Plan and Agreement of Merger By and Among Mach One Corporation, WhiteHat Holdings, LLC and White Hat Acquisition Corp. dated February 25, 2010.
EXHIBIT
2.4
Plan
and Agreement of Merger By and Among
Mach
One Corporation, WhiteHat Holdings, LLC and White Hat Acquisition
Corp.
dated
February 25, 2010.
PLAN
AND AGREEMENT OF MERGER
BY
AND AMONG
MACH
ONE CORPORATION
AND
WHITEHAT
HOLDINGS, LLC
AND
WHITE
HAT ACQUISITION CORP.
DATED
AS OF
FEBRUARY
25, 2010
TABLE
OF CONTENTS
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Page
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| PLAN AND AGREEMENT OF MERGER | ||
| Article I |
The Merger
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____
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| Article II |
Conversion
of Shares
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____
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| Article III |
Issuance
of Certificates
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|
| Article IV |
Closing
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____
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| Article V |
Representations
and Warranties by WhiteHat Members and Xxxxx
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____
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| Article VI |
Representations
and Warranties by Mach One
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____
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| Article VII |
Additional
Agreements
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____
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| Article VIII |
Covenants
of WhiteHat and Xxxxx
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____
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| Article IX |
Covenants
of Mach One
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____
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| Article X |
Additional
Covenants of the Parties
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____
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| Article XI |
Survival
and Non-Survival of Representations, Warranties
and Covenants
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____
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| Article XII |
Conditions
of Parties’ Obligations
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____
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| Article XIII |
Termination,
Amendment, Waiver
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____
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| Article XIV |
Miscellaneous
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____
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EXHIBIT
LIST
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Exhibit
"A":
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Consent
of Members of Mach One’s Board of Directors
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Exhibit
"B":
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Consent
of Members of WhiteHat’s Board of Directors
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Exhibit
“C”
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Form
of Articles of Incorporation of Surviving Corporation
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Exhibit
“D”
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Representation
Letter-WhiteHat Members
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Exhibit
“E”
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Officer’s
Certificate -Mach One
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SCHEDULE
LIST
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Schedule
5.1(d):
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WhiteHat
Equity Securities, Debt Obligations Outstanding
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Schedule
5.1(e):
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WhiteHat
Subsidiaries
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Schedule
5.1(g):
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WhiteHat
Absence of Undisclosed Liabilities
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Schedule
5.1(h):
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WhiteHat
Litigation
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Schedule
5.1(j):
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WhiteHat
Absence of Certain Changes
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Schedule
5.1(k)
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WhiteHat
Contracts
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Schedule
5.1(l):
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WhiteHat
Employee Benefit Plans
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Schedule
5.1(m):
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WhiteHat
Asset Ownership Exceptions
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Schedule
5.1(m)(iii)
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WhiteHat
Receivable Exceptions
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Schedule
5.1(n)
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WhiteHat
Tax Matters
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Schedule
5.1(o):
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WhiteHat
Operating Permits/Licenses
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Schedule
6.1(d):
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Mach
One Equity
Securities, Debt Obligations Outstanding
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Schedule
6.1(e):
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Mach
One Subsidiaries
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Schedule
6.1 (f):
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Mach
One Absence of
Certain Changes
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Schedule
6.1 (g):
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Mach
One Absence of
Undisclosed Liabilities
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Schedule
6.1 (h):
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Mach
One Litigation
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Schedule
6.1 (j):
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Absence
of Certain Changes
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Schedule
6.1(k):
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Mach
One Contracts
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Schedule
6.1(l)
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Mach
One Employee Benefit Plans
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Schedule
6.1(m)
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Mach
One Asset Ownership Exceptions
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Schedule
6.1(n):
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Mach
One Tax Matters
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Schedule
6.1(o)
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Mach
One Permits
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AGREEMENT
AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER
is entered into as of this 25th day of February, 2010 (this “Agreement”),
by and among Mach One Corporation, a Nevada corporation (“Mach One”), WhiteHat Holdings,
LLC, a Georgia limited liability company (“WhiteHat”), White Hat
Acquisition Corp., a Georgia corporation and a wholly-owned subsidiary of Mach
One (“Merger Sub”) and
for the limited purposes set forth herein, Xxxxxxx Xxxxx, a resident of Florida
(“Xxxxx”) and those
persons listed in Exhibit
“A” attached hereto, being all of the Members of Mach One’s Board of
Directors.
R E C I T A L S:
A. The
Board of Directors of each of Mach One and WhiteHat deem it fair, advisable and
in the best interests of Mach One and WhiteHat, respectively, and their
respective shareholders that Mach One and WhiteHat engage in the Merger (as
defined below) on the terms and subject to the conditions set forth
herein.
B. In
furtherance of the Merger, Mach One has formed Merger Sub as a transitory
subsidiary formed solely to accomplish the merger of WhiteHat with and into
Merger Sub and pursuant to such merger the shareholders of WhiteHat will
exchange their shares of WhiteHat Common Stock and Preferred Stock for Mach One
Common Stock upon the terms and subject to the conditions set forth herein and
in accordance with Georgia law (the “Merger”), and change the name
of Merger Sub to WhiteHat Corporation.
C. The
respective Boards of Directors of Mach One, WhiteHat and Merger Sub and Mach One
in its capacity of Merger Sub’s sole shareholder, have approved this Agreement
and the Merger upon the terms and subject to the conditions set forth
herein. The Board of Directors of WhiteHat has determined to
recommend that the shareholders of WhiteHat adopt and approve this Agreement and
approve the Merger.
NOW,
THEREFORE, in consideration of the covenants, promises and representations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE
I
THE
MERGER
1.1 The
Merger. Upon the terms and subject to the conditions hereof
and in accordance with Georgia law, at the Effective Time, WhiteHat shall be
merged with and into Merger Sub. As a result of the Merger, the
separate corporate existence of WhiteHat shall cease and Merger Sub shall
continue as the surviving corporation. Merger Sub shall be renamed
“WhiteHat Corporation” and shall continue its existence under the laws of the
State of Georgia and shall be a wholly-owned subsidiary of Mach
One. For purposes of this Agreement, Merger Sub shall be referred to,
for the period commencing at the Effective Time, as the “Surviving
Corporation.”
1.2 Effective
Time. At the Closing, the parties hereto shall cause articles
of merger (the “Articles of
Merger”) to be filed with the office of the Secretary of State of Georgia
in such form as is required by, and executed in accordance with, the provisions
of Georgia law (the “Applicable
Law”). When used herein, the term “Effective Time” shall mean the
date and time when the Articles of Merger have been filed with the Secretary of
State of Georgia or such date and time as otherwise specified
therein.
1.3 Effect of the
Merger. The Merger shall, at and after the Effective Time,
have all of the effects provided by the Applicable Law. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of WhiteHat
and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions, disabilities and duties of each of
WhiteHat and Merger Sub shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
1.4 Articles of Incorporation of
the Surviving Corporation.
(a) The
Articles of Incorporation of the Surviving Corporation as in effect immediately
prior to the Effective Time shall be the Articles of Incorporation of the
Surviving Corporation, until thereafter changed or amended as provided therein
or by applicable law.
1.5 Board of Directors and
Officers of the Surviving Corporation. The directors and
officers of Surviving Corporation immediately prior to the Effective Time shall
be the directors and officers of the Surviving Corporation, each to hold office
in accordance with the Articles of Incorporation of the Surviving
Corporation.
1.6 Board of Directors of Mach
One. Mach One shall take all such action as may be necessary
(a) to cause the number of directors comprising the Board of Directors of Mach
One as of the Effective Time to be increased to nine (9) members, (b) to cause
Xxxxx and Xxxxx Xxxxx (“Xxxxx”) to be appointed to the
Board of Directors of Mach One as of the Effective Time, and (c) to serve until
the next annual election of directors of Mach One, (c) to cause a person with
significant beverage and/or health care product experience for children,
selected solely by Xxxxx and Xxxxx, or their successors to be
appointed to the Board of Directors.
ARTICLE
II
CONVERSION
OF SHARES
2.1 Merger
Stock. At the Effective Time, by virtue of the Merger and
without any action on the part of any shareholder, officer or director of Mach
One, Merger Sub, WhiteHat or the holders of any of the following
securities:
(a) Each
share of WhiteHat Common Stock issued and outstanding immediately prior to the
Effective Time, shall be converted into the right to receive, and become
exchangeable for 15.480 shares of validly issued, fully paid and nonassessable
shares of Mach One Common Stock (the “Merger Stock”);
(b) Each
share of WhiteHat Preferred Stock issued and outstanding immediately prior to
the Effective Time, shall be converted into the right to receive, and become
exchangeable for 15.480 shares of validly issued, fully
paid and nonassessable shares of the Merger Stock;
(c) Pursuant
to existing agreements, $987,000 of WhiteHat indebtedness will be cancelled and
converted into the right to receive 15,343,750 shares of validly issued, fully
paid and nonassessable shares of the Merger Stock at an average conversion ratio
of one such share for each $.064 of indebtedness cancelled;
(d) Each
share of common stock of Merger Sub issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of any shareholder, officer or director of WhiteHat or Merger Sub, be
converted into and become one fully paid and nonassessable share of common stock
of the Surviving Corporation.
2.2 Fractional
Shares. No fraction of a share of Merger Common Stock will be
issued by virtue of the Merger, and each holder of WhiteHat shares or WhiteHat
indebtedness who would otherwise be entitled to a fraction of a share of Merger
Common Stock shall receive from Mach One, in lieu of such fractional share, one
(1) share of Merger Common Stock if but only if the fractional share would have
been greater that .5 of a full share.
2.3 Dissenting
Shares. Notwithstanding any other provision hereof to the
contrary and to the extent permitted under Georgia law, any shares of WhiteHat
Common Stock and/or Preferred Stock held by a Dissenting Shareholder shall not
be converted as described in Section 2.1(a) or (b), but instead shall be
converted into the right to receive the consideration due a Dissenting
Shareholder pursuant to Georgia law, provided, however, that if a
Dissenting Shareholder shall fail to perfect his demand, withdraw his demand or
otherwise lose his right for appraisal under the terms of Georgia law, then the
WhiteHat Common Stock and/or Preferred Stock held by such Dissenting Shareholder
shall be deemed to be converted as of the Effective Time in accordance with the
provisions of Section 2.1(a) and/or 2.1(b). Surviving
Corporation shall not voluntarily make any payment with respect to, settle, or
offer to settle or otherwise negotiate, any such demands. All amounts
paid to Dissenting Shareholders shall be paid without interest thereon (to the
extent permitted by applicable law) by Mach One.
For
purposes hereof, the term “Dissenting Shareholder” shall
mean a holder of WhiteHat Common Stock and/or Preferred Stock who (a) objects to
the Merger; and (b) complies with the applicable provisions of Georgia law
concerning dissenter’s rights.
2.4 No Further
Rights. As a result of the Merger and without any action on
the part of the holders of any shares of WhiteHat Common Stock and/or Preferred
Stock (the “WhiteHat
Members”), at the Effective Time, all shares of WhiteHat Common Stock and
Preferred Stock shall cease to be outstanding and shall be cancelled and retired
and shall cease to exist, and each holder of such shares shall thereafter cease
to have any rights with respect to such shares of WhiteHat Common Stock and/or
Preferred Stock, except the right to receive the Merger Stock as set forth in
Section 2.1(a) and/or (b), and the right to receive Additional Merger Stock as
set forth in Section 2.5, or dissenter’s rights to the extent available under
Georgia law.
2.5 Additional Merger
Stock.
