AGREEMENT AND PLAN OF REORGANIZATION
by and among
Silverthorne Production Company
a Colorado corporation
and
XxxxxXxx.xxx, Inc., a Nevada corporation
effective as of March 11, 1999
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, is made and entered
into this 11th day of March 1997, by and between Silverthorne
Production Company, a Colorado corporation ("Silverthorne") and
XxxxxXxx.xxx, Inc., a Nevada corporation ("PriceNet"), and certain
shareholders of PriceNet listed on the attached Schedule I
("PriceNet Shareholders"), and specifically incorporated herein by
reference (PriceNet and PriceNet Shareholders shall be hereinafter
jointly referred to as "PriceNet Parties").
PREMISES
A. This Agreement provides for the reorganization of
PriceNet with and into Silverthorne, with PriceNet becoming a
wholly-owned subsidiary of Silverthorne, and in connection
therewith, the exchange of the outstanding common stock of PriceNet
into shares of common voting stock of Silverthorne, all for the
purpose of effecting a tax-free reorganization pursuant to sections
354 and 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended ("IRC"). On the terms and conditions set forth herein, the
parties hereby adopt the Plan of Reorganization embodied in this
Agreement.
B. The boards of directors of PriceNet and Silverthorne
have determined, subject to the terms and conditions set forth in
this Agreement, that the exchange contemplated hereby, as a result
of which PriceNet would become a wholly owned subsidiary of
Silverthorne is desirable and in the best interests of their
stockholders. This Agreement is being entered into for the purpose
of setting forth the terms and conditions of the proposed exchange.
AGREEMENT
NOW, THEREFORE, on the stated premises and for and in
consideration of the mutual covenants and agreements hereinafter set
forth and the mutual benefits to the parties to be derived herefrom,
it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
PRICENET AND PRICENET SHAREHOLDERS
PriceNet and each of PriceNet Shareholders, individually and
neither jointly nor severally, represents and warrants to
Silverthorne, except as disclosed in this Agreement or in the case
of any representation qualified by its terms to a particular
Schedule, as hereinafter defined, of PriceNet attached hereto, that
the statements made in this Article I will be correct and complete
at the Effective Date, as hereinafter defined, provided, however, if
there is no Effective Date, then no party shall be liable for any
inaccuracy.
SECTION 1.1 SHAREHOLDERS. Each of the PriceNet Shareholders
is the owner of all of the issued and outstanding shares of the
capital stock of PriceNet attributed to such Shareholder on Schedule
I; each PriceNet Shareholder has full legal title to all PriceNet
Shares described in Schedule I as being owned by such PriceNet
Shareholder free from any and all claims, liens or other
encumbrances. PriceNet Shareholders have unqualified right to sell,
transfer, and dispose of their respective PriceNet Shares subject to
the laws of bankruptcy, insolvency and general creditors' rights.
Each PriceNet Shareholder represents and warrants that, in regards
to such PriceNet Shareholder's shares of PriceNet, such PriceNet
Shareholder has full right and authority to execute this Agreement
and to transfer his shares of PriceNet to Silverthorne.
SECTION 1.2 ORGANIZATION. PriceNet is a corporation duly
organized, validly existing, and in good standing under the laws of
Nevada and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own all
of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
jurisdiction in which the character and location of the assets owned
by it or the nature of the business transacted by it requires
qualification. Included in the PriceNet Schedules (as hereinafter
defined) are complete and correct copies of the articles of
incorporation, bylaws and amendments thereto of PriceNet as in
effect on the date hereof. The execution and delivery of this
Agreement does not and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof
will not violate any provision of PriceNet's articles of
incorporation or bylaws. PriceNet has full power, authority and
legal right and has taken all action required by law, its articles
of incorporation, its bylaws or otherwise to authorize the execution
and delivery of this Agreement.
SECTION 1.3 CAPITALIZATION. The authorized capitalization of
PriceNet consists of 10 million Common Shares, $0.001 par value per
share (the "PriceNet Common Shares"). As of the date of this
Agreement, 2,100,000 of the authorized common shares are issued and
outstanding. All issued and outstanding shares are legally issued,
fully paid and nonassessable and are not issued in violation of the
preemptive or other rights of any person. PriceNet has no other
securities, warrants or options authorized or issued.
SECTION 1.4 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. Except
as otherwise set forth in the PriceNet Schedules, PriceNet does not
have any other subsidiaries and does not own, beneficially or of
record, any shares of any other corporation. For purposes herein,
all references to PriceNet shall include PriceNet and all of its
subsidiaries.
SECTION 1.5 FINANCIAL INFORMATION.
(a) PriceNet has no
liabilities with respect to the payment
of any federal, state, county, local or
other taxes (including any deficiencies,
interest or penalties), except for taxes
accrued but not yet due and payable;
(b) PriceNet has filed all
state, federal and local income tax
returns required to be filed by it from
inception to the date hereof, if any;
(c) The books and records,
financial and others, of PriceNet are in
all material respects complete and
correct and have been maintained in
accordance with good business accounting
practices; and
(e) except as and to the
extent disclosed herein and the PriceNet
Schedules, PriceNet has no material
contingent liabilities, direct or
indirect, matured or unmatured.
SECTION 1.6 INFORMATION. THE INFORMATION
CONCERNING PRICENET SET FORTH IN THIS AGREEMENT
AND IN THE PRICENET SCHEDULES TO THE BEST OF
PRICENET'S KNOWLEDGE, IS COMPLETE AND ACCURATE IN
ALL MATERIAL RESPECTS AND DOES NOT CONTAIN ANY
UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO
STATE A MATERIAL FACT REQUIRED TO MAKE THE
STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES
UNDER WHICH THEY WERE MADE, NOT MISLEADING.
SECTION 1.7 OPTIONS AND WARRANTS. THERE ARE
NO EXISTING OPTIONS, WARRANTS, CALLS OR
COMMITMENTS OF ANY CHARACTER TO WHICH PRICENET IS
A PARTY AND BY WHICH IT IS BOUND.
SECTION 1.8 ABSENCE OF CERTAIN CHANGES OR
EVENTS. Except as set forth in this Agreement,
the PriceNet Schedules, or as otherwise disclosed
to Silverthorne, since March 5, 1999:
(a) there has not been:
(i) any material adverse change in the
business, operations, properties, assets
or condition of PriceNet; or (ii) any
damage, destruction or loss to PriceNet
(whether or not covered by insurance)
materially and adversely affecting the
business, operations, properties, assets
or condition of PriceNet;
(b) PriceNet has not: (i)
amended its articles of incorporation or
bylaws; (ii) declared or made, or agreed
to declare or make, any payment of
dividends or distributions of any assets
of any kind whatsoever to stockholders or
purchased or redeemed or agreed to
purchase or redeem any of its capital
stock; (iii) waived any rights of value
which in the aggregate are extraordinary
or material considering the
business of
PriceNet; (iv) made any material change
in its method of management, operation or
accounting other than in its ordinary
course of business; (v) entered into any
other material transaction; (vi) made any
accrual or arrangement for or payment of
bonuses or special compensation of any
kind or any severance or termination pay
to any present or former officer or
employee; (vii) increased the rate of
compensation; or (viii) made any increase
in any profit sharing, bonus, deferred
compensation, insurance, pension,
retirement or other employee benefit
plan, payment or arrangement made to,
for, or with its officers, directors or
employees.
(c) PriceNet has not: (i)
granted or agreed to grant any options,
warrants or other rights for its stocks,
bonds or other corporate securities
calling for the issuance thereof; (ii)
borrowed or agreed to borrow any funds or
incurred or become subject to, any
material obligation or liability
(absolute or contingent) except
liabilities incurred in the ordinary
course of business; (iii) paid any
material obligation or liability
(absolute or contingent) other than
current liabilities reflected in or shown
on the most recent PriceNet balance sheet
and current liabilities incurred since
that date in the ordinary course of
business; (iv) sold or transferred, or
agreed to sell or transfer, any of its
assets, properties or rights (except
assets, properties or rights not used or
useful in its business which, in the
aggregate have a value of less than
$10,000); (v) made or permitted any
amendment or termination of any contract,
agreement or license to which it is a
party if such amendment or termination is
material, considering the business of
PriceNet; or (vi) issued, delivered or
agreed to issue or deliver any stock,
bonds or other corporate securities,
including debentures (whether authorized
and unissued or held as treasury stock);
and
(d) to the best knowledge
of PriceNet, it has not become subject to
any law or regulation which materially
and adversely affects, or in the future
may adversely affect, the business,
operations, properties, assets or
condition of PriceNet.
