue to be prepared
in accordance with generally accepted accounting principals
applied on a consistent basis over the reported periods
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("GAAP"); (c) were and will continue to be prepared in
accordance with the books and records of the Company; (d)
fairly present the Company's financial condition and the
results of its operations and changes in its financial
position at the relevant dates thereof and for the years or
periods covered thereby, subject in the case of the
unaudited interim financial statements, to normal year end
audit adjustments; (e) contain and reflect all necessary
adjustments and accruals for a fair presentation of its
financial condition and the results of its operations for
the periods covered by such financial statements; and (f)
contain and reflect reasonable provisions for reserves and
for all reasonably anticipated liabilities for all taxes,
federal, state, or local, with respect to the periods then
ended and all prior periods. Company Sub has no financial
statements because it is newly formed for the purpose of
effectuating the Merger and it has no assets, liabilities,
contracts or obligations of any kind or nature whatsoever.
3.10. Internal Accounting Controls. The Company and
Company Sub each (a) keeps books, records, and accounts that
accurately, fairly, and in reasonable detail reflect its
assets and transactions; and (b) maintains a system of
internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are accurately
and promptly recorded; (ii) transactions are executed in
accordance with management's specific or general
authorizations; and (iii) access to its assets is permitted
only in accordance with management's general or specific
authorization.
3.11. No Undisclosed Liabilities. Except as set forth
in the Financial Statements, the Company has no liabilities
or obligations of any kind or nature, whether absolute,
accrued, contingent, or otherwise, and whether due or to
become due (including without limitation any liability for
taxes and interest, penalties, and other charges payable
with respect to any such liability or obligation) which have
had or could have a Material Adverse Effect (as defined in
Article XI below).
3.12. Absence of Certain Changes. Since inception,
there has not been with respect to the Company and/or
Company Sub:
(a) any transaction not in the ordinary course
of business that has had or could have a Material Adverse
Effect;
(b) any change in the business, property,
assets, liabilities (whether absolute, accrued, contingent,
or otherwise), operations, liquidity, income, condition
(financial or otherwise), prospects, or net worth of the
Company or Company Sub that has had or could have a
Material Adverse Effect;
(c) a declaration, or an agreement to declare
or make any payment of dividends or distributions of any
assets of any kind to the stockholders of the Company or
Company Sub, or a redemption, or agreement or authorization
to redeem any of the Company Stock or Company Sub Stock;
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(d) any damage, destruction, or loss,
extraordinary or otherwise and whether or not covered by
insurance, that has had or could have a Material Adverse
Effect;
(e) any amendment permitted or made with
regard to any material contract, material license, or
material agreement to which the Company or Company Sub is a
party;
(f) any acquisition or disposition by the
Company or Company Sub of any property or asset, whether
real or personal, having a fair market value in an amount
greater than $10,000, except in the ordinary course of
business and in conformity with past practice;
(g) any mortgage, pledge, or subjection to
lien, charge, or encumbrance of any kind or on any of the
respective properties or assets of the Company or Company
Sub, except to secure borrowings in the ordinary course of
business and in conformity with past practice;
(h) any increase in, or commitment to
increase, the compensation payable or to become payable to
any officer, director, employee, or agent of the Company or
Company Sub, or any bonus payment or similar arrangement
made to or with any of such officers, directors, employees,
or agents, other than (except in the case of directors and
officers) routine increases made in the ordinary course of
business and in conformity with past practice;
(i) any incurrence of, guarantee of,
assumption of, or taking any property subject to, any
liability, except for liabilities incurred or assumed or
property taken in the ordinary course of business and in
conformity with past practice;
(j) any adoption of a plan or agreement or
amendment to any plan or agreement providing any new or
additional benefits for officers, directors, or employees;
(k) any material alteration in the manner of
keeping the books, accounts, or records of the Company or
Company Sub, or in the accounting practices therein
reflected;
(l) any release or discharge of any obligation
or liability of any Person to the Company or Company Sub of
any nature whatsoever, except in the ordinary course of
business and in conformity with past practice and except in
cases that have not had and could not have a Material
Adverse Effect;
(m) any delay by the Company or Company Sub in
paying any debt, charge, or amount owed by the Company or
Company Sub in excess of 30 days past the date such amount
was due;
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(n) any increase or decrease of (i) any
amounts charged for services rendered or products sold by
the Company or Company Sub; or (ii) inventory ordered,
except, in either case, in the ordinary course of business
and in conformity with past practice;
(o) any facts or circumstances that may
reasonably result in the loss of customers, suppliers, or
vendors of the Company or Company Sub, including without
limitation, any notices, statements, or circumstances
indicating that any customer, supplier, or vendor has or
will terminate or alter its business relationship with the
Company or Company Sub;
(p) any loan by the Company or Company Sub to
any officer or director of the Company or Company Sub, or
any Affiliate (as defined in Article XI below) thereof;
(q) any other event or condition of any
character which has had or could have a Material Adverse
Effect; or
(r) any agreement or authorization to do any
of the above.
3.13. Tax Matters.
(a) within the times and in the manner
prescribed by law, each of the Company and Company Sub has
filed all federal, state, local and foreign tax returns for
which the Company and Company Sub has had the responsibility
for filing, and has timely paid all taxes, penalties, and
interest (hereinafter collectively referred to as "Taxes")
shown to be due and payable on such returns;
(b) all tax returns filed by the Company and
Company Sub constitute complete and accurate representations
of its tax liabilities for such years and accurately sets
forth all items (to the extent required to be included or
reflected in such returns) relevant to its future tax
liabilities, including the tax bases of its properties and
assets;
(c) each of the Company and Company Sub has
not waived or extended any applicable statute of limitations
relating to the assessment of federal, state, local, or
foreign taxes;
(d) no examination of the federal, state,
local or foreign tax returns of the Company or Company Sub
is currently in progress, nor, to the knowledge of the
Company and Company Sub, is any such examination
threatened;
and
(e) to the knowledge of the Company and
Company Sub, neither the Company or Company Sub has received
any communication from any taxing authority regarding any
tax return of the Company or Company Sub with respect to any
matter that has not been closed, settled, waived, or fully
concluded, or would otherwise have a Material Adverse
Effect.
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3.14. No Litigation. There are no investigations,
actions, suits, judgments, or claims outstanding, pending
or, to the knowledge of the Company or Company Sub,
threatened against the Company or Company Sub or involving
any of its properties or assets, whether at law or in
equity, before or by any foreign, federal, state, municipal,
or other governmental court, department, commission, board,
bureau, agency, instrumentality, or other person (a
"Proceeding"), which may result in a material liability to
the Company or Company Sub or affect the Company Stock or
Company Sub Stock.
3.15. Transactions with Affiliates. There are no
transactions by either the Company or the Company Sub with
their respective officers, directors, employees, or any
affiliates thereof, and no such person has any interest in
any property owned or used by the Company or Company Sub.
3.16. Contracts. Neither the Company or Company Sub
is a party to any oral or written: (a) contract for the
employment or compensation of any officer or employee or
consultant; (b) agreement, contract, or indenture relating
to the borrowing of money by the Company or Company Sub;
(c) guaranty of any obligations for the borrowing of money or
otherwise; (d) management agreement, consulting agreement,
independent contractor agreement, or other similar contract
or arrangement; (e) collective bargaining or labor
agreement; (f) agreement with any present or former officer,
director, or shareholder; (g) employee pension, profit-
sharing, or other benefit plan or arrangement; (h) lease for
real or personal property; (i) any contract or agreement
that will terminate upon a change in control of the Company
or Company Sub; (j) any contract or agreement obligating the
Company or Company Sub to provide products or services for a
period of one year or more; (k) any contract relating to
pending capital expenditures by the Company or Company Sub;
(l) any non-competition or confidentiality agreements
restricting the Company or Company Sub in any manner; (m)
other material contracts or understandings, irrespective of
subject matter and whether or not in writing, and not
otherwise disclosed; or (n) contract, agreement, or other
commitment that involved a payment, or requires the payment
by, the Company or Company Sub of more than $10,000 in any
12-month period not otherwise previously disclosed in
writing to ICN .
3.17. Employment Matters. To the knowledge of the
Company and Company Sub, there is no activity or proceeding
of any labor organization (or representative thereof) or
employee group to organize any employees of the Company or
Company Sub, or to effectuate or threaten to effectuate a
strike, slowdown, work stoppage, or lockout with regard to
the Company or Company Sub.
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3.18. Compliance with Law.
(a) The conduct of the business of each of the
Company and Company Sub to date and through the Closing Date
does not and will not violate any federal, state, local or
foreign laws, statutes, ordinances, rules, regulations,
decrees, orders, permits, or other similar items in force on
the date hereof or through the Closing Date (including, but
not limited to, any of the foregoing relating to employment
discrimination, employment practices, withholding of taxes
and other sums from employees, the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and
environmental protection or conservation), the enforcement
of which could have a Material Adverse Effect on the Company
and/or Company Sub, nor has the Company or Company Sub
received any notice of any such violation.
(b) No prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), has
occurred or is continuing with respect to any employee
pension benefit plan (as defined in Section 3(2) of ERISA)
maintained by the Company or any welfare benefit plan (as
defined in Section 3(1) of ERISA) maintained by the Company.
The Company has no employee benefit plans or any welfare
benefits plans and no contributions are required to be made
by the Company with respect to any such plans.