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(a)
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As
additional partial consideration at Closing, Mach One shall deposit Four
Hundred Thousand Dollars ($400,000.00) into a Surviving Corporation
account controlled by Xxxxxxx Xxxxxxxx, CFO of Mach One and Xxxxx Xxxxx,
CEO of WhiteHat, which shall be used to pay legal fees, accounting fees,
marketing expenses and other costs already incurred by WhiteHat,
indebtedness of WhiteHat and for the further development of the Surviving
Corporation’s business.
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(b)
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As
additional partial consideration, within ninety (90) days of the Closing,
Mach One shall deposit One Million Six Hundred Thousand Dollars
($1,600,000.00) into a Surviving Corporation account controlled by Xxxxxxx
Xxxxxxxx, CFO of Mach One and Xxxxx Xxxxx, CEO of WhiteHat to be used for
the purpose of developing children’s products, including juices, within
the WhiteHat Brands division of Mach
One.
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(c)
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As
additional partial consideration, if Mach One does not deliver the One
Million Six Hundred Thousand Dollars ($1,600,000.00) as set forth above in
Section 2.4(a), then the former WhiteHat Members shall receive a pro-rata
share of 33,691,592 shares of Mach One Common Stock as additional
consideration within ten (10) days following the expiration of such ninety
(90) day period (i) in the ratio of 3.369 shares of Mach One Common Stock
for each share of WhiteHat Common Stock held by such WhiteHat Member at
the Effective Time, and (ii) in the ratio of 3.369 shares of Mach One
Common Stock for each share of WhiteHat Preferred Stock held by such
WhiteHat Member at the Effective Time. Notwithstanding the
foregoing, under no circumstances will the total number of Mach One Common
Stock issued to the WhiteHat Members at the Effective Time and pursuant to
this Section 2.5(c) exceed 49.9% of the total outstanding shares of Mach
One Common stock immediately after the issuance of such Common
Stock.
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ARTICLE
III
ISSUANCE
OF CERTIFICATES
3.1 Issuance
Procedures. Promptly after the Effective Time, Mach One shall
cause its transfer agent, Stalt, Inc. (the “Transfer Agent”), to mail to
each WhiteHat Member and indebtedness holder who was, at the Effective Time, a
holder of record of shares of WhiteHat Common Stock and/or Preferred Stock
and/or indebtedness and is entitled to receive the Merger Stock, instructions as
to the issuance and delivery of such shares of Merger Stock. If any
portion of the Merger Stock is to be issued to a Person other than the WhiteHat
Member in whose name the WhiteHat Common Stock and/or Preferred Stock is
registered, it shall be a condition to such issuance that such shareholder
deliver appropriate transfer instructions to the Transfer Agent and that the
Person requesting such issuance shall pay to the Transfer Agent any transfer or
other taxes required as a result of such payment to a Person other than the
registered holder of such WhiteHat Common Stock and/or Preferred Stock or
establish to the satisfaction of the Transfer Agent that such tax has been paid
or is not payable. Until the Merger Stock is issued as contemplated
by this Section 3.1, each share of WhiteHat Common Stock or Preferred Stock
shall be deemed at all times after the Effective Time to represent only the
right to receive the certificate representing shares of Mach One Common
Stock.
3.2 No Further Ownership Rights
in Stock. All shares of Mach One Common Stock issued in
accordance with the terms of Article II shall be deemed to have been issued
and paid in full satisfaction of all rights pertaining to the shares formerly
represented by such WhiteHat Common Stock and/or Preferred Stock.
3.3 No
Liability. Notwithstanding any provision of this Agreement to
the contrary, none of Mach One, Merger Sub, WhiteHat, Surviving Corporation or
the Transfer Agent shall be liable to any Person in respect of any Merger Stock
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
3.4 Stock Transfer
Books. The stock transfer book of WhiteHat shall be closed at
the Effective Time and there shall be no further registration of transfers of
shares of WhiteHat Common Stock or Preferred Stock thereafter on the records of
WhiteHat. On and after the Effective Time, all WhiteHat Common Stock
and/or Preferred Stock shall represent only the right to receive the applicable
Merger Stock with respect to the shares of WhiteHat Common Stock and/or
Preferred Stock.
3.5 No Liens. The Merger
Stock shall be issued free and clear of all liens, mortgages, pledges,
encumbrances or charges, whether disclosed or not disclosed.
3.6 Federal Securities Laws: No
Registration.
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(a)
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The
Merger Stock issued to the WhiteHat Members hereunder shall not, at the
time of Closing, be registered under the federal securities
laws.
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(b)
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The
Merger Stock shall be issued pursuant to an exemption therefrom as
“restricted stock” within the meaning of Regulation D promulgated under
the Securities Act of 1933, as amended (the “Act”). All
such Merger Stock shall bear a legend worded substantially as
follows:
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“The
shares represented by this certificate have not been registered under the
Securities Act of 1933 (the
“Act”) and are ‘restricted securities’ as that term is defined in
Regulation D under the Act. The shares may not be offered for sale,
sold or otherwise transferred except pursuant to an exemption from registration
under the Act, the availability of which is to be established to the
satisfaction of Mach One.”
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(c)
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The
Transfer Agent shall annotate its records to reflect the restrictions on
transfer embodied in the legend set forth above. There shall be
no requirement that Mach One register the Merger Stock under the
Act.
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3.7 Investment
Representations.
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(a)
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Merger
Stock issued according to the terms hereof shall, when issued, be
restricted shares and shall not be sold, transferred or otherwise disposed
of by the holders thereof without registration under the Act or an
available exemption from registration under the Securities
Act.
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(b)
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The
certificates representing the Merger Stock issued according to the terms
hereof shall contain the appropriate restrictive legends, and Mach One
shall issue appropriate stop-transfer instructions to the Transfer Agent
regarding such Merger Stock.
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3.8 Liquidated
Damages. The procedure set forth in Sections 2.4(b) and (c) has been evaluated by
Mach One and WhiteHat, based on the advice of their legal counsel and in light
of Minnesota law on liquidated damages. Based on that process, Mach
One and WhiteHat agree that the additional 33,691,592 shares of Mach One Common
Stock that would be distributed to the prior WhiteHat Members pursuant to Section 2.1(c) is a reasonable
measure of the probable damages, in light of the Agreement as a whole, that
would be incurred by WhiteHat, and by the WhiteHat Members. Both Mach
One and WhiteHat agree that it would be difficult to precisely prove the direct
and consequential damages incurred by WhiteHat and the WhiteHat Members, if Mach
One failed to deliver to WhiteHat the additional One Million Six Hundred
Thousand Dollars ($1,600,000.00) within ninety (90) days.
ARTICLE
IV
CLOSING
4.1 Closing of
Transaction. Subject to fulfilling or waiving the conditions
precedent set forth in Article
XI hereof, the Closing shall take place on the Closing Date at the
offices of WhiteHat’s counsel, Xxxxxxxxx Traurig, LLP, Suite 400, 0000 Xxxxxxxxx
Xxxxx, Xxxxxxx, XX 00000 at 10:00 A.M., local time.
4.2 Closing
Date. The Closing Date of the Exchange shall be March 5,
2010, or as
extended pursuant to Section
13.1(b) below.
4.3 Deliverables at
Closing.
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(a)
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WhiteHat
shall deliver or cause to be delivered to Mach One at
Closing:
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(i)
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Articles
of Merger executed by duly authorized officers of
WhiteHat;
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(ii)
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An
Investment Letter from each WhiteHat Member surrendering his, her or its
shares and agreeing to a restriction on transferring the Merger Stock as
described in Section 3.7 hereof
;
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(iii)
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A
copy of a consent of WhiteHat’s three Members of its Board of Directors
authorizing WhiteHat to take the necessary steps toward Closing and to
Close the transactions described by this Agreement in the form set forth
in Exhibit “B”;
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(iv)
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A
copy of a Certificate of Good Standing for WhiteHat issued not more than
thirty (10) days prior to Closing by the Georgia Secretary of
State;
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(v)
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Articles
of Incorporation of Surviving Corporation to be effective at
the Effective Time of the Merger in the form attached hereto as Exhibit
“C”;
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(vi)
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All
of WhiteHat’s books and records for the last two years;
and
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(vii)
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Such
other documents, instruments or certificates as shall be commercially
reasonably requested by Mach One or its
counsel.
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(b) Mach
One shall deliver or cause to be delivered to WhiteHat at Closing:
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(i)
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Articles
of Merger executed by duly authorized officers of Mach One and Merger
Subsidiary;
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(ii)
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A
copy of a consent, in the form set forth in Exhibit “A,” of
Mach One’s Board of Directors authorizing Mach One to take the necessary
steps toward Closing and to Close the transactions described by this
Agreement;
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(iii)
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A
copy of a Certificate of Good Standing for Mach One issued not more than
ten (10) days prior to Closing by the Secretary of State of
Nevada;
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(iv)
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Articles
of Incorporation and Bylaws of Mach One certified as of the Closing Date
by the President and Secretary of Mach
One;
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(v)
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Such
other documents, instruments or certificates as shall be commercially
reasonably requested by WhiteHat or its
counsel.
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4.4 Filings;
Cooperation.
(a) Prior
to the Closing, the Parties shall make such filings and take such other actions
as may be necessary to satisfy the conditions precedent set forth in Article XI
below.
(b) On
and after the Closing Date, Mach One, WhiteHat, Peter and the WhiteHat Members
shall, on request and without further consideration, cooperate with one another
by furnishing or causing others to furnish any additional information and/or
executing and delivering or causing others to execute and deliver any additional
documents and/or instruments, and causing others to do any and all other things
to consummate or otherwise implement the transactions described by this
Agreement.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES BY WHITEHAT AND XXXXX
5.1 Subject
to the schedule of exceptions, attached hereto and incorporated herein by this
reference, WhiteHat and Xxxxx represent and warrant to Mach One as
follows:
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(a)
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Organization and Good
Standing of WhiteHat . WhiteHat is
currently:
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(i)
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a
limited liability company;
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(ii)
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duly
organized;
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(iii)
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validly
existing;
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(iv)
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in
good standing under the laws of the State of
Georgia;
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(v)
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has
full corporate power and authority to own or lease its
properties;
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(vi)
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to
carry on its business as now being conducted;
and
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(vii)
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to
carry on its business as proposed to be
conducted.
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(b)
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WhiteHat
is qualified to conduct business as a foreign limited liability company in
no other jurisdiction, and the failure to so qualify in any other
jurisdiction does not materially, adversely affect the ability of WhiteHat
to carry on its business as most recently
conducted.
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(c)
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The
Certificate of Formation of WhiteHat and all Amendments thereto as
presently in effect, and the Operating Agreement of WhiteHat as presently
in effect, both of which shall be certified by the Members of WhiteHat’s
Board of Directors, have been delivered to Mach One and are complete and
correct and there has been no amendment, modification or other change
thereto.
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(d)
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Capitalization.
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(i)
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WhiteHat’s
authorized capital consists of unlimited shares of WhiteHat Common Stock
and Preferred Stock of which 7,412,148 shares of Common Stock and
2,587,852 shares of Preferred Stock are issued and outstanding as of the
date hereof, and are held of record by 77 persons, who are currently
residents of one of the following jurisdictions: AZ, CA, CO,
DC, DE, FL, GA, IN KS, MO, NJ, NY, OH, PA, SC, UK, UT, VA, WI;
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(ii)
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All
such outstanding WhiteHat Common Stock and Preferred Stock is validly
issued, paid and non-assessable;
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(iii)
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All
securities issued by WhiteHat as of the date of this Agreement have been
issued in compliance with all applicable state and federal
laws;
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(iv)
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Except
as set forth in Schedule 5.1(d), no
other equity securities or debt obligations of WhiteHat are authorized,
issued or outstanding.
