Exhibit 2.1
MERGER AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") among GLOBALOCK
CORPORATION, a Delaware corporation ("Acquisition"), CAN/AM MARKETING GROUP,
LLC, a California limited liability company ("Client") and the persons listed in
Exhibit "A" hereof (collectively the "Shareholders"), being the owners of record
of all of the issued and outstanding membership interests of Client.
Whereas, Acquisition wishes to acquire and the Shareholders wish to
transfer all of the issued and outstanding securities of Client in a transaction
intended to qualify as a reorganization within the meaning of ss.368(a)(1)(B) of
the Internal Revenue Code of 1986, as amended.
Now, therefore, Acquisition, Client, and the Shareholders adopt this
plan of reorganization and agree as follows:
1. EXCHANGE OF STOCK/MEMBERSHIP INTERESTS
1.1 EXCHANGE. The Shareholders agree to transfer to Acquisition at the Closing
(defined below) the number of membership interests of Client, shown opposite
their names in Exhibit "A", in exchange for an aggregate of 3,498,000 shares of
voting common stock of Acquisition, $.001 par value per share, at an exchange
ratio of 1.0 share of Acquisition common stock for each Client membership
interests.
1.2 EXCHANGE OF CERTIFICATES. Each holder of an outstanding certificate or
certificates theretofore representing ownership of Client membership interests
shall surrender such certificate(s) for cancellation to Acquisition, and shall
receive in exchange a certificate or certificates representing the number of
full shares of Acquisition common stock into which the shares of Client
membership interests represented by the certificate or certificates so
surrendered shall have been converted. The transfer of Client membership
interests by the Shareholders shall be effected by the delivery to Acquisition
at the Closing of certificates representing the transferred shares endorsed in
blank or accompanied by stock powers executed in blank.
1.3 FRACTIONAL SHARES. Fractional shares of Acquisition common stock shall not
be issued, but in lieu thereof Acquisition shall round up fractional shares to
the next highest whole number.
1.4 FURTHER ASSURANCES. At the Closing and from time to time thereafter, the
Shareholders shall execute such additional instruments and take such other
action as Acquisition may request in order more effectively to sell, transfer,
and assign the transferred stock to Acquisition and to confirm Acquisition's
title thereto.
1.5 SECURITIES OUTSTANDING AFTER CLOSING. Immediately following the Closing,
there will be issued and outstanding in Acquisition 4,498,000 common shares
issued as follows:
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Number of
Shares Name of Shareholder Address
--------- ------------------- -------
3,000,000 Xxxxx Xxxxxxxxxx 000 Xxxxxxx Xxxxxx, Xxxxx Xxxx,
Xxxxxxxxxx, 00000
100,000 Xxxxxxx Xxxxx X.X. Xxx 00000, Xxxxxxxxx,
Xxxxxxxxxx, 00000
70,000 Xxxxxxx Xxxxxxxxxx 0000 Xxxx Xxxxxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx, 00000
50,000 Xxxxxxx Xxxxxx 0000 00xx Xxxxxx, Xxxxx X,
Xxxxxxx, Xxxxxxxxxx 00000
40,000 Xxxx Xxxxxx 00000 XX 00xx Xxxxxx, Xxxxx
000, Xxxxxxx, Xxxxxxxxxx 00000
20,000 Xxxxxxxx Xxxxxxx 000 Xxxxx Xxxxxxx Xxxxx, Xxxxx
000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000
20,000 Xxxxx Xxxxx 00000 Xxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxxx 00000
20,000 Xxx Xxxxxxxxx 000 Xxxxxxx Xxxxxx, Xxxxx Xxxx,
Xxxxxxxxxx 00000
20,000 Xxxxxxx XxXxx 000 Xxxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxx 00000
20,000 Xxxxxx Xxx Xxxxxx 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxx
Xxxxx, Xxxxxx 00000
20,000 Xxxxx Xxxxxxx 00000 Xxxxxxx Xxxxxxxxx, Xxx
Xxxxx, Xxxxxx 00000
20,000 Xxxx Xxxxx 00 Xxxx Xxxxxx, Xxx xxxxxx,
Xxxxxxxxxx 00000
14,000 Xxxxxx Xxxxxxxxx 0000 Xxxx Xxxxxx, Xxxx Xxxxx,
Xxxxxxxxxx 00000
10,000 Xxxxxxxx Xxxxx 00000 Xxxxxxxx, Xxxxx X-00,
Xxxxx Xxxxx, Xxxxxxxxxx 00000
10,000 Xxxxx Xxxxxxxxx 0000 Xxxx Xxxxxx, Xxxx Xxxxx,
Xxxxxxxxxx 00000
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Number of
Shares Name of Shareholder Address
--------- ------------------- -------
10,000 Xxxxxxxx Xxxxxxxx 9221 Xxxx Xxxxxx Xxxxx, XX
Xxxxxxxxxxx, Xxx Xxxxxx 00000
10,000 Cookie Xxxxxxxxx 0000 Xxxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000
10,000 Xxx Xxxxxxxxx X.X. Xxx 000, Xx. Xxxx Xxxxxxx,
Xxxxxxxxxx 00000
10,000 Xxxxxx Xxxxxx 00000 000xx Xxxxxx, XX
Xxxxxxxxxx, Xxxxxxxxxx 00000
10,000 Xxxxx Shab 0000 Xxxxxx Xxxxx, Xxxxxxxxxx
Xxxxx, Xxxxxxxxxx 00000
6,000 Xxxxx Xxxxxxxxx 0000 Xxxx Xxxxxx, Xxxx Xxxxx,
Xxxxxxxxxx 00000
4,000 Xxxx Xxxx 0000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx
00000
4,000 Xxxxxxx Xxxxxx 000 Xxxxx Xxxxx, Xxxxxxxxx,
Xxxxxx 00000
1,000,000 Pre-Merger Shareholders of C/O Globalock Corporation
Globalock Corporation Xxxxxx Xxxx, 860 Xxx xx xx Xxx,
Xxxxx X-0, Xxxxxxx Xxxxxxxxx,
Xxxxxxxxxx 00000
---------
4,498,000
Following the closing, loans of $300,000 shown in the balance sheet of Client at
August 31, 1999 will be converted to stockholder's equity for an aggregate of
300,000 shares of voting common stock of Acquisition at a conversion ratio of
1:1.