(c) The Company has properly and timely filed
with the SEC, the National Association of Securities
Dealers'(the "NASD") Over-the-Counter-Bulletin Board (the
"OTCBB") and the securities boards or commissions of all
applicable states, all reports (including all amendments
thereto) and properly maintained all books and records
required to be filed or maintained by it under applicable
federal and state securities laws, regulations, and rulings,
including the Securities Act of 1933, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder. All information
contained in such filings was true and complete on the date
such filings were made and 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 contained therein not false or
misleading in the light of the circumstances under which
they were made. Independent accountant reviews of all
quarterly financial statements filed by the Company with the
SEC have been obtained by the Company with true and correct
copies thereof provided to ICN. Neither the Company or the
Company Sub is subject to a formal or informal agreement or
enforcement action or proceeding or, to its knowledge,
formal or informal investigation or inquiry, by any
regulatory or self-regulatory agency (including but not
limited to the NASD) or authority having jurisdiction over
it, nor are any of the foregoing pending, or to its
knowledge, threatened or contemplated. The Company's and
Company Sub's respective securities issuances since
inception have been made in compliance with all applicable
U.S., state and foreign securities laws, rules and
regulations.
(d) The Canadian based accounting/auditing
firm used by the Company for its various filings with the
SEC is independent of the Company, as the term
15
"independence"is defined by the SEC. Such auditing firm is
authorized to practice before the SEC, and has complied with
all applicable rules and regulations for accounting firms
practicing before the SEC. The auditing standards and
practices used by the Company's auditors are acceptable to
the SEC. To the best of the Company's knowledge and belief,
the Company's auditors are available and willing to provide
any and all consents necessary for future SEC filings by the
Company that may need to contain the auditors' opinions.
3.19. Absence of Unethical Business Practices. Neither
the Company or Company Sub or any director or officer
thereof has directly or indirectly given or agreed to give
any gift or similar benefit to any customer, contractor,
government, employee, or other Person who was or is in a
possible position to help or hinder the Company or Company
Sub, which gift or benefit (a) might subject the Company or
Company Sub to any damages or penalties in any civil or
criminal proceeding; (b) might have had a Material Adverse
Effect on the Company or Company Sub; or (c) might have a
Material Adverse Effect on the Company or Company Sub if
not continued.
3.20. No Conflict With Other Instruments. The
consummation of the Merger in accordance with the terms,
conditions, and provisions of this Agreement will not be in
material conflict with, or result in a material breach of,
any term, condition, or provision of, or constitute a
material default under, any contract, indenture, mortgage,
deed of trust, or other material agreement or instrument to
which the Company and/or Company Sub is a party and will not
constitute an event that with the lapse of time or action by
a third party could result in any material default under any
of the foregoing, or result in the creation of any lien,
charge, or encumbrance upon any of the assets or properties
of the Company or the Company Stock or Company Sub or
Company Sub Stock.
3.21. Insurance. Neither the Company or Company Sub
has any insurance of any type.
3.22. Intellectual Property.
(a) Each of the Company and Company Sub has
full and exclusive right, title, and interest in and to, or
license rights to, all patents, patent applications,
registered or unregistered trademarks, service marks, and
trade names, registered or unregistered copyrights and
applications therefor, licenses, approvals, or governmental
authorizations to conduct its business as now conducted,
know-how, proprietary rights and processes, trade secrets,
customer lists, methodologies (to the extent protectable),
proprietary development and marketing information and know-
how, inventions, inventors' notes (to the extent such notes
exist), drawings, designs associated with the foregoing, and
other confidential information (collectively, "Intellectual
Property") relating to its business or otherwise used in or
necessary for the proper conduct of its business, free and
clear of all liens, security interests, claims and
encumbrances of any nature; and each of the Company and
Company Sub has no obligation to any other person or entity
with respect to the Intellectual Property or any product or
process of the Company or Company Sub utilizing or embodying
any Intellectual Property. All such Intellectual Property
is set forth in Schedule 3 hereof.
16
(b) There is (i) no infringement, misuse, or
misappropriation of any Intellectual Property owned,
licensed or controlled by any third party arising out of any
product or process now being used, manufactured, or
distributed, or ever having been used, manufactured, or
distributed at any time previously, by or on behalf of the
Company or Company Sub; (ii) no pending or, to the knowledge
of the Company and Company Sub, threatened claim or
challenge of or proceeding for infringement, misuse or
misappropriation of or interference with any Intellectual
Property owned, licensed, or controlled by any third party
arising out of any product or process now being used,
manufactured, or distributed, or ever having been used,
manufactured, or distributed at any time previously, by or
on behalf of the Company or Company Sub ; (iii) no pending
or threatened or potential claim, challenge or proceeding by
the Company or Company Sub against any third party for
infringement, misuse, or misappropriation of or interference
with any Intellectual Property owned, licensed, or
controlled by the Company or Company Sub; or (iv) no notice
or facts or information rendering any Intellectual Property
owned, controlled, or licensed by the Company or Company Sub
invalid or unenforceable, nor is there any allegation that
any such Intellectual Property is invalid or unenforceable.
(c) Each of the Company and Company Sub has not disclosed
any material confidential information developed or utilized by
the Company or Company Sub to any third party except on a confidential basis,
pursuant to a confidentiality agreement, and with no
intention to entitle such third party to use such
information other than for the purposes set forth in such
confidentiality agreement. To the knowledge of the Company
and Company Sub, no third party has disclosed confidential
information developed or utilized by the Company or Company Sub to any
person except as specifically authorized by the Company or Company Sub.
3.23. Real and Personal Property.
(a) The Company has good and marketable title
to each of the items of real and personal tangible and
intangible property recorded as owned in the Financial
Statements (except for property sold or otherwise disposed
of since September 30, 2000 in the ordinary course of
business and in conformity with past practice), free and
clear of all mortgages, liens, security interests,
conditional sales contracts, encumbrances, leases, equities,
claims, charges, easements, rights-of-way, covenants,
conditions, and restrictions, except (i) those incurred or
created in conformity with past practice; (ii) mortgages and
other encumbrances reflected in the Financial Statements;
(iii) liens for current taxes not yet due and payable; and
(iv) such imperfections of title and encumbrances as do not
detract from, or interfere with, the present use of the
properties subject thereto or affected thereby, or otherwise
impair the value thereof or the operations thereat; and
(b) no officer, director, or employee of the
Company, nor any spouse, child, or other relative or
Affiliate thereof, owns directly or indirectly in whole or
in part, any of such real property or tangible or intangible
personal property.
3.24. Environmental Compliance.
(a) The Company and any Property owned or
operated by it are in compliance with all applicable
Environmental Laws and have obtained and are in compliance
with all permits, licenses, and other authorizations
required under any Environmental Law. There is no past or
present event, condition, or circumstance that is likely to
interfere with the conduct of the business of the Company in
the manner now conducted relating to such entity's
compliance with Environmental Laws or constitute a material
violation thereof or which would have a Material Adverse
Effect;
(b) The Company does not now or has not
leased, operated, owned, or exercised managerial functions
at any facilities or real property with respect to which
such entity, facility, or real property is subject to any
actual proceeding under any Environmental Law, and the
Company is not aware of any facts or circumstances that
could give rise to such a proceeding;
17
(c) there are no actions or proceedings
pending or, to the knowledge of the Company, threatened
against the Company under any Environmental Law, and the
Company has not received any notice (whether from any
regulatory body or private person) of any violation, or
potential or threatened violation, of any Environmental
Law;
(d) there are no actions or proceedings
pending or, to the knowledge of the Company, threatened
under any Environmental Law involving the release or threat
of release of any Polluting Substances at or on (i) any
property currently or in the past owned, operated, or leased
by the Company or over which the Company exercised
managerial functions; or (ii) at any property where
Polluting Substances generated by the Company have been
disposed;
(e) there is no Property for which the Company
is or was required to obtain any permit under an
Environmental Law to construct, demolish, renovate, occupy,
operate, or use such property or any portion of it;
(f) the Company has not generated any Polluting Substances;
(g) there has been no release of Polluting
Substances by the Company in violation of any Environmental
Law which would require any report or notification to any
governmental or regulatory authority in or on any property;
(h) neither the Company nor any property is
subject to investigation or, to the knowledge of the
Company, threatened or pending litigation by federal, state,
or local officials or a private litigant as a result of any
previous on-site management, treatment, storage, release, or
disposal of Polluting Substances or exposure to any Polluting Substances;
18
(i) there are no underground or above ground
storage tanks on or under any property which are not in
conformity with any Environmental Law and any property
previously containing such tanks has been remediated in
compliance with all Environmental Laws; and
(j) there is no asbestos containing material
on any Property owned or operated by the Company.
3.25. Minute Books. The minute books of the Company
and Company Sub, complete copies of which have previously
been provided to ICN, accurately reflect all material
actions taken by the stockholders of the Company and its
Board of Directors and the stockholder of Company Sub and
its Board of Directors.
3.26. ▇▇▇▇-▇▇▇▇▇. Within the meaning of the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended,
and the applicable regulations thereunder, 16 C.F.R. Parts
801-803 (collectively, "▇▇▇▇-▇▇▇▇▇"), neither the Company
nor Company Sub nor any of their respective Affiliates (i)
is engaged in manufacturing; (ii) has total assets of $10
million or more; or (iii) has annual net sales of $100
million or more.
3.27. Articles of Incorporation; Bylaws. The
Company's and Company Sub's respective Articles of
Incorporation and bylaws, true and complete copies of which
have previously been delivered to ICN, have not been
rescinded, amended or modified in any respect.
3.28. Broker's Agents and Finder's Fees. There is no
agent's, broker's, or finder's fee or commission payable, or
that will be payable, in connection with the transactions
contemplated by this Agreement by virtue of, or resulting
from, any action or agreement by each of the Company and
Company Sub or any affiliate thereof.