SECTION 1.9 TITLE AND RELATED MATTERS.
Except as provided herein or in the PriceNet
Schedules, PriceNet has good and marketable title
to and is the sole and exclusive owner of all of
its properties, inventory, interests in properties
and assets, real and personal including technical
information, copyrights, trademarks, service marks
and tradenames (collectively, the "Assets") which
are reflected in the PriceNet Schedules or
acquired after that date (except properties,
interests in properties and assets sold or
otherwise disposed of since such date in the
ordinary course of business), free and clear of
all liens, pledges, charges or encumbrances
except: (a) statutory liens or claims not yet
delinquent; (b) 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 properties subject thereto or
affected thereby or otherwise materially impair
present business operations on such properties;
and (C) as described in the PriceNet Schedules.
Except as set forth in the PriceNet Schedules,
PriceNet owns free and clear of any liens, claims,
encumbrances, royalty interests or other
restrictions or limitations of any nature
whatsoever, any and all products it is currently
manufacturing, including the underlying technology
and data, and all procedures, techniques,
marketing plans, business plans, methods of
management or other information utilized in
connection with PriceNet's business. Except as
set forth in the PriceNet Schedules, no third
party has any right to, and PriceNet has not
received any notice of infringement of or conflict
with asserted rights of others with respect to any
product, technology, data, trade secrets,
know-how, proprietary techniques, trademarks,
service marks, trade names or copyrights which,
singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would
have a materially adverse affect on the business,
operations, financial conditions or income of
PriceNet or any material portion of its
properties, assets or rights.
SECTION 1.10 LITIGATION AND PROCEEDINGS. To
the best of PriceNet's knowledge and belief, there
are no actions, suits, proceedings or
investigations pending or threatened by or against
PriceNet or affecting PriceNet or its properties,
at law or in equity, before any court or other
governmental agency or instrumentality, domestic
or foreign or before any arbitrator of any kind
that would have a material adverse affect on the
business, operations, financial condition or
income of PriceNet. PriceNet does not have any
knowledge of any default on its part with respect
to any judgment, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator
or governmental agency or instrumentality or of
any circumstances which, after reasonable
investigation, would result in the discovery of
such a default.
SECTION 1.11 CONTRACTS.
(a) Except as included or
described in the PriceNet Schedules,
there are no material contracts,
agreements, franchises, license
agreements or other commitments to which
PriceNet is a party or by which it or any
of its assets, products, technology or
properties are bound;
(b) Except as included or
described in the PriceNet Schedules or
reflected in the most recent PriceNet
balance sheet, PriceNet is not a party to
any oral or written: (i) contract for
the employment of any officer or employee
which is not terminable on thirty (30)
days or less notice; (ii) profit sharing,
bonus, deferred compensation, stock
option, severance pay, pension benefit or
retirement plan, agreement or arrangement
covered by Title IV of the Employee
Retirement Income Security Act, as
amended; (iii) agreement, contract or
indenture relating to the borrowing of
money; (iv) guaranty of any obligation,
other than one on which PriceNet is a
primary obligor, for collection and other
guaranties of obligations, which, in the
aggregate do not exceed more than one
year or providing for payments in excess
of $10,000 in the aggregate; (v)
consulting or other similar contracts
with an unexpired term of more than one
year or providing for payments in excess
of $10,000 in the aggregate; (vi)
collective bargaining agreements; (vii)
agreement with any present or former
officer or director of PriceNet; or
(viii) contract, agreement or other
commitment involving payments by it of
more than $10,000 in the aggregate; and
(c) To PriceNet's knowledge,
all contracts, agreements, franchises,
license agreements and other commitments
to which PriceNet is a party or by which
its properties are bound and which are
material to the operations of PriceNet
taken as a whole, are valid and
enforceable by PriceNet in all respects,
except as limited by bankruptcy and
insolvency laws and by other laws
affecting the rights of creditors generally.
SECTION 1.12 MATERIAL CONTRACT DEFAULTS.
Except as set forth in the PriceNet Schedules, to
the best of PriceNet's knowledge and belief,
PriceNet is not in default in any material respect
under the terms of any outstanding contract,
agreement, lease or other commitment which is
material to the business, operations, properties,
assets or condition of PriceNet, and there is no
event of default in any material respect under any
such contract, agreement, lease or other
commitment in respect of which PriceNet has not
taken adequate steps to prevent such a default
from occurring.
SECTION 1.13 NO CONFLICT WITH OTHER
INSTRUMENTS. The execution of this Agreement and
the consummation of the transactions contemplated
by this Agreement will not result in the breach of
any term or provision of, or constitute an event
of default under, any material indenture,
mortgage, deed of trust or other material
contract, agreement or instrument to which
PriceNet is a party or to which any of its
properties or operations are subject.
SECTION 1.14 GOVERNMENTAL AUTHORIZATIONS. To
the best of PriceNet's knowledge and except as
provided herein or in the PriceNet Schedules,
PriceNet has all licenses, franchises, permits or
other governmental authorizations legally required
to enable PriceNet to conduct its business in all
material respects as conducted on the date hereof.
Except for compliance with federal and state
securities and corporation laws, as hereinafter
provided, no authorization, approval, consent or
order of, or registration, declaration or filing
with, any court or other governmental body is
required in connection with the execution and
delivery by PriceNet of this Agreement and the
consummation by PriceNet of the transactions
contemplated hereby.
SECTION 1.15 COMPLIANCE WITH LAWS AND
REGULATIONS. To the best of PriceNet's knowledge,
except as disclosed in the PriceNet Schedules,
PriceNet has complied with all applicable statutes
and regulations of any federal, state or other
governmental entity or agency thereof, except to
the extent that noncompliance would not materially
and adversely affect the business, operations,
properties, assets or condition of PriceNet or
would not result in PriceNet's incurring any
material liability.
SECTION 1.16 INSURANCE. PriceNet has no
insurable properties and no insurance policies
will be in effect at the Closing Date, as
hereinafter defined.
SECTION 1.17 APPROVAL OF AGREEMENT. The
board of directors of PriceNet has authorized the
execution and delivery of this Agreement by
PriceNet, has approved the transactions
contemplated hereby and approved the submission of
this Agreement and the transactions contemplated
hereby to the stockholders of PriceNet for their
unanimous approval, which approval has been provided.
SECTION 1.18 MATERIAL TRANSACTIONS OR
AFFILIATIONS. Except as disclosed herein and in
the PriceNet Schedules, there exists no material
contract, agreement or arrangement between
PriceNet and any predecessor and any person who
was at the time of such contract, agreement or
arrangement an officer, director or person owning
of record, or known by PriceNet to own
beneficially, ten percent (10%) or more of the
issued and outstanding PriceNet Common Shares and
which is to be performed in whole or in part after
the date hereof. In all of such transactions, the
amount paid or received, whether in cash, in
services or in kind, has been during the full term
thereof, and is required to be during the
unexpired portion of the term thereof, no less
favorable to PriceNet than terms available from
otherwise unrelated parties in arms length
transactions. There are no commitments by
PriceNet, whether written or oral, to lend any
funds to, borrow any money from or enter into any
other material transactions with, any such
affiliated person.
SECTION 1.19 LABOR RELATIONS. PriceNet has
never had a work stoppage resulting from labor
problems. To the best knowledge of PriceNet, no
union or other collective bargaining organization
is organizing or attempting to organize any
employee of PriceNet.
SECTION 1.20 PREVIOUS SALES AND ISSUANCE OF
SECURITIES. Since inception, PriceNet has issued
PriceNet Common Shares in reliance upon applicable
exemptions from the registration requirements
under the laws of the jurisdiction of Nevada to
the shareholders listed on Schedule I. The shares
of PriceNet Common Stock issued to the PriceNet
Shareholders are legally issued, fully paid and
nonassessable and are not issued in violation of
the preemptive or other rights of any person.
SECTION 1.21 REORGANIZATION RELATED
REPRESENTATIONS.
(a) following the Effective
Date, PriceNet will continue its historic
business or use a significant portion of its
historic business assets in its business;
(b) PriceNet is not an
investment company as defined in section
368(a)(2)(f)(iii) and (iv) of IRC;
(c) PriceNet is not under the
jurisdiction of a court in a title 11 or
similar case within the meaning of Section
368(a)(3)(A) of the IRC.