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(v)
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The
total number of issued and outstanding WhiteHat Common Stock Preferred
Stock that will be issued and outstanding as of the Closing Date shall not
exceed 10,000,000 shares of WhiteHat Common Stock and Preferred
Stock;
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(h)
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Subsidiaries. Other
than as set forth in Schedule 5.1(e),
WhiteHat has no subsidiaries and no other investments, directly or
indirectly, or other financial interest in any other corporation or
business organization, joint venture or partnership of any kind
whatsoever.
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(f)
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Financial
Statements.
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(i)
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WhiteHat
shall deliver to Mach One, prior to Closing, a copy of WhiteHat’s
unaudited, financial statements for the years ended December 31, 2008 and
2009.
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(ii)
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They
shall be true and complete in all material respects and will have been
prepared in conformity with generally accepted accounting principles (the “WhiteHat Financial
Statements”) except that conforming footnotes shall not be
included.
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(iii)
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Other
than changes in the usual and ordinary conduct of the business since
December 31, 2009, there have not been and, at the Closing Date, there
shall not be any material adverse changes in such financial
statements.
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(g)
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Absence of Undisclosed
Liabilities.
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(i)
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Except
as disclosed in Schedule
5.1(g), WhiteHat has no liabilities that are not adequately
reflected or reserved against in the WhiteHat Financial Statements or
otherwise reflected in this
Agreement.
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(ii)
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Except
as disclosed in Schedule
5.1(g), WhiteHat does not have and shall not have as of the Closing
Date, any liabilities (secured or unsecured and whether accrued, absolute,
direct, indirect or otherwise) that were incurred after December 31, 2009,
and would be individually or in the aggregate, material to the results of
operations or financial condition of WhiteHat as of the Closing
Date.
|
|
|
(h)
|
Litigation. Except
as disclosed in Schedule 5.1(h):
|
|
|
(i)
|
There
are no outstanding orders, judgments, injunctions, awards or decrees of
any court, governmental or regulatory body or arbitration tribunal against
WhiteHat or its properties;
|
|
|
(ii)
|
There
are no actions, suits or proceedings pending, or, to the knowledge of
WhiteHat , threatened against or affecting WhiteHat or its affiliated
companies, any of its officers or directors relating to their positions as
such, or any of its properties, at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, connected
with the business, operations or affairs of WhiteHat or its affiliated
companies:
|
|
|
X.
|
that
might result in any material adverse change in the operations or financial
condition of WhiteHat ; or
|
|
|
Y.
|
that
might prevent or materially impede the consummation of the transactions
under this Agreement.
|
|
|
(i)
|
Compliance with
Laws. To its knowledge, the operations and affairs of
WhiteHat do not violate any law, ordinance, rule or regulation currently
in effect, or any order, writ, injunction or decree of any court or
governmental agency, the violation of which would substantially and
adversely affect the business, financial conditions or operations of
WhiteHat
..
|
|
|
(j)
|
Contracts. Except
as set forth in Schedule
5.1(k):
|
|
|
(i)
|
WhiteHat
has not entered into any material
transaction;
|
|
|
(ii)
|
There
has been no change in financial or other condition, business, property,
prospects, assets or liabilities of WhiteHat as shown on the WhiteHat
Financial Statements, other than changes that both individually and in the
aggregate do not have a consequence that is materially adverse to such
condition, business, property, prospects, assets or
liabilities;
|
|
|
(iii)
|
There
has been no damage to, destruction of or loss of any of the properties or
assets of WhiteHat (whether or not covered by insurance) materially and
adversely affecting the financial or other condition, business, property,
prospects, assets or liabilities of WhiteHat
;
|
|
|
(iv)
|
WhiteHat
has not declared, or paid any dividend or made any distribution on its
membership interests, redeemed, purchased or otherwise acquired any of its
membership interests, granted any options to purchase membership
interests, or issued any of its membership
interests;
|
|
|
(v)
|
There
has been no material change, except in the ordinary course of business, in
the contingent obligations of WhiteHat by way of guaranty, endorsement,
indemnity, warranty or otherwise;
|
|
|
(vi)
|
There
have been no loans made by WhiteHat to its employees, officers or
directors;
|
|
|
(vii)
|
There
has been no waiver or compromise by WhiteHat of a valuable right or of a
material debt owed to it;
|
|
|
(viii)
|
There
has been no extraordinary increase in the compensation of any of
WhiteHat’s employees;
|
|
|
(ix)
|
There
has been no agreement or commitment by WhiteHat to do or perform any of
the acts described in this Section 5.1(j);
and
|
|
|
(x)
|
There
has been no other event or condition of any character, which might be
expected either to result in a material and adverse change in the
condition (financial or otherwise), business, property, prospects, assets
or liabilities of WhiteHat or to impair materially the ability of WhiteHat
to conduct the business now being
conducted.
|
|
|
(k)
|
Contracts. Except
as set forth in Schedule
5.1(k):
|
|
|
(i)
|
WhiteHat
is not a Party to any written or oral commitment for capital
expenditures;
|
|
|
(ii)
|
WhiteHat
is not a Party to, nor is its property bound by any written or oral,
express or implied, agreement, contract or other contractual obligation
including, without limitation, any real or personal property leases, any
employment agreements, any consulting agreements any personal services
agreements or any other agreements that require WhiteHat to pay any money
or deliver any assets or services after the Closing;
and
|
|
|
(iii)
|
WhiteHat
has in all material respects performed all obligations required to be
performed by it to date and is not in default in any material respect
under any agreements or other documents to which it was a
Party.
|
|
|
(l)
|
Employees.
|
|
|
(i)
|
There
are, except as disclosed in Schedule 5.1(l), no
collective bargaining, bonus, profit sharing, compensation, or other
plans, agreements or arrangements between WhiteHat and any of its
directors, officers or employees,
and
|
|
|
(ii)
|
There
are, except as disclosed in Schedule 5.1(l), no
employment, consulting, severance or indemnification arrangements,
agreements or understandings between WhiteHat on the one hand, and any
current or former directors, officers or employees of WhiteHat on the
other hand.
|
|
|
(m)
|
Assets.
|
|
|
(i)
|
All
of the assets reflected on the December 31, 2009, unaudited financial
statements or acquired and held as of the Closing Date, will be owned by
WhiteHat on the Closing Date.
|
|
|
(ii)
|
Except
as set forth in Schedule 5.1(m):
|
|
|
X.
|
WhiteHat
owns outright and has good and marketable title, or holds valid and
enforceable leases, to all of such
assets.
|
|
|
Y.
|
None
of WhiteHat’s equipment used by WhiteHat connected with its business has
any material defects and all of them are in all material respects in good
operating condition and repair, and are adequate for the uses to which
they are being put.
|
|
|
Z.
|
None
of WhiteHat’s equipment is in need of maintenance or repairs, except for
ordinary, routine maintenance and
repair.
|
|
|
(iii)
|
WhiteHat
represents that, except to the extent disclosed in Schedule 5.1(m)(iii)
to this Agreement or reserved against on its unaudited balance sheet as of
December 31, 2009, it is not aware of any accounts and contracts
receivable existing that in its judgment would be
uncollectible.
|
|
|
(n)
|
Operating
Authorities.
|
|
|
(ii)
|
Except
as set forth in Schedule
5.1(n), all federal, foreign, state and local tax returns, reports
and information statements required to be filed by or regarding the
activities of WhiteHat have been filed for all the years and periods for
which such returns and statements were due, including extensions
thereof.
|
|
|
(ii)
|
Such
returns, reports and information statements are true and correct in all
material respects insofar as they relate to the activities of WhiteHat
.
|
|
|
(iii)
|
On
the date of this Agreement, WhiteHat is not delinquent in the payment of
any such tax or assessment, and no deficiencies for any amount of such tax
have been proposed or assessed.
|
|
|
(o)
|
Operating
Authorities.
|
|
|
(i)
|
To
its knowledge, WhiteHat has all material operating authorities,
governmental certificates and licenses, permits, authorizations and
approvals (“Permits”) required for
conducting its business as presently conducted. Such Permits are set forth
on Schedule 5.1(o).
|
|
|
(ii)
|
Since
WhiteHat’s inception:
|
|
|
W.
|
there
has not been any notice or adverse development regarding such
Permits;
|
|
|
X.
|
such
Permits are in full force and
effect;
|
|
|
Y.
|
no
material violations are or have been recorded regarding any permit;
and
|
|
|
Z.
|
no
proceeding is pending or threatened to revoke or limit any
Permit.
|
|
|
(p)
|
Authority to Execute
Agreement.
|
|
|
(i)
|
The
Members of WhiteHat’s Board of Directors, pursuant to the power and
authority legally vested in them, have duly
authorized the execution and delivery by WhiteHat of this Agreement, and
have duly authorized each of the transactions hereby
described.
|
|
|
(ii)
|
WhiteHat,
the WhiteHat Members and Xxxxx have the power and authority to execute and
deliver this Agreement, to consummate the transactions hereby described
and to take all other actions required to be taken by it or them pursuant
to the provisions hereof.
|
|
|
(iii)
|
WhiteHat
has taken all actions required by law, its Certificate of Formation, as
amended, or otherwise to authorize the execution and delivery of this
Agreement.
|
|
|
(iv)
|
This
Agreement is valid and binding upon WhiteHat, the WhiteHat Members and
Xxxxx according to its terms.
|
|
|
(v)
|
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions described hereby shall constitute a violation or breach of
the Certificate of Formation, as amended, or the Operating Agreement, as
amended, of WhiteHat, or any agreement, stipulation, order, writ,
injunction, decree, law, rule or regulation applicable to
WhiteHat.
|
|
|
(q)
|
Continuation of Key
Management and Directors. To its knowledge, WhiteHat has
confirmed that all key management personnel of WhiteHat intend to continue
their employment with the Surviving Corporation or its subsidiaries after
the Closing. For purposes of this Section 5.1(q), “key management
personnel” shall include Xxxxx, who is the CEO and a Member of the
Board of Directors, and Xxxxx, a Member of the Board of
Directors.
|
|
|
(r)
|
Books and
Records.
|
|
|
(i)
|
The
books and records of WhiteHat are materially complete and materially
correct, and are maintained according to business
practices.
|
|
|
(ii)
|
They
accurately present and reflect, in all material respects, all of the
transactions therein described; and
|
|
|
(iii)
|
There
have been no transactions involving WhiteHat that properly should have
been set forth therein and that have not been accurately so set
forth.
|
|
|
(s)
|
Finder’s
Fees. WhiteHat is not and on the Closing Date shall not
be liable or obligated to pay any finder’s, agent’s or broker’s fee
arising out of or connected with this Agreement or the transactions
described by this
Agreement.
|
5.2 Disclosure.
|
|
(a)
|
At
the date of this Agreement, WhiteHat and Xxxxx, the CEO of WhiteHat, have,
and at the Closing Date they shall have, to their knowledge, disclosed all
events, conditions and facts materially affecting WhiteHat’s business and
prospects.
|
|
|
(b)
|
WhiteHat
and Xxxxx have not now and shall not have at the Closing Date, withheld
knowledge of any such events, conditions or facts which they know, or have
grounds to know, would materially affect WhiteHat’s business and
prospects.
|
|
|
(c)
|
This
Agreement and any certificate, exhibit, schedule or other written document
or statement, furnished to Mach One by WhiteHat and/or Xxxxx connected
with the transactions described by this Agreement shall not contain any
untrue statement of a material fact or omits and shall not omit to state a
material fact necessary to be stated in order to make the statements
contained herein or therein not
misleading.