3.29. Disclosure. The information with respect to the
Company and Company Sub heretofore provided and to be
provided by the Company and Company Sub pursuant to this
Agreement, including any Exhibits or Schedules hereto, and
each of the representations, agreements, documents,
certificates and writings to be delivered to ICN or its
representatives at the Closing, do not and will not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated herein or therein or
necessary in order to make the statements and writings
contained herein or therein not false or misleading in the
light of the circumstances under which they were made.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ICN
ICN hereby represents and warrants to and with the
Company as of the date hereof, which shall also be true as
of the Closing Date, as follows:
19
4.01. Organization and Qualification. ICN (a) is a
corporation duly incorporated, validly existing under the
laws of the State of Florida whose status is active, and has
all requisite corporate power and authority to own, operate,
and lease its properties and to carry on its business as it
is currently being conducted; and (b) is qualified to do
business in every jurisdiction in which the character and
location of the assets owned by it or the nature of its
business require such qualification.
4.02. Licenses and Permits. ICN has all licenses,
permits, consents, orders, approvals, and other
authorizations necessary for the conduct of its business as
now being conducted and proposed to be conducted. Except as
provided in Section 5.04 below, no approval, consent,
authorization, or other order of, and no designation,
filing, registration, qualification, or recording with any
governmental authority, domestic or foreign, is required for
ICN's performance of this Agreement or the consummation of
the transactions contemplated hereby.
4.03. Capitalization. The authorized capital stock of
ICN consists of: (a) 20,000,000 shares of ICN Stock, of
which 2,166,710 shares are currently issued and outstanding.
These shares constitute 100% of the issued and outstanding
shares of capital stock of ICN; (b) 2,000,000 shares of
blank check preferred stock, $0.0001 par value per share of
which none are currently issued and outstanding.
4.04. Options, Warrants, and Subscriptions.
(a) ICN has outstanding (i) no shares of any
class of capital stock other than ICN Stock, (ii) no
options, warrants, subscription, or other rights to purchase
from ICN any capital stock of ICN except for warrants to
purchase 271,000 shares of ICN Stock; (iii) no securities
convertible into or exchangeable for capital stock of ICN;
and (iv) no other commitments of any kind for the issuance
of additional shares of capital stock or options, warrants,
or other securities of ICN.
(b) No Person, including, but not limited to,
any officer or director of ICN, has any right (preemptive or
otherwise) to acquire any capital stock of ICN.
4.05. Subsidiaries. There is no corporation,
partnership, limited liability company, or other business
enterprise in which ICN has any direct or indirect equity
interest.
4.06. Authorization, Execution, and Delivery. ICN has
all requisite power and authority to execute and deliver
this Agreement and to consummate the transactions
contemplated hereby. No proceedings on the part of ICN are
necessary to authorize the execution and delivery of this
Agreement and, except as provided in Section 5.04 below, the
consummation of such transactions. This Agreement and all
other agreements herein contemplated to be executed by ICN
20
have been duly executed and delivered by ICN and constitute
legal, valid, and binding obligations of ICN enforceable
against ICN in accordance with their respective terms,
subject as to enforceability to applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors' rights generally and
to the application of equitable principles and judicial
discretion.
4.07. No Conflict With Judgments and Decrees. The
consummation of the Merger in accordance with the terms,
conditions, and provisions of this Agreement will not
conflict with, or result in a breach of, any term,
condition, or provision of any judgment, order, injunction,
decree, writ, or ruling of any court or tribunal, either
domestic or foreign, to which ICN or either Stockholder is
subject.
4.08. Government Approvals. No consent, approval,
order, or authorization of, or registration, declaration, or
filing with, any federal, state, or local governmental
authority is required to be made or obtained by ICN in
connection with the execution and delivery of this Agreement
by ICN or the consummation by ICN of the transactions
contemplated hereby.
4.09. Financial Statements. ICN has previously
delivered to the Company true, correct, and complete copies
of the following financial statements (the "ICN Financial
Statements"): audited financial statements for the period
from July 30, 1999 (date of incorporation) through June 30,
2000.
ICN's fiscal year end is June 30. Except as set forth
in this Section 4.09, the ICN Financial Statements (a) are
and will continue to be a true and correct reflection of the
financial condition of ICN as of the dates therein; (b) were
and will continue to be through the Closing Date of the
Merger prepared in accordance with GAAP; (c) were and will
continue to be through the Closing Date of the Merger
prepared in accordance with the books and records of ICN;
(d) fairly present ICN's financial condition and the results
of its operations at the relevant dates thereof and for the
years or periods covered thereby, subject in the case of the
unaudited interim financial statements, to normal year end
audit adjustments; (e) contain and reflect all necessary
adjustments and accruals for a fair presentation of its
financial condition and the results of its operations for
the periods covered by such financial statements; and (f)
contain and reflect reasonable provisions for reserves and
for all reasonably anticipated liabilities for all taxes,
federal, state, or local, with respect to the periods then
ended and all prior periods. All of the receivables of ICN,
net of any allowance for doubtful accounts, reflected in the
balance sheets for the unaudited interim financial
statements are valid and legally binding, represent bona
fide transactions, arose in the ordinary course of business,
and are collectible in accordance with the terms of such
receivables, without setoff or counterclaim.
4.10. Internal Accounting Controls. ICN (a) keeps books,
records, and accounts that accurately, fairly, and in
reasonable detail reflect its assets and transactions; and
(b) maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i)
transactions are accurately and promptly recorded; (ii)
transactions are executed in accordance with management's
specific or general authorizations; and (iii) access to its
assets is permitted only in accordance with management's
general or specific authorization.
21
4.11. No Undisclosed Liabilities. Except as set forth
in the ICN Financial Statements, ICN has no liabilities or
obligations of any nature, whether absolute, accrued,
contingent, or otherwise, and whether due or to become due
(including without limitation any liability for taxes and
interest, penalties, and other charges payable with respect
to any such liability or obligation) which have had or could
have a Material Adverse Effect.
4.12. Absence of Certain Changes. Since June 30,
2000, and except for ICN's pending acquisition of additional
leased space and related equipment in a new facility in
addition to its present location, there has not been with
respect to ICN:
(a) any transaction not in the ordinary course
of business that has had or could have a Material Adverse
Effect;
(b) any change in the business, property,
assets, liabilities (whether absolute, accrued, contingent,
or otherwise), operations, liquidity, income, condition
(financial or otherwise), prospects, or net worth of ICN
that has had or could have a Material Adverse Effect;
22
(c) a declaration, or an agreement to declare
or make any payment of dividends or distributions of any
assets of any kind to the stockholders of ICN, or a
redemption, or agreement or authorization to redeem any of
ICN Stock;
(d) any damage, destruction, or loss,
extraordinary or otherwise and whether or not covered by
insurance, that has had or could have a Material Adverse
Effect;
(e) any amendment permitted or made with
regard to any material contract, material license, or
material agreement to which ICN is a party;
(f) any acquisition or disposition by ICN of
any property or asset, whether real or personal, having a
fair market value in an amount greater than $10,000, except
in the ordinary course of business and in conformity with
past practice;
(g) any mortgage, pledge, or subjection to
lien, charge, or encumbrance of any kind or on any of the
respective properties or assets of ICN, except to secure
borrowings in the ordinary course of business and in
conformity with past practice;
(h) any increase in, or commitment to
increase, the compensation payable or to become payable to
any officer, director, employee, or agent of ICN, or any
bonus payment or similar arrangement made to or with any of
such officers, directors, employees, or agents, other than
(except in the case of directors and officers) routine
increases made in the ordinary course of business and in
conformity with past practice;
(i) any incurrence of, guarantee of,
assumption of, or taking any property subject to, any
liability, except for liabilities incurred or assumed or
property taken in the ordinary course of business and in
conformity with past practice;
(j) any adoption of a plan or agreement or
amendment to any plan or agreement providing any new or
additional benefits for officers, directors, or employees;
(k) any material alteration in the manner of
keeping the books, accounts, or records of ICN, or in the
accounting practices therein reflected;
(l) any release or discharge of any obligation
or liability of any Person to ICN of any nature whatsoever,
except in the ordinary course of business and in conformity
with past practice and except in cases that have not had and
could not have a Material Adverse Effect;
(m) any delay by ICN in paying any debt,
charge, or amount owed by ICN in excess of 30 days past the
date such amount was due;
(n) any increase or decrease of (i) any
amounts charged for services rendered or products sold by
ICN; or (ii) inventory ordered, except, in either case, in
the ordinary course of business and in conformity with past
practice;
(o) any facts or circumstances that may
reasonably result in the loss of customers, suppliers, or
vendors of ICN, including without limitation, any notices,
statements, or circumstances indicating that any customer,
supplier, or vendor has or will terminate or alter its
business relationship with ICN;
(p) any loan by ICN to any officer or Director
of ICN, or any Affiliate thereof;
(q) any other event or condition of any
character which has had or could have a Material Adverse
Effect; or
(r) any agreement or authorization to do any
of the above.
4.13. Real and Personal Property.
(a) ICN has good and marketable title to each
of the items of real and personal tangible and intangible
property recorded as owned in the ICN Financial Statements
(except for property sold or otherwise disposed of since
23
June 30, 2000 in the ordinary course of business and in
conformity with past practice), free and clear of all
mortgages, liens, security interests, conditional sales
contracts, encumbrances, leases, equities, claims, charges,
easements, rights-of-way, covenants, conditions, and
restrictions, except (i) those incurred or created in
conformity with past practice; (ii) mortgages and other
encumbrances reflected in the ICN Financial Statements;
(iii) liens for current taxes not yet due and payable; and
(iv) such imperfections of title and encumbrances as do not
detract from, or interfere with, the present use of the
properties subject thereto or affected thereby, or otherwise
impair the value thereof or the operations thereat; and
(b) no officer, director, or employee of ICN,
nor any spouse, child, or other relative or Affiliate
thereof, owns directly or indirectly in whole or in part,
any of such real property or tangible or intangible
personal property.