2. EXCHANGE OF OTHER SECURITIES.
2.1 SECURITIES EXCHANGED. All outstanding warrants, options, stock rights and
all other securities of Client owned by the Shareholders shall be exchanged and
adjusted, subject to the terms contained in such warrants, options, stock rights
or other securities, for similar securities of Acquisition.
2.2 RATIO OF EXCHANGE. The securities of Client owned by the Shareholders, and
the relative securities of Acquisition for which they will be exchanged, are set
out opposite their names in Exhibit A.
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3. CLOSING. The Closing contemplated herein shall be held on ________ at the
principal offices of Acquisition, at 000 Xxx xx xx Xxx, Suite E-1, Xxxxxxx
Xxxxxxxxx, XX 00000 unless another place or time is agreed upon in writing by
the parties without requiring the meeting of the parties hereof. All proceedings
to be taken and all documents to be executed at the Closing shall be deemed to
have been taken, delivered and executed simultaneously, and no proceeding shall
be deemed taken nor documents deemed executed or delivered until all have been
taken, delivered and executed. The date of Closing may be accelerated or
extended by agreement of the parties.
Any copy, facsimile telecommunication or other reliable reproduction of the
writing or transmission required by this Agreement or any signature required
thereon may be used in lieu of an original writing or transmission or signature
for any and all purposes for which the original could be used, provided that
such copy, facsimile telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or transmission or original
signature.
4. UNEXCHANGED CERTIFICATES. Until surrendered, each outstanding certificate
that prior to the Closing represented Client membership interests shall be
deemed for all purposes, other than the payment of dividends or other
distributions, to evidence ownership of the number of shares of Acquisition
common stock into which it was converted. No dividend or other distribution
shall be paid to the holders of certificates of Client membership interests
until presented for exchange at which time any outstanding dividends or other
distributions shall be paid.
5. REPRESENTATIONS AND WARRANTIES OF CLIENT
Client represents and warrants as follows:
5.1 ORGANIZED STATUS. Client is a limited liability corporation duly organized,
validly existing, and in good standing under the laws of the state of California
and is licensed or qualified as a foreign corporation in all states in which the
nature of its business or the character or ownership of its properties makes
such licensing or qualification necessary. Attached hereto are complete and
correct copies of the articles of organization and operating agreement of Client
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
(a) articles of organization and operating agreement of Client, or (b) any
resolution adopted by the managers of Client or the Shareholders.
5.2 CAPITALIZATION. The equity structure of Client consists of membership
interests in the aggregate of 20,000,000, of which 3,498,000 membership
interests are issued and outstanding, all fully paid and nonassessable.
Shareholders are, and will be on the Closing Date, the record and beneficial
owners and holders of all of the outstanding equity securities and other
securities of Client, free and clear of all liens, claims, or other adverse
interests. All issued and outstanding membership interest of Client have been
duly authorized, validly issued and are fully paid and nonassessable, and none
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of such shares of such interests were issued in violation of the preemptive or
other rights of any person or the provisions of any applicable law, rule or
regulation. Except as set forth on the attached exhibit, there are no: (a)
outstanding securities convertible into or exchangeable for any of Client
interests capital stock; (b) outstanding options, warrants, calls or other
rights, including rights to demand registration or to sell in connection with
any registration by Client under the Securities Act of 1933, as amended (the
"Securities Act") to purchase or subscribe to membership interests of Client or
securities convertible into or exchangeable for membership interest of Client;
or (c) contracts, agreements, arrangements, commitments, plans or understandings
relating to the issuance, sale or transfer of any equity or other security of
Client, other than this Agreement.
