EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
By and Among
ELLIGENT CONSULTING GROUP, INC.,
▇▇▇▇▇ ACQUISITION, INC.,
▇▇▇▇▇ CAPITAL LIMITED
and
THE SHAREHOLDERS OF ▇▇▇▇▇
Dated
August 26, 1998
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "AGREEMENT") is made as of August
1, 1998, by and among Elligent Consulting Group, Inc., a Nevada corporation (the
"COMPANY"), ▇▇▇▇▇ Acquisition, Inc., a Delaware corporation ("ACQUISITION
SUBSIDIARY"), a wholly-owned subsidiary of the Company, ▇▇▇▇▇ Capital Limited, a
Delaware corporation ("▇▇▇▇▇"), and the shareholders of ▇▇▇▇▇ (the "▇▇▇▇▇
SHAREHOLDERS") as listed on Exhibit 2.4. By this reference Exhibit 2.4 and all
other exhibits are made a part of this Agreement.
WITNESSETH:
In consideration of the mutual covenants and agreements hereinafter set
forth, the receipt and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
TERMS OF THE MERGER
1.1 MERGER. At the Effective Time (as hereinafter defined), upon the terms
and subject to the conditions of this Agreement and the Plan of Merger (as
hereinafter defined), the Acquisition Subsidiary shall merge with and into ▇▇▇▇▇
(the "Merger") in accordance with the Delaware General Corporation Law (the
"Delaware Act"). At the Effective Time, the separate existence of Acquisition
Subsidiary shall cease, and ▇▇▇▇▇, as the surviving corporation in the Merger
(the "Surviving Corporation"), shall become a subsidiary of the Company. The
Company shall execute a plan of merger (the "Plan of Merger") and articles of
merger ("Articles of Merger") in order to comply in all respects with the
requirements of the Delaware Act and with the provisions of this Agreement.
1.2 EFFECTIVE TIME. The Merger shall become effective at the time of the
filing of the Plan of Merger and Articles of Merger with the Secretary of State
of Delaware in accordance with the applicable provisions of the Delaware Act or
at such later time as may be specified in the Articles of Merger. The Plan of
Merger and Articles of Merger shall be filed as soon as practicable after all of
the conditions set forth in this Agreement have been satisfied or waived by the
party or parties entitled to the benefit of the same. ▇▇▇▇▇ and the Company
shall mutually determine the time of such filing and the place where the closing
of the Merger (the "CLOSING") shall occur. The time when the Merger shall become
effective is herein referred to as the "EFFECTIVE TIME," and the date on which
the Effective Time occurs is herein referred to as the "CLOSING DATE."
1.3 MERGER CONSIDERATION. Subject to the provisions of this Agreement, at
the Effective Time, the issued and outstanding shares of common stock of ▇▇▇▇▇
(the "▇▇▇▇▇ STOCK") held by a ▇▇▇▇▇ Shareholder shall, by virtue of the Merger
and without any action on the part of the holders thereof, be converted into the
right to receive, and there shall be paid and issued as hereinafter provided in
exchange therefor shares of the Company's Common Stock, par value $.001 (the
"COMPANY STOCK"), in an amount which is the product of the Shareholders current
percent ownership in ▇▇▇▇▇ and 12,950,000. The aggregate number of shares to be
issued to the ▇▇▇▇▇ Shareholders shall be known as the "MERGER CONSIDERATION."
No fractional shares shall be
issued. The Merger Consideration shall be payable to the ▇▇▇▇▇ Shareholders as
of the Effective Time. The aggregate number of shares of Company Stock to be
issued pursuant to this Agreement and that certain Agreement dated as of August
1, 1998 by and between ▇▇▇▇▇, ▇▇▇▇▇ Holdings LLC, Conversion Services
International, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to which ▇▇▇▇▇
shall acquire all of the outstanding equity securities of CSI will, in no case,
exceed 12,950,000.
1.4 ▇▇▇▇▇ SHAREHOLDERS' RIGHTS UPON MERGER. Upon consummation of the
Merger, the holders of certificates which theretofore represented shares of
▇▇▇▇▇ Stock (the "CERTIFICATES") shall cease to have any rights with respect
thereto, and, subject to applicable law and this Agreement, shall only have the
right to receive the number of shares of Company Stock into which their shares
of ▇▇▇▇▇ Stock have been converted pursuant to this Agreement and the Merger.
1.5 SURRENDER AND EXCHANGE OF SHARES; PAYMENT OF MERGER
CONSIDERATION. In connection with the Closing, each Shareholder shall surrender
and deliver the Certificates to the Company together with a duly completed and
executed transmittal letter, waiver and release in the form attached hereto as
EXHIBIT 1.5 ("TRANSMITTAL LETTER"). Upon the later to occur of the Effective
Time or such surrender and delivery, the holder shall receive a certificate
representing the number of whole shares of Company Stock to which such holder is
entitled pursuant to this Agreement. Until so surrendered and exchanged, each
outstanding Certificate after the Effective Time shall be deemed for all
purposes to evidence the right to receive that number of whole shares of Company
Stock into which the ▇▇▇▇▇ Stock previously represented by the Certificate has
been converted pursuant to this Agreement; PROVIDED, HOWEVER, that no dividends
or other distributions, if any, in respect of the shares of the Company Stock,
declared after the Effective Time and payable to holders of record after the
Effective Time, shall be paid to the holders of any unsurrendered Certificates
until such Certificates and Transmittal Letters are surrendered and delivered as
provided herein. Holders of any unsurrendered Certificates shall not be entitled
to vote the Company Stock involved until such Certificates are exchanged
pursuant to this Agreement.
1.6 CERTIFICATE OF INCORPORATION. At and after the Effective Time, the
Certificate of Incorporation of ▇▇▇▇▇ shall be the Certificate of Incorporation
of the Surviving Corporation (subject to any amendment specified in the Plan of
Merger and any subsequent amendment).
1.7 BYLAWS. At and after the Effective Time, the Bylaws of ▇▇▇▇▇ shall be
the Bylaws of the Surviving Corporation (subject to any amendment specified in
the Plan of Merger and any subsequent amendment).
1.8 DIRECTORS AND OFFICERS. At and after the Effective Time, until their
successors are duly elected or appointed, the directors and the officers of the
Surviving Corporation shall be as follows:
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Directors Officers
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - President and CEO
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - Vice President of Operations
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - Chief Financial Officer
The Company shall also take whatever action is necessary to duly elect and
appoint such individuals to the corresponding positions in the Company,
including but not limited to, any required expansion of the Company's Board of
Directors, appointment of such individuals as Directors until the Company's next
Annual Meeting of Shareholders and appointment of such individual to the proper
executive offices.
1.9 OTHER EFFECTS OF MERGER. The Merger shall have all further effects as
specified in the applicable provisions of the Delaware Act.
1.10 ADDITIONAL ACTIONS. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Acquisition Subsidiary or otherwise to carry out this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of Acquisition
Subsidiary, all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of Acquisition Subsidiary, all such other
actions and things as may be necessary or desirable to vest, perfect or confirm
any and all right, title and interest in, to and under such rights, properties
or assets in the Surviving Corporation or otherwise to carry out this Agreement
and the transactions contemplated hereby.