|
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES BY MACH ONE
6.1 Subject
to the schedule of exceptions, attached hereto and incorporated herein by this
reference, Mach One represents and warrants to WhiteHat and the WhiteHat Members
as follows:
|
|
(a)
|
Organization and Good
Standing. Mach One is
currently:
|
|
|
(i)
|
a
corporation;
|
|
|
(ii)
|
duly
organized;
|
|
|
(iii)
|
validly
existing;
|
|
|
(iv)
|
in
good standing under the laws of the State of
Nevada;
|
|
|
(v)
|
has
full corporate power and authority to own or lease its
properties;
|
|
|
(vi)
|
to
carry on its business as now being conducted;
and
|
|
|
(vii)
|
to
carry on its business as proposed to be
conducted.
|
|
|
(b)
|
Mach
One is qualified to conduct business as a foreign corporation in Minnesota
and Wisconsin and no other jurisdiction, and the failure to so qualify in
any other jurisdiction does not materially, adversely affect the ability
of Mach One to carry on its business as most recently
conducted.
|
|
|
(c)
|
The
Articles of Incorporation of Mach One and all amendments thereto as
presently in effect, certified by the Secretary of State of Nevada, and
the Bylaws of Mach One as presently in effect, certified by the President
and Secretary of Mach One, have been delivered to WhiteHat and are
complete and correct and since the date of such delivery, there has been
no amendment, modification or other change
thereto.
|
|
|
(d)
|
Capitalization.
|
|
|
(i)
|
Mach
One’s authorized capital stock consists of 510,500,000 shares consisting
of:
|
|
|
X.
|
500,000,000
shares of $.001 par value Common Stock, of which 183,671,991 shares are
issued and; and
|
|
|
Y.
|
10,500,000
shares of $0.05 par value Preferred Stock, of which 500,000 shares of
Series B Convertible Preferred Stock are issued and outstanding and held
of record by one shareholder and 1,200,000 shares of Series C Convertible
Preferred Stock are issued and outstanding and held of record by six
shareholders.
|
|
|
(ii)
|
Except
as set forth in Schedule 6.1(d), no
other equity securities or debt obligations of Mach One are authorized,
issued or outstanding and as of the Closing, there will be no other
outstanding options, warrants, agreements, contracts, calls, commitments
or demands of any character, preemptive or otherwise, other than as set
forth in Schedule
6.1(d) and in this Agreement, relating to any of the Mach One Common
Stock, and there will be no outstanding security of any kind convertible
into Mach One Common
Stock.
|
|
|
(iii)
|
The
shares of Mach One Common
Stock are free and clear of all liens, charges, claims, pledges,
restrictions and encumbrances whatsoever of any kind or nature that would
inhibit prevent or otherwise interfere with the transactions described
hereby.
|
|
|
(iv)
|
All
of the outstanding Mach One Common
Stock is validly issued, fully paid and nonassessable and there are no
voting trust agreements or other contracts, agreements or arrangements
restricting or affecting voting or dividend rights or transferability
regarding the outstanding shares of Mach One Common
Stock.
|
|
|
(v)
|
The
total number of issued and outstanding Mach One common stock that will be
issued and outstanding as of the Closing Date shall not exceed 183,671,991
shares (not taking into account any shares issued upon conversion of any
Zero Coupon Convertible Subordinated Notes, Series B Preferred Stock or
Series C Preferred Stock prior to Closing)
..
|
|
|
(e)
|
Subsidiaries. Other
than as set forth in Schedule 6.1(e), Mach
One has no subsidiaries and no other investments, directly or indirectly,
or other financial interest in any other corporation or business
organization, joint venture or partnership of any kind
whatsoever.
|
|
|
(f)
|
Financial
Statements.
|
|
|
(i)
|
Mach
One shall deliver to WhiteHat at least ten (10) days prior to Closing,
copies of all of Mach One’s audited and unaudited financial statements
through September 30, 2009;
|
|
|
(ii)
|
They
shall be true and complete and have been prepared according to generally
accepted accounting principles (the “Mach One Financial
Statements”).
|
|
|
(iii)
|
Other
than changes in the usual and ordinary conduct of the business since
September 30, 2009, there have not been and, at the Closing Date, there
shall not be any material adverse changes in such financial statements
except as disclosed in Schedule
6.1(f).
|
|
|
(g)
|
Absence of Undisclosed
Liabilities.
|
|
|
(i)
|
Except
as disclosed in Schedule
6.1(g), Mach One has no liabilities that are not adequately
reflected or reserved against in the Mach One Financial Statements or
otherwise reflected in this
Agreement.
|
|
|
(ii)
|
Except
as disclosed in Schedule
6.1(g) and in Mach One’s Financial Statements, Mach One does not
have and shall not have, as of the Closing Date, any liabilities (secured
or unsecured and whether accrued, absolute, direct, indirect or otherwise)
that were incurred after September 30, 2009, and would be individually or
in the aggregate, material to the results of operation or financial
condition of Mach One.
|
|
|
(h)
|
Litigation.
Except as disclosed in Schedule
6.1(h):
|
|
|
(i)
|
there
are no outstanding orders, judgments, injunctions, awards or decrees of
any court, governmental or regulatory body or arbitration tribunal against
Mach One or its properties; and
|
|
|
(ii)
|
there
are no actions, suits or proceedings pending, or, to the knowledge of Mach
One, threatened against or affecting Mach One or its affiliated companies,
any of its officers or directors relating to their positions as such, or
any of its properties, at law or in equity, or before or by any federal,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, connected with the
business, operations or affairs of Mach One or its affiliated
companies:
|
|
|
X.
|
that
might result in any material adverse change in the operations or financial
condition of Mach One; or
|
|
|
Y.
|
That
might prevent or materially impede the consummation of the transactions
under this Agreement.(l)
|
|
|
(i)
|
Compliance with
Laws. To its knowledge, the operations and affairs of Mach One do
not violate any law, ordinance, rule or regulation currently in effect, or
any order, writ, injunction or decree of any court or governmental agency,
the violation of which would substantially and adversely affect the
business, financial conditions or operations of Mach
One.
|
|
|
(j)
|
Absence of Certain
Changes. Except as set forth in Schedule 6.1(j), or
otherwise disclosed in writing to WhiteHat , since September 30,
2009:
|
|
|
(i)
|
Mach
One has not entered into any material
transaction;
|
|
|
(ii)
|
There
has been no change in financial or other condition, business, property,
prospects, assets or liabilities of Mach One as shown on the Mach One
Financial Statements, other than changes that both individually and in the
aggregate do not have a consequence that is materially adverse to such
condition, business, property, prospects, assets or
liabilities;
|
|
|
(iii)
|
There
has been no damage to, destruction of or loss of any of the properties or
assets of Mach One (whether or not covered by insurance) materially and
adversely affecting the financial or other condition, business, property,
prospects, assets or liabilities of Mach
One;
|
|
|
(iv)
|
Mach
One has not declared, or paid any dividend or made any distribution on its
membership interests, redeemed, purchased or otherwise acquired any of its
membership interests, granted any options to purchase membership
interests, or issued any of its membership
interests;
|
|
|
(v)
|
There
has been no material change, except in the ordinary course of business, in
the contingent obligations of Mach One by way of guaranty, endorsement,
indemnity, warranty or otherwise;
|
|
|
(vi)
|
There
have been no loans made by Mach One to its employees, officers or
directors;
|
|
|
(vii)
|
There
has been no waiver or compromise by Mach One of a valuable right or of a
material debt owed to it;
|
|
|
(viii)
|
There
has been no extraordinary increase in the compensation of any of Mach
One’s employees;
|
|
|
(ix)
|
There
has been no agreement or commitment by Mach One to do or perform any of
the acts described in this Section 4.1(j);
and
|
|
|
(x)
|
There
has been no other event or condition of any character, which might be
expected either to result in a material and adverse change in the
condition (financial or otherwise), business, property, prospects, assets
or liabilities of Mach One or to impair materially the ability of Mach One
to conduct the business now being
conducted.
|
|
|
(k)
|
Contracts. Except as
set forth in Schedule
6.1(k):
|
|
|
(i)
|
Mach
One is not a Party to any written or oral commitment for capital
expenditures;
|
|
|
(ii)
|
Mach
One is not a Party to, nor is its property bound by any written or oral,
express or implied, agreement, contract or other contractual obligation
including, without limitation, any real or personal property leases, any
employment agreements, any consulting agreements any personal services
agreements or any other agreements that require Mach One to pay any money
or deliver any assets or services after the Closing;
and
|
|
|
(iii)
|
Mach
One has in all material respects performed all obligations required to be
performed by it to date and is not in default in any material respect
under any agreements or other documents to which it was a
Party.
|
|
|
(l)
|
Employees.
|
|
|
(i)
|
There
are, except as disclosed in Schedule 6.1(l), no
collective bargaining, bonus, profit sharing, compensation, or other
plans, agreements or arrangements between Mach One and any of its
directors, officers or employees;
and
|
|
|
(ii)
|
There
are no employment, consulting, severance or indemnification arrangements,
agreements or understandings between Mach One on the one hand, and any
current or former directors, officers or employees of Mach One on the
other hand.
|
|
|
(m)
|
Assets.
|
|
|
(i)
|
All
of the assets reflected on the September 30, 2009, unaudited financial
statements or acquired and held as of the Closing Date, shall be owned by
Mach One on the Closing Date.
|
|
|
(ii)
|
Except
as set forth in Schedule 6.1(m):
|
|
|
X.
|
Mach
One owns outright and has good and marketable title, or holds valid and
enforceable leases, to all of such
assets.
|
|
|
Y.
|
None
of Mach One’s equipment used by Mach One connected with its business has
any material defects and all of them are in all material respects in good
operating condition and repair, and are adequate for the uses to which
they are being put.
|
|
|
Z.
|
None
of Mach One’s equipment is in need of maintenance or repairs, except for
ordinary, routine maintenance and
repair.
|
|
|
(iii)
|
Mach
One represents that, except to the extent disclosed in Schedule 6.1(m) to
this Agreement or reserved against on its balance sheet as of September
30, 2009, it is not aware of any accounts and contracts receivable
existing that in its judgment would be
uncollectible.
|
|
|
(n)
|
Tax
Matters.
|
|
|
(i)
|
Except
as set forth in Schedule
6.1(n), all federal, foreign, state and local tax returns, reports
and information statements required to be filed by or regarding the
activities of Mach One have been filed for all the years and periods for
which such returns and statements were due, including extensions
thereof.
|
|
|
(ii)
|
Such
returns, reports and information statements are true and correct in all
material respects insofar as they relate to the activities of Mach
One.
|
|
|
(iii)
|
On
the date of this Agreement, Mach One is not delinquent in the payment of
any such tax or assessment, and no deficiencies for any amount of such tax
have been proposed or assessed.
|
|
|
(0)
|
Operating
Authorities.
|
|
|
(i)
|
To
its knowledge, Mach One, Mach One has all material operating authorities,
governmental certificates and licenses, permits, authorizations and
approvals (“Permits”) required to
conduct its business as presently conducted. Such Permits are
set forth on Schedule 6.1(o).
|
|
|
(ii)
|
Since
Mach One’s inception:
|
|
|
W.
|
there
has not been any notice or adverse development regarding such
Permits;
|
|
|
X.
|
such
Permits are in full force and
effect;
|
|
|
Y.
|
no
material violations are or have been recorded regarding any permit;
and
|
|
|
Z.
|
no
proceeding is pending or threatened to revoke or limit any
Permit.
|
|
|
(p)
|
Authority to Execute
Agreement.
|
|
|
(i)
|
The
Board of Directors of Mach One, pursuant to the power and authority
legally vested in it, has duly authorized the execution and delivery by
Mach One of this Agreement and the Merger Stock, and has duly authorized
each of the transactions hereby
described.
|
|
|
(ii)
|
Mach
One has the power and authority to execute and deliver this Agreement, to
consummate the transactions hereby described and to take all other actions
required to be taken by it pursuant to the provisions
hereof.
|
|
|
(iii)
|
Mach
One has taken all the actions required by law, its Articles of
Incorporation, as amended, its Bylaws, as amended, applicable state law or
otherwise to authorize the execution and delivery of the Merger Stock
pursuant to the provisions hereof.
|
|
|
(iv)
|
This
Agreement is valid and binding upon Mach One according to its
terms.
|
|
|
(v)
|
Neither,
the execution and delivery of this Agreement, nor the consummation of the
transactions described hereby will constitute a violation or breach of the
Articles of Incorporation, as amended, or the Bylaws, as amended, of Mach
One, or any agreement, stipulation, order, writ, injunction, decree, law,
rule or regulation applicable to Mach
One.
|
|
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(q)
|
Continuation of Key
Management and Directors. To its knowledge, all key
management personnel of Mach One intend to continue their employment with
Mach One after the Closing. For purposes of this Section 6.1(q), “key
management personnel” shall include Xxxxx Xxxxxxx, the COO,
Xxxxxxx X. Xxxxxxxx, the CFO and Xxx Xxxxxxxxxx, a
Director.