SECTION 1.22 PRICENET SCHEDULES. Upon execution
hereof, PriceNet will deliver to Silverthorne the
following schedules, which are collectively referred
to as the "PriceNet Schedules" and which consist of
separate schedules dated as of the date of this
Agreement and instruments and data as of such date,
all certified by the chief executive officer of
PriceNet as complete, true and correct in all material
respects:
(a) copies of the articles
of incorporation, bylaws and all minutes
of shareholders' and directors' meetings
of PriceNet;
(b) the financial
information of PriceNet referenced
hereinabove in Section 1.4;
(c) a list indicating the
name and address of the stockholders of
PriceNet, together with the number of
shares owned by them;
(d) the PriceNet Business
Plan which includes, among other matters,
information concerning all of PriceNet's
material licenses, permits and other
governmental authorizations, requests or
applications therefor, pursuant to which
PriceNet carries on or proposes to carry
on its business (except those which in
the aggregate, are immaterial to the
present or proposed business of
PriceNet), as well as a description of
any material adverse change in the
business operations, property, inventory,
assets or condition of PriceNet since the
most recent PriceNet balance sheet
required to be provided pursuant to
Section 1.7; and
PriceNet shall cause the PriceNet Schedules
and the instruments and data delivered to
Silverthorne hereunder to be updated after the
date hereof up to and including the Closing Date,
as hereinafter defined.
SECTION 1.23 TAXES. PriceNet has complied
with applicable tax filing requirements, if any.
SECTION 1.24 ADDITIONAL INFORMATION AVAILABLE.
PriceNet will make available to Silverthorne the
opportunity to ask questions and receive answers
concerning acquisition of PriceNet shares in this
transaction, and to obtain any additional
information related thereto which PriceNet
possesses or can acquire without unreasonable
effort or expense.
SECTION 1.25 LIMITATION ON LIABILITY.
Notwithstanding anything to the contrary contained
in this Agreement, PriceNet shall not have any
liability for any misrepresentation or breach of
any representation or warranty contained in this
Article I, if Silverthorne has actual knowledge
(rather than Knowledge) of such misrepresentation
or breach.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF SILVERTHORNE
As an inducement to, and to obtain the
reliance of PriceNet, Silverthorne represents and
warrants as follows:
SECTION 2.1 ORGANIZATION. Silverthorne is a
corporation duly organized, validly existing and
in good standing under the laws of the state of
Colorado and has the corporate power and is duly
authorized, qualified, franchised and licensed
under all applicable laws, regulations, ordinances
and orders of public authorities to own all of its
properties and assets and to carry on its business
in all material respects as it is now being
conducted, including qualification to do business
as a foreign corporation in the states in which
the character and location of the assets owned by
it or the nature of the business transacted by it
requires qualification. Included in the
Silverthorne Schedules (as hereinafter defined)
are complete and correct copies of the articles of
incorporation, amended articles of incorporation
(collectively, hereinafter referred to as the
"articles of incorporation"), bylaws of
Silverthorne as in effect on the date hereof and a
certificate of Good Standing. The execution and
delivery of this Agreement does not and the
consummation of the transactions contemplated by
this Agreement in accordance with the terms hereof
will not, violate any provision of Silverthorne's
articles of incorporation or bylaws. Silverthorne
has taken all action required by law, its articles
of incorporation, its bylaws or otherwise to
authorize the execution and delivery of this
Agreement. Silverthorne has full power, authority
and legal right and has taken all action required
by law, its articles of incorporation, bylaws or
otherwise to consummate the transactions herein
contemplate.
SECTION 2.2 CAPITALIZATION. The authorized
capitalization of Silverthorne consists of
50,000,000 shares of Common Stock, par value
$0.001 per share, of which 15,575,705 shares are
issued and outstanding. All issued and outstanding
shares are legally issued, fully paid and
nonassessable and are not issued in violation of
the preemptive or other rights of any person.
Silverthorne has no other securities, warrants or
options authorized or issued.
SECTION 2.3 SUBSIDIARIES. At the Closing,
other than as disclosed herein, Silverthorne shall
own no securities or have any interest in any
corporation, partnership, or other form of
business organization, including its current
subsidiaries.
SECTION 2.4 FINANCIAL STATEMENTS.
(a) Attached hereto as
Schedule 2.4 are unaudited consolidated
financial statements of Silverthorne as
of December 31, 1998 ("Silverthorne
Management Reports") and audited
consolidated financial statements for the
years ended June 30, 1998 and June 30,
1997, together with the related footnotes
and report thereon of the auditors
rendering such reports (the "Silverthorne
Audited Financial Statements"). The
Silverthorne Management Reports and the
Silverthorne Audited Financial Statements
are hereafter referred to as the
"Silverthorne Financial Statements". The
Silverthorne Financial Statements are
correct and complete in all respects and
fairly present, in accordance with
generally accepted accounting principles
("GAAP"), consistently applied, the
consolidated financial position of
Silverthorne as of such dates and the
results of operations and changes in
financial position for such periods all
in accordance with GAAP, subject, in case
of the Management Reports, to normal
recurring year end adjustments (the
effect of which will not, individually or
in the aggregate, be materially adverse)
and the absence of the notes (that if
presented would not differ materially
from those included in the Silverthorne
Audited Financial Statements). The
Silverthorne Financial Statements comply
with the requirements of Regulation S-X
of the Securities and Exchange Commission
and the provisions of the Securities Act
of 1933 (the "1933 Act") and will be
suitable for inclusion in any subsequent
filing with any state or federal
regulatory agency under the Securities
Exchange Act of 1934 (the "1934 Act")
(b) The books and records,
financial and others, of Silverthorne are
in all material respects complete and
correct and have been maintained in
accordance with good business accounting
practices;
(c) Silverthorne has no
liabilities with respect to the payment
of any federal, state, county, local or
other taxes, current or accrued
(including any deficiencies, interest or
penalties).
SECTION 2.5 INFORMATION. The information
concerning Silverthorne as set forth in this
Agreement and in the Silverthorne Schedules, to
the best of Silverthorne's knowledge, is complete
and accurate in all material respects and does not
contain any untrue statement of a material fact or
omit to state a material fact required to make the
statements made, in light of the circumstances
under which they were made, not misleading.
SECTION 2.6 ABSENCE OF CERTAIN CHANGES OR
EVENTS. Except as described herein or in the
Silverthorne Schedules, since December 31, 1998:
(a) Silverthorne has not:
(i) amended its articles of incorporation
or bylaws; (ii) waived any rights of
value which in the aggregate are
extraordinary or material considering the
business of Silverthorne; (iii) made any
material change in its method of
management, operation or accounting; or
(iv) made any accrual or arrangement for
or payment of bonuses or special
compensation of any kind or any severance
or termination pay to any present or
former officer or employee;
(b) Except as disclosed to
PriceNet or as included in the
Silverthorne Schedules, Silverthorne has
not: (i) granted or agreed to grant any
options, warrants or other rights for its
stocks, bonds or other corporate
securities calling for the issuance
thereof, which option, warrant or other
right has not been canceled as of the
Closing Date; (ii) borrowed or agreed to
borrow any funds or incurred or become
subject to, any material obligation or
liability (absolute or contingent) except
liabilities incurred in the ordinary
course of business; and
(c) to the best knowledge
of Silverthorne, it has not become
subject to any law or regulation which
materially and adversely affects, or in
the future may adversely affect, the
business, operations, properties, assets
or condition of Silverthorne.
SECTION 2.7 TITLE AND RELATED MATTERS. As of
the Closing Date, Silverthorne will own no real,
personal or intangible property, other than as
disclosed herein.
SECTION 2.8 LITIGATION AND PROCEEDINGS.
There are no actions, suits or proceedings pending
or, to the best of Silverthorne's knowledge and
belief, threatened by or against or affecting
Silverthorne, at law or in equity, before any
court or other governmental agency or
instrumentality, domestic or foreign, or before
any arbitrator of any kind that would have a
material adverse effect on the business,
operations, financial condition, income or
business prospects of Silverthorne. Silverthorne
does not have any knowledge of any default on its
part with respect to any judgment, order, writ,
injunction, decree, award, rule or regulation of
any court, arbitrator or governmental agency or
instrumentality.