1.11 TAX-FREE REORGANIZATION. The parties intend that the Merger qualify
as a tax-free reorganization pursuant to Section 368 of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder (the "CODE").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
▇▇▇▇▇ AND THE ▇▇▇▇▇ SHAREHOLDERS
▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders represent and warrant to the Company and
the Acquisition Subsidiary as follows, which representations and warranties are
made as of the date hereof and as of the Closing Date and shall survive the
Closing for a period of two (2) years from and after the Effective Time:
2.1 ORGANIZATION. ▇▇▇▇▇ is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
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2.2 AUTHORIZATION. The execution, delivery and performance by ▇▇▇▇▇ of
this Agreement has been duly and validly authorized by the Board of Directors of
▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders, and this Agreement constitutes the valid and
binding agreement of ▇▇▇▇▇, enforceable in accordance with its terms, subject to
(i) general principles of equity, regardless of whether enforcement is sought in
a proceeding in equity or at law, and (ii) bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium, receivership or other similar
laws relating to or affecting creditors' rights generally.
2.3 NON-CONTRAVENTION. Neither the execution nor the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
result in the breach of any term or provision of, or constitute a default under,
the Certificate of Incorporation or Bylaws of ▇▇▇▇▇.
2.4 CAPITAL STRUCTURE AND OWNERSHIP. ▇▇▇▇▇ has authorized, issued and
outstanding the number of shares of stock and other securities so indicated on
EXHIBIT 2.4 attached hereto. All such outstanding securities have been duly and
validly issued, are fully paid and nonassessable and have not been issued in
violation of the preemptive rights of any person or entity or applicable
securities laws. No shares of any other class of capital stock of ▇▇▇▇▇ are
outstanding. There are no outstanding options, warrants or other rights to
acquire securities of ▇▇▇▇▇, nor are there securities outstanding which are
convertible into securities of ▇▇▇▇▇, except as set forth on said EXHIBIT 2.4.
Except pursuant to applicable corporate laws and as set forth on EXHIBIT 2.4
attached hereto, there are no restrictions including, but not limited to,
self-imposed restrictions on the retained earnings of the Company or on the
ability of the Company to declare and pay dividends.
The name and residence address of each of the ▇▇▇▇▇ Shareholders and the
respective number and percentage of outstanding shares held by each Shareholder
are set forth on EXHIBIT 2.4 attached hereto. Such shares and other securities
are owned as indicated on said EXHIBIT 2.4 beneficially and of record, free and
clear of all restrictions, liens, claims, charges, security interests, options
or other title defects or encumbrances. At the Effective Time, the shares of
▇▇▇▇▇ Stock shall be free and clear of all restrictions, liens, claims, charges,
security interests, options or other title defects or encumbrances.
2.5 BUSINESS OPERATIONS. After the Merger, it is anticipated that the
Surviving Corporation will continue the historic business of ▇▇▇▇▇.
2.6 FUTURE ACTION. ▇▇▇▇▇ has no current plan or intention to liquidate the
Surviving Corporation, to merge the Surviving Corporation with or into another
corporation, or to sell or otherwise dispose of the Surviving Corporation Common
Stock, except for dispositions made in the ordinary course of business.
2.7 DISCLOSURE. No representation, warranty or statement made by or on
behalf of ▇▇▇▇▇ or the ▇▇▇▇▇ Shareholders in this Agreement (including, but not
limited to, the Exhibits attached hereto) or in the certificates or other
materials furnished or to be furnished to the Company or its
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representatives in connection with this Agreement and the transactions
contemplated hereby or thereby, contains or will contain any untrue statement of
a material fact or omits or will omit to state a material fact required to be
stated herein or therein or necessary to make the statements contained herein or
therein not misleading. All information and documents provided prior to the date
of this Agreement, and all information and documents subsequently provided, to
the Company or its representatives by or on behalf of ▇▇▇▇▇ or the ▇▇▇▇▇
Shareholders are or contain, or will be or will contain as to subsequently
provided information or documents, true, accurate and complete information with
respect to the subject matter thereof and are, or will be as to subsequently
provided information or documents, fully responsive to any specific request made
by or on behalf of the Company or its representatives. ▇▇▇▇▇ shall promptly
notify the Company of any change or event which could adversely affect the
assets, operations, business, condition or prospects of ▇▇▇▇▇.
2.8 ACQUISITION FOR INVESTMENT. The ▇▇▇▇▇ Shareholders are acquiring the
Company Stock for their own account for investment, with no present intention of
dividing their interests with others or of reselling or otherwise disposing of
all or any portion of the same except with respect to certain limited
transactions (the "LIMITED TRANSACTIONS") which transactions will not cause the
loss of the exemption pursuant Regulation D under the Securities Act of 1993, as
amended (the "SECURITIES ACT") upon which the Company is relying in the issuance
of the Company Stock; except for the Limited Transactions, the ▇▇▇▇▇
Shareholders do not have in mind any sale of the Company Stock either currently
or after the passage of a fixed or determinable period of time or upon the
occurrence or non-occurrence of any predetermined event or circumstance; the
▇▇▇▇▇ Shareholders have no present or contemplated agreement, undertaking,
arrangement, obligation, indebtedness or commitment providing for or which is
likely to compel a disposition of the Company Stock; the ▇▇▇▇▇ Shareholders are
not aware of any circumstances presently in existence which are likely in the
future to prompt a disposition of the Company Stock. The ▇▇▇▇▇ Shareholders are
"accredited investors" as defined in the Securities Act; the ▇▇▇▇▇ Shareholders
possess the business experience to make an informed decision to acquire the
Company Stock; and, the ▇▇▇▇▇ Shareholders have the financial means to bear the
economic risk of the investment in the Company Stock.
2.9 BROKER'S OR FINDER'S FEE. No agent, broker, person or firm acting on
behalf of ▇▇▇▇▇ or the ▇▇▇▇▇ Shareholders is, or will be, entitled to any
commission or broker's or finder's fees from any of the parties hereto, or from
any person controlling, controlled by or under common control with any of the
parties hereto, in connection with any of the transactions contemplated herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE ACQUISITION SUBSIDIARY
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The Company and the Acquisition Subsidiary represents and warrants to
▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders as follows, which representations and
warranties are made as of the date hereof and as of the Closing Date and shall
survive the Closing for a period of two (2) years:
3.1 ORGANIZATION. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada with full
power and authority to own its properties and assets and to carry on lawfully
its business as currently conducted, and is not required to be qualified to do
business as a foreign corporation in any other jurisdiction. Except for the
Acquisition Subsidiary, the Company does not have any other subsidiaries, does
not own or hold any securities of, or any interest in, any other person or
entity and is not subject to any joint venture, partnership, limited liability
company or other arrangement or contract which is or could be treated as a
partnership for federal income tax purposes.
3.2 STATUS OF ACQUISITION SUBSIDIARY. As of the Effective Time, the
Acquisition Subsidiary will be a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and will not have
any material liabilities or any material assets except the Company Stock to be
used as the Merger Consideration and shall have joined in this Agreement.
3.3 PUBLIC STATUS OF THE COMPANY. The Company is a publicly held company
and is a reporting company under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). All reports due under the Exchange Act have been filed as
of the date of this Agreement and are true, correct and complete in all material
respects.