4.14. Environmental Compliance.
(a) to ICN's knowledge, ICN and any Property
owned or operated by it are in compliance with all
applicable Environmental Laws and have obtained and are in
compliance with all permits, licenses, and other
authorizations required under any Environmental Law. To
ICN's knowledge, there is no past or present event,
condition, or circumstance that is likely to interfere with
the conduct of the business of ICN in the manner now
conducted relating to such entity's compliance with
Environmental Laws or constitute a material violation
thereof or which would have a Material Adverse Effect;
(b) to ICN's knowledge, ICN does not now or
has not leased, operated, owned, or exercised managerial
functions at any facilities or real property with respect to
which such entity, facility, or real property is subject to
any actual proceeding under any Environmental Law, and ICN
is not aware of any facts or circumstances that could give
rise to such a proceeding;
(c) there are no actions or proceedings
pending or, to the knowledge of ICN, threatened against ICN
under any Environmental Law, and ICN has not received any
notice (whether from any regulatory body or private person)
of any violation, or potential or threatened violation, of
any Environmental Law;
(d) there are no actions or proceedings
pending or, to the knowledge of ICN, threatened under any
Environmental Law involving the release or threat of release
of any Polluting Substances at or on (i) any property
currently or in the past owned, operated, or leased by ICN
or over which ICN exercised managerial functions; or (ii) at
any property where Polluting Substances generated by ICN
have been disposed;
(e) there is no Property for which ICN is or
was required to obtain any permit under an Environmental Law
to construct, demolish, renovate, occupy, operate, or use
such property or any portion of it;
(f) ICN has not generated any Polluting
Substances;
(g) there has been no release of Polluting Substances in
violation of any Environmental Law which would
require any report or notification to any governmental or
regulatory authority in or on any property;
(h) neither ICN nor any property is subject
to investigation or, to the knowledge of ICN, threatened or
pending litigation by federal, state, or local officials or
a private litigant as a result of any previous on-site
management, treatment, storage, release, or disposal of
Polluting Substances or exposure to any Polluting
Substances;
(i) there are no underground or above ground
storage tanks on or under any Property which are not in
conformity with any Environmental Law and any property
previously containing such tanks has been remediated in
compliance with all Environmental Laws; and
(j) to ICN's knowledge, there is no asbestos
containing material on any Property owned or operated, or to
be operated by the Company.
4.15. Tax Matters.
(a) within the times and in the manner
prescribed by law, ICN has filed all federal, state, and
local tax returns for which ICN has had the responsibility
for filing, and has timely paid all taxes shown to be due
and payable on such returns;
(b) all tax returns filed by ICN constitute
complete and accurate representations of its tax liabilities
for such years and accurately sets forth all items (to the
extent required to be included or reflected in such returns)
relevant to its future tax liabilities, including the tax
bases of its properties and assets;
(c) ICN has not waived or extended any
applicable statute of limitations relating to the assessment
of federal, state, local, or foreign taxes;
(d) no examination of the federal, state, or
local tax returns of ICN is currently in progress, nor, to
the knowledge of ICN, is any such examination threatened;
and
(e) to the knowledge of ICN, ICN has not
received any communication from any taxing authority
regarding any tax return of ICN with respect to any matter
that has not been closed, settled, waived, or fully
concluded, or would otherwise have a Material Adverse
Effect.
4.16. No Litigation. To the knowledge of ICN, there
are no proceedings that may result in a material liability
to ICN or affect ICN Stock.
24
4.17. Transactions with Affiliates. There are no
transactions by ICN with its officers, directors, employees,
or any Affiliates thereof, and no such person has any
interest in any property owned or used by ICN.
4.18. Personnel. Except as set forth on Schedule 4,
to the knowledge of ICN, no employee of, or party or person
providing services to ICN has any present intention to
terminate his, her, or its relationship with ICN or, in the
case of employees, leave the employ of ICN.
4.19. Contracts. ICN is not a party to any oral or
written contracts, other than those provided or otherwise
disclosed to the Company. ICN has furnished the Company
with a true and complete copy of each such Contract,
including all amendments thereto made through the date
hereof or otherwise disclosed same. Each of such Contracts
is a valid and binding agreement of ICN and all other
parties thereto; there has not occurred any material default
under any of the material terms and conditions thereof, nor
has any event occurred that with the giving of notice or
lapse of time, or both, would constitute any such material
default.
4.20. Employment Matters. To the Knowledge of ICN,
there is no activity or proceeding of any labor organization
(or representative thereof) or employee group to organize
any employees of ICN, or to effectuate or threaten to
effectuate a strike, slowdown, work stoppage, or lockout
with regard to ICN.
4.21. Compliance with Law.
(a) To the knowledge of ICN, the conduct of
the business of ICN to date does not violate any federal,
state, or local laws, statutes, ordinances, rules,
regulations, decrees, orders, permits, or other similar
items in force on the date hereof (including, but not
limited to, any of the foregoing relating to employment
discrimination, employment practices, withholding of taxes
and other sums from employees, ERISA, and environmental
protection or conservation), the enforcement of which could
have a Material Adverse Effect, nor has ICN received any
notice of any such violation.
(b) No prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code
has occurred or is continuing with respect to any employee
pension benefit plan (as defined in Section 3(2) of ERISA)
maintained by ICN or any welfare benefit plan (as defined in
Section 3(1) of ERISA) maintained by ICN. No contributions
are required to be made by ICN with respect to any employee
pension benefit plan.
(c) ICN is not subject to a formal or informal
agreement or enforcement action by any regulatory agency or
authority having jurisdiction over it.
25
4.22. Employee Benefits.
(a) To the knowledge of ICN, neither ICN, nor
any ERISA Affiliate, as determined under Section 414(b),
(c), or (m) of the Code, sponsors, maintains, or otherwise
is a party to, or is currently in default under, or has any
current accrued obligations under any pension, profit
sharing, or other retirement plan, fringe benefit plan,
health, group insurance, or other welfare benefit plan, or
other similar plan, agreement, policy, or understanding,
including, without limitation, any "employee benefit plan"
within the meaning of Section 3(3) of the ERISA, whether
formal or informal and whether legally binding or not under
which ICN or an ERISA Affiliate has any current or future
obligation or liability or under which any present or future
employee of ICN or an ERISA Affiliate, or such present or
former employee's dependents or beneficiaries, has any
current or future rights to benefits (each such plan,
agreement, policy, or understanding being hereinafter
referred to individually as a "Plan"). Neither ICN nor any
ERISA Affiliate has any formal plan or commitment, whether
legally binding or not, to create any additional Plan or
modify or change any existing Plan that would affect any
present or former employee of ICN, or such present or former
employee's dependents or beneficiaries. Except as disclosed
of Schedule 4 hereof, ICN is not now, and has not been, a
part of a controlled group of corporations within the
meaning of Section 414(b) of the Code or a group of trades
or businesses under common control within the meaning of
Section 414(c) of the Code.
(b) Neither ICN nor any ERISA Affiliate has
ever sponsored, adopted, maintained, or been obligated to
contribute to a single employer, multiple employer, or
multiemployer defined benefit pension plan which is, or ever
was, subject to the provisions of Title IV of ERISA.
Neither ICN nor any ERISA Affiliate has ever sponsored,
adopted, maintained, or been obligated to contribute to a
Plan which is, or ever was, subject to the minimum funding
standards of Section 302 of ERISA and Section 412 of the
Code. Neither ICN nor any ERISA Affiliate has any
obligation in connection with any Plan pursuant to the terms
of a collective bargaining agreement. ICN and all ERISA
Affiliates have made or will make all contributions required
to be made by ICN and all ERISA Affiliates under each Plan
for all periods through and including the Effective Date or
adequate accruals therefore have been made or will be
provided.
(c) Each Plan, if any, has been maintained and
administered in all material respects in accordance with
applicable laws, including, but not limited to, the Age
Discrimination in Employment Act, as amended, Title X of the
COBRA, ERISA, and the Code. All reports required by any
governmental agency with respect to each Plan, if any, have
been timely filed. ICN shall cooperate in full with any
action deemed reasonably necessary by ICN to ensure
compliance with any federal or state law applicable to a
Plan, whether such action occurs prior to, on, or after the
Effective Date. There are no pending, or to the knowledge
of ICN, threatened or anticipated, claims or actions with
respect to any Plan (other than routine claims for benefits
by employees covered under any such Plan and their
beneficiaries). No "prohibited transaction" as defined in
Section 406 of ERISA or Section 4975 of the Code has
occurred with respect to any Plan, excluding transactions
effected pursuant to a statutory or administrative
exemption. No tax under Section 4980B of the Code has been
incurred, or is reasonably expected to be incurred, in
respect of any Plan that is a group health plan as defined
in Section 162(i)(2) of the Code. No lien has been filed by
any person or entity on the assets of ICN or any ERISA
Affiliate relating to the operation or maintenance of a
Plan, and no lien exists by operation of law or otherwise on
the assets of ICN as a result of the operation or
maintenance of a Plan or any other similar plan or plans,
and neither ICN nor any ERISA Affiliate has knowledge of the
existence of facts or circumstances that could result in the
imposition of such a lien.
26
(d) Each Plan that is intended to be
"qualified" within the meaning of Section 401(a) of the Code
is so qualified, both as to form and operation and all
necessary governmental approvals, including a favorable
determination as to the qualification under the Code of each
such Plan, and each amendment thereto, have been obtained.