SECTION 2.9 CONTRACTS. On the Closing Date
and other than as disclosed herein in Schedule 2.9
or otherwise:
(a) There are no material
contracts, agreements, franchises,
license agreements, or other commitments
to which Silverthorne is a party or by
which it or any of its properties are
bound;
(b) Silverthorne is not a
party to any contract, agreement,
commitment or instrument or subject to
any charter or other corporate
restriction or any judgment, order, writ,
injunction, decree or award which
materially and adversely affects, or in
the future may (as far as Silverthorne
can now foresee) materially and adversely
affect, the business, operations,
properties, assets or conditions of
Silverthorne; and
(c) Silverthorne is not a
party to any material oral or written:
(i) contract for the employment of any
officer or employee; (ii) profit sharing,
bonus, deferred compensation, stock
option, severance pay, pension, benefit
or retirement plan, agreement or
arrangement covered by Title IV of the
Employee Retirement Income Security Act,
as amended; (iii) agreement, contract or
indenture relating to the borrowing of
money; (iv) guaranty of any obligation
for the borrowing of money or otherwise,
excluding endorsements made for
collection and other guaranties of
obligations, which, in the aggregate
exceeds $1,000; (v) consulting or other
similar contract with an unexpired term
of more than one year or providing for
payments in excess of $10,000 in the
aggregate; (vi) collective bargaining
agreement; (vii) agreement with any
present or former officer or director of
Silverthorne; or (viii) contract,
agreement, or other commitment involving
payments by it of more than $10,000 in
the aggregate.
SECTION 2.10 NO CONFLICT WITH OTHER
INSTRUMENTS. The execution of this Agreement and
the consummation of the transactions contemplated
by this Agreement will not result in the breach of
any term or provision of, or constitute an event
of default under, any material indenture,
mortgage, deed of trust or other material
contract, agreement or instrument to which
Silverthorne is a party or to which any of its
properties or operations are subject.
SECTION 2.11 MATERIAL CONTRACT DEFAULTS. To
the best of Silverthorne's knowledge and belief,
Silverthorne is not in default in any material
respect under the terms of any outstanding
contract, agreement, lease or other commitment
which is material to the business, operations,
properties, assets or condition of Silverthorne,
and there is no event of default in any material
respect under any such contract, agreement, lease
or other commitment in respect of which
Silverthorne has not taken adequate steps to
prevent such a default from occurring.
SECTION 2.12 GOVERNMENTAL AUTHORIZATIONS. To
the best of Silverthorne's knowledge, Silverthorne
has all licenses, franchises, permits and other
governmental authorizations that are legally
required to enable it to conduct its business
operations in all material respects as conducted
on the date hereof. Except for compliance with
federal and state securities or corporation laws,
no authorization, approval, consent or order of,
or registration, declaration or filing with, any
court or other governmental body is required in
connection with the execution and delivery by
Silverthorne of the transactions contemplated hereby.
SECTION 2.13 COMPLIANCE WITH LAWS AND
REGULATIONS. To the best of Silverthorne's
knowledge and belief, Silverthorne has complied
with all applicable statutes and regulations of
any federal, state or other governmental entity or
agency thereof, except to the extent that
noncompliance would not materially and adversely
affect the business, operations, properties,
assets or condition of Silverthorne or would not
result in Silverthorne's incurring any material
liability.
SECTION 2.14 INSURANCE. Silverthorne has no
insurable properties and no insurance policies
will be in effect at the Closing Date, as
hereinafter defined.
SECTION 2.15 APPROVAL OF AGREEMENT. The
board of directors of Silverthorne has authorized
the execution and delivery of this Agreement by
Silverthorne and has approved the transactions
contemplated hereby. The approval of this
Agreement by Silverthorne's shareholders is not
required.
SECTION 2.16 MATERIAL TRANSACTIONS OR
AFFILIATIONS. Except as stated herein or in the
Silverthorne Schedules, as of the Closing Date
there will exist no material contract, agreement
or arrangement between Silverthorne and any person
who was at the time of such contract, agreement or
arrangement an officer, director or person owning
of record, or known by Silverthorne to own
beneficially, ten percent (10%) or more of the
issued and outstanding common stock of
Silverthorne and which is to be performed in whole
or in part after the date hereof. Silverthorne
has no commitment, whether written or oral, to
lend any funds to, borrow any money from or enter
into any other material transactions with, any
such affiliated person.
SECTION 2.17 LABOR RELATIONS. Silverthorne
has never had a work stoppage resulting from labor
problems. Silverthorne has no employees other
than its officers and directors.
SECTION 2.18 TAXES. (a) Silverthorne has
timely filed (within the applicable extension
periods) with the appropriate governmental
agencies all governmental tax returns, information
returns, tax reports and declarations which are
monetary liabilities. All governmental tax
returns, information returns, tax reports and
declarations filed by Silverthorne for years for
which the statute of limitations has not run (the
"Tax Returns") are correct in all material
respects. Silverthorne has timely paid (or has
collected and paid over in the case of sales, use
or similar taxes) all taxes, additions to tax,
penalties, interest, assessments, deposits, and
other governmental charges imposed by law upon it
or any of its properties, tangible or intangible
assets, income, receipts, payrolls, transactions,
capital, net worth and franchises, or upon the
sale, use or delivery of any item sold by the
Company, other than as may be disclosed in the
Schedule of Taxes. Except as set forth in the
Schedule of Taxes, no tax returns have been
examined by the Internal Revenue Service or any
other governmental authority. Except as may be
disclosed in the Schedule of Taxes or in any
document delivered to Silverthorne therewith,
Silverthorne (i) is not currently being audited
with respect to any tax, assessment or other
governmental charge; (ii) has not received formal
or informal notice from any governmental agency
that an audit or investigation with respect to any
tax, assessment or other governmental charge is to
be initiated; (iii) is not formally or informally
discussing material pending ruling requests or
other material tax or assessment issues with the
Internal Revenue Service or any other governmental
taxing authority in connection with any matter
concerning any member of Silverthorne's group; or
(iv) has not been formally or informally notified
of any potential tax or assessment issue which the
Internal Revenue Service or any other governmental
taxing authority intends to raise in connection
with any matter concerning any member of
Silverthorne's group. Except (i) as may be
disclosed in the Schedule of Taxes, or (ii) in
connection with any pending audit or
investigation, Silverthorne has not granted or
proposed any waiver of any statute of limitations
with respect to, or any extension of a period for
the assessment or collection of, or any offer in
compromise of any governmental tax. The accruals
and reserves for taxes reflected in the financial
statements are adequate to cover substantially all
taxes (including additions to tax, interest,
penalties, and other charges or assessments, if
any) which become due and payable or accruable by
reason of the business conducted by Silverthorne
through the Closing Date herein. Silverthorne is
not now or has it ever been a corporation which
meets the tests of Section 542(b)(2) of the
Internal Revenue Code. Silverthorne has not
participated in, or is required to participate in,
for any period prior to the date of this Agreement
the filing of any consolidated tax return other
than (i) as set forth in the Schedule of Taxes, or
(ii) as a member of an affiliated group of which
Silverthorne is the common parent.
SECTION 2.19 REPORTING ACT DOCUMENTS. Except
as set forth in Silverthorne's Schedules,
Silverthorne has, in all reporting act documents,
complied in all material respects with the
reporting requirements of the Exchange Act and
the rules and regulations of the Securities and
Exchange Commission promulgated thereunder. The
information contained in each reporting act
document of Silverthorne, to the best of
Silverthorne's knowledge, is true and correct in
all material respects as of the date thereof, and
no reporting act document contains any untrue
statement of a material fact or omits to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading as of the date thereof. To the best
knowledge of current management of Silverthorne,
there is
no negative matters, such as pending
investigation or formal inquiry, which are
outstanding concerning Exchange Act reports filed
by Silverthorne prior to the Closing hereof or
with the Nasdaq.
SECTION 2.20 SILVERTHORNE SCHEDULES. Upon
execution hereof, Silverthorne shall deliver to
PriceNet the following schedules, which are
collectively referred to as the "Silverthorne
Schedules" which are dated the date of this
Agreement, all certified by an officer of
Silverthorne to be complete, true and accurate:
(a) complete and correct
copies of the articles of incorporation,
bylaws and Certificate of Good Standing
of Silverthorne as in effect as of the
date of this Agreement;
(b) copies of all
financial statements of Silverthorne
identified in Section 2.4(a);
(c) the description of any
material adverse change in the business,
operations, property, assets, or
condition of Silverthorne since December
31, 1998 required to be provided pursuant
to Section 2.6; and
(d) any other information,
together with any required copies of
documents, required to be disclosed in
the Silverthorne Schedules under this
Agreement.
Silverthorne shall cause the Silverthorne
Schedules and the instruments to be delivered to
PriceNet hereunder to be updated after the date
hereof up to and including the Closing Date.
SECTION 2.21 ADDITIONAL INFORMATION AVAILABLE.
Silverthorne will make available to each
PriceNet Shareholder the opportunity to ask
questions and receive answers concerning the
acquisition of Silverthorne Common Stock in the
transaction, and to obtain any additional
information which Silverthorne possesses or can
acquire without unreasonable effort or expense.