3.4 ARTICLES OF INCORPORATION, BYLAWS AND AGREEMENTS. A true,
complete and correct copy of the Articles of Incorporation and Bylaws of the
Company and the Certificate of Incorporation and Bylaws of the Acquisition
Subsidiary together with all amendments thereto shall have been delivered to
▇▇▇▇▇ as of the Effective Date. There are no agreements by and between or among
any or all of the security holders of the Company, whether or not the Company is
a party thereto, imposing any restrictions upon the transfer of or otherwise
pertaining to the securities of the Company or the ownership thereof. Any and
all such restrictions shall be duly complied with or effectively waived as of
the Closing.
3.5 VALID SHARES. The Company Stock, when issued pursuant to this
Agreement, will have been duly and validly authorized and issued, will be fully
paid and nonassessable and will not have been issued in violation of the
preemptive rights of any person or entity. Prior to the issuance of the Company
Stock in payment of the Merger Consideration, the Company has 1,594,225 share of
Common Stock issued and outstanding.
3.6 AUTHORIZATION. The Company and the Acquisition Subsidiary have full
legal right, power and authority to enter into this Agreement and to carry out
the transactions contemplated by this Agreement. The execution, delivery and
performance by the Company and the Acquisition Subsidiary of this Agreement and
the other agreements and documents referred to herein and the actions
contemplated hereby and thereby have been duly and validly authorized by all
necessary
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corporate action, and this Agreement and such other agreements and documents
constitute valid and binding obligations of the Company and the Acquisition
Subsidiary, enforceable in accordance with their terms, subject to (i) general
principles of equity, regardless of whether enforcement is sought in a
proceeding in equity or at law, and (ii) bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium, receivership or other similar laws relating
to or affecting creditors' rights generally.
3.7 FINANCIAL STATEMENTS AND ABSENCE OF CHANGES. The balance sheets as of
July 31, 1998, and the income statements and statements of cash flows for the
fiscal years then ended and the balance sheets as of July 31, 1998, and the
income statements and statements of cash flows for July 31, 1998 of the Company
(the "FINANCIAL STATEMENTS") have been provided to ▇▇▇▇▇. Each of the Financial
Statements is true, complete and correct and fairly presents (including, but not
limited to, the inclusion of all adjustments with respect to interim periods
which are necessary to present fairly the financial condition and assets and
liabilities or the results of operations of the Company) the financial condition
and assets and liabilities or the results of operations of the Company as of the
dates and for the periods indicated. The Financial Statements were prepared in
accordance with generally accepted accounting principles consistently applied.
Except as reflected in the Exhibits attached hereto or the Financial Statements,
the Company has no debts, obligations, guaranties of obligations of others or
liabilities (contingent or otherwise) that would be required to be disclosed in
financial statements prepared in accordance with generally accepted accounting
principles. Since July 31, 1998, there have been no adverse changes to the
business, financial condition, results of operations or prospects of the Company
from that described and reflected in the Financial Statements as of that date.
Any financial statements prepared with respect to the Company subsequent to the
date hereof shall be promptly provided to ▇▇▇▇▇ and shall constitute Financial
Statements for purposes hereof.
3.8 LIABILITIES. Except as and to the extent reflected or reserved against
in the Financial Statements or disclosed in the Exhibits attached hereto, and
except for any costs of this transaction (including legal and accounting fees)
and tax liabilities arising solely as a direct consequence of the taxation of
the transactions contemplated by this Agreement and for liabilities permitted by
this Agreement, the Company had no liabilities or obligations as of the dates
thereof, secured or unsecured (whether accrued, absolute, contingent or
otherwise) including, without limitation, tax liabilities due or to become due,
and the Company has not incurred, nor will it incur, any liabilities or
obligations since the date of the most recent of the Financial Statements and
the Company has no obligations or liabilities, whether direct or indirect, joint
or several, absolute or contingent, matured or unmatured, secured or unsecured,
which could be affected by the execution and delivery of this Agreement or the
consummation of the transactions contemplated by this Agreement or which could
affect the same.
3.9 CONTRACTS. Neither the Company nor the Acquisition Subsidiary is a
party to or bound by, and neither has any liability with respect to, any of the
following (hereinafter, any of the following are referred to collectively as the
"CONTRACTS" and individually as a "CONTRACT"):
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(a) contract for the purchase or sale of services, equipment,
inventory, materials, supplies, or any capital item or items, or supply
agreements with the government or any agency thereof;
(b) collective bargaining agreement or other agreement with any labor
union or labor organization or any employment, consulting, severance, bonus,
deferred compensation or similar agreement;
(c) agreement, indenture or other instrument relating to the
borrowing of money or guaranty of any obligation for the borrowing of money;
(d) tenancy, lease, license or similar agreement relating to
property;
(e) license, lease or other agreement to provide, acquire or use
telecommunications or other services or equipment of any kind;
(f) any insurance policies naming the Company or the Acquisition
Subsidiary as an insured or beneficiary or as a loss payee, or for which the
Company has paid all or part of the premium;
(g) any instrument or agreement relating to indebtedness by way of
lease-purchase arrangements, conditional sale, guarantee or other undertakings
on which others rely in extending credit, any joint venture agreements or any
chattel mortgages or other security arrangements;
(h) confidentiality, secrecy, standstill or noncompete agreement to
which the Company is bound or which is in its favor;
(i) any agreement or contract with, or any obligation to or from, an
Affiliate, a shareholder or any Affiliate of a shareholder. For purposes of this
Agreement, "AFFILIATE" shall mean: any person or entity (i) that directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, the person or entity involved including, without
limitation, officers and directors, (ii) that directly or beneficially owns or
holds 5% or more of any equity interest in the person or entity involved, or
(iii) 5% or more of whose voting securities (or in the case of an entity which
is not a corporation, 5% or more of any equity interest) is owned directly or
beneficially by the person or entity involved. As used herein, the term
"CONTROL" shall mean possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a person or entity,
whether through ownership of securities, by contract or otherwise; or
(j) any other plans, agreements, contracts, powers of attorney, bids
or proposals, whether written or oral.
3.10 LITIGATION AND COMPLIANCE. There are no pending or threatened claims,
investigations, lawsuits or administrative proceedings (including environmental)
by or against the Company or the Acquisition Subsidiary or involving the Company
Stock. The Company and the
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Acquisition Subsidiary are in compliance with all applicable laws and
regulations and administrative orders and their Articles (of Certificate) of
Incorporation and Bylaws. There is no order, writ, injunction or decree relating
to or affecting the business of the Company or the Acquisition Subsidiary or the
transactions contemplated by this Agreement.
3.11 NON-CONTRAVENTION. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
result in the breach of any term or provision of, constitute a default under, or
accelerate or augment the performance otherwise required under, any provision of
the Articles (or Certificate) of Incorporation or Bylaws of the Company or the
Acquisition Subsidiary or, as of the time of Closing, any agreement (including,
without limitation, any loan agreement or promissory note), indenture,
instrument, order, law or regulation to which the Company or the Acquisition
Subsidiary is a party or by which either is bound, or will result in the
creation of any lien or encumbrance upon any property of the Company, the
Acquisition Subsidiary or the Company Stock.
3.12 LICENSES, PERMITS AND REQUIRED CONSENTS. The Company has all required
franchises, tariffs, licenses, ordinances, certifications, approvals,
authorizations and permits necessary to the conduct of its business as currently
conducted.