5.3 SUBSIDIARIES. Client does not have any subsidiaries and does not own,
beneficially or of record, directly or indirectly, any equity securities or
other securities issued by any other person, or any direct or indirect equity or
ownership interest in any other business.
5.4 Financial Statements. The unaudited financial statements of Client at and
for the year ended December 31, 1998 and at and for the 8-month period ended
August 31, 1999 or such other period as acceptable to Acquisition ("Client's
Financial Statements") furnished to Acquisition are correct and fairly present
the financial condition of Client as of the dates and for the periods involved,
and such statements were prepared in accordance with generally accepted
accounting principles consistently applied.
5.5 UNDISCLOSED LIABILITIES. Client had no liabilities of any nature except to
the extent reflected or reserved against in Client's Financial Statements,
whether accrued, absolute, contingent, or otherwise, including, without
limitation, tax liabilities and interest due or to become due, and Client's
accounts receivable, if any, are collectible in accordance with the terms of
such accounts, except to the extent of the reserve therefor in Client's
Financial Statements.
5.6 ABSENCE OF MATERIAL CHANGES. Between the date of Client's Financial
Statements and the date of this Agreement, there have not been, except as set
forth in a list certified by the president of Client and delivered to
Acquisition, (1) any changes in Client's financial condition, assets,
liabilities, or business which, in the aggregate, have been materially adverse;
(2) any damage, destruction, or loss of or to Client's property, whether or not
covered by insurance; (3) any declaration or payment of any dividend or other
distribution in respect of Client's capital structure, or any direct or indirect
redemption, purchase, or other acquisition of any such stock or equity
instrument; (4) any increase paid or agreed to in the compensation, retirement
benefits, or other commitments to employees, (5) made any change in any method
of accounting or accounting practice, (6) made any gifts, or sold, transferred
or exchanged any property of any material value for less than the fair value
thereof.
5.7 LITIGATION. There is no litigation or proceeding pending, or to Client's
knowledge threatened, against or relating to Client, its properties or business,
except as set forth in a list certified by the president of Client and delivered
to Acquisition.
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5.8 CONTRACTS. Client is not a party to any material contract other than those
listed as attachment hereto.
5.9 NO VIOLATION. Execution of this Agreement and performance by Client
hereunder has been duly authorized by all requisite corporate action on the part
of Client, and this Agreement constitutes a valid and binding obligation of
Client, performance hereunder will not violate any provision of any charter,
bylaw, indenture, mortgage, lease, or agreement, or any order, judgment, decree,
law, or regulation to which any property of Client is subject or by which Client
is bound.
5.10 TAXES. Client has filed in correct form all federal, state, and other tax
returns of every nature required to be filed by it and has paid all taxes as
shown on such returns and all assessments, fees and charges received by it to
the extent that such taxes, assessments, fees and charges have become due.
Client has also paid all taxes which do not require the filing of returns and
which are required to be paid by it. To the extent that tax liabilities have
accrued, but have not become payable, they have been adequately reflected as
liabilities on the books of Client and are reflected in the financial statements
furnished hereto.
5.11 TITLE TO PROPERTY. Client has good and marketable title to all properties
and assets, real and personal, reflected in Client's Financial Statements,
except as since sold or otherwise disposed of in the ordinary course of
business, and Client's properties and assets are subject to no mortgage, pledge,
lien, or encumbrance, except for liens shown therein, with respect to which no
default exists.
5.12 CORPORATE AUTHORITY. Client has full corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder, and will deliver
at the Closing a certified copy of resolutions of its board of directors
authorizing execution of this Agreement by its officers and performance
thereunder.
5.13 ACCESS TO RECORDS. From the date of this Agreement to the Closing, Client
will (1) give to Acquisition and its representatives full access during normal
business hours to all of its offices, books, records, contracts, and other
corporate documents and properties so that Acquisition may inspect and audit
them and (2) furnish such information concerning Client's properties and affairs
as Acquisition may reasonably request.
5.14 CONFIDENTIALITY. Until the Closing (and permanently if there is no
Closing), Client and the Shareholders will keep confidential any information
which they obtain from Acquisition concerning its properties, assets, and
business. If the transactions contemplated by this Agreement are not
consummated, Client and the Shareholders will return to Acquisition all written
matter with respect to Acquisition obtained by them in connection with the
negotiation or consummation of this Agreement.
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6. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders, individually and separately, represent and warrant as follows:
6.1 TITLE TO MEMBERSHIP INTERESTS. The Shareholders, and each of them, are the
owners, free and clear of any liens and encumbrances, of the number of Client
membership interests which are listed in the attached schedule and which they
have contracted to exchange.
6.2 LITIGATION. There is no litigation or proceeding pending or to each
Shareholder's knowledge threatened, against or relating membership interest of
Client held by the Shareholders.