SECTION 2.22 LIMITATION ON LIABILITY.
Notwithstanding anything to the contrary contained
in this Agreement, Silverthorne shall not have any
liability for any misrepresentation or breach of
any representation or warranty contained in this
Article II, if PriceNet or any of the PriceNet
Shareholders has actual knowledge (rather than
Knowledge) of such misrepresentation or breach.
ARTICLE III
EXCHANGE PROCEDURE
SECTION 3.1 DELIVERY OF PRICENET SECURITIES.
On the Closing Date, the holders of the PriceNet
Common Shares shall deliver to Silverthorne (i)
certificates or other documents evidencing all of
the issued and outstanding PriceNet Common Shares,
duly endorsed in blank or with executed stock
power attached thereto in transferrable form and
(ii) investment letters, the form of which is
attached hereto as Exhibit "A".
SECTION 3.2 ISSUANCE OF SILVERTHORNE COMMON
SHARES. (a) In exchange for all of the PriceNet
Common Share tendered pursuant to Section 3.1,
Silverthorne shall instruct its Transfer Agent to
issue an aggregate of 10,500,000 (post reverse
split) "restricted" Silverthorne Common Shares to
the PriceNet shareholders on a pro rata basis and
shall cause such shares to be delivered to
PriceNet. Such shares shall be issued as follows:
34,000,000 (3,400,000 post reverse-split) shares
shall be issued immediately to PriceNet
shareholders upon signing of this agreement and an
additional 7,100,000 post reverse-split
Silverthorne Common Shares shall be issued to
PriceNet shareholders after the reverse-split has
been declared effective and approved by the
shareholders of Silverthorne. Each share of
PriceNet shall be exchanged for 5 shares of
Silverthorne (based on the total issuance of
10,500,000 post-reverse split Silverthorne Common
Shares).
(b) No fractional Silverthorne Common Shares
shall be issued pursuant to this Section 3.2. In
lieu of such fractional shares, all shares to be
issued shall be rounded up or down to the nearest
whole share.
(c) The total of 10,500,000 shares to be
issued to the PriceNet shareholders by
Silverthorne (the "PriceNet Shares") are not being
registered under the Securities Act of 1933, as
amended (the "Securities Act") and are to be
issued as "restricted securities", as that term is
defined in Rule 144 promulgated under the Act,
and that the certificates representing the
PriceNet Shares will bear a legend to that effect,
substantially in the form set forth in Schedule
3.2, as follows:
THE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS
OF CERTAIN STATES, AND MAY NOT
BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO (I) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE
ACT AND ANY APPLICABLE STATE
LAWS, (II) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE
ACT (OR ANY SIMILAR RULE UNDER
THE ACT RELATING TO THE
DISPOSITION OF SECURITIES), OR
(III) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL TO THE
ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND
APPLICABLE STATE LAW IS AVAILABLE.
SECTION 3.3 UNDERTAKINGS.
(a) Upon
execution hereof or as soon
thereafter as practical,
management of Silverthorne and
PriceNet shall execute,
acknowledge and deliver (or
shall cause to be executed,
acknowledged and delivered) any
and all certificates, opinions,
financial statements, schedules,
agreements, resolutions, rulings
or other instruments required by
this Agreement to be so
delivered, together with such
other items as may be reasonably
requested by the parties hereto
and their respective legal
counsel in order to effectuate
or evidence the transactions
contemplated hereby, subject
only to the conditions to
Closing referenced hereinbelow.
(b) PriceNet
hereby undertakes and provides
assurances to Silverthorne that
it will file a current report on
Form 8-K within 15 days of the
Closing in compliance with the
Exchange Act, with the audited
financial statements of PriceNet
and the pro forma statements
required by the Exchange Act and
by Regulation S-B by amendment
of the Form 8-K within the time
parameters established by the
Exchange Act, and will otherwise
comply with the reporting
requirements of the Exchange Act.
SECTION 3.4 CLOSING.
The closing ("Closing") of the
transactions contemplated by
this Agreement shall be as of
the date in which all of the
shareholders of PriceNet have
approved the terms of this
Agreement ("Closing Date"), all
conditions to Closing referenced
in this Agreement have been
satisfied or waived by PriceNet
and all documentation referenced
herein is delivered to the
respective party herein, unless
a different date is mutually
agreed to in writing by the
parties hereto.
SECTION 3.5 TERMINATION.
(a) This Agreement may
be terminated by the board of
directors of either Silverthorne
or PriceNet at any time prior to
the Closing Date if:
(i)
there shall be any
action or proceeding
before any court or
any governmental body
which shall seek to
restrain, prohibit or
invalidate the
transactions
contemplated by this
Agreement and which,
in the judgment of
such board of
directors, made in
good faith and based
on the advice of its
legal counsel, makes
it inadvisable to
proceed with the
exchange contemplated
by this Agreement; or
(ii) any of the
transactions
contemplated hereby
are disapproved by any
regulatory authority
whose approval is
required to consummate
such transactions; or
(iii) the conditions
described in Section
6.6 below have not
been satisfied in
full; or
In the event of termination
pursuant to this paragraph (a)
of this Section 3.5, no
obligation, right, or liability
shall arise hereunder and each
party shall bear all of the
expenses incurred by it in
connection with the negotiation,
drafting and execution of this
Agreement and the transactions
herein contemplated;
(b) This Agreement may
be terminated at any time prior
to the Closing Date by action of
the board of directors of
Silverthorne if PriceNet shall
fail to comply in any material
respect with any of its
covenants or agreements
contained in this Agreement or
if any of the representations or
warranties of PriceNet contained
herein shall be inaccurate in
any material respect, which
noncompliance or inaccuracy is
not cured after 20 days' written
notice thereof is given to
PriceNet. If this Agreement is
terminated pursuant to this
paragraph (b) of this Section
3.5, this Agreement shall be of
no further force or effect and
no obligation, right or
liability shall arise hereunder;
and
(c) This Agreement may
be terminated at any time prior
to the Closing Date by action of
the board of directors of
PriceNet if Silverthorne shall
fail to comply in any material
respect with any of its
covenants or agreements
contained in this Agreement or
if any of the representations or
warranties of Silverthorne
contained herein shall be
inaccurate in any material
respect, which noncompliance or
inaccuracy is not cured after 20
days written notice thereof is
given to Silverthorne. If this
Agreement is terminated pursuant
to this paragraph (C) of Section
3.5, this Agreement shall be of
no further force or effect and
no obligation, right or
liability shall arise hereunder.
SECTION 3.6 DIRECTORS OF
SILVERTHORNE. Upon the Closing, the
present members of Silverthorne's Board
of Directors shall tender their
resignations seriatim so that the
following persons are appointed directors
of Silverthorne in accordance with
procedures set forth in the Silverthorne
bylaws: Xxxx X. Xxxxxxx, Xxxx Xxxxxxxxxx.
Each director shall hold office until
his successor shall have been duly
elected and shall have qualified or until
his or her earlier death, resignation or
removal.
SECTION 3.7 OFFICERS OF
SILVERTHORNE. UPON THE CLOSING, THE
PRESENT OFFICERS OF SILVERTHORNE SHALL
TENDER THEIR RESIGNATIONS AND PROVIDE
SILVERTHORNE WITH APPLICABLE RELEASES
CONCERNING THEIR RESPECTIVE EMPLOYMENT
AGREEMENTS. SIMULTANEOUS THEREWITH, THE
FOLLOWING PERSONS SHALL BE ELECTED AS
OFFICERS OF SILVERTHORNE IN ACCORDANCE
WITH PROCEDURES SET FORTH IN THE
SILVERTHORNE BYLAWS:
NAME OFFICE
XXXX X. XXXXXXX CHIEF EXECUTIVE OFFICER
XXXX XXXXXXXXXX PRESIDENT
XXXXXX X. XXXXXXX CHIEF FINANCIAL OFFICER
AND SECRETARY
SECTION 3.8 EFFECTIVE DATE. The
parties hereto hereby agree that the
Effective Date of the transaction
proposed herein shall be 11:50 P.M.
Eastern Time on March 11, 1999, unless
the parties agree otherwise, in writing.
ARTICLE IV
SPECIAL COVENANTS
SECTION 4.1 ACCESS TO PROPERTIES AND
RECORDS. Silverthorne and PriceNet will
each afford to the officers and
authorized representatives of the other
full access to the properties, books and
records of Silverthorne and PriceNet, as
the case may be, in order that each may
have full opportunity to make such
reasonable investigation as it shall
desire to make of the affairs of the
other and each will furnish the other
with such additional financial and
operating data and other information as
to the business and properties of
Silverthorne and PriceNet, as the case
may be, as the other shall from time to
time prior to Closing reasonably request.