3.13 INSURANCE. The Company has no policies of insurance at the present
time.
3.14 EMPLOYEES AND EMPLOYEE BENEFIT PLANS. The Company has no employees
and neither the Company nor the Acquisition Subsidiary has any employee benefit
plans or arrangement including, but not limited to, any employee benefit plan as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended, and the regulations thereunder ("ERISA"), whether or not subject to
ERISA including, but not limited to, any pension, profit sharing, stock bonus,
deferred or supplemental compensation, retirement, thrift, stock purchase or
stock option plan, or any other compensation, welfare, fringe benefit or
retirement plan, program, policy, course of conduct, understanding or
arrangement of any kind whatsoever, whether formal or informal, oral or written,
which is or has been maintained for current or former employees or agents of the
Company and their beneficiaries and dependents or which is or has been
contributed to by the Company. For purposes of this Section, the Company shall
include all trades or businesses (whether or not incorporated) which are a
member of a group of which the Company is a member and which are under common
control within the meaning of Section 414 of the Code.
3.15 TAXES AND RETURNS. All federal, state, county and local, and all
foreign and other, income, franchise, excise, tariff, gross receipts, sales and
use, payroll, real and personal property and other taxes and governmental
charges, assessments and contributions for which the Company and the Acquisition
Subsidiary is or may be liable including, but not limited to, interest and
penalties ("TAXES"), required to be paid, collected or withheld with respect to
all open years have been paid or collected or withheld and remitted to the
appropriate governmental agency except for (i) any Taxes which the Company is
contesting in good faith which have been noted in the Financial Statements, (ii)
Taxes not yet payable which have been adequately provided for in the Financial
Statements, (iii)
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any Taxes which may be imposed as a sole and direct result of the transactions
contemplated by this Agreement, and (iv) Taxes set forth in EXHIBIT 3.15
attached hereto. True, complete and correct returns (including, without
limitation, information returns and other material information) have been timely
filed by the Company with the appropriate governmental agency with respect to
all Taxes and the copies thereof which have been provided to ▇▇▇▇▇ are true,
accurate and complete. Such tax returns of the Company have not been audited by
the Internal Revenue Service. Neither the Company nor any group of which the
Company is now or ever was a member has filed or entered into any election,
consent or extension agreement that extends any applicable statute of
limitations or the time within which a return must be filed. Neither the Company
nor any group of which the Company is now or ever was a member is a party to any
action or proceeding pending or threatened by any governmental authority for
assessment or collection of Taxes, no unresolved claim for assessment or
collection of Taxes has been asserted, no audit or investigation by any
governmental authority is pending or threatened and no such matters are under
discussion with any governmental authority. No deficiencies for Taxes have been
claimed, proposed or assessed by any taxing or other governmental authority. The
Company has never been an "S" corporation under the Code.
3.16 CHANGES. Since July 31, 1998, there has not been:
(a) any damage, destruction, other casualty loss or other occurrence
that could, individually or in the aggregate, have an adverse effect on the
assets, business, condition or prospects of the Company;
(b) any disposition of any asset of the Company other than in the
ordinary course of business;
(c) any amendment, modification or termination of any existing, or
entering into any new, contract, agreement, lease, license, permit or franchise
that could, individually or in the aggregate, have an adverse effect on the
business, condition or prospects of the Company;
(d) any direct or indirect redemption, purchase or other acquisition
of, or any declaration, setting aside or payment of any dividend or other
distribution on or in respect of, any stock or other securities of the Company;
(e) any changes in the accounting methods or practices followed by
the Company or any change in depreciation or amortization policies or rates; or
(f) any other adverse change in the assets, business, condition or
prospects of the Company.
3.17 LABOR MATTERS. Neither the Company nor the Acquisition Subsidiary
have any obligations, contingent or otherwise, under any employment or
consulting agreement, collective bargaining agreement or other contract with a
labor union or other labor or employee group. There are no efforts presently
being made or threatened by or on behalf of any labor union with respect to
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employees of the Company or the Acquisition Subsidiary. The Company and the
Acquisition Subsidiary are in compliance with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and have not and are not engaged in any unfair labor practice;
no unfair labor practice complaint against the Company or the Acquisition
Subsidiary is pending or threatened before the National Labor Relations Board;
there is no labor strike, dispute, disturbance, slowdown or stoppage pending or
threatened against or involving the Company or the Acquisition Subsidiary; no
representation question exists respecting the employees of the Company or the
Acquisition Subsidiary; no grievance or internal or informal complaint which
might have an adverse effect upon the Company or the Acquisition Subsidiary
exists, and no arbitration proceeding arising out of or under any collective
bargaining agreement is pending and no claim therefor has been asserted; no
collective bargaining agreement is currently being negotiated by the Company or
the Acquisition Subsidiary; and neither the Company nor the Acquisition
Subsidiary has experienced any labor difficulty.
3.18 MINUTE AND STOCK BOOKS; RECORDS. The minute books of the Company and
the Acquisition Subsidiary made available to ▇▇▇▇▇ contain the records of all
meetings and other corporate actions of the shareholders and directors (and
committees thereof) of the Company and the Acquisition Subsidiary and accurately
and completely reflect all such actions. The Bylaws contained in or kept with
said minute books are true, complete and correct copies of the Bylaws of the
Company and the Acquisition Subsidiary and all amendments thereto duly adopted
and in force. All other records maintained by the Company and the Acquisition
Subsidiary including, but not limited to, records pertaining to bank accounts
accurately reflect the information presented therein.
3.19 DISCLOSURE. No representation, warranty or statement made by or on
behalf of the Company and the Acquisition Subsidiary in this Agreement
(including, but not limited to, the Exhibits attached hereto) or in the
certificates or other materials furnished or to be furnished to ▇▇▇▇▇ or its
representatives in connection with this Agreement and the transactions
contemplated hereby or thereby, contains or will contain any untrue statement of
a material fact or omits or will omit to state a material fact required to be
stated herein or therein or necessary to make the statements contained herein or
therein not misleading. All information and documents provided prior to the date
of this Agreement, and all information and documents subsequently provided, to
▇▇▇▇▇ or its representatives by or on behalf of the Company and the Acquisition
Subsidiary are or contain, or will be or will contain as to subsequently
provided information or documents, true, accurate and complete information with
respect to the subject matter thereof and are, or will be as to subsequently
provided information or documents, fully responsive to any specific request made
by or on behalf of ▇▇▇▇▇ or its representatives. Prior to the Closing, full
disclosure shall have been made to ▇▇▇▇▇ of all material facts with respect to
the Company and its business, assets, operations, condition and prospects and
the transactions contemplated by this Agreement which a reasonable purchaser
would deem relevant. The Company shall promptly notify ▇▇▇▇▇ of any change or
event which could adversely affect the assets, operations, business, condition
or prospects of the Company.
3.20 BROKER'S OR FINDER'S FEE. No agent, broker, person or firm acting on
behalf of the Company or the Acquisition Subsidiary is, or will be, entitled to
any commission or broker's or
11
finder's fees from any of the parties hereto, or from any person controlling,
controlled by or under common control with any of the parties hereto, in
connection with any of the transactions contemplated herein.
3.21 SHAREHOLDER APPROVAL. No approval of the shareholders of the Company
is required under Nevada law for either the execution of this Agreement or the
consummation of the transactions contemplated by this Agreement.
