Exhibit 2.3
AGREEMENT AND PLAN OF EXCHANGE
AGREEMENT AND PLAN OF EXCHANGE (hereinafter called this "Agreement")
dated this 8th day of June, 1999, between Inter-Con/PC, Inc. (the "Company"), a
Minnesota corporation, and Infopac Systems, Inc. (the "Purchaser") a Minnesota
corporation,
WHEREAS, the Purchaser desires to acquire all of the outstanding shares
of the Company in exchange for shares of the Purchaser, all upon the terms and
subject to the conditions of this Agreement and the Plan of Exchange attached as
Exhibit A (the "Plan of Exchange"); and
WHEREAS, the Company and the Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Exchange of the Company;
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, the parties agree as follows:
ARTICLE 1
THE EXCHANGE; CLOSING; EFFECTIVE TIME
1.1 THE EXCHANGE. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in section 1.4) all of the shares
of the Company shall be exchanged for shares of the Purchaser (the "Exchange").
The Purchaser shall continue to be governed by the laws of the State of
Minnesota, and the separate corporate existence of the Purchaser and the Company
with all their rights, privileges, immunities and franchises shall continue
unaffected by the Exchange.
1.2 TERMS OF EXCHANGE. The shareholders of the Company shall transfer
all of their stock in the Company to the Purchaser. The Purchaser agrees to
issue 23,007,890 shares of its stock to the shareholders of the Company, and
will reserve 6,645,885 shares for outstanding warrants, stock options and
convertible notes of the Company, all of which are restricted shares.
1.3 CLOSING. The closing of the Exchange (the "Closing") shall take
place on the first business day on which the last to be fulfilled or waived of
the conditions set forth in Article VII shall be fulfilled or waived in
accordance with this Agreement, at such time and place as the Company and
Purchaser may agree,
1.4 EFFECTIVE TIME. As soon as practicable following fulfillment or
waiver of the conditions specified in Article VII, and provided that this
Agreement has not been terminated or abandoned pursuant to Article VIII, the
Company and the Purchaser will cause the Articles of Exchange (the "Articles of
Exchange") to be executed and filed with the Secretary of State of Minnesota
(the "State Commission"). The Exchange shall become effective on the date on
which the Secretary of State issues a Certificate of Exchange, and such time is
referred to as the "Effective Time".
ARTICLE II
ARTICLES OF INCORPORATION AND BY-LAWS OF THE
PURCHASER
2.1 THE ARTICLES OF INCORPORATION. The Articles of Incorporation of the
Purchaser (the "Articles") in effect at the Effective Time shall remain in
effect in accordance with the Minnesota Statutes.
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2.2 THE BY-LAWS. The By-Laws of the Purchaser in effect at the
Effective Time shall remain in effect unless duly amended in accordance with its
terms and the Minnesota Statutes.
ARTICLE III
OFFICERS AND DIRECTORS OF THE PURCHASING CORPORATION
3.1 OFFICERS AND DIRECTORS. The directors and officers of the Company
at the Effective Time shall, from and after the Effective Time, shall be
directors and officers until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Purchasing Corporation's Articles and By-Laws.
ARTICLE IV
CONVERSION OR CANCELLATION OF SHARES IN THE EXCHANGE
4.1 At the Effective Time, all shares of common stock of the Company
issued and outstanding immediately prior to the Effective Time shall be
exchanged for validly issued, fully paid and nonassessable shares of the
Purchaser.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 CORPORATE ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Minnesota. The Company has the corporate power and authority to
carry on its respective businesses as they are now being conducted. The Company
has made available to Purchaser a complete and correct copy of the Company's
Articles, and the Company's By-Laws. The Company's Articles and By-Laws so
delivered are in full force and effect.
5.2 CORPORATE AUTHORITY. Subject only to approval of this Agreement and
the Plan of Exchange by the holders of a majority of the outstanding shares, the
Company has the requisite corporate power and authority and has taken all
corporate action necessary in order to execute and deliver this Agreement and to
consummate the transactions contemplated. This Agreement is a valid and binding
agreement of the Company.
5.3 COMPLIANCE. The execution and delivery of this Agreement by the
Company does not, and the consummation of the transactions contemplated by the
Company will not, constitute or result in (i) a breach or violation of, or a
default under, the Articles or By-Laws of the Company or (ii) a breach or
violation of, a default under, the acceleration of, or the creation of a lien,
pledge, security interest or other encumbrance on assets pursuant to (with or
without the giving of notice or the lapse of time), any provision of any
agreement, lease, contract, note, mortgage, indenture, arrangement or other
obligation ("Contracts") of the Company, or any law, rule, ordinance or
regulation or judgment, decree, order, award or governmental or non-governmental
permit or license to which the Company is subject, except, in the case of clause
(ii) above, for such breaches, violations, defaults, or accelerations which,
alone or in the aggregate, will not have a material adverse effect on the
financial condition, properties, business or results of operations of the
Company.