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(r)
|
Books and
Records.
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|
(i)
|
The
books and records of Mach One are materially complete and materially
correct, and are maintained according to business
practices;
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|
(ii)
|
Accurately
present and reflect in all material respects, all of the transactions
therein described; and
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|
(iii)
|
There
have been no transactions involving Mach One that properly should have
been set forth therein and that have not been accurately so set
forth.
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(s)
|
Finder’s Fees.
Mach One is not, and on the Closing Date, shall not be liable or obligated
to pay any finder’s, agent’s or broker’s fee arising out of or connected
with this Agreement or the transactions described by this
Agreement.
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(t)
|
SEC Filings.
Mach One is a Section 12G reporting company under the Securities and
Exchange Act of 1934 (“Exchange Act”). Mach One
has filed all reports with the SEC required by the Exchange Act. WhiteHat
may obtain copies of all of the reports filed by Mach One with the SEC at
xxx.xxx.xxx. All of such reports are true and correct in
all material respects.
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(u)
|
Issuance of Exchange
Securities. All of the Mach One Common
Stock to be issued to WhiteHat Members pursuant to this Agreement, when
issued and delivered as provided herein, shall be duly authorized, validly
issued, and shall be free and clear of all liens, charges, claims,
pledges, restrictions and encumbrances whatsoever of any kind or nature,
except those restrictions imposed by State or Federal corporate and
securities regulations.
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(v)
|
No Violation.
The execution and delivery of this Agreement, the consummation of the
transactions described hereby and compliance by Mach One with any of the
provisions hereof shall not:
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(i)
|
violate
or conflict with, or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, any of the terms, conditions or
provisions of the Articles of Incorporation or Bylaws of Mach One or any
note, bond, mortgage, indenture, deed of trust, license, agreement or
other instrument to which Mach One is a Party, or by which it or its
properties or assets may be bound or affected;
or
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(ii)
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violate
any order, writ, injunction or decree, or any statute, rule, permit, or
regulation applicable to Mach One or any of its properties or
assets.
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6.2 Disclosure.
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(a)
|
Mach
One has and at the Closing Date it shall have, disclosed all events,
conditions and facts materially affecting the business and prospects of
Mach One.
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(b)
|
Mach
One has not now and shall not have at the Closing Date, withheld knowledge
of any such events, conditions and facts which it knows, or has grounds to
know, may materially affect Mach One’s business and
prospects.
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(c)
|
This
Agreement and any certificate, exhibit, schedule or other written document
or statement, furnished to WhiteHat or the WhiteHat Stockholders by Mach
One connected with the transactions described by this Agreement do not
contain any untrue statement of a material fact or omits and shall not
omit to state a material fact necessary to be stated in order to make the
statements contained herein or therein not
misleading.
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ARTICLE
VII
ADDITIONAL
AGREEMENTS
7.1 Undertaking by Mach One
Accountant. On or before the Closing, Mach One shall obtain an
undertaking from Xxxxxx, Xxxxxxx and X’Xxxxxx, LLC (“Accountant”), providing
that:
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(a)
|
the
Accountant has agreed to an engagement with Mach One to serve as its
certified public accountants following the Closing for purposes of
auditing and reviewing the financial statements of Mach One and WhiteHat
to comply with Mach One's ongoing reporting requirements under the
Exchange Act including, without limitation, the filing of Forms 10-Q,
10-K, and 8-K;
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(b)
|
the
Merger described hereunder will not disqualify or otherwise prohibit the
Accountant from rendering the foregoing engagement services or from
undertaking such services in a timely
manner;
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|
(c)
|
the
Accountant is duly registered with the PCAOB;
and
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(d)
|
the
Accountant shall provide its consent to the use of their audited financial
statements and accompanying reports for Mach One and WhiteHat, as
applicable, in any regulatory filing by Mach One prior to or following the
Closing.
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7.2 Other
Actions.
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|
(a)
|
At
least three (3) days prior to Closing, Mach One shall prepare the Form 8-K
announcing the Closing in conformance with regulations, which shall
include all information required by such form,
including:
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(i)
|
the
information required by Form 10 regarding
WhiteHat;
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(ii)
|
any
other information required connected with Mach One as a result of the
Merger;
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|
(iii)
|
the
U.S. GAAP Financial Statements and the Pro Forma Financial Statements, if
available, (as defined below) ("Merger Form 8-K"),
which shall be in a form acceptable to Mach One and in a format acceptable
for XXXXX filing.
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(b)
|
At
or subsequent to Closing, Mach One and WhiteHat shall jointly prepare a
press release announcing the consummation of the Merger hereunder ("Press
Release").
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|
|
(c)
|
Mach
One shall file the Merger Form 8-K with the SEC and distribute the Press
Release within the statutory time frame following the
Closing.
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|
(d)
|
Not
more than seventy-one (71) days after the filing of the Merger Form 8-K
with the SEC of the prior to the Closing, WhiteHat shall deliver to Mach
One, if possible, pro forma consolidated financial statements for
WhiteHat, its Subsidiaries and Mach One giving effect to the Merger, for
such periods as required by the SEC to be included in a Form 8-K or any
other report or form required to be filed with the SEC at or after Closing
regarding the Merger, all prepared in all material respects with the
published rules and regulations of the SEC and according to U.S. GAAP
applied on a consistent basis throughout the periods involved (the "Pro Forma Financial
Statements"). The Pro Forma Financial Statements shall have been
reviewed by the Accountant and shall be in a format acceptable for
inclusion on the Merger 8-K.
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(e)
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WhiteHat
and Mach One shall cooperate with each other and use their respective
efforts to take or cause to be taken all actions, and do or cause to be
done all things, necessary, proper or advisable on its part under this
Agreement and applicable laws to consummate the Merger and the other
transactions described hereby as soon as practicable,
including:
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(i)
|
preparing
and filing as soon as practicable all documentation to effect all
necessary notices, reports and other filings;
and
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(ii)
|
obtaining
as soon as practicable all consents, registrations, approvals, permits and
authorizations necessary or advisable to be obtained from any third party
and/or any governmental entity in order to consummate the Merger or any of
the other transactions described
hereby.
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(f)
|
Subject
to applicable laws relating to the exchange of information and the
preservation of any applicable attorney-client privilege, work-product
doctrine, self-audit privilege or other similar privilege, each of
WhiteHat and Mach One shall have the right to review and comment on in
advance, and to the extent practicable each shall consult the other on,
all the information relating to such Party, that appear in any filing made
with, or written materials submitted to, any third party and/or any
governmental entity connected with the Merger and the other transactions
described hereby. In exercising the foregoing right, each of WhiteHat and
Mach One shall act and as promptly as
practicable.
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7.4 Required
Information.
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(i)
|
Connected
with preparing the Merger Form 8-K and Press Release, and for such
other purposes, each of WhiteHat and Mach One shall, upon
request by the other, furnish the other with all information concerning
themselves, and, if any, their respective subsidiaries, directors,
officers, managers, managing members, stockholders and members (including
the directors to be elected to Mach One’s Board of Directors
effective as of the Closing pursuant to Section 1.6 hereof) and
such other matters connected with the Merger, or any other statement,
filing, notice or application made by or on behalf of each of WhiteHat and
Mach One to any third party and/or any governmental entity connected with
the Merger and the other transactions described
hereby.
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(ii)
|
Each
Party warrants and represents to the other Party that all such information
shall be true and correct in all material respects and shall not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading.
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7.5 Confidentiality; Access to
Information.
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|
(a)
|
Each
Party agrees to maintain in confidence any non-public information received
from the other Party, and to use such non-public information only for
purposes of consummating the transactions described by this Agreement.
Such confidentiality obligations will not apply
to:
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|
(i)
|
information
which was known to the one Party or their respective agents prior to
receipt from the other Party;
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|
(ii)
|
information
which is or becomes generally
known;
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(iii)
|
information
acquired by a Party or their respective agents from a third party who was
not bound to an obligation of confidentiality;
and
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|
(iv)
|
disclosure
required by law.
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(b)
|
In
the event this Agreement is terminated as provided in Article XII hereof,
each Party will return or cause to be returned to the other all documents
and other material obtained from the other connected with the Merger
described hereby.
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(c)
|
Access to
Information.
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(i)
|
WhiteHat
shall afford Mach One and its financial advisors, accountants, counsel and
other representatives access during normal business hours, upon notice, to
the properties, books, records and personnel of WhiteHat and its
Subsidiaries during the period prior to the Closing to obtain all
information concerning the business, including the status of product
development efforts, properties, results of operations and personnel of
WhiteHat and its Subsidiaries, as Mach One may request. No information or
knowledge obtained by Mach One in any investigation pursuant to this Section 7.5 shall affect
or be deemed to modify any representation or warranty contained herein or
the conditions to the obligations of the Parties to consummate the
Merger.
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(ii)
|
Mach
One shall afford WhiteHat and its financial advisors, underwriters,
accountants, counsel and other representatives access during normal
business hours, upon notice, to the properties, books, records and
personnel of Mach One during the period prior to the Closing to obtain all
information concerning the business, including the status of product
development efforts, properties, results of operations and personnel of
Mach One, as WhiteHat may request. No information or knowledge obtained by
WhiteHat in any investigation pursuant to this Section 7.5 shall affect
or be deemed to modify any representation or warranty contained herein or
the conditions to the obligations of the Parties to consummate the
Merger.
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7.6 No
Solicitation.
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|
(a)
|
Other
than regarding the Merger, WhiteHat and Mach One agree that neither of
them nor any of their officers, directors, managers, or managing members
shall, and that they shall cause their agents and other representatives
(including any investment banker, attorney or accountant retained by it)
not to, directly or indirectly, initiate, solicit, encourage or otherwise
facilitate any inquiries or the making of any proposal or offer
regarding:
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|
|
(i)
|
a
merger, reorganization, share exchange, consolidation or similar
transaction involving them;
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|
(ii)
|
any
sale, lease, exchange, mortgage, pledge, transfer or purchase of all or
substantially all of the assets or equity securities of them, taken as a
whole, in a single transaction or series of related transactions;
or
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|
|
(iii)
|
any
tender offer or exchange offer for 20% or more of the outstanding shares
of Mach One common stock or WhiteHat’s membership interests ( “Acquisition
Proposal”).