3.22 SHAREHOLDER LIST. Attached hereto as EXHIBIT 3.22 is a list of
shareholders of the Company as provided by the Company's stock transfer agent.
ARTICLE IV
ADDITIONAL AGREEMENTS OF THE PARTIES
4.1 ORDINARY COURSE. The Company and the Acquisition Subsidiary represent
and warrant that prior to the Closing, without Patra's written consent, they
shall not: amend or propose to amend their Articles (or Certificate) of
Incorporation or Bylaws;
(a) except for the issuance of Acquisition Subsidiary shares to the
Company upon organization, and the issuance of the 12,950,000 shares of the
Company Stock in exchange therefore, authorize for issuance, issue, grant, sell,
pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any
shares of, or any options, warrants, commitments, subscriptions or rights of any
kind to acquire or sell any shares of, the capital stock or other securities of
the Company or the Acquisition Subsidiary including, but not limited to, any
securities convertible into or exchangeable for shares of stock of any class of
the Company or the Acquisition Subsidiary;
(b) split, combine or reclassify any shares of its capital stock or
declare, pay or set aside any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
or redeem, purchase or otherwise acquire or offer to acquire any shares of its
capital stock or other securities;
(c) (i) create, incur or assume any short-term debt, long-term debt
or obligations in respect of capital leases; (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, indirectly,
contingently or otherwise) for the obligations of any person or entity; (iii)
make any capital expenditures or make any loans, advances or capital
contributions to, or investments in, any other person or entity; (iv) acquire
the stock or assets of, or merge or consolidate with, any other person or
entity; or (v) incur any liability or obligation (absolute, accrued, contingent
or otherwise);
(d) directly or indirectly through any investment banker or other
representative or otherwise, solicit, entertain or negotiate with respect to any
inquiries or proposals from any person or entity relating to: (i) the merger or
consolidation of the Company or the Acquisition Subsidiary with any person or
entity, (ii) the direct or indirect acquisition by any person or entity of any
of the
12
assets of the Company or the Acquisition Subsidiary, or (iii) the acquisition of
direct or indirect beneficial ownership or control of the Company or the
Acquisition Subsidiary or any securities thereof by any person or entity;
(e) sell, transfer, mortgage, pledge or otherwise dispose of, or
encumber, any assets or properties;
(f) hire any officers, employees or agents;
(g) increase in any manner the compensation of any of its officers,
employees or agents;
(h) enter into or establish any employment, consulting, retention,
change in control, collective bargaining, bonus or other incentive compensation,
profit sharing, health or other welfare, stock option or other equity, pension,
retirement, vacation, severance, deferred compensation or other compensation or
benefit plan, policy, agreement, trust, fund or arrangement with, for or in
respect of, any shareholder, officer, director, other employee, agent,
consultant or Affiliate;
(i) make any new elections with respect to Taxes or any changes in
current elections with respect to Taxes;
(j) compromise, settle, grant any waiver or release relating to or
otherwise adjust any litigation, claim or proceeding;
(k) take any action or omit to take any action, which action or
omission would result in a breach of any of the covenants, representations and
warranties of the Company set forth in this Agreement;
(l) enter into or amend any lease of, or agreement with respect to,
real property;
(m) take any action with respect to the indemnification of any person
or entity;
(n) change any accounting practices;
(o) agree, commit or arrange to do any of the foregoing.
4.2 ACCESS PRIOR TO CLOSING. Upon reasonable notice, the Company and the
Company's officers, agents and employees shall afford ▇▇▇▇▇ and its
representatives (including, without limitation, its independent public
accountants, attorneys and banks or other lenders' representatives) reasonable
access from the date hereof through the Closing to any and all of the premises,
properties, contracts, books, records, data and personnel of or relating to the
Company or its operations. The Company and the Company's officers, agents and
employees shall cooperate fully in connection with the foregoing.
13
4.3 REGULATORY AND OTHER AUTHORIZATIONS. The Company and the Acquisition
Subsidiary shall obtain or make, and/or shall cooperate fully in obtaining or
making, all governmental, regulatory and third-party approvals, orders,
qualifications, waivers, consents, filings, authorizations, certifications or
other actions necessary in order to consummate the transactions contemplated
hereby. The parties hereto will not take any action that will have the effect of
delaying, impairing or impeding the receipt of any of the foregoing and will use
their respective best efforts to secure the same as promptly as possible.
4.4 FURTHER ASSURANCES. At any time and from time to time at or after the
Closing, the parties agree to cooperate with each other, to execute and deliver
such other documents, instruments of transfer or assignment, files, books and
records and do all such further acts and things as may be reasonably required to
carry out the transactions contemplated hereby.
4.5 DELIVERY. The parties shall cause the delivery of the respective
documents required to be delivered or caused to be delivered by them pursuant to
ARTICLE VI below.
4.6 INDEMNITY.
(a) The representations and warranties made by the parties in this
Agreement, in the Exhibits attached hereto and in the certificates delivered at
the Closing, and all of the covenants of the parties in this Agreement, shall
survive the execution and delivery of this Agreement and the Closing Date and
shall expire on the second anniversary of the Closing Date. Any claim for
indemnification shall be effective only if notice of such claim is given by the
party claiming indemnification or other relief to the party against whom such
indemnification or other relief is claimed on or before the second anniversary
of the Closing Date.
(b) The Company and the Acquisition Subsidiary agree to indemnify and
hold ▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders harmless, from and after the Closing Date,
against and in respect of all matters in connection with any losses,
liabilities, costs or damages (including reasonable attorneys' fees) incurred by
▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders that result from any misrepresentation or
breach of the warranties by the Company or the Acquisition Subsidiary in Article
III, "Representations and Warranties of the Company and the Acquisition
Subsidiary," or any breach or nonfulfillment of any agreement or covenant on the
part of the Company contained in this Agreement, and all suits, actions,
proceedings, demands, judgments, costs and expenses incident to the foregoing
matters, including reasonable attorneys' fees.
(c) ▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders, on a joint and several basis,
agree to indemnify and hold the Company and the Acquisition Subsidiary harmless,
from and after the Closing Date, against and in respect of all matters in
connection with any losses, liabilities or damages (including reasonable
attorneys' fees) incurred by the Company and the Acquisition Subsidiary
resulting from any misrepresentation or breach of the warranties of ▇▇▇▇▇ and
the ▇▇▇▇▇ Shareholders in Article II, "Representations and Warranties of ▇▇▇▇▇
and the ▇▇▇▇▇ Shareholders," or any breach or nonfulfillment of any agreement or
covenant on the part of ▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders contained in this
14
Agreement and all suits, actions, proceedings, demands, judgments, costs and
expenses incident to the foregoing matters, including reasonable attorneys'
fees. No claim for indemnification may be made under this Section 4.6(b) after
the second anniversary of the Closing Date.