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5.4 BROKERS AND FINDERS. Neither the Company nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated, except as disclosed.
5.5 FINANCIAL STATEMENTS. The financial statements as of December 31,
1998, which have been delivered to Purchaser ("Company Financial Statements")
are complete, accurate, and fairly present the financial condition of the
Company as of the date and the results of its operation for the periods covered.
To the best knowledge of the Company, there are no liabilities, either fixed or
contingent, not reflected in the financial statements other than contracts or
obligations in the ordinary and usual course of business, constituting liens or
other liabilities which, if disclosed, would alter substantially the financial
condition of the Company as reflected in the financial statements. These
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied.
5.6 LITIGATION AND PROCEEDINGS. To the best knowledge of the Company,
it is not involved in any pending litigation or governmental investigation or
proceeding not reflected in the financial statements, or otherwise disclosed in
the Schedules and, to the best knowledge of the Company, no litigation, claims,
assessments, or governmental investigation or proceeding is threatened against
the Company.
5.7 TAX RETURNS. The Company has filed all tax returns, forms, or
reports, which are due or required to be filed by it prior to this date and has
paid or made adequate provisions for the payment of all taxes, penalty fees, or
assessments which have or may become due pursuant to such returns or pursuant to
any assessments received.
5.8 TITLE AND RELATED MATTERS. The Company has good and marketable
title to all of its licenses, copyrights, trademark, patents, patents pending,
properties, inventory, interests in properties, and other assets, real and
personal, free and clear of all mortgages, liens, pledges, charges, or
encumbrances except (i) statutory liens or claims not yet delinquent; (ii) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the assets or properties
subject thereto or affected thereby or otherwise materially impair present
business operations on such properties or in connection with such assets; and
(iii) as described in the financial statements or in Company Schedules. The
Company owns, free and clear of any liens, claims, encumbrances, royalty
interests, or other restrictions or limitations of any nature whatsoever, any
and all procedures, techniques, business plans, methods of management, or other
information utilized in the conduct of the Company's business or operations,
whether or not the value thereof is reflected in the most recent balance sheet
included in the Company Schedules. The plants, structures, and equipment of the
Company that are necessary or used in the operations of the business of the
Company are in good operating condition and repair, normal wear and tear
excepted.
5.9 CORPORATE ORGANIZATION AND QUALIFICATION. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Minnesota. The Purchaser has the corporate power and authority
to carry on its respective businesses as they are now being conducted. The
Purchaser has made available to Company a complete and correct copy of the
Purchaser's Articles, and the Purchaser's By-Laws. The Purchaser's Articles and
By-Laws so delivered are in full force and effect.
5.10 CORPORATE AUTHORITY. Subject only to approval of this Agreement
and the Plan of Exchange by the holders of a majority of the outstanding shares,
the Purchaser has the requisite corporate power and authority and has taken all
corporate action necessary in order to execute and deliver this Agreement and to
consummate the transactions contemplated. This Agreement is a valid and binding
agreement of the Purchaser.
5.11 COMPLIANCE. The execution and delivery of this Agreement by the
Purchaser does not, and the consummation of the transactions contemplated by the
Purchaser will not, constitute or result in (i) a breach or violation of, or a
default under, the Articles or By-Laws of the Purchaser or (ii) a breach or
violation of, a default under, the acceleration of, or the creation of a lien,
pledge, security interest or other encumbrance on assets pursuant to (with or
without the giving of notice or the lapse of time), any provision of any
agreement, lease, contract, note, mortgage, indenture, arrangement or other
obligation ("Contracts") of the Purchaser, or any law, rule, ordinance or
regulation or
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judgment, decree, order, award or governmental or non-governmental permit or
license to which the Purchaser is subject, except, in the case of clause (ii)
above, for such breaches, violations, defaults, or accelerations which, alone or
in the aggregate, will not have a material adverse effect on the financial
condition, properties, business or results of operations of the Purchaser.
5.12 BROKERS AND FINDERS. Neither the Purchaser nor any of its
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated, except as disclosed.
5.13 FINANCIAL STATEMENTS. The financial statements as of December
31,1998, which have been delivered to Company ("Purchaser Financial Statements")
are complete, accurate, and fairly present the financial condition of the
Purchaser as of the date and the results of its operation for the periods
covered. To the best knowledge of the Purchaser, there are no liabilities,
either fixed or contingent, not reflected in the financial statements other than
contracts or obligations in the ordinary and usual course of business,
constituting liens or other liabilities which, if disclosed, would alter
substantially the financial condition of the Purchaser as reflected in the
financial statements. These Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied.