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|
|
(b)
|
WhiteHat
and Mach One further agree that neither of them nor any of their officers,
directors, managers, or managing members shall, and
that:
|
|
|
(i)
|
They
shall direct and use their efforts to cause their agents and
representatives not to, directly or indirectly, engage in any negotiations
concerning, or provide any confidential information or data to, or have
any discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal;
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|
(ii)
|
WhiteHat
and Mach One agree that they will immediately cease and cause to be
terminated any existing discussions or negotiations with any Parties
conducted heretofore regarding any Acquisition
Proposal;
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|
|
(iii)
|
WhiteHat
and Mach One agree that they will take the necessary steps to promptly
inform the individuals or entities referred to in the first sentence
hereof of the obligations undertaken in this Section
7.6.
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|
|
Notwithstanding
anything contained in this Agreement to the contrary, nothing
contained in this Agreement shall prevent the Board of Directors of
WhiteHat, or their respective representatives from, prior to the
Closing:
|
|
|
(i)
|
providing
information in response to a request therefore by a person who has made a
bona fide unsolicited Acquisition Proposal;
or
|
|
|
(ii)
|
engaging
in any negotiations or discussions with any person who has made a bona
fide unsolicited Acquisition Proposal or otherwise facilitating any effort
or attempt to implement an Acquisition
Proposal.
|
|
|
(d)
|
Notwithstanding
anything contained in this Agreement to the contrary, but only if it does
not adversely impact either Mach One or Mach One’s interests in the
Closing, including the Merger, nothing contained in this Agreement shall
prevent the board of directors of WhiteHat, or their respective
representatives from, prior to the Closing, taking any of the following
action:
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|
|
(i)
|
approving
or recommending any unsolicited Acquisition Proposal;
or
|
|
|
(ii)
|
causing
the applicable Party to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement relating to
any unsolicited Acquisition
Proposal.
|
|
|
(iii)
|
the
action set forth in Subsections (d)(i) and
(d)(ii) shall not occur unless and only to the extent
that:
|
|
|
W.
|
in
each such case referred to in Section(c)(i) and Section(c)(ii),
or Section(d)(ii) above,
WhiteHat’s Board of Directors determines, after consultation with outside
legal counsel that such action is necessary to act in a manner consistent
with the directors’ fiduciary duties under applicable
law;
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|
|
X.
|
determines
after consultation with its financial advisors that the person or group
making such Acquisition Proposal has adequate sources of financing to
consummate such Acquisition
Proposal;
|
|
|
Y.
|
that
such Acquisition Proposal, if consummated as proposed, is materially more
favorable to the WhiteHat stockholders from a financial point of view (any
such more favorable Acquisition Proposal being referred to as a “Superior Proposal”);
and
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|
|
Z.
|
determines
that such Superior Proposal is capable of being consummated, taking into
account legal, financial, regulatory and other aspects of the proposal and
the person making the proposal.
|
7.7 Public
Disclosure.
|
|
(a)
|
Except
to the extent previously disclosed or to the extent the
Parties are required by applicable law or regulation to make
disclosure, prior to Closing, no Party shall issue any statement or
communication to the public regarding the Merger without the other Party’s
consent, which consent shall be given in a timely manner. If a Party is
required by law or regulation to make disclosure regarding the Merger, it
shall, if possible, immediately notify the other Party prior to such
disclosure.
|
|
|
(b)
|
Notwithstanding
the foregoing, the Parties hereto agree that Mach One shall prepare and
file a Current Report on Form 8-K pursuant to the Exchange Act acceptable
to WhiteHat to report the execution of this Agreement and that any Party
hereto may file any reports as required by the Exchange
Act.
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|
|
(c)
|
Publicity. Prior
to the Closing, any written news releases or public disclosure by either
Party pertaining to this Agreement shall be submitted to the other Party
for its review and approval prior to such release or disclosure, provided,
however, that:
|
(i) such
approval shall not be unreasonably withheld, and
|
|
(ii)
|
such
review and approval shall not be required of disclosures required to
comply, in the judgment of counsel, with federal or state securities or
corporate laws or policies.
|
7.8 Efforts;
Notification.
|
|
(a)
|
Upon
the terms and subject to the conditions set forth in this Agreement, each
of the Parties shall use its efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with
the other Parties in doing, all things necessary and proper to consummate
and make effective, using the Standard of Conduct in Section 14.13, the
Agreement and the other transactions described by this Agreement,
including using efforts to accomplish the
following:
|
|
|
(i)
|
the
taking of all actions necessary to cause the conditions precedent set
forth in Article
XII to be satisfied;
|
|
|
(ii)
|
the
obtaining of all actions or non actions, waivers, consents,
approvals, orders and authorizations from Governmental Entities and the
making of all registrations, declarations and filings
(including registrations, declarations and filings with Governmental
Entities, if any) and the taking of all steps as may be
necessary to avoid any suit, claim, action, investigation or proceeding by
any governmental entity;
|
|
|
(iii)
|
obtaining
of all consents, approvals or waivers from third parties required as a
result of the transactions described in this
Agreement;
|
|
|
(iv)
|
defending
of any suits, claims, actions, investigations or proceedings, whether
judicial or administrative, challenging this Agreement or the consummation
of the transactions described hereby, including seeking to have any stay
or temporary restraining order entered by any court or other governmental
entity vacated or reversed; and
|
|
|
(v)
|
executing
or delivering any additional instruments necessary to consummate the
transactions described by, and to fully carry out the purposes of, this
Agreement.
|
|
|
(b)
|
Connected
with and without limiting the foregoing, Mach One and the Members of its
Board of Directors and WhiteHat and the Members of its Board of Directors
and WhiteHat Members shall, if any state takeover statute or similar
statute or regulation is or becomes applicable to the Merger, this
Agreement or any of the transactions described by this Agreement, use
their efforts to enable the Merger and the other transactions described by
this Agreement to be consummated as promptly as practicable on the terms
described by this Agreement. Notwithstanding anything herein to the
contrary, nothing in this Agreement shall be deemed to require Mach One or
WhiteHat to agree to any divestiture by itself or any of its affiliates of
shares of capital stock, membership interests or ownership interest or of
any business, assets or property, or the imposition of any material
limitation on the ability of any of them to conduct their business or to
own or exercise control of such assets, properties and
stock.
|
|
|
(c)
|
WhiteHat
shall give prompt notice to Mach One upon becoming aware that any
representation or warranty made by it contained in this Agreement has
become untrue or inaccurate, or of any failure of WhiteHat to comply with
or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement, such that the
conditions set forth in Article XII would not be
satisfied; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the Parties or the
conditions to the obligations of the Parties under this
Agreement.
|
|
|
(d)
|
Mach
One shall give prompt notice to WhiteHat upon becoming aware that any
representation or warranty made by it contained in this Agreement has
become untrue or inaccurate, or of any failure of Mach One to comply with
or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement, such that the
conditions set forth in Article XII would not be
satisfied; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the Parties or the
conditions to the obligations of the Parties under this
Agreement.
|
ARTICLE
VIII
COVENANTS
OF WHITEHAT AND XXXXX
8.1 Conduct of Business Pending
the Merger. WhiteHat and Xxxxx, to the extent within Peter’s
control, covenant and agree with Mach One that, prior to the consummation of the
Merger called for by this Agreement, and Closing, or the termination of this
Agreement pursuant to its terms, unless Mach One shall otherwise consent in
writing, and except as otherwise described by this Agreement, WhiteHat and
Xxxxx, to the extent within Peter’s control, shall comply with each of the
following:
|
|
(a)
|
WhiteHat’s
business shall be conducted only in the ordinary and usual
course;
|
|
|
(b)
|
WhiteHat
shall:
|
|
|
(i)
|
keep
intact its business organization and good
will;
|
|
|
(ii)
|
keep
available the services of its respective officers and
employees;
|
|
|
(iii)
|
maintain
good relations with suppliers, creditors, employees, customers, and others
having business or financial relationships with it;
and
|
|
|
(iv)
|
promptly
notify Mach One of any event or occurrence which is material to, and not
in the ordinary and usual course of business of WhiteHat
.
|
|
|
(c)
|
WhiteHat
shall not:
|
|
|
(i)
|
amend
its Certificate of Formation or Operating Agreement, except as
contemplated by this Agreement; or
|
|
|
(ii)
|
split,
combine, or reclassify any of its outstanding securities, or declare, set
aside, or pay any dividend or other distribution on, or make or agree or
commit to make any exchange for or redemption of any such securities
payable in cash, stock or property.
|
|
|
(d)
|
WhiteHat
shall not:
|
|
|
(i)
|
issue
or agree to issue any securities or rights of any kind to acquire any
securities; or
|
|
|
(ii)
|
enter
into any contract, agreement, commitment, or arrangement regarding any of
the foregoing, except as set forth in this
Agreement.
|
|
|
(e)
|
WhiteHat
shall not create, incur, or assume any long-term or short-term
indebtedness for money borrowed or make any capital expenditures or
commitment for capital expenditures, except in the ordinary course of
business and consistent with past
practice.
|
|
|
(f)
|
WhiteHat
shall not:
|
|
|
(i)
|
adopt,
enter into, or amend any bonus, profit sharing, compensation, stock
option, warrant, pension, retirement, deferred compensation, employment,
severance, termination or other employee benefit plan, agreement, trust
fund, or arrangement for the benefit or welfare of any officer, director,
or employee; or
|
|
|
(ii)
|
agree
to any material (in relation to historical compensation) increase in the
compensation payable or to become payable to, or any increase in the
contractual term of employment of, any officer, director or employee,
except regarding employees who are not officers or directors, in the
ordinary course of business according to past practice, or with the
written approval of Mach One.
|
|
|
(g)
|
WhiteHat
shall not sell lease, mortgage, encumber, or otherwise dispose of or grant
any interest in any of its assets or properties except
for:
|
|
|
(i)
|
sales,
encumbrances, and other dispositions or grants in the ordinary course of
business and consistent with past
practice;
|
|
|
(ii)
|
liens
for taxes not yet due;
|
|
|
(iii)
|
liens
or encumbrances that are not material in amount or effect and do not
impair the use of the property, or
|
|
|
(iv)
|
as
specifically provided for or permitted in this
Agreement.
|
|
|
(h)
|
WhiteHat
shall not enter into any agreement, commitment, or understanding, whether
in writing or otherwise, regarding any of the matters referred to in
subparagraphs (a) through (g)
above.
|
|
|
(i)
|
WhiteHat
shall continue properly and promptly to file when due all federal, state,
local, foreign, and other tax returns, reports, and declarations required
to be filed by it, and will pay, or make full and adequate provision for
the payment of, all taxes and governmental charges due from or payable by
it.
|
|
|
(j)
|
WhiteHat
shall comply with all laws and regulations applicable to it and its
operations.
|
ARTICLE
IX
COVENANTS
OF MACH ONE
9.1 Conduct of Mach One Pending
Closing. Mach One covenants and agrees with WhiteHat that,
prior to consummating the Merger called for by this Agreement, and Closing, or
terminating this Agreement pursuant to its terms, unless WhiteHat shall
otherwise consent in writing, and except as otherwise described by this
Agreement, Mach One shall comply with each of the following.
|
|
(a)
|
No
change will be made in Mach One’s Articles of Incorporation or Bylaws, or
in Mach One’s authorized or issued shares of stock, except as described in
this Agreement or as may be first approved in its sole discretion in
writing by WhiteHat .
|
|
|
(b)
|
No
dividends shall be declared, no stock options granted and no employment
agreements shall be entered into with officers or directors in Mach One,
except as may be first approved by WhiteHat in its sole discretion in
writing.
|
|
|
(c)
|
It
shall not (except as otherwise provided for in this
Agreement):
|
|
|
(i)
|
issue
or agree to issue any additional shares of, or rights of any kind to
acquire any shares of its capital stock of any class;
or
|
|
|
(ii)
|
enter
into any contract, agreement, commitment, or arrangement regarding any of
the foregoing, except as set forth in this
Agreement.
|
|
|
(d)
|
It
shall not create, incur, or assume any long-term or short-term
indebtedness for money borrowed or make any capital expenditures or
commitment for capital expenditures, except in the ordinary course of
business and consistent with past
practice.
|
|
|
(e)
|
It
shall not:
|
|
|
(i)
|
adopt,
enter into, or amend any bonus, profit sharing, compensation, stock
option, warrant, pension, retirement, deferred compensation, employment,
severance, termination or other employee benefit plan, agreement, trust
fund, or arrangement for the benefit or welfare of any officer, director,
or employee; or
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(ii)
|
agree
to any material (in relation to historical compensation) increase in the
compensation payable or to become payable to, or any increase in the
contractual term of employment of, any officer, director or employee
except, regarding employees who are not officers or directors, in the
ordinary course of business according to past
practice, or with the written approval of Mach
One.