(d) If the Company believes that a matter has occurred that entitles
it to indemnification under Section 4.6(c), or ▇▇▇▇▇ or the ▇▇▇▇▇ Shareholders
believes that a matter has occurred that entitles them to indemnification under
Section 4.6(b), ▇▇▇▇▇, the Company, the Acquisition Subsidiary or the ▇▇▇▇▇
Shareholders, as the case may be (the "INDEMNIFIED PARTY"), shall give written
notice to the party or parties against whom indemnification is sought (each of
whom is referred to herein as an "INDEMNIFYING PARTY") describing such matter in
reasonable detail. The Indemnified Party shall be entitled to give such notice
prior to the establishment of the amount of its losses, liabilities, costs or
damages, and to supplement its claim from time to time thereafter by further
notices as they are established. Each Indemnifying Party shall send a written
response to such claim for indemnification within thirty (30) days after receipt
of the claim stating its acceptance or objection to the indemnification claim,
and explaining its position in respect thereto in reasonable detail. If such
Indemnifying Party does not timely so respond, it will be deemed to have
accepted the Indemnified Party's indemnification claim as specified in the
notice given by the Indemnified Party. If the Indemnifying Party gives a timely
objection notice, then the parties will negotiate in good faith to attempt to
resolve the dispute, and upon the expiration of an additional thirty (30) day
period from the date of the objection notice or such longer period as to which
the Indemnified and Indemnifying Parties may agree, any such dispute shall be
submitted to arbitration in New York City, New York to a member of the American
Arbitration Association mutually appointed by the Indemnified Party and
Indemnifying Party (or, in the event the Indemnified Party and Indemnifying
Party cannot agree on a single such member, to a panel of three members of such
Association selected in accordance with the rules of such Association), who
shall promptly arbitrate such dispute in accordance with the rules of such
Association and report to the parties upon such disputed items, and such report
shall be final, binding and conclusive on the parties. Judgment upon the award
by the arbitrator(s) may be entered in any court having jurisdiction. The
prevailing party in any such arbitration shall be entitled to recover from, and
have paid by, the other party hereto all fees and disbursements of such
arbitrator or arbitrators. For this purpose, a party shall be deemed to be the
prevailing party only if such party (A)(i) receives an award or judgment in such
arbitration and/or litigation for more than fifty percent (50%) of the disputed
amount involved in such matter, or (ii) is ordered to pay the other party less
than fifty percent (50%) of the disputed amount involved in such matter or
(B)(i) succeeds in having imposed a material equitable remedy on the other party
(such as an injunction or order compelling specific performance), or (ii)
succeeds in defeating the other party's request for such an equitable remedy.
(e) If any third person asserts a claim against an Indemnified Party
in connection with the matter involved in such claim, the Indemnified Party
shall promptly (but in no event later than ten (10) days prior to the time at
which an answer or other responsive pleading or notice with respect to the claim
is required) notify the Indemnifying Party of such claim. The Indemnifying Party
shall have the right, at its election, to take over the defense or settlement of
such claim by giving prompt notice to the Indemnified Party that it will do so,
such election to be made and notice given in any event at
15
least five (5) days prior to the time at which an answer or other responsive
pleading or notice with respect thereto is required. If the Indemnifying Party
makes such election, the Indemnifying Party may conduct the defense of such
claim through counsel of its choosing (subject to the Indemnified Party's
approval, not to be unreasonably withheld), will be responsible for the expenses
of such defense, and shall be bound by the results of its defense or settlement
of the claim to the extent it produces damage or loss to the Indemnified Party.
The Indemnifying Party shall not settle such claims without prior notice to and
consultation with the Indemnified Party, and no such settlement involving any
injunction or material and adverse effect on the Indemnified Party may be agreed
to without its consent. As long as the Indemnifying Party is diligently
contesting any such claim in good faith, the Indemnified Party shall not pay or
settle any such claim. If the Indemnifying Party does not make such election, or
having made such election does not proceed diligently to defend such claim prior
to the time at which an answer or other responsive pleading or notice with
respect thereto is required, or does not continue diligently to contest such
claim, then the Indemnified Party may take over defense and proceed to handle
such claim in its exclusive discretion, and the Indemnifying Party shall be
bound by any defense or settlement that the Indemnified Party may make in good
faith with respect to such claim. The parties agree to cooperate in defending
such third party claims, and the defending party shall have access to records,
information and personnel in control of the other part which are pertinent to
the defense thereof.
(f) The parties understand that this Section 4.6 requires that all
disputed claims shall be submitted to arbitration in accordance with Section
4.6(d).
4.7 CONFIDENTIALITY.
(a) Except as contemplated by this Agreement, as required by law or
otherwise expressly consented to in writing by ▇▇▇▇▇ and the Company, all
information or documents furnished hereunder by any party shall be kept strictly
confidential by the party or parties to whom furnished at all times prior to the
Closing Date, and in the event such transactions are not consummated, each shall
return to the other all documents furnished hereunder and copies thereof upon
request and shall continue to keep confidential all information furnished
hereunder and shall not thereafter use the same for its advantage.
Notwithstanding the foregoing, the Company may, at any time after the date of
this Agreement, file with the Securities and Exchange Commission (the
"COMMISSION") a Report on Form 8-K pursuant to the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), with respect to the transactions
contemplated by this Agreement. ▇▇▇▇▇ shall cooperate with the Company and
provide such information and documents as may be required in connection with any
such filings.
(b) In the event the Closing is not consummated, each party hereto
will return all documents obtained from the other party and will hold in
absolute confidence any information obtained from another party except to the
extent (i) such party is required to disclose such information by law or
regulation, (ii) disclosure of such information is necessary or desirable in
connection with the pursuit or defense of a claim, (iii) such information was
known by such party prior to such disclosure or was thereafter developed or
obtained by such party independent of such
16
disclosure, or (iv) such information becomes generally available to the public
or is otherwise no longer confidential. Prior to any disclosure of information
pursuant to the exception in clause (i) or (ii) of the preceding sentence, the
party intending to disclose the same shall so notify the party which provided
the same in order that such party may seek a protective order or other
appropriate remedy should it choose to do so.
4.8 SHAREHOLDER APPROVAL. As soon as practicable, the Board of Directors
of the Company will take all steps necessary, as the sole shareholder of the
Acquisition Subsidiary to approve the Plan of Merger and provide the approval
for such other purposes as may be necessary or desirable in connection with
effectuating the transactions contemplated hereby.
ARTICLE V
CONDITIONS TO CLOSING
5.1 CONDITIONS TO CLOSE OF THE COMPANY AND THE ACQUISITION SUBSIDIARY. The
obligations of the Company and the Acquisition Subsidiary under this Agreement
are subject to the satisfaction at or prior to the Closing of each of the
following conditions, but compliance with any or all of such conditions may be
waived, in writing, by the Company:
(a) The representations and warranties of ▇▇▇▇▇ and the ▇▇▇▇▇
Shareholders contained in this Agreement shall be true and correct in all
material respects on the date hereof and on the Closing Date;
(b) ▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders shall have performed and
complied with all of the covenants and agreements in all material respects and
satisfied in all material respects the conditions required by this Agreement to
be performed or complied with or satisfied by ▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders
at or prior to the Closing;
(c) All required governmental and regulatory approvals, consents
and/or waiting periods shall have been obtained;
(d) No action, suit or proceeding shall have been instituted or
threatened by any person or entity including, but not limited to, any
governmental agency or body to restrain or prevent the carrying out of the
transactions contemplated by this Agreement or that seeks other material relief
with respect to any of such transactions or that could, individually or in the
aggregate, have a material adverse effect on the business or prospects of ▇▇▇▇▇.