(e) Neither ICN nor any ERISA Affiliate has
any current or projected liability in respect of post-
employment or post-retirement benefits for retired or former
employees of ICN or an ERISA Affiliate, or such present or
former employees' dependents or beneficiaries, except as
required to avoid excise tax under Section 4980B of the
Code. With respect to each Plan that is funded wholly or
partially through an insurance policy, there will be no
liability of ICN, as of the Effective Date, under any such
insurance policy or ancillary agreement with respect to such
insurance policy.
(f) A true and complete copy of each Plan, if
any, that covers any employee or former employee of ICN
(and, if applicable, related trust agreements) and all
amendments thereto and written interpretations thereof have
been furnished to the Company, together with (i) the most
recent favorable determination letter, if any, with respect
to each Plan; (ii) the two most recent annual reports
prepared in connection with any such Plan (Form 5500,
including all applicable schedules); (iii) the most recent
actuarial valuation report, if any, prepared in connection
with any such Plan; and (iv) the most recently disseminated
summary plan description and an explanation of any material
plan modifications made after the date thereof.
4.23. Absence of Unethical Business Practices. Neither
ICN, nor any director or officer thereof, has directly or
indirectly given or agreed to give any gift or similar
benefit to any customer, contractor, government, employee,
or other Person who was or is in a possible position to help
or hinder ICN, which gift or benefit (a) might subject ICN
to any damages or penalties in any civil or criminal
proceeding; (b) might have had a Material Adverse Effect; or
(c) might have a Material Adverse Effect if not continued.
4.24. No Conflict With Other Instruments. The
consummation of the Merger in accordance with the terms,
conditions, and provisions of this Agreement will not be in
material conflict with, or result in a material breach of,
any term, condition, or provision of, or constitute a
material default under, any contract, indenture, mortgage,
deed of trust, or other material agreement or instrument to
which ICN is a party and will not constitute an event that
with the lapse of time or action by a third party could
result in any material default under any of the foregoing,
or result in the creation of any lien, charge, or
encumbrance upon any of the assets or properties of ICN or
ICN Stock.
28
4.25. Insurance. ICN has policies of insurance in
effect in such amounts as are adequate to protect its assets
and properties and consistent with its past practices There
are no pending claims under any insurance policy of ICN nor,
to the knowledge of ICN, any facts or circumstances that may
cause the cancellation of any insurance policy held by ICN
or the repudiation of any claims thereunder, nor prevent the
insurance policies it presently has in force from being
renewed or require onerous conditions to renewal that are
not currently in effect with regard to such insurance
policies.
4.26. Accounts Receivable. The accounts receivable of
ICN have arisen in the ordinary course of business and are
valid and enforceable subject to no defenses, setoffs, or
counterclaims.
4.27. Intellectual Property.
(a) Schedule 4 sets forth a true and complete
list of intellectual property owned or licensed by ICN
(other than off-the-shelf software). Except as indicated on
Schedule 4, ICN has full and exclusive right, title, and
interest in and to, or license rights to, all patents,
patent applications, registered or unregistered trademarks,
service marks, and trade names, registered or unregistered
copyrights and applications therefor, licenses, approvals,
or governmental authorizations to conduct its business as
now conducted, know-how, proprietary rights and processes,
trade secrets, customer lists, methodologies (to the extent
protectable), proprietary development and marketing
information and know-how, inventions, inventors' notes (to
the extent such notes exist), drawings, designs associated
with the foregoing, and other confidential information
(collectively, "Intellectual Property") relating to its
business or otherwise used in or necessary for the proper
conduct of its business, free and clear of all liens,
security interests, claims and encumbrances of any nature;
and ICN has no obligation to any other Person or entity with
respect to the Intellectual Property or any product or
process of ICN utilizing or embodying any Intellectual
Property.
(b) There is (i) no infringement, misuse, or
misappropriation of any Intellectual Property owned,
licensed or controlled by any third party arising out of any
product or process now being used, manufactured, or
distributed, or ever having been used, manufactured, or
distributed at any time previously, by or on behalf of ICN;
(ii) no pending or, to the knowledge of ICN, threatened
claim or challenge of or proceeding for infringement, misuse
or misappropriation of or interference with any Intellectual
Property owned, licensed, or controlled by any third party
arising out of any product or process now being used,
manufactured, or distributed, or ever having been used,
manufactured, or distributed at any time previously, by or
on behalf of ICN; (iii) except as set forth in Schedule 4
hereto, no pending or threatened or potential claim,
challenge or proceeding by ICN against any third party for
infringement, misuse, or misappropriation of or interference
with any Intellectual Property owned, licensed, or
controlled by ICN; or (iv) no notice or facts or information
rendering any Intellectual Property owned, controlled, or
licensed by ICN invalid or unenforceable, nor is there any
allegation that any such Intellectual Property is invalid or
unenforceable.
29
(c) ICN has not disclosed any material
confidential information developed or utilized by ICN to any
third party except on a confidential basis, pursuant to a
confidentiality agreement, and with no intention to entitle
such third party to use such information other than for the
purposes set forth in such confidentiality agreement. To
the Knowledge of ICN, no third party has disclosed
confidential information developed or utilized by ICN to any
Person except as specifically authorized by ICN.
4.28. Minute Books. The minute books of ICN
accurately reflect all material actions taken by the
stockholders of ICN and its Board of Directors.
4.29. ▇▇▇▇-▇▇▇▇▇. Within the meaning of ▇▇▇▇-▇▇▇▇▇,
neither ICN nor any of its Affiliates (i) is engaged in
manufacturing; (ii) has total assets of $10 million or more;
or (iii) has annual net sales of $100 million or more.
4.30. Sufficiency of Assets. The assets and
properties currently owned and operated by ICN constitute,
in the aggregate, all of the assets and properties used in
the conduct of ICN's business in the manner in which and to
the extent to which such business is currently being
conducted. ICN has not received any notice from any current
supplier of items essential to the conduct of its business
that such supplier intends to terminate or materially alter
a business relationship for any reason, and no such supplier
intends to terminate or materially alter any such business
relationship with ICN. ICN has not received any notice from
any customer that such customer intends to discontinue
purchases of products or services from ICN, and, to the
knowledge of ICN, no such customer intends to discontinue or
cancel purchases or orders.
4.31. Broker's Agents and Finder's Fees. There is no
agent's, broker's, or finder's fee or commission payable, or
that will be payable, in connection with the transactions
contemplated by this Agreement by virtue of, or resulting
from, any action or agreement by ICN or any Affiliate
thereof.
4.32. Disclosure. The information with respect to ICN
heretofore provided and to be provided by ICN pursuant to
this Agreement, including any Exhibits and/or Schedules
hereto, and each of the representations, agreements,
documents, certificates and writings to be delivered to ICN
or its representatives at the Closing, do not and will not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated herein or
therein or necessary in order to make the statements and
writings contained herein or therein not false or misleading
in the light of the circumstances under which they were
made.
30
ARTICLE V
COVENANTS OF ICN
ICN hereby covenants and agrees with the Company to
the following as of the date hereof to the Effective Time:
5.01. Affirmative Covenants of ICN. ICN will operate
its business only in the usual, regular, and ordinary
manner, and to the extent consistent with such operations,
ICN will use its best efforts to (a) preserve intact its
present business organizations; (b) keep available all the
services of its present officers and employees; (c) preserve
its present business relationships with depositors,
borrowers, and others having business dealings with it; (d)
maintain and keep its material properties in good repair and
condition as at present, except for deterioration due to
ordinary wear and tear and damage due to casualty; (e)
maintain, in full force and effect, insurance comparable in
amount and in scope of coverage to that now maintained by
it, including, but not limited to, bankers' blanket bond and
director and officer liability insurance policies as may be
in effect as of the date of this Agreement; (f) perform all
of its material obligations under contracts, leases, and
documents relating to or affecting its assets, properties,
and businesses; and (g) comply with and perform all material
obligations and duties imposed upon it by federal, state,
and local laws, and all rules, regulations, and orders
imposed by federal, state, or local governmental
authorities, except as may be contested by it in good faith
by appropriate proceedings.
5.02. Negative Covenants of ICN. Unless ICN shall
have received the prior written consent of the Company and
Company Sub, which consent shall not be unreasonably
withheld, ICN shall not do or cause to have done any of the
following except for those previously disclosed to the
Company and Company Sub:
(a) enter into any transaction not in the
ordinary course of business that could have a Material
Adverse Effect;
(b) make or allow any change in the business,
Property, assets, liabilities (whether absolute, accrued,
contingent, or otherwise), operations, liquidity, income,
condition (financial or otherwise), prospects, or net worth
of ICN that could have a Material Adverse Effect;
(c) declare or make any payment of dividends
or distributions of any assets of any kind to the
stockholders of ICN, or redeem or authorize the redemption
of any of ICN Stock;
(d) amend any material contract, material
license, or material agreement to which ICN is a party;
(e) acquire or dispose of any Property or
asset, whether real or personal, having a fair market value
in an amount greater than $50,000, except in the ordinary
course of business and in conformity with past practice;
31
(f) mortgage, pledge, or subject to any lien,
charge, or encumbrance of any kind any of the properties or
assets of ICN, except to secure borrowings in the ordinary
course of business and in conformity with past practice;
(g) increase, or commit to increase, the
compensation payable or to become payable to any officer,
director, employee, or agent of ICN, or any bonus payment or
similar arrangement made to or with any of such officers,
directors, employees, or agents, other than (except in the
case of directors and officers) routine increases made in
the ordinary course of business and in conformity with past
practice;
(h) incur, guarantee, assume, or take any
Property subject to any liability, except for liabilities
incurred or assumed or Property taken in the ordinary
course
of business and in conformity with past practice;
(i) adopt a plan or agreement or amend any
plan or agreement providing any new or additional benefits
for officers, directors, or employees;
(j) make or allow any material alteration in
the manner of keeping the books, accounts, or records of
ICN, or in the accounting practices therein reflected;
(k) release or discharge any obligation or
liability of any Person to ICN of any nature whatsoever,
except in the ordinary course of business and in conformity
with past practice and except in cases that have not had and
could not have a Material Adverse Effect;
(l) delay in paying any material debt, charge,
or amount owed by ICN in excess of 30 days past the date
such amount was due;
(m) amend, restate, or rescind the Articles of
Incorporation or Bylaws of ICN;
(n) make any loan to any officer or director
of ICN, or any Affiliate thereof; or
(o) enter into any agreement or authorization
to do any of the above.