In addition, Silverthorne shall provide
to PriceNet subsequent to Closing all
information necessary to allow PriceNet
to properly prepare and file all reports
required to be filed pursuant to the
Exchange Act, including all information
concerning Silverthorne's subsidiaries
which existed prior to Closing.
SECTION 4.2 INFORMATION FOR
SILVERTHORNE PUBLIC REPORTS. PriceNet
will furnish Silverthorne with all
information concerning PriceNet and the
PriceNet Stockholders, including all
financial statements, required for
inclusion in any public report to be
filed by Silverthorne pursuant to the
Securities Act, the Exchange Act, or any
other applicable federal or state law.
PriceNet covenants that all information
so furnished to Silverthorne, including
the financial statements described in
Section 1.4, shall be true and correct in
all material respects without omission of
any material fact required to make the
information stated not misleading.
Similarly, Silverthorne will provide all
information concerning its history and
operations reasonably requested by PriceNet.
SECTION 4.3 SPECIAL COVENANTS AND
REPRESENTATIONS REGARDING THE
SILVERTHORNE COMMON SHARES TO BE ISSUED
IN THE EXCHANGE. The consummation of
this Agreement, including the issuance of
the Silverthorne Common Shares to the
stockholders of PriceNet as contemplated
hereby, constitutes the offer and sale of
securities under the Securities Act, and
applicable state statutes. Such
transaction shall be consummated in
reliance on exemptions from the
registration and prospectus delivery
requirements of such statutes which
depend, inter alia, upon the
circumstances under which the PriceNet
stockholders acquire such securities. In
connection with reliance upon exemptions
from the registration and prospectus
delivery requirements for such
transactions, at the Closing, PriceNet
shall cause to be delivered, and the
PriceNet stockholders shall deliver to
Silverthorne, the investment letters
referenced in Section 3.1.
SECTION 4.4 THIRD PARTY CONSENTS.
Silverthorne and PriceNet agree to
cooperate with each other in order to
obtain any required third party consents
to this Agreement and the transactions
herein contemplated.
SECTION 4.5 ACTIONS PRIOR TO CLOSING.
(a) From and after the
date of this Agreement until the
Closing Date and except as set
forth in the Silverthorne or
PriceNet Schedules or as
permitted or contemplated by
this Agreement, PriceNet will
each use its best efforts to:
(i)
carry on its business
in substantially the
same manner as it has
heretofore;
(ii) maintain and
keep its properties in
states of good repair
and condition as at
present, except for
depreciation due to
ordinary wear and tear
and damage due to
casualty;
(iii) maintain in
full force and effect
insurance comparable
in amount and in scope
of coverage to that
now maintained by it;
(iv) perform in all
material respects all
of its obligations
under material
contracts, leases and
instruments relating
to or affecting its
assets, properties and
business;
(v)
maintain and preserve
its business
organization intact,
to retain its key
employees and to
maintain its
relationship with its
material suppliers and
customers; and
(vi) fully comply
with and perform in
all material respects
all obligations and
duties imposed on it
by all federal and
state laws and all
rules, regulations and
orders imposed by
federal or state
governmental authorities.
(b) From and after the
date of this Agreement until the
Closing Date, neither
Silverthorne nor PriceNet will,
without the prior consent of the
other party:
(i)
except as otherwise
specifically set forth
herein, make any
change in their
respective
certificates or
articles of
incorporation or bylaws;
(ii) declare or pay
any dividend on its
outstanding shares of
capital stock, except
as may otherwise be
required by law, or
effect any stock split
or otherwise change
its capitalization,
except as provided
herein;
(iii) enter into or
amend any employment,
severance or similar
agreements or
arrangements with any
directors or officers;
(iv) grant, confer or
award any options,
warrants, conversion
rights or other rights
not existing on the
date hereof to acquire
any shares of its
capital stock; or
(v)
purchase or redeem
any shares of its
capital stock, except
as disclosed herein.
SECTION 4.6 INDEMNIFICATION.
(a) PriceNet and
its chief executive officer and
director hereby agrees to
indemnify Silverthorne and each
of the officers, agents and
directors of Silverthorne as of
the date of execution of this
Agreement against any loss,
liability, claim, damage or
expense (including, but not
limited to, any and all expense
whatsoever reasonably incurred
in investigating, preparing or
defending against any
litigation, commenced or
threatened or any claim
whatsoever), to which it or they
may become subject arising out
of or based on any inaccuracy
appearing in or
misrepresentation made in this
Agreement. The indemnification
provided for in this paragraph
shall survive the Closing and
consummation of the transactions
contemplated hereby and
termination of this Agreement
for a period of 18 months; and
(b) Silverthorne and
its chief executive officer and
director hereby agrees to
indemnify PriceNet and each of
the officers, agents, directors
and current shareholders of
PriceNet as of the Closing Date
against any loss, liability,
claim, damage or expense
(including, but not limited to,
any and all expense whatsoever
reasonably incurred in
investigating, preparing or
defending against any
litigation, commenced or
threatened or any claim
whatsoever), to which it or they
may become subject arising out
of or based on any inaccuracy
appearing in or
misrepresentation made in this
Agreement and particularly the
representation regarding no
liabilities referred to in
Section 2.4(b). The
indemnification provided for in
this Section shall survive the
Closing and consummation of the
transactions contemplated hereby
and termination of this
Agreement for a period of 18
months.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
OF SILVERTHORNE
The obligations of Silverthorne under
this Agreement are subject to the
satisfaction, at or before the Closing
Date, of the following conditions:
SECTION 5.1 ACCURACY OF
REPRESENTATIONS. The representations and
warranties made by PriceNet in this
Agreement were true when made and shall
be true at the Closing Date with the same
force and effect as if such
representations and warranties were made
at the Closing Date (except for changes
therein permitted by this Agreement), and
PriceNet shall have performed or complied
with all covenants and conditions
required by this Agreement to be
performed or complied with by PriceNet
prior to or at the Closing. Silverthorne
shall be furnished with a certificate,
signed by a duly authorized officer of
PriceNet and dated the Closing Date, to
the foregoing effect.
SECTION 5.2 STOCKHOLDER APPROVAL.
The stockholders of PriceNet shall have
unanimously approved this Agreement and
the transactions contemplated thereby as
described in Section 4.1.
SECTION 5.3 OFFICER'S CERTIFICATE.
Silverthorne shall have been furnished
with a certificate dated the Closing Date
and signed by a duly authorized officer
of PriceNet to the effect that no
litigation, proceeding, investigation or
inquiry is pending or, to the best
knowledge of PriceNet, threatened, which
might result in an action to enjoin or
prevent the consummation of the
transactions contemplated by this
Agreement or, to the extent not disclosed
in the PriceNet Schedules, by or against
PriceNet which might result in any
material adverse change in any of the
assets, properties, business or
operations of PriceNet.
SECTION 5.4 NO MATERIAL ADVERSE
CHANGE. Prior to the Closing Date, there
shall not have occurred any material
adverse change in the financial
condition, business or operations of nor
shall any event have occurred which, with
the lapse of time or the giving of
notice, may cause or create any material
adverse change in the financial
condition, business or operations of
PriceNet.
SECTION 5.5 OTHER ITEMS.
Silverthorne shall have received such
further documents, certificates or
instruments relating to the transactions
contemplated hereby as Silverthorne may
reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF
PRICENET
The obligations of PriceNet under
this Agreement are subject to the
satisfaction, at or before the Closing
Date (unless otherwise indicated herein),
of the following conditions:
SECTION 6.1 ACCURACY OF
REPRESENTATIONS. The representations and
warranties made by Silverthorne in this
Agreement were true when made and shall
be true as of the Closing Date (except
for changes therein permitted by this
Agreement) with the same force and effect
as if such representations and warranties
were made at and as of the Closing Date,
and Silverthorne shall have performed and
complied with all covenants and
conditions required by this Agreement to
be performed or complied with by
Silverthorne prior to or at the Closing.
PriceNet shall have been furnished with a
certificate, signed by a duly authorized
executive officer of Silverthorne and
dated the Closing Date, to the foregoing
effect.
SECTION 6.2 OFFICER'S CERTIFICATE.