On the Closing Date, there shall be no injunction, restraining order or decree
of any nature of any court or governmental agency or body in effect that
restrains or prohibits the consummation of the transactions contemplated by this
Agreement;
(e) The Plan of Merger shall have been duly approved by the ▇▇▇▇▇
Shareholders pursuant to the Delaware Act;
17
(f) There shall not have occurred any material adverse change in the
assets, business, condition or prospects of ▇▇▇▇▇; and
5.2 CONDITIONS TO CLOSE OF ▇▇▇▇▇ AND THE ▇▇▇▇▇ SHAREHOLDERS. The
obligations of ▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders under this Agreement are subject
to the satisfaction at or prior to the Closing of each of the following
conditions, but compliance with any or all of such conditions may be waived, in
writing, by ▇▇▇▇▇ and the ▇▇▇▇▇ Shareholders:
(a) The representations and warranties of the Company and the
Acquisition Subsidiary contained in this Agreement shall be true and correct in
all material respects on the date hereof and on the Closing Date;
(b) The Company and the Acquisition Subsidiary shall have performed
and complied with all the covenants and agreements in all material respects and
satisfied in all material respects the conditions required by this Agreement to
be performed or complied with or satisfied by it or them at or prior to the
Closing;
(c) All required governmental, regulatory and third-party approvals
or consents shall have been obtained;
(d) The Plan of Merger shall have been duly approved by the Company
as the sole shareholder of the Acquisition Subsidiary pursuant to the Delaware
Act;
(e) No action, suit or proceeding shall have been instituted or
threatened by any person or entity including, but not limited to, any
governmental agency or body to restrain or prevent the carrying out of the
transactions contemplated by this Agreement or that seeks other material relief
with respect to any of such transactions or that could, individually or in the
aggregate, have a material adverse effect on the business or prospects of the
Company. On the Closing Date, there shall be no injunction, restraining order or
decree of any nature of any court or governmental agency or body in effect that
restrains or prohibits the consummation of the transactions contemplated by this
Agreement;
(f) There shall not have occurred any material adverse change in the
assets, business, condition or prospects of the Company; and
ARTICLE VI
THE CLOSING
6.1 DELIVERIES BY THE COMPANY AND THE ACQUISITION SUBSIDIARY. At the
Closing, ▇▇▇▇▇ shall receive from the Company and/or the Acquisition Subsidiary
the following:
(a) Certificates of Company Stock representing the Merger
Consideration;
18
(b) Certificate of good standing or existence in each of the states
in which the Company and the Acquisition Subsidiary is incorporated or qualified
stating that the Company is a validly existing corporation in good standing;
(c) Copies of duly adopted resolutions of the Board of Directors of
the Company and the Acquisition Subsidiary approving the execution, delivery and
performance of this Agreement and the other agreements and instruments
contemplated hereby and by the Company as the sole shareholder of the
Acquisition Subsidiary approving the Plan of Merger, certified by the Secretary
of the Acquisition Subsidiary;
(d) The resignations of any officers or directors of the Acquisition
Subsidiary; and
(e) Such other documents and instruments as ▇▇▇▇▇ may reasonably
request.
6.2 DELIVERIES BY ▇▇▇▇▇ AND THE ▇▇▇▇▇ SHAREHOLDERS. At the Closing, the
Company and/or the Acquisition Subsidiary shall receive from ▇▇▇▇▇ and/or the
▇▇▇▇▇ Shareholders the following:
(a) Certificate of existence from the Secretary of State of the State
of Delaware stating that ▇▇▇▇▇ is a validly existing corporation in good
standing;
(b) Copies of duly adopted resolutions of the Board of Directors and
Shareholders of ▇▇▇▇▇ approving the execution, delivery and performance of this
Agreement, certified by its Secretary; and
ARTICLE VII
TERMINATION
7.1 TERMINATION. Notwithstanding anything in this Agreement to the
contrary, this Agreement may be terminated only by the mutual written consent of
▇▇▇▇▇ and the Company.
7.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 7.1 of this Agreement, this Agreement shall
thereafter become void and have no effect, and without any liability on the part
of any party or its shareholders, directors or officers in respect thereof,
except as otherwise provided in this Agreement and except that nothing herein
will relieve any party from liability for any breach of this Agreement. In
addition, all confidential information exchanged by the parties shall be
promptly returned to the proper party.
ARTICLE VIII
MISCELLANEOUS
8.1 EXPENSES. Each party hereto shall bear their or its own respective
expenses, fees and commissions (including, but not limited to, all compensation
and expenses of counsel, financial
19
advisors, brokers, consultants, actuaries and accountants) incurred in
connection with the preparation, negotiation and execution of this Agreement and
consummation of the transactions contemplated hereby.
8.2 PUBLIC DISCLOSURE. No press release or other public announcement or
communication will be made or caused to be made concerning the terms and
conditions of this Agreement unless specifically approved in advance by ▇▇▇▇▇
and the Company. However, the parties acknowledge that such a press release or
public announcement is necessary under applicable law and no party shall
unreasonably withhold its approval from such a press release.
8.3 GOVERNING LAW AND CONSENT TO JURISDICTION. This Agreement shall be
deemed to be made in, and in all respects shall be interpreted, construed and
governed by and in accordance with the internal laws of, the State of Delaware
(except to the extent the Nevada Act may control with respect to matters
concerning the Company as part of the Merger), and the parties hereto consent to
the jurisdiction of the courts of or in the State of Delaware with respect to
any dispute, controversy or other matter relating to or arising out of this
Agreement or the transactions contemplated hereby after submission to
arbitration as outlined in Section 4.6(d).
8.4 NOTICES. Any notices or other communications required under this
Agreement shall be in writing, shall be deemed to have been given when delivered
in person, by telex or facsimile, when delivered to a recognized next business
day courier, or, if mailed, when deposited in the United States first class
mail, registered or certified, return receipt requested, with proper postage
prepaid, addressed as follows or to such other address as notice shall have been
given pursuant hereto:
If to the Company or the Acquisition Subsidiary:
Elligent Consulting Group, Inc.
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III, Esq.
▇▇▇▇▇▇▇ Lang, P.A.
Renaissance ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇ or the ▇▇▇▇▇ Shareholders:
▇▇▇▇▇ Capital Limited
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Moses & Singer LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
8.5 ASSIGNMENT. This Agreement may not be assigned, by operation of law or
otherwise to any other person or entity.
8.6 SECTION HEADINGS. The section headings contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
8.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
8.8 AMENDMENT. This Agreement may not be amended except by a writing
signed by the party to be charged.
8.9 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof.
8.10 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.
8.11 SURVIVAL. Subject to the express limitations specified in this
Agreement, the covenants, agreements, indemnities, representations and
warranties of ▇▇▇▇▇, the Company, the Acquisition Subsidiary and the ▇▇▇▇▇
Shareholders made in or pursuant to this Agreement shall survive the Closing,
notwithstanding any investigation made or information obtained by or on behalf
of ▇▇▇▇▇, the Company, the Acquisition Subsidiary or the ▇▇▇▇▇ Shareholders.
8.12 SEVERABILITY. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof shall not in any way be affected or impaired
thereby.