6.3 SECURITIES REPRESENTATIONS
(a) The shares of common stock of Acquisition are being acquired for the
account of the Shareholders and not with a view to sale in connection with any
distribution of the Acquisition common stock;
(b) Each of the Shareholders is acquiring the Acquisition common stock
hereunder without having received any form of general solicitation or general
advertising;
(c) Each of the Shareholders or his representative, if any, have been
provided with, or given reasonable access to, full and fair disclosure of all
material information concerning Acquisition;
(d) Each of the Shareholders has a preexisting personal or business
relationship with Acquisition or certain of its officers, directors or
controlling persons, or by reason of its business or financial experience, each
of the Shareholders could reasonably be assumed to have the capacity to
represent his own interests in connection with this Agreement;
(e) Each of the Shareholders understands and hereby acknowledges that the
Acquisition common stock will be issued pursuant only to those restrictions
imposed by and exemptions available pursuant to applicable federal and state
laws and that the certificates to be issued in respect of the Acquisition common
stock may bear a legend in a form satisfactory to counsel for Acquisition; in
part, Acquisition's reliance upon such exemptions is based on the
representations and warranties made by Shareholders in this Section 6.3;
(f) Each of the Shareholders agrees that the certificates to be issued in
respect of the Acquisition common stock may bear a legend in a form satisfactory
to counsel for Acquisition reflecting the status of the Acquisition common stock
as restricted securities under Rule 144(a)(3) promulgated under the Securities
Act and acknowledges that the transfer agent or registrar for Acquisition may be
instructed to restrict the transfer of the Acquisition common stock in
accordance with such legend and any other restrictions provided in this
Agreement;
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(g) Each of the Shareholders hereby agrees that he will not sell, transfer,
hypothecate, pledge, assign or otherwise dispose of any of the Acquisition
common stock, except pursuant to the terms of this Agreement and to a
registration statement filed under the provisions of the Securities Act, a
favorable no-action or interpretive letter received from the Commission or an
opinion of counsel satisfactory to Acquisition that such sale, transfer,
hypothecation, pledge, assignment or other disposition will not violate the
registration requirements of the Securities Act, pursuant to an opinion of
counsel satisfactory to Acquisition that such sale, transfer, hypothecation,
pledge, assignment or other disposition will not violate the registration
requirements of the Securities Act and does not in any way violate the terms of
this Agreement; and
(h) Each of the Shareholders hereby acknowledges that: (i) the shares of
Acquisition common stock referred to herein are being acquired after adequate
investigation of the business plan and prospects of Acquisition; (ii) that none
of the Shareholders is relying upon the accuracy of any predictions as to the
future prospects or developments of Acquisition or its business and is well
informed as to the business of Acquisition and has reviewed its operations and
financial statements; (iii) each of the Shareholders or his professional
advisors have discussed the financial condition and business operations of
Acquisition with the officers, directors and principal stockholders of
Acquisition and has been afforded the opportunity to ask questions with respect
thereto; and (iv) each of the Shareholders specifically acknowledges that the
shares of Acquisition common stock are speculative and involve a very high
degree of risk and that there can be no assurance that Acquisition will achieve
its business objectives or, in particular, that it will ever have cash available
for distribution to its stockholders.
7. REPRESENTATIONS AND WARRANTIES OF ACQUISITION
The Acquisition represents and warrants as follows:
7.1 CORPORATE STATUS. Acquisition is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware and is
licensed or qualified as a foreign corporation in all states in which the nature
of its business or the character or ownership of its properties makes such
licensing or qualification necessary.
7.2 CAPITALIZATION. The authorized capital stock of Acquisition consists of
100,000,000 shares of common stock, $.001 par value per share, of which
1,000,000 shares are issued and outstanding, all fully paid and nonassessable.
7.3 SUBSIDIARIES. Acquisition has no subsidiaries.
7.4 PUBLIC COMPANY. Acquisition filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, a registration
statement on August 27, 1999 registering its common stock.
7.5 PUBLIC FILINGS. Acquisition has timely filed all reports required to be
filed by it under Section 13 of the Securities Exchange Act of 1934.
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7.6 FINANCIAL STATEMENTS. The audited financial statements of Acquisition of
December 31, 1998 and for the period May 29, 1998 (inception) to September 30,
1999 or such other period as acceptable Client ("Acquisition's Financial
Statements") furnished to Client are correct and fairly present the financial
condition of Acquisition as of the dates and for the periods involved, and such
statements were prepared in accordance with generally accepted accounting
principles consistently applied.
7.7 UNDISCLOSED LIABILITIES. Acquisition had no liabilities of any nature except
to the extent reflected or reserved against in Acquisition's Financial
Statements, whether accrued, absolute, contingent, or otherwise, including,
without limitation, tax liabilities and interest due or to become due, and
Acquisition's accounts receivable, if any, are collectible in accordance with
the terms of such accounts, except to the extent of the reserve therefor in
Acquisition's Financial Statements.
7.8 ABSENCE OF MATERIAL CHANGES. Between the date of Acquisition's Financial
Statements and the date of this Agreement, there have not been, except as set
forth in a list certified by the president of Acquisition and delivered to
Client, (1) any changes in Acquisition's financial condition, assets,
liabilities, or business which, in the aggregate, have been materially adverse;
(2) any damage, destruction, or loss of or to Acquisition's property, whether or
not covered by insurance; (3) any declaration or payment of any dividend or
other distribution in respect of Acquisition's capital stock, or any direct or
indirect redemption, purchase, or other acquisition of any such stock; or (4)
any increase paid or agreed to in the compensation, retirement benefits, or
other commitments to employees.