PriceNet shall be furnished with a
certificate dated the Closing Date and
signed by a duly authorized officer of
Silverthorne to the effect that no
litigation, proceeding, investigation or
inquiry is pending or, to the best
knowledge of Silverthorne, threatened,
which might result in an action to enjoin
or prevent the consummation of the
transactions contemplated by this
Agreement or,
to the extent not disclosed
in the Silverthorne Schedules, by or
against Silverthorne which might result
in any material adverse change in any of
the assets, properties, business or
operations of Silverthorne.
SECTION 6.3 NO MATERIAL ADVERSE
CHANGE. Prior to the Closing Date, there
shall not have occurred any material
adverse change in the financial
condition, business or operations of nor
shall any event have occurred which, with
the lapse of time or the giving of
notice, may cause or create any material
adverse change in the financial
condition, business or operations of
Silverthorne.
SECTION 6.5 COMPLIANCE WITH
REPORTING REQUIREMENTS. As of the
Closing Date, Silverthorne shall be
current in, and in compliance with all
requirements of, all filings required to
be tendered to the Securities and
Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended.
SECTION 6.6 REVERSE SPLIT.
Simultaneous with the Closing of this
Agreement, the Board of Directors of
Silverthorne shall authorize and call for
the special meeting of the shareholders
to undertake a reverse split of the
Silverthorne issued and outstanding
Common Stock, whereby 1 share of Common
Stock shall be issued in exchange for
every 10 shares of Common Stock presently
issued and outstanding, which reverse
split shall have an effective date of
March 25, 1999. As a result and on
Closing Date, as defined herein, there
will be no more than 1,575,705 common
shares issued and outstanding and
reserved for issuance (including shares
reserved for issuance applicable to
issued and outstanding Common Stock
Purchase Warrants, if any) (the
"Silverthorne Common Shares"). The Board
of Directors of Silverthorne shall file a
proxy statement with the Securities and
Exchange Commission to that effect. All
issued and outstanding Silverthorne
Common Shares have been legally issued,
fully paid and are nonassessable.
SECTION 6.7 NAME CHANGE.
Silverthorne shall also approve the name
change and shall propose such name change
in the special meeting of the
shareholders. Upon receiving the
approval of the shareholders of
Silverthorne, it shall deliver to
PriceNet an amendment to Silverthorne's
certificate of incorporation changing the
company's name to "XxxxxXxx.xxx, Inc."
SECTION 6.8 NO LIABILITIES. As of
the Closing Date, as defined herein the
Silverthorne balance sheet and the notes
thereto, shall reflect that Silverthorne
has: (i) no receivables; (ii) no accounts
payable; (iii) except as stated herein or
in the Silverthorne Schedules, no
liabilities, whether absolute, accrued,
known or unknown, contingent or
otherwise, whether due or to become due,
including, without limitation,
liabilities as guarantor under any
guaranty or other governmental charges.
In the event Silverthorne is bound by or
otherwise liable for any contract, lease
or other agreement or any other liability
at the date of Closing, Silverthorne's
existing "inside" officers and directors
shall execute and deliver a binding
Indemnification and Hold Harmless
Agreement at Closing relevant to such
obligations.
SECTION 6.9 OTHER ITEMS. PriceNet
shall have received such further
documents, certificates, or instruments
relating to the transactions contemplated
hereby as PriceNet may reasonably request.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 BROKERS AND FINDERS.
Except as set forth in Schedule 7.1, each
party hereto hereby represents and
warrants that it is under no obligation,
express or implied, to pay certain
finders in connection with the bringing
of the parties together in the
negotiation, execution, or consummation
of this Agreement. The parties each
agree to indemnify the other against any
claim by any third person not listed in
Schedule 7.1 for any commission,
brokerage or finder's fee or other
payment with respect to this Agreement or
the transactions contemplated hereby
based on any alleged agreement or
understanding between the indemnifying
party and such third person, whether
express or implied from the actions of
the indemnifying party.
SECTION 7.2 LAW. FORUM AND
JURISDICTION. This Agreement shall be
construed and interpreted in accordance
with the laws of the State of California.
SECTION 7.3 NOTICES. Any notices or
other communications required or
permitted hereunder shall be sufficiently
given if personally delivered to it or
sent by registered mail or certified
mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Silverthorne: Silverthorne Production Co.
00000 Xxx Xxxxxxx
Xxxxxx Xxxxx Xx, XX 00000
With copies to: Xxx Xxxxxx, Esq.
Krys, Boyle, Xxxxxxxx & Xxxxxx
000 00xx Xxxxxx
Xxxxx 0000 Xxxxx
Xxxxxx, XX 00000
If to PriceNet: XxxxxXxx.xxx, Inc.
000 Xxxxxxx Xxxxxx Xx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
With copies to: Xxxxx Xxxxx, Esq.
000 Xxxxxxx Xxxxxx Xx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
or such other addresses as shall be
furnished in writing by any party in the
manner for giving notices hereunder, and
any such notice or communication shall be
deemed to have been given as of the date
so delivered, mailed, or telegraphed.
SECTION 7.4 ATTORNEYS' FEES.
The prevailing party in any proceeding
brought to enforce or interpret any
provision of this Agreement shall be
entitled to recover its reasonable
attorney's fees, costs and disbursements
incurred in connection with such
proceeding, including but not limited to
the costs of experts, accountants and
consultants and all other costs and
services reasonably related to the
proceeding, including those incurred in
any bankruptcy or appeal, from the
non-prevailing party or parties.
SECTION 7.5 CONFIDENTIALITY.
Each party hereto agrees with the other
parties that, unless and until the
reorganization contemplated by this
Agreement has been consummated, they and
their representatives will hold in strict
confidence all data and information
obtained with respect to another party or
any subsidiary thereof from any
representative, officer, director or
employee, or from any books or records or
from personal inspection, of such other
party, and shall not use such data or
information or disclose the same to
others, except: (i) to the extent such
data is a matter of public knowledge or
is required by law to be published; and
(ii) to the extent that such data or
information must be used or disclosed in
order to consummate the transactions
contemplated by this Agreement.
SECTION 7.6 SCHEDULES; KNOWLEDGE.
Each party is presumed to have full
knowledge of all information set forth in
the other party's schedules delivered
pursuant to this Agreement.
SECTION 7.7 THIRD PARTY
BENEFICIARIES. This contract is solely
between Silverthorne and PriceNet and,
except for the PriceNet shareholders or
as otherwise specifically provided
herein, no director, officer,
stockholder, employee, agent, independent
contractor or any other person or entity
shall be deemed to be a third party
beneficiary of this Agreement.
SECTION 7.8 ENTIRE AGREEMENT.
This Agreement represents the entire
agreement between the parties relating to
the subject matter hereof. This
Agreement alone fully and completely
expresses the agreement of the parties
relating to the subject matter hereof.
There are no other courses of dealing,
understandings, agreements,
representations or warranties, written or
oral, except as set forth herein. This
Agreement may not be amended or modified,
except by a written agreement signed by
all parties hereto.
SECTION 7.9 SURVIVAL; TERMINATION.
The representations, warranties and
covenants of the respective parties shall
survive the Closing Date and the
consummation of the transactions herein
contemplated for three years.
SECTION 7.10 COUNTERPARTS. This
Agreement may be executed in multiple
counterparts, each of which shall be
deemed an original and all of which taken
together shall be but a single instrument.
SECTION 7.11 AMENDMENT OR
WAIVER. Every right and remedy provided
herein shall be cumulative with every
other right and remedy, whether conferred
herein, at law, or in equity, and may be
enforced concurrently herewith, and no
waiver by any party of the performance of
any obligation by the other shall be
construed as a waiver of the same or any
other default then, theretofore, or
thereafter occurring or existing. At any
time prior to the Closing Date, this
Agreement may be amended by a writing
signed by all parties hereto, with
respect to any of the terms contained
herein, and any term or condition of this
Agreement may be waived or the time for
performance hereof may be extended by a
writing signed by the party or parties
for whose benefit the provision is intended.
SECTION 7.12 INCORPORATION OF
RECITALS. All of the recitals hereof are
incorporated by this reference and are
made a part hereof as though set forth at
length herein.
SECTION 7.13 EXPENSES. Each
party herein shall bear all of their
respective costs and expenses incurred in
connection with the negotiation of this
Agreement and in the consummation of the
transactions provided for herein and the
preparation therefor.
SECTION 7.14 HEADINGS; CONTEXT. The
headings of the sections and paragraphs
contained in this Agreement are for
convenience of reference only and do not
form a part hereof and in no way modify,
interpret or construe the meaning of this
Agreement.
SECTION 7.15 BENEFIT. This
Agreement shall be binding upon and shall
insure only to the benefit of the parties
hereto, and their permitted assigns
hereunder. This Agreement shall not be
assigned by any party without the prior
written consent of the other party.