8.13 THIRD PARTIES. Nothing contained in this Agreement or in any
instrument or document executed by any party in connection with the transactions
contemplated hereby shall create
21
any rights in, or be deemed to have been executed for the benefit of, any person
or entity that is not a party hereto, a successor or permitted assign of such a
party or a person or entity entitled to indemnification hereunder.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
▇▇▇▇▇ CAPITAL LIMITED ELLIGENT CONSULTING GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President Title: President
▇▇▇▇▇ SHAREHOLDERS: ▇▇▇▇▇ ACQUISITION, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
For: ▇▇▇▇▇ HOLDING, LLC ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
22
Exhibit 1.5
FORM OF TRANSMITTAL LETTER
LETTER OF TRANSMITTAL, WAIVER AND RELEASE
For submitting certificates representing shares of stock of
▇▇▇▇▇ Capital Inc.
pursuant to the Agreement and Plan of Merger
dated as of August 26, 1998 (the "Merger Agreement")
and related Plan of Merger (the "Plan of Merger")
This Letter of Transmittal, Waiver and Release should be completed, signed
and submitted, together with your certificates representing shares of ▇▇▇▇▇
Capital, Inc. common stock, to:
Elligent Consulting Group, Inc.
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
IMPORTANT: YOU ARE REQUESTED TO SIGN THIS DOCUMENT IN EACH OF THE
PLACES INDICATED BELOW.
In connection with the merger (the "Merger") of ▇▇▇▇▇ Acquisition, Inc., a
Delaware corporation and wholly owned subsidiary of Elligent Consulting Group,
Inc., a Nevada corporation ("Elligent"), with and into ▇▇▇▇▇ Capital, Inc., a
Delaware corporation ("▇▇▇▇▇"), and pursuant to the Merger Agreement and the
Plan of Merger, the undersigned encloses herewith and surrenders the following
certificate(s) (the "Certificates"), representing shares of ▇▇▇▇▇ common stock
(the "Shares"):
NAME & ADDRESS OF ▇▇▇▇▇ CERTIFICATE(S) ENCLOSED
REGISTERED OWNER
CERTIFICATE NO. NUMBER OF SHARES
OF COMMON STOCK
AUTHORITY, OWNERSHIP AND FURTHER ASSURANCES
The undersigned hereby warrants that the undersigned has full power and
authority to submit, sell, assign and transfer the Certificates and the Shares
and that the Shares are owned by
the undersigned and are free and clear of all liens, encumbrances, security
interests, mortgages, pledges, charges, agreements, rights, options, warrants,
restrictions and claims. The undersigned will, upon request, execute any
additional documents reasonably necessary or desirable to complete the transfer
of the Shares and accomplish the matters contemplated hereby.
PAYMENT OF MERGER CONSIDERATION
You hereby are authorized and instructed to prepare in the name and deliver to
the address of the undersigned set forth above, or to such other address as
requested by the undersigned in writing, shares of Common Stock of Elligent
("Elligent Shares") in accordance with the terms and conditions of the Merger
Agreement and the Plan of Merger in exchange for the Shares evidenced by the
enclosed Certificates.
RELEASE
For valuable consideration, the receipt of which hereby is acknowledged,
the undersigned hereby releases and forever discharges ▇▇▇▇▇, its affiliates,
officers, directors and their respective heirs, personal representatives,
successors and assigns, from any and all claims, damages, losses, liabilities,
demands, charges, suits, penalties, actions and causes of action, whether
accrued, absolute, contingent, known or unknown, which the undersigned may now
or hereafter have arising out of or relating to (i) the formation, financing,
management or operations of ▇▇▇▇▇, (ii) the issuance, holding or repurchase of
securities of ▇▇▇▇▇, or (iii) other than with respect to any existing right to
indemnification by ▇▇▇▇▇, the undersigned's status as a shareholder, officer,
director, and/or employee of ▇▇▇▇▇. The foregoing release shall be binding upon
the undersigned and the undersigned's heirs, personal representatives,
successors and assigns.
CERTIFICATION
By signing below, under the penalties of perjury, the undersigned certifies (1)
that the Social Security Number or Taxpayer Identification Number set forth
below is the undersigned's correct Social Security Number or Taxpayer
Identification Number, (2) that all other information provided herein is true
and accurate, and (3) that the undersigned is not subject to backup withholding
because (a) the undersigned has not been notified that the undersigned is
subject to backup withholding as a result of a failure to report all interest or
dividends, or (b) the Internal Revenue Service has notified the undersigned that
the undersigned is no longer subject to backup withholding. (The undersigned
must cross out subpart (3) of the certification if the Internal Revenue Service
has notified the undersigned that the undersigned is subject to backup
withholding due to the underreporting of dividends or interest on tax returns
and notice has not been received from the Internal Revenue Service advising that
backup withholding has terminated.) NOTE: FAILURE TO COMPLETE AND RETURN THIS
INFORMATION WILL RESULT IN BACKUP WITHHOLDING ON PAYMENTS DUE TO YOU.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND ALL OTHER DOCUMENTS AND INSTRUMENTS
REQUIRED HEREBY SHOULD BE DELIVERED TO ELLIGENT CONSULTING GROUP, INC. IN CARE
OF ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ AT THE ADDRESS SET FORTH ABOVE. UNLESS AND UNTIL ANY
OUTSTANDING CERTIFICATE FORMERLY EVIDENCING THE SHARES IS SO DELIVERED, NO
ELLIGENT SHARES WILL BE DELIVERED TO THE HOLDER OF ▇▇▇▇▇ SHARES.
2
The undersigned has carefully reviewed this Letter of Transmittal and
Release and understands its contents and the significance thereof and has
consulted with counsel with regard thereto. All authority herein conferred shall
survive the death or incapacity of the undersigned, and all obligations of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Dated as of _____________________, 1998.
(Signature)
Name:___________________ All Registered Owners must sign exactly
as name(s) appear on Certificate(s). If Phone
No.:______________ anyone other than the Registered Owner or
if an attorney, personal representative,
Social Security or trustee, custodian, guardian, partner,
Taxpayer I.D. No.: other fiduciary or officer of a corporation
______________________ signs the Letter of Transmittal, proper
evidence of authority to act, satisfactory to
___________, must be submitted herewith.
3
EXHIBIT 2.4
▇▇▇▇▇ CAPITAL, LIMITED SHAREHOLDERS
▇▇▇▇▇ Capital Shareholder Share Holdings
▇▇▇▇▇ Holdings, LLC 844
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 29
ANIN Development LLC 55
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Family Limited Partnership 17
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 30
Gennaro Vendome Family Limited Partnership 8
Gennaro Vendome 17
Total Issued and Outstanding 1000
Treasury Stock 0
Total Authorized 1000
Elligent Shares
to be issued
under
▇▇▇▇▇ Capital Shareholder Agreement
▇▇▇▇▇ Holdings, LLC 10,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 350,000
ANIN Development LLC 650,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Family Limited Partnership 200,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 350,000
Gennaro Vendome Family Limited Partnership 100,000
Gennaro Vendome 200,000
Total Elligent Shares to be issued to ▇▇▇▇▇ 11,850,000
Capital Shareholders
Total Elligent Shares to be issued 12,950,000
EXHIBIT 3.15
TAXES
None.
EXHIBIT 3.22
SHAREHOLDER LIST OF
ELLIGENT CONSULTING GROUP, INC.
Omitted.