7.9 LITIGATION. There is no litigation or proceeding pending, or to the
Company's knowledge threatened, against or relating to Acquisition, its
properties or business, except as set forth in a list certified by the president
of Acquisition and delivered to Client.
7.10 CONTRACTS. Acquisition is not a party to any material contract other than
those listed as an attachment hereto.
7.11 NO VIOLATION. Execution of this Agreement and performance by Acquisition
hereunder has been duly authorized by all requisite corporate action on the part
of Acquisition, and this Agreement constitutes a valid and binding obligation of
Acquisition, performance hereunder will not violate any provision of any
charter, bylaw, indenture, mortgage, lease, or agreement, or any order,
judgment, decree, law, or regulation to which any property of Acquisition is
Subject or by which Acquisition is bound.
7.12 TAXES. Acquisition has filed in correct form all federal, state, and other
tax returns of every nature required to be filed by it and has paid all taxes as
shown on such returns and all assessments, fees and charges received by it to
the extent that such taxes, assessments, fees and charges have become due.
Acquisition has also paid all taxes which do not require the filing of returns
and which are required to be paid by it. To the extent that tax liabilities have
accrued, but have not become payable, they have been adequately reflected as
liabilities on the books of Acquisition and are reflected in the financial
statements furnished hereto.
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7.13 TITLE TO PROPERTY. Acquisition has good and marketable title to all
properties and assets, real and personal, reflected in Acquisition's Financial
Statements, except as since sold or otherwise disposed of in the ordinary course
of business, and Acquisition's properties and assets are Subject to no mortgage,
pledge, lien, or encumbrance, except for liens shown therein, with respect to
which no default exists.
7.14 CORPORATE AUTHORITY. Acquisition has full corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder, and will
deliver at the Closing a certified copy of resolutions of its board of directors
authorizing execution of this Agreement by its officers and performance
thereunder.
7.15 CONFIDENTIALITY. Until the Closing (and permanently if there is no
Closing), Acquisition and its representatives will keep confidential any
information which they obtain from Client concerning its properties, assets, and
business. If the transactions contemplated by this Agreement are not
consummated, Acquisition will return to Client all written matter with respect
to Client obtained by it in connection with the negotiation or consummation of
this Agreement.
7.16 INVESTMENT INTENT. Acquisition is acquiring the Client membership interests
to be transferred to it under this Agreement for investment and not with a view
to the sale or distribution thereof, and Acquisition has no commitment or
present intention to liquidate Client or to sell or otherwise dispose of its
stock.
8. CONDUCT PENDING THE CLOSING
Acquisition, Client and the Shareholders covenant that between the date of this
Agreement and the Closing as to each of them:
8.1 No change will be made in the charter documents, by-laws, or other corporate
documents of Acquisition or Client.
8.2 This Agreement will be submitted for shareholder approval with a favorable
recommendation by the Board of Directors of each of Client and Acquisition and
the Board of Directors of each will use its best efforts to obtain the requisite
shareholder approval.
8.3 Client and Acquisition will use their best efforts to maintain and preserve
its business organization, employee relationships, and goodwill intact, and will
not enter into any material commitment except in the ordinary course of
business.
8.4 None of the Shareholders will sell, transfer, assign, hypothecate, lien, or
otherwise dispose or encumber the Client membership interests by them.
9. CONDITIONS PRECEDENT TO OBLIGATION OF CLIENT AND THE SHAREHOLDERS
Client's and the Shareholder's obligation to consummate this exchange shall be
Subject to fulfillment on or before the Closing of each of the following
conditions, unless waived in writing by Client or the Shareholders as
appropriate:
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9.1 ACQUISITION'S REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Acquisition set forth herein shall be true and correct at the
Closing as though made at and as of that date, except as affected by
transactions contemplated hereby.
9.2 ACQUISITION'S COVENANTS. Acquisition shall have performed all covenants
required by this Agreement to be performed by it on or before the Closing.
9.3 BOARD OF DIRECTOR APPROVAL. This Agreement shall have been approved by the
Board of Directors of Acquisition.
9.4 SUPPORTING DOCUMENTS OF ACQUISITION. Acquisition shall have delivered to
Client and the Shareholders supporting documents in form and substance
reasonably satisfactory to Client and the Shareholders, to the effect that:
(a) Acquisition is a corporation duly organized, validly existing, and in
good standing;
(b) Acquisition's authorized capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of directors of
Acquisition authorizing the execution of this Agreement and the consummation
hereof;
(d) Secretary's certificate of incumbency of the officers and directors of
Acquisition;
(e) Acquisition's Financial Statement and unaudited financial statement
from January 1, 1999 to close of most recent fiscal quarter; and
(f) Any document as may be specified herein or required to satisfy the
conditions, representations and warranties enumerated elsewhere herein.