5.03. Information for Applications. ICN will
cooperate with and will use reasonable efforts to furnish
the Company with all the information concerning ICN required
for inclusion in (a) all applications filed or to be filed
by the Company with the SEC and any other governmental or
32
regulatory agency or department for authority to consummate
the transactions contemplated by this Agreement; and (b) any
other application or statement to be made by the Company to
any governmental body in connection with such matters. ICN
represents and warrants that all information so furnished
for such statements and applications shall be true and
correct in all material respects without omission of any
material fact required to be stated to make the information
stated therein not misleading.
5.04. Shareholder Approval and Best Efforts. As soon
as is practical but in no event later than December 26,
2000, ICN will cause a special meeting of shareholders to be
duly called and held or a written consent of majority
shareholders to be executed to authorize, approve, and adopt
this Agreement and the transactions contemplated hereby.
The Board of Directors of ICN will (a) recommend approval
of this Agreement to its shareholders; and (b) use its best
efforts to take or cause to be taken all other actions
necessary, proper, or advisable to consummate this
Agreement.
ARTICLE VI
COVENANTS OF THE COMPANY AND COMPANY SUB
The Company and Company Sub each hereby covenants and
agrees with ICN to the following as of the date hereof
through the Effective Time:
6.01. Affirmative Covenants of the Company and Company
Sub. Each of the Company and Company Sub will operate its
business only in the usual, regular, and ordinary manner,
and to the extent consistent with such operations, each of
the Company and Company Sub will use its best efforts to (a)
preserve intact its present business organizations; (b) keep
available all the services of its present officers and
employees; (c) preserve its present business relationships
with depositors, borrowers, and others having business
dealings with it; (d) maintain and keep its material
properties in good repair and condition as at present,
except for deterioration due to ordinary wear and tear and
damage due to casualty; (e) maintain, in full force and
effect, insurance comparable in amount and in scope of
coverage to that now maintained by it, including, but not
limited to, bankers' blanket bond and director and officer
liability insurance policies as may be in effect as of the
date of this Agreement; (f) perform all of their material
obligations under contracts, leases, and documents relating
to or affecting its assets, properties, and businesses; (g)
comply with and perform all material obligations and duties
imposed upon them by federal, state, and local laws, and all
rules, regulations, and orders imposed by federal, state, or
local governmental authorities, except as may be contested
by it in good faith by appropriate proceedings; (h) maintain
the Company's current listing in good standing on the NASD's
OTCBB; (i) deliver all funds in the Company's bank
account(s) in the aggregate amount of $42,844 to ICN on or
prior to the Effective Time, close all such bank account(s)
and provide evidence thereof satisfactory to ICN on or prior
to the Effective Time; (j) deliver all of the Company's and
Company Sub's corporate books and records to the Company's
officers and directors as of the Effective Time; and ((k)
comply with any and all SEC and/or regulatory or self-
regulatory agency comments or suggestions relating to the
Company's previously filed financial statements and to the
use of a Canadian auditing firm.
33
6.02. Negative Covenants of the Company and Company
Sub. Unless the Company or Company Sub shall have received
the prior written consent of ICN, which consent shall not be
unreasonably withheld, the Company and Company Sub, as the
case may be, shall not do or cause to have done any of the
following:
(a) enter into any transaction not in the
ordinary course of business that could have a Material
Adverse Effect;
(b) make or allow any change in the business,
Property, assets, liabilities (whether absolute, accrued,
contingent, or otherwise), operations, liquidity, income,
condition (financial or otherwise), prospects, or net worth
of the Company or Company Sub that could have a Material
Adverse Effect;
(c) declare or make any payment of dividends
or distributions of any assets of any kind to the
stockholders of the Company or Company Sub, issue any
additional Company securities or any additional Company Sub
Securities, or enter into any agreements, arrangements or
understandings in connection therewith, other than as
provided for herein, or redeem or authorize the redemption
of any of the Company Stock or Company Sub Stock;
(d) amend any material contract, material
license, or material agreement to which the Company or
Company Sub is a party;
(e) acquire or dispose of any Property or
asset, whether real or personal, having a fair market value
in an amount greater than $10,000 not previously disclosed
in writing to ICN, except in the ordinary course of
business and in conformity with past practice;
(f) mortgage, pledge, or subject to any lien,
charge, or encumbrance of any kind any of the properties or
assets of the Company or of the Company Sub, except to
secure borrowings in the ordinary course of business and in
conformity with past practice;
(g) increase, or commit to increase, the
compensation payable or to become payable to any officer,
director, employee, or agent of the Company or Company Sub,
or any bonus payment or similar arrangement made to or with
any of such officers, directors, employees, or agents, other
than (except in the case of directors and officers) routine
increases made in the ordinary course of business and in
conformity with past practice;
(h) incur, guarantee, assume, or take any
Property subject to any liability, except for liabilities
incurred or assumed or Property taken in the ordinary course
of business and in conformity with past practice;
(i) adopt a plan or agreement or amend any
plan or agreement providing any new or additional benefits
for officers, directors, or employees;
34
(j) make or allow any material alteration in
the manner of keeping the books, accounts, or records of the
Company or Company Sub, or in the accounting practices
therein reflected;
(k) release or discharge any obligation or
liability of any Person to the Company or Company Sub of any
nature whatsoever, except in the ordinary course of business
and in conformity with past practice and except in cases
that have not had and could not have a Material Adverse
Effect;
(l) delay in paying any debt, charge, or
amount owed by the Company or Company Sub in excess of 30
days past the date such amount was due;
(m) amend, restate, or rescind the Restated
Articles of Incorporation or Bylaws of the Company or
Company Sub;
(n) make any loan to any officer or director
of the Company or Company Sub, or any Affiliate thereof;
(o) delisting of Company Stock from the
NASD/OTCBB; or
(p) enter into any agreement or authorization
to do any of the above.
6.03. Securities Laws Filings. The Company will
file with the SEC (a) all requisite Form 10-QSB quarterly
and other Exchange Act filings until the Closing Date of
this Agreement, at which time, the then current management
of the Company will be responsible for all filings and (b)
will file with any other governmental or regulatory or self-
regulatory agency or department, including but not limited
to the NASD, or department any other application or
statement to be made by the Company necessary to consummate
the transactions contemplated by this Agreement and to
maintain its current listing on the NASD OTCBB. The Company
represents and warrants that all information so furnished
for such statements and applications shall be true and
correct in all material respects without omission of any
material fact required to be stated to make the information
stated therein not misleading.
6.04. Approvals and Best Efforts. On or before
January 12, 2001, the Company will, in
accordance with all applicable laws, rules and
regulations, use its best efforts to take or
cause to be taken all actions necessary, proper,
or advisable to consummate this Agreement and
the transactions described herein, including
but not limited to obtaining any and all
required or desired approvals of the NASD and
OTCBB, and shall obtain the approval thereof of
the Board of Directors of each of the Company
and Company Sub and the approval thereof by
written consent of the Company as the sole
shareholder of the Company Sub. No approvals of
any type are required of the Company's
shareholders in connection with the consummation
of the transactions contemplated hereby.
35
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
AND COMPANY SUB TO CLOSE
The obligations of the Company and of the Company Sub
to cause the Merger to be consummated shall be subject to
the satisfaction on or before the Closing Date of all of the
following conditions, except as the Company and Company Sub
may waive such conditions in writing:
7.01 Approval by Directors and
Shareholders of ICN. Pursuant to the written consent of
ICN's directors and at a meeting of shareholders of ICN duly
called and held for such purpose, or pursuant to a written
consent of the majority of the issued and outstanding shares
of ICN Stock, this Agreement and the transactions described
herein shall have been duly approved by the requisite vote
of such directors and shareholders.
7.02. Regulatory Approvals. Orders, consents, and
approvals in form and substance reasonably satisfactory to
the Company shall have been entered by the SEC, NASD/OTCBB
and any other applicable governmental or regulatory or self-
regulatory agency/agencies granting the authority necessary
for consummation of the transactions contemplated by this
Agreement.
7.03. Litigation. On the Closing Date, there shall
not be pending or threatened litigation in any court or any
proceeding by any governmental commission, board, or agency
with a view to seeking, or in which it is sought, to
restrain or prohibit consummation of the Merger, or in which
it is sought to obtain divestiture, rescission, or damages
in connection with the Merger or the consummation of the
Merger, and to the knowledge of any of the parties hereto,
no investigation by any governmental agency shall be pending
or threatened that might result in any such suit, action, or
other proceeding.
7.04. Representations and Warranties; Absence of
Material Changes in Schedules. All representations and
warranties of ICN contained in this Agreement shall be true
in all material respects on and as of the Closing Date, and
ICN shall have performed all agreements and covenants
required by this Agreement to be performed by it on or prior
to the Closing Date. ICN shall not have updated or amended
its Schedules to reflect or disclose a material adverse
effect in its business, financial condition, results of
operations, or future prospects.