5.14 LITIGATION AND PROCEEDINGS. To the best knowledge of the
Purchaser, it is not involved in any pending litigation or governmental
investigation or proceeding not reflected in the financial statements, or
otherwise disclosed in the Schedules and, to the best knowledge of the
Purchaser, no litigation, claims, assessments, or governmental investigation or
proceeding is threatened against the Purchaser.
5.15 TAX RETURNS. The Purchaser has filed all tax returns, forms, or
reports, which are due or required to be filed by it prior to this date and has
paid or made adequate provisions for the payment of all taxes, penalty fees, or
assessments which have or may become due pursuant to such returns or pursuant to
any assessments received.
5.16 TITLE AND RELATED MATTERS. The Purchaser has good and marketable
title to all of its licenses, copyrights, trademark, patents, patents pending,
properties, inventory, interests in properties, and other assets, real and
personal, free and clear of all mortgages, liens, pledges, charges, or
encumbrances except (i) statutory liens or claims not yet delinquent; (ii) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the assets or properties
subject thereto or affected thereby or otherwise materially impair present
business operations on such properties or in connection with such assets; and
(iii) as described in the financial statements or in Purchaser Schedules. The
Purchaser owns, free and clear of any liens, claims, encumbrances, royalty
interests, or other restrictions or limitations of any nature whatsoever, any
and all procedures, techniques, business plans, methods of management, or other
information utilized in the conduct of the Purchaser's business or operations,
whether or not the value thereof is reflected in the most recent balance sheet
included in the Purchaser Schedules. The plants, structures, and equipment of
the Purchaser that are necessary or used in the operations of the business of
the Purchaser are in good operating condition and repair, normal wear and tear
excepted.
ARTICLE VI
COVENANTS
6.1 ACQUISITION PROPOSALS. The Company will, and shall direct (and
shall use its best efforts to cause) all of its officers and directors and
employees and any investment banker, attorney, accountant or other agent
retained by the Company not to, initiate or solicit any inquiries or the making
of any proposal with respect to, or, except to the extent required by fiduciary
obligations under applicable laws, as advised in writing by counsel, engage in
negotiations concerning, or provide any confidential information or data or to
have any discussions with, any person relating to, any acquisition, business
combination or purchase of all or any significant portion of the assets of, or
any equity interest in, the Company. The Company will immediately cease and
cause to be terminated any existing activities,
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discussions or negotiations with any parties conducted with respect to any of
the foregoing. The Company will notify Purchaser immediately if any such
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated or continued
with the Company.
6.2 INTERIM OPERATIONS OF THE COMPANY. The Company covenants and agrees
that after this date and prior to the Effective Time (unless Purchaser shall
otherwise agree in writing and except as otherwise contemplated by this
Agreement):
(a) the business of the Company shall be conducted only in the
ordinary and usual course and, to the extent consistent
therewith, the Company shall use its reasonable best efforts
to preserve its business organization intact and maintain its
existing relations with customers, suppliers, employees and
business associates;
(b) the Company shall not materially modify or amend or terminate
any of its material contracts or waive, release or assign any
material rights or claims, except in the ordinary and usual
course of business;
6.3 MEETINGS OF THE SHAREHOLDERS. As soon as practicable after this
date, Purchaser and the Company shall prepare a joint proxy/registration
statement (the "Registration Statement"), which shall comply as to form with all
applicable law and its governing instruments to convene a meeting of its
shareholders as promptly as practicable to consider and vote upon the approval
of this Agreement and the Plan of Exchange and the Exchange. Subject to
fiduciary requirements of applicable law, the respective boards of directors of
each of Purchaser and the Company shall recommend such approval and take all
lawful action to solicit such approval; provided, however, and notwithstanding
any other provision in this Agreement to the contrary, if either Purchaser or
the Company should experience any development or combination of developments
having a material adverse effect on the financial condition, properties,
business or results of operations of Purchaser, taken as a whole, or the
Company, taken as a whole, as the case may be, other than as a result of factors
affecting the industry or the economy generally, then the board of directors of
the other Company may withdraw its recommendation of the Exchange and may
postpone the meeting of its shareholders to allow adequate time to disseminate
relevant disclosure material. The Company agrees, as to information with respect
to the Company, its officers, directors, and shareholders contained when the
Registration Statement becomes effective and at the date of the meeting of the
respective shareholders of Purchaser and the Company, will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated or necessary to make the statement not misleading.
ARTICLE VII
CONDITIONS
7.1 CONDITIONS TO OBLIGATIONS OF PURCHASER AND COMPANY. The respective
obligations of Purchaser and the Company to consummate the Exchange are subject
to the fulfillment of each of the following conditions, any or all of which may
be waived in whole or in part by Purchaser or the Company as the case may be, to
the extent permitted by applicable law:
(a) Shareholder Approval. This Agreement shall have been duly
approved by the holders of (i) at least a majority of the
voting power of the outstanding shares of the Purchaser common
stock, voting together as a single class, in accordance with
applicable law and the Certificate of Incorporation and
By-Laws of Purchaser and (ii) a majority of the outstanding
shares, in accordance with applicable law and the Articles
By-Laws of the Company.