10. CONDITIONS PRECEDENT TO OBLIGATION OF ACQUISITION
Acquisition's obligation to consummate this merger shall be Subject to
fulfillment on or before the Closing of each of the following conditions, unless
waived in writing by Acquisition:
10.1 CLIENT'S AND THE SHAREHOLDER'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Client and the Shareholders set forth herein
shall be true and correct at the Closing as though made at and as of that date,
except as affected by transactions contemplated hereby.
10.2 CLIENT'S AND THE SHAREHOLDERS' COVENANTS. Client and the Shareholders shall
have performed all covenants required by this Agreement to be performed by them
on or before the Closing.
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10.3 MANAGER APPROVAL. This Agreement shall have been approved by the Manager of
Client.
10.4 SHAREHOLDER EXECUTION. This Agreement shall have been executed by all the
members of Client.
10.5 SUPPORTING DOCUMENTS OF CLIENT. Client shall have delivered to Acquisition
supporting documents in form and Substance reasonably satisfactory to
Acquisition to the effect that:
(a) Client is a limited liability company duly organized, validly existing,
and in good standing;
(b) Client's capital stock/equity is as set forth herein;
(c) Certified copies of the resolutions of the board of directors of Client
authorizing the execution of this Agreement and the consummation hereof;
(d) Secretary's certificate of incumbency of the officers and directors of
Client;
(e) Client's Financial Statements and unaudited financial statements for
the period from the date of the unaudited financial statements to the close of
the most recent fiscal quarter; audited financial statements are to be finished
within 60 days from the closing date of this agreement, and
(f) Any document as may be specified herein or required to satisfy the
conditions, representations and warranties enumerated elsewhere herein.
11. INDEMNIFICATION
11.1 INDEMNIFICATION OF ACQUISITION. Client and the Shareholders severally (and
not jointly) agree to indemnify Acquisition against any loss, damage, or expense
(including reasonable attorney fees) suffered by Acquisition from (1) any breach
by Client or the Shareholders of this Agreement or (2) any inaccuracy in or
breach of any of the representations, warranties, or covenants by Client or the
Shareholders herein; provided, however, that (a) Acquisition shall be entitled
to assert rights of indemnification hereunder only if and to the extent that it
suffers losses, damages, and expenses (including reasonable attorney fees)
exceeding $50,000 in the aggregate and (b) Acquisition shall give notice of any
claims hereunder within twenty-four months beginning on the date of the Closing.
No loss, damage, or expense shall be deemed to have been sustained by
Acquisition to the extent of insurance proceeds paid to, or tax benefits
realizable by, Acquisition as a result of the event giving rise to such right to
indemnification.
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11.2 PROPORTIONATE LIABILITY. The liability of each Shareholder under this
Section shall be in the proportion that the total number of Acquisition shares
to be received by him bears to the total number of Acquisition shares to be
received by all the Shareholders and shall in no event exceed 25 percent of the
value of the Acquisition shares received by such Shareholder. With respect to
Shareholders that are estates, trusts, or custodianships, the executor, trustee,
or custodian is a party to this Agreement only in its fiduciary capacity and
liability hereunder shall be limited to the fiduciary assets and shall not
extend to the assets of the executor, trustee, or custodian.
11.3 INDEMNIFICATION OF CLIENT AND THE SHAREHOLDERS. Acquisition agrees to
indemnify Client and the Shareholders against any loss, damage, or expense
(including reasonable attorney fees) suffered by Client or by any of the
Shareholders from (1) any breach by Acquisition of this Agreement or (2) any
inaccuracy in or breach of any of Acquisition's representations, warranties, or
covenants herein.
11.4 DEFENSE OF CLAIMS. Upon obtaining knowledge thereof, the indemnified party
shall promptly notify the indemnifying party of any claim, which has given or
could give rise to a right of indemnification under this Agreement. If the right
of indemnification relates to a claim asserted by a third party against the
indemnified party, the indemnifying party shall have the right to employ counsel
acceptable to the indemnified party to cooperate in the defense of any such
claim. As long as the indemnifying party is defending any such claim in good
faith, the indemnified party will not settle such claim. If the indemnifying
party does not elect to defend any such claim, the indemnified party shall have
no obligation to do so.
12. TERMINATION. This Agreement may be terminated (1) by mutual consent in
writing; (2) by either Client, the Shareholders or Acquisition if there has been
a material misrepresentation or material breach of any warranty or covenant by
any other party; or (3) by either Client, the Shareholders or Acquisition if the
Closing shall not have taken place, unless adjourned to a later date by mutual
consent in writing.