7.05. Fulfillment of Covenants. ICN shall have
fulfilled all of the covenants set forth in Article V in all
material respects.
36
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF ICN TO CLOSE
The obligation of ICN to cause the Merger to be
consummated shall be subject to the satisfaction on or
before the Closing Date of all the following conditions,
except as ICN may waive such conditions in writing:
8.01. Approval by Directors of Company and Company
Sub; Approval of Company Sub Shareholder. Pursuant to the
written consent of the directors of each of the Company and
Company Sub and the written consent of the Company as the
sole shareholder of the Company Sub, this Agreement and the
transactions described herein shall have been duly approved
by the requisite vote of such directors and shareholder.
8.02. Regulatory Approvals. Orders, consents, and
approvals in form and substance reasonably satisfactory to
ICN shall have been entered by the SEC, NASD/OTCBB and any
other applicable governmental or regulatory or self-
regulatory agency/agencies granting the authority necessary
for consummation of the transactions contemplated by this
Agreement.
8.03. Litigation. On the Closing Date, there shall
not be pending or threatened litigation in any court or any
proceeding by any governmental commission, board, or agency
with a view to seeking, or in which it is sought, to
restrain or prohibit consummation of the Merger or other
transactions described herein, or in which it is sought to
obtain divestiture, rescission, or damages in connection
with the Merger or the consummation of the Merger or other
transactions described herein, and to the knowledge of any
of the parties hereto, no investigation by any governmental
agency shall be pending or threatened that might result in
any such suit, action, or other proceeding.
8.04. Representations and Warranties; Absence of
Material Changes in Schedules. All representations and
warranties of the Company and of Company Sub contained in
this Agreement shall be true in all material respects on and
as of the Closing Date, and each of the Company and Company
Sub shall have performed all agreements and covenants
required by and terms and conditions of this Agreement to be
performed by it on or prior to the Closing Date. Each of
the Company and Company Sub shall not have updated or
amended any of its Schedules to reflect or disclose a
material adverse effect in its business, financial
condition, results of operations, or future prospects.
8.05. Fulfillment of Covenants. Each of the Company
and Company Sub shall have fulfilled all of the covenants
set forth in Article VI in all material respects.
37
8.06. ICN Dissenters' Rights. Dissenters' rights are
not exercised by ICN's shareholders representing ten
percent (10%) or more of the issued and outstanding ICN Stock.
ARTICLE IX
EXPENSES
Costs and expenses relating to the negotiation and
drafting of this Agreement and the transactions contemplated
hereby shall be borne and paid by the Surviving Corporation,
and shall not exceed $5,000 in connection with such costs
and expenses incurred on behalf of the Company and Company
Sub.
ARTICLE X
CLOSING DATE AND EFFECTIVE TIME
The closing of this Agreement and the transactions
contemplated hereby shall be held on a mutually agreed upon
time, date and place. The "Closing Date" shall be the later
of: (a) the fulfillment of all of the conditions to be met
by the Company and Company Sub and all other conditions as
set forth in Article VIII above and the fulfillment of all
of the conditions to be met by ICN set forth in Article VII
above; (b) such later date as the presidents of the Company,
Company Sub and ICN, respectively, may agree upon in
writing; or (c) with respect to any of the above, if such
date is not a business day, then the next business day
following. Subject to the terms and upon satisfaction on or
before the Closing Date of all requirements of law and
conditions specified in this Agreement, the Company, Company
Sub and ICN shall, at the Closing Date, execute,
acknowledge, and deliver such other documents and
instruments and take such further action as may be necessary
or appropriate to consummate the Merger. Immediately
thereafter, the Company and ICN shall file, or cause to be
filed, with the SEC, NASD/OTCBB, the Florida Secretary of
State, and any other governmental or regulatory or self-
regulatory agency all necessary documents and instruments to
consummate the Merger. The "Effective Time" is the date on
which the Merger is effective, which shall be on the date
specified in the Articles of Merger to be issued by the
Florida Secretary of State, and if no date is specified in
such certificate, then the Effective Time shall be the time
of the opening of business on the date the Articles of
Merger are recorded by the Florida Secretary of State.
At the closing, the following documents shall be
delivered:
(a) each of the Company and Company Sub shall
deliver or cause to be delivered to ICN:
(i) a certificate executed by the President
and Secretary of each of the Company and
Company Sub, in form and substance
satisfactory to the ICN, confirming as of
the Closing Date that all representations,
warranties and covenants made by each of
the Company and Company Sub are true and
correct as of the closing, and that all of
the terms and conditions of the Agreement
have been fully complied with by the
Company and Company Sub;
38
(ii) a certificate from each of the Secretary
of State of Nevada and Florida dated at or
about the date of closing to the effect,
as to the Company, that the Company is in
good standing and, as to the Company Sub,
that its status is active, under the laws
of each such respective state;
(iii) such other instruments, documents and
certificates, if any as are required to be
delivered pursuant to the terms and
provisions of this Agreement;
(iv) executed copies of the Articles of Merger
for filing with the Florida Secretary of
State; and certified copies of resolutions
by the directors of the Company and
Company Sub, and the Company as the sole
shareholder of Company Sub authorizing the
execution, delivery and performance of
this Agreement and the consummation of the
transactions described herein;
(v) resignations of all officers and
directors of the Company and Company Sub;
(vi) stock certificates representing those
shares of Company Stock to be issued as a
part of the exchange described in Article
II hereof; and
(vii) all other items, the delivery of which is
a condition precedent to the obligations
of ICN, as set forth in Article VIII
hereof.
(b) ICN shall deliver or cause to be delivered to
the Company and Company Sub:
(i) a certificate executed by the President
and Secretary of ICN, in form and
substance satisfactory to the Company and
Company Sub, confirming as of the Closing
Date that all representations, warranties,
covenants and covenants made by ICN are
true and correct as of the closing, and
that all of the terms and conditions of
the Agreement have been fully complied
with by ICN;
(ii) a certificate from the Secretary of State
of Florida dated at or about the date of
closing to the effect that the status of
ICN is active under the laws of such
state;
(iii) such other instruments, documents and
certificates, if any as are required to be
delivered pursuant to the terms and
provisions of this Agreement;
(iv) executed copies of the Articles of Merger
for filing with the Florida Secretary of
State; and certified copies of resolutions
by the directors of ICN and a majority of
the shareholders of ICN authorizing the
execution, delivery and performance of
this Agreement and the consummation of the
transactions described herein; and
39
(v) all other items, the delivery of which is
a condition precedent to the obligations
of the Company and Company Sub as set
forth in Article VII hereof.
ARTICLE XI
DEFINITIONS
The following terms as used in this Agreement shall
have the meanings set forth below:
"Affiliate" shall mean, as to any Person, any Person
controlled by, controlling, or under common control with
such Person, and, in the case of a Person who is an
individual, a member of the family of such individual
consisting of a spouse, sibling, in-law, lineal descendant,
or ancestor (including by adoption), and the spouses of any
such individuals. For purposes of this definition, control
(including the terms, controlling, controlled by, and under
common control with) of a Person means the possession,
directly or indirectly, alone or in concert with others, of
the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership
of securities, by contract or otherwise, and no Person shall
be deemed in control of another solely by virtue of being a
director, officer or holder of voting securities of any
entity. A Person shall be presumed to control any
partnership of which such Person is a general partner.
"Environmental Laws" shall mean laws, including,
without limitation, federal, state, local, or foreign laws,
ordinances, rules, regulations, interpretations, and orders
of courts or administrative agencies or authorities relating
to pollution, environmental protection, health and safety,
or similar laws (including, without limitation, ambient air,
surface water, ground water, land surface, and subsurface
strata), including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act of
1980, as amended ("CERCLA"), the Federal Clean Water Act
("CWA"), the Safe Drinking Water Act ("SDWA"), the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA"),
the Clean Air Act ("CAA"), the Emergency Planning and
Community Right to Know Act ("EPCRA"), the Occupational
Safety and Health Act ("OSHA"), and other laws relating to
pollution or protection of the environment, or to the
manufacturing, processing, distribution, use, treatment,
handling, storage, disposal, or transportation of Polluting
Substances.
"Governmental Authority" means any nation or
government, any state, regional, local, or other political
subdivision thereof, and any entity or official exercising
executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Knowledge" shall mean, with respect to ICN, the
knowledge of its officers and directors, and shall mean,
with respect to the Company, the knowledge of its officers
and directors. An individual shall be deemed to have
"knowledge" of a particular fact or other matter if (i) such
individual is actually aware of such fact or other matter,
or (ii) a prudent person serving in the same capacity as
such individual would be expected to discover or otherwise
become aware of such fact or other matter in the course of
performing the official duties of such individual.
40
"Material Adverse Effect" means any development,
change, or effect that is materially adverse to the
business, properties, tangible or intangible assets, net
worth, condition (financial or other), results of
operations, or prospects of the entity to which it refers.
"Person" shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d)(3) and 14(d)(2) of such act.
"Polluting Substances" shall be construed broadly to
include (a) asbestos, (b) petroleum products or wastes, (c)
biomedical or biological wastes, and (d) all pollutants,
contaminants, chemicals, or industrial, toxic, or hazardous
substances or wastes and shall include, without limitation,
any flammable explosives, radioactive materials, oil,
hazardous materials, hazardous or solid wastes, hazardous or
toxic substances or regulated materials defined in CERCLA,
CWA, SDWA, RCRA, EPCRA, and CAA and/or any other
Environmental Laws, as amended, and in the regulations
adopted and publications promulgated thereto; provided, to
the extent that the laws of the State of Florida establish a
meaning for, hazardous substance, hazardous waste, hazardous
materials, solid waste, or toxic substance, which is broader
than that specified in any of CERCLA, CWA, SDWA, RCRA,
EPCRA, and CAA or other Environmental Laws such broader
meaning shall apply.