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(f)
|
It
shall not sell lease, mortgage, encumber, or otherwise dispose of or grant
any interest in any of its assets or properties except
for:
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(i)
|
sales,
encumbrances, and other dispositions or grants in the ordinary course of
business and consistent with past
practice;
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(ii)
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liens
for taxes not yet due;
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(iii)
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liens
or encumbrances that are not material in amount or effect and do not
impair the use of the property, or
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(iv)
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as
specifically provided for or permitted in this
Agreement.
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(g)
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It
shall not enter into any agreement, commitment, or understanding, whether
in writing or otherwise, regarding any of the matters referred to in
subparagraphs (a) through (f)
above.
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(h)
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It
will continue properly and promptly to file when due all federal, state,
local, foreign, and other tax returns, reports, and declarations required
to be filed by it, and will pay, or make full and adequate provision for
the payment of, all taxes and governmental charges due from or payable by
it.
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(i)
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It
will comply with all laws and regulations applicable to it and its
operations.
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(j)
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It
shall promptly notify WhiteHat of any event or occurrence which is
material to, and not in the ordinary and usual course of business of Mach
One.
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(k)
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It
shall use its best efforts to cause all holders of its $3,035,000 of Zero
Coupon Convertible Subordinated Notes (including interest) due December
12, 2013, to convert such Notes into shares of Common Stock of Mach One at
$0.125 per share for a total of 24,280,000 shares not later than ninety
(90) calendar days from the Closing
Date.
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(l)
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It
shall use it best efforts to cause all holders of its Series B Preferred
Stock and Series C Preferred Stock to convert such Preferred Stock into
shares of Common Stock of Mach One in accordance with the terms of such
Preferred Stock not later than ninety (90) calendar days from
the Closing Date.
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ARTICLE
X
ADDITIONAL
COVENANTS OF THE PARTIES
10.1 Cooperation. Both
WhiteHat and Mach One shall cooperate with each other and their respective
counsel, accountants and agents in carrying out the transaction described by
this Agreement. They shall deliver all documents and instruments
deemed necessary or useful by the other Party. Furthermore, both
WhiteHat and Mach One shall collaborate on preparing and disseminating a
disclosure document soliciting the approval of the Merger, which the Members of
WhiteHat’s Board of Directors shall approve and recommend, of the required vote
of the WhiteHat Members.
10.2
Expenses. Each
of the Parties hereto shall pay all of its respective costs and expenses
(including attorneys’ and accountants’ fees, costs and expenses) incurred
connected with this Agreement and the consummation of the transactions described
herein.
ARTICLE
XI
SURVIVAL
AND NON-SURVIVAL OF REPRESENTATIONS,
WARRANTIES
AND COVENANTS
11.1 Survival. The
representations, warranties, covenants and other agreements made by the Parties
in this Agreement (including the schedules and exhibits to the Agreement that
are hereby incorporated by reference) shall survive for 12 months beyond the
Closing Date. This Article 11 shall not limit any claim for fraud or any
covenant or agreement of the Parties contained herein which by its terms
contemplates performance, in whole or in part, after the Closing
Date.
11.2 Termination. In
the event this Agreement is terminated by either Mach One or WhiteHat as
provided in Section 13.1, this Agreement shall forthwith become
void. Consequently, there shall be no liability or obligation on the
part of any of the Parties or their respective officers or
directors. Notwithstanding anything to the contrary contained in this
Agreement, neither Mach One nor WhiteHat shall be relieved or released from any
liabilities or damages arising out of its willful and material breach of this
Agreement.
11.3 Non-Survival. Except
as set forth above in Article XI, no other representations, warranties or
covenants survive.
ARTICLE
XII
CONDITIONS
OF PARTIES’ OBLIGATIONS
12.1 Conditions to Obligations of
the Parties. The obligations of Mach One, the Directors of
Mach One, WhiteHat, the WhiteHat Members and Xxxxx under this Agreement shall be
subject to the fulfillment, on or prior to the Closing, of all conditions
elsewhere herein set forth, including, but not limited to, receipt by the
appropriate Party of all deliveries required by Sections 4 and 5 herein, and
fulfillment, prior to Closing, of each of the following conditions:
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(a)
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WhiteHat Members
Approval. WhiteHat shall have received the required approval of its
Members in accordance with the terms of its Amended and Restated Operating
Agreement dated August 23, 2006.
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(b)
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Governmental
Consents. All material authorizations, consents or approvals of any
and all governmental regulatory authorities necessary connected with the
consummation of the transactions described by this Agreement shall have
been obtained and be in full force and
effect
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(b)
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No
Order.
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(i)
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No
governmental entity shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction
or other order (whether temporary, preliminary or permanent) that is in
effect and that has the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger, substantially on the terms
described by this Agreement.
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(ii)
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All
waiting periods, if any, under any law in any jurisdiction in which
WhiteHat or Mach One has material operations relating to the transactions
described hereby has expired or terminated early and all material
approvals required to be obtained prior to the Merger connected with the
transactions described hereby shall have been
obtained.
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(c)
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Blue Sky
Laws. The Merger Stock to be issued under this Agreement
shall be exempt from, or have been qualified under, the Blue Sky Laws of
each appropriate jurisdiction to the satisfaction of Mach One and WhiteHat
and their respective counsels.
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(d)
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Mach
One and WhiteHat and their respective legal counsel shall have received
copies of all such certificates, opinions and other documents and
instruments as each Party or its legal counsel may request pursuant to
this Agreement or otherwise connected with the consummation of the
transactions described hereby, and all such certificates, opinions and
other documents and instruments received by each Party shall be
satisfactory, in form and substance, to each Party and its legal
counsel.
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(e)
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Each
Party shall have granted to the other Party (acting through its management
personnel, counsel, accountants or other representatives designated by it)
full opportunity to examine its books and records, properties, plants and
equipment, proprietary rights and other instruments, rights and papers of
all kinds according to Articles V and VI
hereof, and each Party shall be satisfied to proceed with the transactions
described by this Agreement upon completion of such examination and
investigation.
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(f)
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Mach
One and WhiteHat shall agree to indemnify each other Party against any
liability to any broker or finder to which the indemnifying Party may
become obligated.
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12.2 Conditions to Obligations of
Mach One. The obligations of Mach One to consummate the transactions
described herein are subject to satisfaction (or waiver by it) of the following
conditions:
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(a)
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Each
WhiteHat Member acquiring Merger Stock shall be required, at Closing, to
submit an agreement confirming that all the Merger Stock received was
acquired for investment and not with a view to, or for sale connected
with, any distribution thereof, and agreeing not to transfer any of the
Merger Stock for a period of six months from the date of the Closing,
except for those transfers falling within the exemption from registration
under the Securities Act of 1933 and any applicable state securities laws,
which transfers do not constitute a public distribution of securities, and
in which the transferees execute an investment letter in form and
substance satisfactory to counsel for Mach
One.
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(b)
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The
foregoing provision shall not prohibit registering those shares at any
time following the Closing. Each WhiteHat Member acquiring
Merger Stock shall be required to transfer to Mach One at the Closing
his/her respective WhiteHat Common Stock, free and clear of all liens,
mortgages, pledges, encumbrances or changes, whether disclosed or
undisclosed.
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(c)
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All
schedules, prepared by WhiteHat shall be current or updated as necessary
as of the Closing Date.
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(d)
|
WhiteHat
shall have provided to Mach One unaudited financial statements for the
years ended December 30, 2009 and 2008. WhiteHat shall also
provide an update on any material change in the aforementioned financial
statements.
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(e)
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WhiteHat
shall have delivered the fully completed and signed Questionnaires, and
the D&O Information shall be acceptable to Mach
One.
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(f)
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Mach
One shall have received from the Accountants, the Accountant Undertaking
in a form satisfactory to Mach One.
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(g)
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A
representation letter substantially in the form attached hereto as Exhibit “D” executed by
each of the Members of WhiteHat’s Board of Directors and Xxxxx pursuant to
which each such individual shall represent and warrant to Mach One that
he, she or it has no knowledge of any fact or circumstance that would
cause any representation or warranty of WhiteHat set forth herein to be
false or misleading in any material
respect.
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12.3 Conditions to Obligation of
WhiteHat. The obligations of WhiteHat to consummate the
transactions described herein are subject to satisfaction (or waiver by it) of
the following conditions:
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(a)
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Mach
One shall have raised an additional amount of Four Hundred Thousand
Dollars ($400,000.00) in equity prior to the Closing on March 5, 2010 and
deposited that amount in an account solely controlled by Xxxxxxx Xxxxxxxx,
CFO of Mach One and Xxxxx Xxxxx, CEO of WhiteHat to be used as set forth
in Section
2.1(d);
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(b)
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Mach
One and its Directors shall have confirmed in the minutes of the Board of
Directors that Mach One shall use commercially reasonable
efforts to raise an additional amount of One Million Six Hundred Thousand
Dollars ($1,600,000.00) within ninety (90) days of the
Closing. If that amount is raised, it shall be deposited in a
specially designated bank account solely for the purpose of operating of
what will then be the WhiteHat Brands division of Mach One, as set forth
in Section
2.4(b).
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(c)
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Mach
One and its Directors shall have provided to WhiteHat through September
30, 2009, all audited and unaudited financial statements prepared
according to generally accepted accounting principles by independent
accountants of Mach One. Mach One shall also provide, as of a
date within thirty (30) days of Closing, an update on any material change
in the aforementioned financial
statements.
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(d)
|
Mach
One shall have delivered to WhiteHat resolutions, in a form satisfactory
to WhiteHat, effective as of the Closing, of the appointment of new
directors of Mach One according to Section 1.6
hereof.
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(e)
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All
schedules prepared by Mach One shall be current or updated as necessary as
of the Closing Date.
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(f)
|
An
Officer’s Certificate substantially in the form attached hereto as Exhibit “E” executed by
the President and COO of Mach One pursuant to which such officer shall
represent and warrant to WhiteHat that he or she has no knowledge of any
fact or circumstance that would cause any representation or warranty of
Mach One set forth herein to be false or misleading in any material
respect.