13. SHAREHOLDERS' REPRESENTATIVE. The Shareholders hereby irrevocably designate
and appoint Xxxxx Xxxxxxxxxx as their agent and attorney in fact ("Shareholders'
Representative") with full power and authority until the Closing to execute,
deliver, and receive on their behalf all notices, requests, and other
communications hereunder; to fix and alter on their behalf the date, time, and
place of the Closing; to waive, amend, or modify any provisions of this
Agreement, and to take such other action on their behalf in connection with this
Agreement, the Closing, and the transactions contemplated hereby as such agent
or agents deem appropriate; provided, however, that no such waiver, amendment,
or modification may be made if it would decrease the number of shares to be
issued to the Shareholders hereunder or increase the extent of their obligation
to indemnify Acquisition hereunder.
14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Client, the Shareholders and Acquisition set out herein shall
survive the Closing.
13
15. ARBITRATION
SCOPE. The parties hereby agree that any and all claims (except only for
requests for injunctive or other equitable relief) whether existing now, in the
past or in the future as to which the parties or any affiliates may be adverse
parties, and whether arising out of this agreement or from any other cause, will
be resolved by arbitration before the American Arbitration Association. Situs.
The situs of arbitration shall be chosen by the party against whom arbitration
is sought, provided only that arbitration shall be held at a place in the
reasonable vicinity of such party's place of business or primary residence and
shall be within the United States. The situs of counterclaims will be the same
as the situs of the original arbitration. Any disputes concerning situs will be
decided by the American Arbitration Association.
APPLICABLE LAW. The law applicable to the arbitration and this agreement shall
be that of the State of Delaware, determined without regard to its provisions
which would otherwise apply to a question of conflict of laws. Any dispute as to
the applicable law shall be decided by the arbitrator.
DISCLOSURE AND DISCOVERY. The arbitrator may, in its discretion, allow the
parties to make reasonable disclosure and discovery in regard to any matters,
which are the Subject of the arbitration, and to compel compliance with such
disclosure and discovery order. The arbitrator may order the parties to comply
with all or any of the disclosure and discovery provisions of the Federal Rules
of Civil Procedure, as they then exist, as may be modified by the arbitrator
consistent with the desire to simplify the conduct and minimize the expense of
the arbitration.
FINALITY AND FEES. Any award or decision by the American Arbitration Association
shall be final, binding and non-appealable except as to errors of law. Each
party to the arbitration shall pay its own costs and counsel fees.
MEASURE OF DAMAGES. In any adverse action, the parties shall restrict themselves
to claims for compensatory damages and no claims shall be made by any party or
affiliate for lost profits, punitive or multiple damages.
COVENANT NOT TO XXX. The parties covenant that under no conditions will any
party or any affiliate file any action against the other (except only requests
for injunctive or other equitable relief) in any forum other than before the
American Arbitration Association, and the parties agree that any such action, if
filed, shall be dismissed upon application and shall be referred for arbitration
hereunder with costs and attorney's fees to the prevailing party.
INTENTION. It is the intention of the parties and their affiliates that all
disputes of any nature between them, whenever arising, from whatever cause,
based on whatever law, rule or regulation, whether statutory or common law, and
however characterized, be decided by arbitration as provided herein and that no
party or affiliate be required to litigate in any other forum any disputes or
other matters except for requests for injunctive or equitable relief. This
agreement shall be interpreted in conformance with this stated intent of the
parties and their affiliates.
14
16. GENERAL PROVISIONS
16.1 FURTHER ASSURANCES. From time to time, each party will execute such
additional instruments and take such actions as may be reasonably required to
carry out the intent and purposes of this Agreement.
16.2 WAIVER. Any failure on the part of either party hereto to comply with any
of its obligations, agreements, or conditions hereunder may be waived in writing
by the party to whom such compliance is owed.
16.3 BROKERS. Each party agrees to indemnify and hold harmless the other party
against any fee, loss, or expense arising out of claims by brokers or finders
employed or alleged to have been employed by the indemnifying party.
16.4 NOTICES. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given if delivered in person or sent by prepaid
first-class certified mail, return receipt requested, or recognized commercial
courier service, as follows:
If to Acquisition, to:
GLOBALOCK CORPORATION
Xxxxxx Xxxx
President
000 Xxx xx xx Xxx, Suite E-1
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
If to Client, to
CAN/AM MARKETING GROUP, LLC C/O Xxxxx Xxxxxxxxxx 000 Xxxxxxx Xxxxxx Xxxxx Xxxx,
Xxxxxxxxxx 00000
If to the Shareholders, to
CAN/AM MARKETING GROUP, LLC C/O Xxxxx Xxxxxxxxxx 000 Xxxxxxx Xxxxxx Xxxxx Xxxx,
Xxxxxxxxxx 00000
16.5 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
16.6 ASSIGNMENT. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their successors and assigns; provided, however,
that any assignment by either party of its rights under this Agreement without
the written consent of the other party shall be void.
16.7 COUNTERPARTS. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures sent by
facsimile transmission shall be deemed to be evidence of the original execution
thereof.
15
16.8 EFFECTIVE DATE. This effective date of this Agreement shall
be December 29, 1999.