(b) Continuing Warranties, Certificate. The representations and
warranties of the Company contained in this Agreement shall be
correct on and as of the Effective Time in all material
respects with the same effect as though made and as of such
date, except for the changes contemplated by this
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Agreement, and the Company shall have performed in all
material respects all of its obligations to be performed, and
Purchaser shall have received at the Effective Time a
certificate to that effect, dated the Effective Time, and
executed on behalf of the Company by an executive officer of
the Company. Notwithstanding anything in the foregoing to the
contrary, this Section 7.1(b) shall be deemed to have been
fulfilled regardless of whether the representations contained
in Section 5.1 shall not be so correct or the covenants in
Sections 6.1 and 6.2 to the extent it is applied to these
sections.
7.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the
Company to consummate the Exchange are subject to the fulfillment of each of the
following conditions, any or all of which may be waived in whole or in part by
the Company to the extent permitted by applicable law:
(a) Shareholder Approval. This Agreement shall have been duly
approved by the holders of (i) at least a majority of the
voting power of the outstanding shares of the Purchaser common
stock, voting together as a single class, in accordance with
applicable law and the Certificate of Incorporation and
By-Laws of Purchaser and (ii) a majority of the outstanding
shares, in accordance with applicable law and the Articles and
By-Laws of the Purchaser.
(b) Continuing Warranties, Certificate. The representations and
warranties of the Purchaser contained in this Agreement shall
be correct on and as of the Effective Time in all material
respects with the same effect as though made and as of such
date, except for the changes contemplated by this Agreement,
and the Purchaser shall have performed in all material
respects all of its obligations to be performed, and Company
shall have received at the Effective Time a certificate to
that effect, dated the Effective Time, and executed on behalf
of the Purchaser by an executive officer of the Purchaser.
ARTICLE VIII
TERMINATION
8.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and
the Exchange may be abandoned at any time prior to the Effective Time, before or
after the approval by shareholders of the parties by the mutual consent of
Purchaser and the Company by action of their respective boards of directors.
8.2 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination
of this Agreement and abandonment of the Exchange pursuant to this Article VIII
no party (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement, except as provided in
Section 9.2 and except that nothing will relieve any party from liability for
any breach of this Agreement.
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1 PAYMENT OF EXPENSES. Whether or not the Exchange shall be
consummated, each party hereto shall pay its own expenses incident to preparing
for, entering into and carrying out this Agreement and the consummation of the
Exchange.
9.2 SURVIVAL. The agreements shall survive the consummation of the
Exchange.
9.3 MODIFICATION OR AMENDMENT. Subject to the Minnesota Statutes, at
any time prior to the Effective Time, the parties may, by written agreement,
make any modification or amendment of this Agreement approved by their
respective boards of directors. This Agreement shall not be modified or amended
except pursuant
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to an instrument in writing executed and delivered on behalf of each of the
parties. After the Effective Time, none of the agreements may be amended.
9.4 WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the Exchange are for the sole benefit of such party
and may be waived by such party in whole or in part to the extent permitted by
applicable law.
9.5 COUNTERPARTS. For the convenience of the parties this Agreement may
be executed in any number of counterparts, each such counterpart being deemed to
be an original instrument, and all counterparts shall together constitute the
same agreement.
9.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota regardless of the laws that
might otherwise govern under applicable principles of conflicts of law.
9.7 NOTICES. Any notice, request, instruction, or other document to be
given by any party to the other, shall be in writing and delivered personally or
sent by a registered or certified mail, postage prepaid to the Company to
Xxxxxxx Xxxxxxxx, 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, and to the
Purchaser Infopac Systems, Inc., 00000 Xxxxxxxxxx Xxxxxxxxx, Xxx Xxxxx,
Xxxxxxxxx 00000, or to such other persons or addresses as may be designated in
writing by the party to receive such notice.
9.8 ENTIRE AGREEMENT, ETC. This Agreement (a) constitutes the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, among the parties, with respect to the subject matter and (b)
shall not be assignable by operation of law or obligation to, or rights in
respect of, any persons other than the parties, it being expressly agreed that
all of the persons (and their successors and assigns) who are beneficiaries of
such sections or schedule (whether as individuals or as members of a class or
group) shall be entitled to enforce such sections and schedule against Purchaser
or the surviving corporation or of the Purchaser.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
written above.
INTER-CON/PC, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: CEO
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INFOPAC SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Pres.
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