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ARTICLE
XIII
TERMINATION,
AMENDMENT, WAIVER
13.1 This
Agreement may be terminated at any time prior to the Closing, and the described
transactions abandoned, without liability to either Party:
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(a)
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By
mutual agreement of Mach One and
WhiteHat;
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(b)
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If
the Closing (as defined in Article IV) has not have
taken place on or prior to March 31, 2010, this Agreement can be
terminated upon written notice given by Mach One or WhiteHat, but only if
the Party giving such notice is not in material
default;
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(c)
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By
Mach One, if there has been a material misrepresentation or breach of
warranty on the part of WhiteHat in the representations and warranties set
forth in the Agreement.
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(d)
|
By
WhiteHat or Xxxxx if there has been a material misrepresentation or breach
of warranty on the part of Mach One in the representations and warranties
set forth in the Agreement;
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(e)
|
By
Mach One if, in its opinion or that of its counsel, the Merger does not
qualify for exemption from registration under applicable federal and state
securities laws, or qualification, if obtainable, cannot be accomplished
in Mach One’s opinion or that of its counsel, without unreasonable expense
or effort;
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(f)
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By
Mach One or by WhiteHat if either Party believes that the Merger has
become impossible on a practical level by reason of the institution or
threat by state, local or federal governmental authorities or by any other
person of material litigation or proceedings against any Party. For
clarity, a written request, on its own, by a governmental authority for
information regarding the Merger, which information could be used
connected with such litigation or proceedings, is not a threat of material
litigation or proceedings regardless of whether such request is received
before or after the signing of this
Agreement;
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(g)
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By
Mach One if the business or assets or financial condition of WhiteHat ,
taken as a whole, have been materially and adversely affected, whether by
the institution of litigation or by reason of changes or developments or
in operations in the ordinary course of business or otherwise; or,
by WhiteHat if the business or assets or financial condition of
Mach One, taken as a whole, have been materially and adversely affected,
whether by the institution of litigation or by reason of changes or
developments or in operations in the ordinary course of business or
otherwise;
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(h)
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By
Mach One or WhiteHat if, in the opinion of Mach One’s independent
accountants, it should appear that the combined entity will not be
auditable to SEC accounting
standards;
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(i)
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By
WhiteHat, if Mach One fails to perform material conditions set forth in
Subsections 12.1 or
12.3
herein;
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(j)
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By
WhiteHat if examination of Mach One’s books and records pursuant to Section 7.5(c) herein
uncovers a material deficiency;
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(k)
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By
Mach One if WhiteHat fails to perform material conditions set forth in
Section 11.1 or
11.2 herein;
and
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(l)
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By
Mach One if examination of WhiteHat’s books and records pursuant to Article V herein
uncovers a material deficiency.
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13.2 Both
WhiteHat and Mach One shall have the right to waive any or all of the conditions
precedent to its obligations hereunder not otherwise legally required
but:
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(a)
|
no
waiver by a Party of any condition precedent to its obligations hereunder
shall constitute a waiver by such Party of any other
condition;
|
(b) shall
expressly in writing what is being waived; and
(c) be
signed by the Party to be bound by the waiver.
ARTICLE
XIV
MISCELLANEOUS
14.1 Entire
Agreement.
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(a)
|
This
Agreement (including the exhibits and schedules hereto) contains the
entire agreement between the Parties regarding the transactions described
hereby.
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(b)
|
Therefore,
this Agreement supersedes all negotiations, representations, warranties,
commitments, offers, contracts, and writings prior to the date
hereof.
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(c)
|
For
clarity, the letter of intent between Mach One and WhiteHat dated July 31,
2009 has been terminated in its entirety and shall be of no further force
and effect.
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14.2 Binding
Agreement. This Agreement shall become binding upon the
Parties when, but only when, it shall have been signed on behalf of all
Parties.
14.3 Xxxxx. Xxxxx
is only executing this Agreement regarding Sections 4.4(b), Articles V and
VIII, Section 13.1 and Article XIV.
14.4 Counterparts. This
Agreement may be executed in one or more counterparts, each of which may be
deemed an original, but all of which together, shall constitute one and the same
instrument.
14.5 Severability. If
any provisions hereof are to be held invalid or unenforceable by any court of
competent jurisdiction or as a result of future legislative action, such holding
or action shall be strictly construed and shall not affect the validity or
effect or any other provision hereof.
14.6 Assignability. This
Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Parties hereto; provided that neither this Agreement nor any
right hereunder shall be assignable by WhiteHat or Mach One without prior
written consent of the other Party.
14.7 Captions. The
captions of the various Articles, Sections and Subsections of this Agreement
have been inserted only for convenience of reference and shall not be deemed to
modify, explain, enlarge or restrict any of the provisions of this
Agreement.
14.8 Governing
Law. The validity, interpretation and effect of this Agreement
shall be governed exclusively by the laws of the United States of America and
State of Minnesota, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.
14.9 Rules of
Construction. The Parties have been represented by counsel
negotiating and executing this Agreement and, therefore, shall not be permitted
to allege the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the Party drafting such agreement or document.
14.10
Notices. All
notices, requests, demands and other communications under this Agreement shall
be in writing and delivered in person, sent by a nationally recognized overnight
delivery service that obtains a signature when delivering any document or sent
by certified mail, postage prepaid and properly addressed as
follows:
To WhiteHat and WhiteHat
Members:
Xxxxx X
Xxxxx, President and CEO
WhiteHat
Brands, LLC.
0000
Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Fax (000)
000-0000
With a Copy
to:
Xxxxxxx
X. Xxxxx, Esq.
Xxxxxxxxx
Xxxxxxx, LLP
The
Forum
0000
Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Fax (000)
000-0000
To Mach
One:
Xxx
Xxxxxxxxxx, Chairman
Mach One
Corporation
000
Xxxxxx Xxxxx Xxxx
Xxxxxxx,
XX 00000
Fax (000)
000-0000
With a Copy
to:
Xxxxxxx
X. Xxxxxxx, Esq.
Law
Offices of Xxxxxxx X. Xxxxxxx
00000
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx
Xxxxx, XX 00000
Fax (000)
000-0000
Any Party
may from time-to-time change its address for the purpose of notices to that
Party by a similar notice specifying a new address, but no such change shall be
deemed to have been given until it is actually received by the respective Party
hereto.
All
notices and other communications required or permitted under this Agreement
which are addressed as provided in this Section 14.10, if
delivered personally, shall be effective upon delivery; and, if delivered by
mail, shall be effective on the day it is signed for.
14.11 Other Remedies; Specific
Performance. Except as otherwise provided herein, any and all remedies
herein expressly conferred upon a Party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity upon such
Party, and the exercise by a Party of any one remedy will not preclude the
exercise of any other remedy. The Parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed according to their specific terms or were otherwise breached. It is
accordingly agreed that the Parties shall be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
14.12 Arbitration.
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(a)
|
Arbitration
shall not be commenced unless the Party that subsequently commences it as
set forth below has notified the other Party in writing regarding the
basis for the wrongful conduct that allegedly is the subject of the
arbitration and provides the other Party with thirty (30) days within
which to cure the alleged wrongful
conduct.
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(b)
|
Except
for Section 14.11,
any disputes or claims arising under or connected with this Agreement or
the transactions described hereunder shall be resolved by binding
arbitration. Notice of a demand to arbitrate a dispute by either Party
shall be given in writing to the other at their last known
address.
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(c)
|
Arbitration
shall be commenced by the filing by a Party of an arbitration demand with
the American Arbitration Association (“AAA”) in its office in
Minneapolis, Minnesota USA.
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(d)
|
The
arbitration of the dispute shall be resolved by three
arbitrators. Mach One and WhiteHat shall jointly request the
AAA to provide a panel of 33 potential arbitrators pursuant to AAA rules.
Mach One and WhiteHat shall alternate, each striking a total of 15 names
from the list of potential arbitrators, until only 3 are
left. Those 3 proposed arbitrators shall become the arbitration
panel for the then-existing
dispute.
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(e)
|
The
arbitration shall in all other respects be governed and conducted by
applicable AAA rules. Any award and/or decision shall be conclusive and
binding on the Parties.
|
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(f)
|
The
arbitration shall be conducted in Minneapolis,
Minnesota.
|
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(g)
|
The
arbitrator shall supply a written opinion supporting any award, and
judgment may be entered on the award in any court of competent
jurisdiction.
|
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|
(h)
|
Each
Party shall pay its own fees and expenses for the arbitration, except that
any costs and charges imposed by the AAA and any fees of the arbitrator
for the services shall be assessed against the losing Party by the
arbitrator.
|
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|
(i)
|
In
the event that preliminary or permanent injunctive relief is necessary or
desirable in order to prevent a Party from acting contrary to this
Agreement or to prevent irreparable harm prior to a confirmation of an
arbitration award, then either Party is authorized and entitled to
commence a lawsuit solely to obtain equitable relief against the other
pending the completion of the arbitration in a court having jurisdiction
over the Parties.
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(j)
|
All
rights and remedies of the Parties shall be cumulative and in addition to
any other rights and remedies obtainable from
arbitration.
|
14.13 Standard of
Conduct.
|
|
(a)
|
All
conduct required under this Agreement, including conduct required by law,
shall be undertaken in good faith using principles of fair dealing, in
a amount of time and with due
diligence.
|
|
|
(b)
|
Notwithstanding
anything to the contrary set forth above in Section 14.13(a), if a
different standard of conduct is expressly set forth in another Section or
Sections of this Agreement, that standard of conduct shall replace the
standard of conduct set forth
above.
|
|
|
(c)
|
For
example, if this Agreement expressly stated that neither Mach One nor
WhiteHat had the duty to undertake a specific task in its sole discretion,
that conduct would not have to be undertaken in a commercially reasonable
manner. However, the remaining portions of the Standard of
Conduct set forth above in Section 14.13(a) would
still control.
|
|
|
(d)
|
If
any sentence in this Agreement contains words identical to or
substantially similar to “commercially reasonable”, “good faith”, “fair
dealing” or “due diligence”, the Standard of Conduct in this Section shall
still control entirely and the use of those words shall be considered
neutral. The Standard of Conduct shall be different for a
particular sentence only if there is the express use of words which are
not substantially similar or identical, such as sole
discretion.
|
15.14 Force
Majeure.
|
|
(a)
|
Mach
One and WhiteHat agree that their rights and duties under this Agreement
do not change just because an event they do not control, such as a general
flood or a hurricane, makes it more expensive than may have been
originally described to carry out their duties under this
Agreement.
|
|
|
(b)
|
If,
however, an event that the adversely affected Party does not control, such
as a general flood or a hurricane, prevents or would make it to carry out
a duty under this Agreement, then the delay in carrying out that duty
shall not be a breach of this Agreement. Such events shall
include, but not be limited to, general floods, hurricanes, riots, wars,
general labor strikes that significantly impair the ability of a Party to
carry out their duties under this Agreement or similar events (collectively or individually a
“Force Majeure Event”).
|
IN WITNESS
WHEREOF, the Parties
hereto have executed this Agreement as of the date first written
above.
[Signatures
on the following page]
|
MACH
ONE CORPORATION
|
||
| By: |
/s/ Xxxxx
Xxxxxxx
|
|
|
Xxxxx
Xxxxxxx, President and COO
|
||
|
WHITE
HAT ACQUISITION CORP.
|
||
| By: |
/s/ Xxxxx
Xxxxxxx
|
|
| Xxxxx Xxxxxxx, President and COO | ||
|
WHITEHAT
HOLDINGS,
LLC
|
||
| By: |
/s/ Xxxxx X.
Xxxxx
|
|
|
Xxxxx
X Xxxxx, President and CEO
|
||
|
/s/ Xxxxxxx
Xxxxx
|
||
|
Xxxxxxx
Xxxxx |
||