GLOBALOCK CORPORATION
By /s/ Xxxxxx Xxxx
-------------------------
Xxxxxx Xxxx
CLIENT CORPORATION
By /s/ Xxxxx Xxxxxxxxxx
------------------------
Xxxxx Xxxxxxxxxx
16
EXHIBIT A
Number of
Client
Membership Number of
Interests Acquisition
To Be Shares To Be Name of
Transferred Received Shareholder Address
----------- ----------- ----------- -------
3,000,000 3,000,000 Xxxxx Xxxxxxxxxx 000 Xxxxxxx Xxxxxx,
Xxxxx Xxxx, XX 00000
100,000 100,000 Xxxxxxx Xxxxx X.X. Xxx 00000,
Xxxxxxxxx, XX 00000
70,000 70,000 Xxxxxxx Xxxxxxxxxx 0000 Xxxx Xxxxxxxx,
Xxxxxxx Xxxxx, XX 00000
50,000 50,000 Xxxxxxx Xxxxxx 0000 00xx Xxxxxx, Xxx X,
Xxxxxxx, XX 00000
40,000 40,000 Xxxx Xxxxxx 00000 XX 00xx Xx., Xxx 000
Xxxxxxx, Xxxxxxxxxx 00000
20,000 20,000 Xxxxxxxx Xxxxxxx 000 Xx. Xxxxxxx Xx., Xxx 000
Xxx Xxxxxxx, XX 00000
20,000 20,000 Xxxxx Xxxxx 00000 Xxxxxxxx Xxxx,
Xxxxxxxxxx, XX 00000
20,000 20,000 Xxx Xxxxxxxxx 000 Xxxxxxx Xxxxxx,
Xxxxx Xxxx, XX 00000
20,000 20,000 Xxxxxxx XxXxx 000 Xxxxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxx 00000
20,000 20,000 Xxxxxx Xxx Xxxxxx 0000 Xxxxxx Xxxxxx Xxxxxxx,
Xxx Xxxxx, Xxxxxx 00000
20,000 20,000 Xxxxx Xxxxxxx 00000 Xxxxxxx Xxxxxxxxx,
Xxx Xxxxx, Xxxxxx 00000
20,000 20,000 Xxxx Xxxxx 00 Xxxx Xxxxxx,
Xxx xxxxxx, XX 00000
14,000 14,000 Xxxxxx Xxxxxxxxx 0000 Xxxx Xxxxxx,
Xxxx Xxxxx, XX 00000
A-1
Number of
Client
Membership Number of
Interests Acquisition
To Be Shares To Be Name of
Transferred Received Shareholder Address
----------- ----------- ----------- -------
10,000 10,000 Xxxxxxxx Xxxxx 00000 Xxxxxxxx, Xxx X-00,
Xxxxx Xxxxx, XX 00000
10,000 10,000 Xxxxx Xxxxxxxxx 0000 Xxxx Xxxxxx,
Xxxx Xxxxx, XX 00000
10,000 10,000 Xxxxxxxx Xxxxxxxx 0000 Xxxx Xxxxxx Xx, XX
Xxxxxxxxxxx, XX 00000
10,000 10,000 Cookie Xxxxxxxxx 0000 Xxxxxxx Xxxxx,
Xxxxx Xxx, XX 00000
10,000 10,000 Xxx Xxxxxxxxx X.X. Xxx 000,
Xx. Xxxx Xxxxxxx, XX 00000
10,000 10,000 Xxxxxx Xxxxxx 00000 000xx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
10,000 10,000 Xxxxx Shab 0000 Xxxxxx Xxxxx,
Xxxxxxxxxx Xxxxx, XX 00000
6,000 6,000 Xxxxx Xxxxxxxxx 0000 Xxxx Xxxxxx,
Xxxx Xxxxx, XX 00000
4,000 4,000 Xxxx Xxxx 0000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxxx Xxxxx, XX 00000
4,000 4,000 Xxxxxxx Xxxxxx 000 Xxxxx Xxxxx,
Xxxxxxxxx, XX, 00000
--------- ---------
3,498,000 3,498,000
A-2
EXHIBIT B
Agreement made this 29th day of December, 1999, between CLIENT CORPORATION, a
California limited liability company ("Client"), and the individuals whose names
and signatures are set out below (the "Shareholders"), being the owners of all
of the issued and outstanding stock of Client. As of the date hereof, Client
hereby releases the Shareholders and the Shareholders jointly and severally
hereby release Client from all claims of every kind and description, known and
unknown, without regard to the capacity in which such claims may have arisen.
CLIENT CORPORATION
By /s /Xxxxx Xxxxxxxxxx
-------------------------
THE SHAREHOLDERS:
Xxxxx Xxxxxxxxxx
Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxx
Xxxx Xxxxxx
Xxxxxxxx Xxxxxxx
Xxxxx Xxxxx
Xxx Xxxxxxxxx
Xxxxxxx XxXxx
Xxxxxx Xxx Xxxxxx
Xxxxx Xxxxxxx
Xxxx Xxxxx
Xxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx
Xxxxxxxx Xxxxxxxx
Cookie Xxxxxxxxx
Xxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Shab
Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxxxxxx
Xxxx Xxxx
Xxxxxxx Xxxxxx