"Property" includes any property (whether real or
personal) which the entity to which it refers currently or
in the past has leased, operated, owned, or managed in any
manner, including, without limitation, any property acquired
by foreclosure or deed in lieu thereof and property held as
security for a loan or other indebtedness by the Company on
the date hereof.
ARTICLE XII
AMENDMENTS
This Agreement may be amended only by written
agreement duly authorized by the boards of directors of the
parties hereto prior to the Closing Date, provided that any
amendments that are not material to the transactions
contemplated by this Agreement may be approved by written
agreement executed by the presidents of the Company, Company
Sub and ICN, respectively. After the meetings of
shareholders of ICN and the shareholders of the Company Sub
(or votes taken by written consent of the majority of the
outstanding shares of ICN Stock and Company Sub Stock, as
applicable) wherein this Agreement is considered and
approved, no amendment hereto shall be made that would
change the exchange rate specified in Section 2.02 above
for which each share of ICN Stock shall be exchanged for
Company Stock immediately prior to the consummation of the Merger.
41
ARTICLE XIII
TERMINATION
This Agreement shall terminate automatically if the
Merger shall not become effective on or before January 12,
2001, unless the parties hereto, acting pursuant to the
authority of their respective boards of directors, shall
have otherwise agreed in writing on or prior to that date to
extend such date. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after
action thereon has been taken by the shareholders of ICN or
the stockholders of the Company, as follows:
(a) By mutual consent of the Company, Company
Sub and ICN acting pursuant to the authority of their
respective boards of directors;
(b) By the Company and Company Sub, if any of
the representations and warranties of ICN contained in this
Agreement shall be false in any material respect as of the
Closing Date, or ICN shall, as of the Closing Date, have
failed to comply with any of its agreements or covenants
contained in this Agreement to be performed at or prior to
the Closing Date, or any conditions to the obligations of
the Company and Company Sub contained in this Agreement
shall not have been satisfied or waived as of the Closing
Date;
(c) By ICN, if any of the representations and
warranties of the Company and/or Company Sub contained in
this Agreement shall be false in any material respect as of
the Closing Date, or the Company and/or Company Sub shall,
as of the Closing Date, have failed to comply with any of
its/their agreements or covenants contained in this
Agreement to be performed at or prior to the Closing Date,
or if any of the conditions to the obligations of ICN
contained in this Agreement shall not have been satisfied or
waived as of the Closing Date; or
(d) By ICN on or prior to the Effective Time,
if its due diligence on the Company,
Company Sub and the transactions contemplated by the parties
hereto is not to its satisfaction, in its sole discretion
and for any reason.
Should this Agreement be terminated for any reason,
such termination shall not prevent the respective boards of
directors of the Company, Company Sub and ICN from
renegotiating the terms of this Agreement. An election by a
party to this Agreement to terminate this Agreement and
abandon the Merger as provided in Paragraphs (a) through (d)
above shall be exercised on behalf of the Company, Company
Sub and ICN by its board of directors and shall become
effective when conveyed in writing and received by the other
party. In the event of a termination of this Agreement
pursuant to Paragraphs (a) through (d) above, this Agreement
shall become void and shall have no effect and create no
liability on the part of any of the parties hereto or their
respective directors, officers, shareholders, employees or
agents.
42
ARTICLE XIV
NOTICES
All notices, requests, demands, and other
communications under this Agreement shall be in writing and
shall be deemed to have been duly given at the time either
personally delivered or sent by registered or certified
mail, postage prepaid, or deposited with a nationally
recognized overnight courier service with written
instructions given for next business day delivery or via
telecopier (in which case notice shall be deemed to have
been duly given upon the sender's receipt of a printed
confirmation reflecting receipt by the recipient) as
follows:
If to the Company: ▇▇▇ ▇▇▇▇▇▇▇▇,
President and CEO
Never Miss A Call, Inc.
▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
If to ICN: ▇▇▇▇▇ ▇▇▇▇▇▇▇, President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Lippm ▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
ARTICLE XV
MISCELLANEOUS
15.01. Execution Via Telecopier and in Counterparts. This Agreement
may be executed via telecopier and in multiple counterparts, each of which
shall be deemed an original and all of which together shall constitute one
agreement.
15.02. Entire Agreement; Severability. This
Agreement and all other instruments, documents and
Agreements executed and delivered in connection with this
Agreement embody the final, entire Agreement among the
parties hereto and supersede any and all prior commitments,
agreements, representations and understandings, whether
written or oral, relating to this Agreement, and may not be
contradicted or varied by evidence of prior, contemporaneous
or subsequent oral agreements or discussions of the parties
hereto. There are no oral agreements among the parties
hereto. If any part of this Agreement is deemed to be
unenforceable by a court of competent jurisdiction, the
balance of the Agreement shall remain in full force and
effect.
43
15.03. Applicable Law; Jurisdiction; Venue. This
Agreement shall be governed by, and construed in accordance
with, the laws of the State of Nevada, except to the extent
that the Florida Business Corporation Act applies.
Jurisdiction and venue for any action and/or proceeding
brought hereunder shall be in the state or federal courts
located in Washoe County, Nevada. The prevailing
party/parties in any such action and/or proceeding shall be
entitled to recover its reasonable attorneys' fees and costs
from the other party/parties.
15.04. Binding Nature of Agreement; Assignment.
This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective
successors and assigns; the parties hereby may not assign or
transfer rights or obligations under this Agreement without
the prior written consent of the other parties hereto.
15.05. Gender, Etc. Words used herein,
regardless of the number and gender specifically used, shall
be deemed and construed to include any other number,
singular or plural, and any other gender, masculine,
feminine, or neuter, as the context requires.
15.06. Section Headings. The section headings
this Agreement are for convenience only and form no part of
this Agreement and shall not affect its interpretation.
15.07. Omissions or Delays. No omission or delay
by the Company, Company Sub, or ICN in exercising any right
or power under this Agreement shall impair such right or
power or be construed to be a waiver of any default or
acquiescence therein, and any single or partial exercise of
any such right or power will not preclude other or further
exercise of any right. No waiver will be valid unless in
writing and signed by the party to be bound thereby, and
then only to the extent specified.
15.08. Survivability of Representations and
Warranties. The respective representations and warranties
of the parties hereto contained in this Agreement shall
survive the consummation of the Merger.
44
IN WITNESS WHEREOF, the duly authorized officers of
the parties hereto have caused this Agreement to be
executed as of the date first written above.
NEVER MISS A CALL, INC.
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇, President
PROVINCE OF BRITISH COLUMBIA )
)ss:
CITY OF VANCOUVER )
The foregoing instrument was acknowledged before me
on this 10th day of January, 2001 by ▇▇▇ ▇▇▇▇▇▇▇▇, as President
of Never Miss A Call, Inc., on behalf of such corporation
who has produced a passport and driver's license as identification
and did take an oath.
Notary Public: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇, Barrister & Solicitor
▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
NMC ACQUISITION CORP.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇, President
PROVINCE OF BRITISH COLUMBIA )
)ss:
CITY OF VANCOUVER )
The foregoing instrument was acknowledged before me
on this 10th day of January, 2001 by ▇▇▇ ▇▇▇▇▇▇▇▇, as President
of Never Miss A Call, Inc., on behalf of such corporation
who has produced a passport and driver's license as identification
and did take an oath.
Notary Public: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇, Barrister & Solicitor
▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
INTER-CALL-NET TELESERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇, President
STATE OF FLORIDA )
)ss:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me on
this 21st day of December, 2000 by ▇▇▇▇▇ ▇▇▇▇▇▇▇, as
President of Inter-Call-Net Teleservices, Inc., on behalf
of such corporation who is personally known to me and
did/did not take an oath.
Notary Public:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
My commission expires: August 19, 2002
45
EXHIBIT A
ARTICLES OF MERGER
The undersigned corporations, in accordance with the Florida
Business Corporation Act, pursuant to Section 607.1105, hereby
submit the following Articles of Merger:
ARTICLE ONE
The name and jurisdiction of the surviving corporation is as
follows:
Name Jurisdiction
Inter-Call-Net Teleservices, Inc. Florida
ARTICLE TWO
The name and jurisdiction of each merging corporation is as
follows:
Name Jurisdiction
NMC Acquisition Corp. Florida
ARTICLE THREE
The Plan of Reorganization and Merger Agreement is attached.
ARTICLE FOUR
The merger shall become effective on the date the Articles of
Merger are filed with the Florida Department of State by Inter-Call-
Net Teleservices, Inc. and NMC Acquisition Corp.
ARTICLE FIVE
The Plan of Reorganization and Merger Agreement was
authorized, ratified and approved by a written consent of the majority
shareholders of Inter-Call-Net Teleservices, Inc. on December 21,
2000.
The Plan of Reorganization and Merger Agreement was
authorized, ratified and approved by a written consent of the majority
shareholders of NMC Acquisition Corp. on December 21, 2000.
These Articles of Merger may be executed in counterparts.
Signed this day of January, 2001.
INTER-CALL-NET TELESERVICES, INC.
By:
▇▇▇▇▇ ▇▇▇▇▇▇▇, President
NMC ACQUISITION CORP.
By:
▇▇▇ ▇▇▇▇▇▇▇▇, President
46
SCHEDULE 3
None.
SCHEDULE 4
4.18 None
4.22 None
4.27 ▇▇▇▇▇▇▇▇▇.▇▇▇
47