SECTION 7.16 PUBLIC
ANNOUNCEMENTS. Except as may be required
by law, neither party shall make any
public announcement or filing with
respect to the transactions provided for
herein without the prior consent of the
other party hereto.
SECTION 7.17 SEVERABILITY. In
the event that any particular provision
or provisions of this Agreement or the
other agreements contained herein shall
for any reason hereafter be determined to
be unenforceable, or in violation of any
law, governmental order or regulation,
such unenforceability or violation shall
not affect the remaining provisions of
such agreements, which shall continue in
full force and effect and be binding upon
the respective parties hereto.
SECTION 7.18 FAILURE OF
CONDITIONS; TERMINATION. In the event
any of the conditions specified in this
Agreement shall not be fulfilled on or
before the Closing Date, either of the
parties have the right either to proceed
or, upon prompt written notice to the
other, to terminate and rescind this
Agreement without liability to any other
party. The election to proceed shall not
affect the right of such electing party
reasonably to require the other party to
continue to use its efforts to fulfill
the unmet conditions.
SECTION 7.19 NO STRICT
CONSTRUCTION. The language of this
Agreement shall be construed as a whole,
according to its fair meaning and
intendment, and not strictly for or
against either party hereto, regardless
of who drafted or was principally
responsible for drafting the Agreement or
terms or conditions hereof.
SECTION 7.20 EXECUTION KNOWING
AND VOLUNTARY. In executing this
Agreement, the parties severally
acknowledge and represent that each: (a)
has fully and carefully read and
considered this Agreement; (b) has been
or has had the opportunity to be fully
apprized of its attorneys of the legal
effect and meaning of this document and
all terms and conditions hereof; and (C)
is executing this Agreement voluntarily,
free from any influence, coercion or
duress of any kind.
SECTION 7.21 JOINT PREPARATION.
This Agreement is to be deemed to have
been prepared jointly by the parties
hereto and any uncertainty or ambiguity
existing herein, if any, shall not be
interpreted against any party, but shall
be interpreted according to the
application of the rules of
interpretation for arm's length agreements.
SECTION 7.22 ARBITRATION AND
VENUE. Any controversy arising out of or
relating to this Agreement or any
modification or extension thereof,
including any claim for damages and/or
recission, shall be settled by
arbitration in Los Angeles, California in
accordance with the Commercial
Arbitration Rules of the American
Arbitration Association before one
arbitrator. The arbitrator sitting in
any such controversy shall have no power
to alter or modify any express provisions
of this Agreement or to render any award
which by its terms effects any such
alteration, or modification. The parties
consent to the jurisdiction of the
Superior Court of California, and of the
United States District Court for the
Central District of California for all
purposes in connection with such
arbitration including the entry of
judgment on any award. The parties
consent that any process or notice of
motion or other application to either of
said courts, and any paper in connection
with arbitration, may be served by
certified mail or the equivalent, return
receipt requested, or by personal service
or in such manner as may be permissible
under the rules of the applicable court
or arbitration tribunal, provided a
reasonable time for appearance is
allowed, The parties further agree that
arbitration proceedings must be
instituted within one year after the
claimed breach occurred, and that such
failure to institute arbitration
proceedings within such period shall
constitute an absolute bar to the
institution of any proceedings and a
waiver of all claims. Each of the
parties shall, subject to the award of
the arbitrators, pay an equal share of
the arbitrators' fees except the
arbitrators shall have the power to award
recovery of all costs (including the
attorneys' fees, administrative fees,
arbitrators' fees and court fees) to the
prevailing party, as determined by the
arbitrators. This section shall survive
the termination of this Agreement.
IN WITNESS WHEREOF,
the corporate parties hereto have caused
this Agreement to be executed by their
respective officers, hereunto duly
authorized, and entered into as of the
date first above written.
SILVERTHORNE PRODUCTION COMPANY
ATTEST:
_________________________ By: ____________________________
Secretary or President
Assistant Secretary
ATTEST: XXXXXXXX.XXX, INC.
____________________________ By: ____________________________
Secretary or President
Assistant Secretary
PRICENET SHAREHOLDERS:
____________________________
Xxxx X. Xxxxxxx
____________________________
Xxxx Xxxxxxxxxx
____________________________
Xxxxxx X. Xxxxxxx
SCHEDULE I
LIST OF PRICENET SHAREHOLDERS
List of PriceNet Shareholders
# of PriceNet Shares # of Silverthorne Shares
Name to be Exchanged to be Issued
Xxxx X. Xxxxxxx 1,000,000 5,000,000
Xxxx Xxxxxxxxxx 1,000,000 5,000,000
Xxxxxx X. Xxxxxxxx 100,000 500,000
____ ____
TOTAL _______ 10,500,000
EXHIBIT "A"
FORM OF INVESTMENT LETTER
INVESTMENT LETTER
March , 1999
Silverthorne Production Company
Gentlemen:
The undersigned herewith deposits
certificate(s) for shares of common stock
of XxxxxXxx.xxx, Inc., ("PriceNet"), as
described below (endorsed, or having
executed stock powers attached) in
acceptance of and subject to the terms
and conditions of that certain Agreement
and Plan of Reorganization (the
"Agreement"), between PriceNet and
Silverthorne Production Company
("Silverthorne" or the "Company"), dated
March , 1999, receipt of which is
hereby acknowledged, in exchange for
shares of Common Stock of Silverthorne
(the "Exchange Shares"). If any
condition precedent to the Agreement is
not satisfied within the relevant time
parameters established in the Agreement
(or any extension thereof), the
certificate(s) are to be returned to the
undersigned.
The undersigned hereby
represents, warrants, covenants and
agrees with you that, in connection with
the undersigned's acceptance of the
Exchange Shares and as of the date of
this letter:
1. The undersigned is
aware that his, her or its acceptance of
the Exchange Shares is irrevocable,
absent an extension of the Expiration
Date of any material change to any of the
terms and conditions of the Agreement.
2. The undersigned
warrants full authority to deposit all
shares referred to above and that
Silverthorne will acquire a good and
unencumbered title thereto.
3. The undersigned has
full power and authority to enter into
this agreement and that this agreement
constitutes a valid and legally binding
obligation of the undersigned.
4. By execution
hereof, the undersigned hereby confirms
that the Silverthorne common stock to be
received in exchange for PriceNet common
stock (the "Securities"), will be
acquired for investment for the
undersigned's own account, not as a
nominee or agent, and not with a view to
the resale or distribution of any part
thereof, and that the undersigned has no
present intention of selling, granting
any participation in, or otherwise
distributing the same. By execution
hereof, the undersigned further
represents the undersigned does not have
any contract, undertaking, agreement or
arrangement with any third party, with
respect to any of the Securities.
5. The undersigned
understands that the Securities are being
issued pursuant to available exemption
thereto and have not been registered
under the Securities Act of 1933, as
amended (the "1933 Act"), or under any
state securities laws. The undersigned
understands that no registration
statement has been filed with the United
States Securities and Exchange Commission
nor with any other regulatory authority
and that, as a result, any benefit which
might normally accrue to a holder such as
me by an impartial review of such a
registration statement by the Securities
and Exchange Commission or other
regulatory authority will not be
forthcoming. The undersigned understands
that he/she/it cannot sell the Securities
unless such sale is registered under the
1933 Act and applicable state securities
laws or exemptions from such registration
become available. In this connection the
undersigned understands that the Company
has advised the Transfer Agent for the
Common Shares that the Securities are
"restricted securities" under the 1933
Act and that they may not be transferred
by the undersigned to any person without
the prior consent of the Company, which
consent of the Company will require an
opinion of my counsel to the effect that,
in the event the Securities are not
registered under the 1933 Act, any
transfer as may be proposed by the
undersigned must be entitled to an
exemption from the registration
provisions of the 1933 Act. To this end,
the undersigned acknowledges that a
restrictive legend will be placed upon
the certificate representing the
Securities and that the Transfer Agent
has been advised of such facts.
6. The undersigned
represents that it is experienced in
evaluation and investing in securities of
companies and acknowledges that he/she/it
is able to fend for itself, can bear the
economic risk of this investment and has
such knowledge and experience in
financial and business matters that it is
capable of evaluating the merits and
risks of the investment in the Securities.
IN WITNESS WHEREOF, the
undersigned has duly executed this
Investment Letter as of the date
indicated hereon.
Dated: ______________, 1999
Very truly yours,
____________________________
(signature)
____________________________
(print name in full)
____________________________
( address)
