EXHIBIT 2.1
MERGER AGREEMENT
AGREEMENT AND PLAN OF MERGER
BY AND
AMONG
DELIVERY NOW CORP.
A DELAWARE CORPORATION,
DLVN ACQUISITION, INC.,
A DELAWARE CORPORATION
AND
CANONLINE GLOBAL MEDIA, INC.
A WASHINGTON CORPORATION
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LIST OF SCHEDULES AND EXHIBITS
TO
AGREEMENT AND PLAN OF MERGER
SCHEDULES
Company Disclosure Schedule
CGMI Disclosure Schedule
EXHIBITS
Exhibit 6.1(a)(1) Company Certified Resolutions
Exhibit 6.1(a)(2) Acquisition Certified Resolutions
Exhibit 6.1(b) Opinion of Counsel to the Company
Exhibit 6.1(f)(1) Company Officer's Certificate
Exhibit 6.1(f)(2) Acquisition Officer's Certificate
Exhibit 6.2(a) CGMI Certified Resolutions
Exhibit 6.2(b) Opinion of CGMI counsel
Exhibit 6.2(e) CGMI Officer's Certificate
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AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of November 3,
2003, by and among Delivery Now Corp., a Delaware corporation (the "Company"),
DLVN Acquisition, Inc., a Delaware corporation ("Acquisition") and CanOnline
Global Media, Inc., a Washington corporation ("CGMI").
RECITALS
WHEREAS, the Company and CGMI desire to merge Acquisition with and into
CGMI whereby CGMI shall be the surviving entity pursuant to the terms and
conditions set forth herein and whereby the transaction is intended to qualify
as a tax free reorganization pursuant to Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "IRC"), to the extent permitted by applicable law;
WHEREAS, in furtherance of such combination, the Boards of Directors of the
Company, Acquisition and CGMI have each approved the merger of Acquisition with
and into CGMI (the "Merger"), upon the terms and subject to the conditions set
forth herein, in accordance with the applicable provisions of the Delaware
General Corporation Law (the "DGCL") and the Washington Business Corporation Act
(the "WBCA").
WHEREAS, the stockholders of CGMI desire to exchange all of their shares of
the capital stock of CGMI (the "CGMI Capital Stock") for shares of the capital
stock of the Company (the "Company Capital Stock") as a tax free reorganization
pursuant to Section 368(a) of the IRC, to the extent permitted by applicable
law;
WHEREAS, CGMI has issued 7.25% Convertible Debentures Due January 28, 2004
in the aggregate principal amount of Six Hundred Thousand Dollars ($600,000)
(the "CGMI Debentures") are convertible into shares of CGMI common stock par
value $0.001 per share (the "CGMI Common Stock") pursuant to the terms of the
CGMI Debentures and the Purchase Agreement (as defined below) and upon the
consummation of the Merger CGMI Debentures in the aggregate principal amount of
Two Hundred Thousand ($200,000) will be convertible into an equivalent number of
shares of the Company's common stock, par value $0.0001 per share (the "Company
Common Stock") (the "Company Underlying Shares") and the balance of CGMI
Debentures in the aggregate principal amount of Four Hundred Thousand Dollars
($400,000) will be redeemed by the Company sometime after the Merger is
consummated;
WHEREAS, CGMI has issued and outstanding fourteen million eight hundred
eighty six thousand seven hundred and two (14,886,702) options to acquire shares
of CGMI Common Stock (the "CGMI Options"), and the Company and CGMI desire that
upon the effectiveness of the Merger that the CGMI Options be converted into
options to acquire Company Common Stock (the "Company Options");
WHEREAS, upon the effectiveness of the Merger and pursuant to the terms of
this Agreement, the Company Underlying Shares will be substituted for the CGMI
Underlying Shares, the Company will assume the obligations, jointly and
severally, with CGMI under the CGMI Debentures and the Company will assume the
obligations of CGMI under that certain Convertible Debenture Purchase Agreement
dated January 28, 2003 between CGMI and the Debenture Holders (the "Debenture
Holders") (the "Purchase Agreement") and CGMI will be released from certain of
such obligations; and
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WHEREAS, simultaneously with the Merger the Company desires to transfer all
of the capital stock (the "BMW Capital Stock") of BMW Messenger Service, Inc.
("BMW"), a wholly-owned subsidiary of the Company, to Xxxxxxx Xxxxx and Xxxxx
Xxxxxxxx (collectively, the "BMW Purchasers") in exchange for twenty four
million nine hundred fifty thousand (24,950,000) shares of Company Capital Stock
(the "BMW Purchasers' Company Capital Stock").
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as hereinafter defined) and
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subject to and upon the terms and conditions of this Agreement and the DGCL and
WBCA, Acquisition shall be merged with and into CGMI pursuant to the Merger.
Following the Merger, CGMI shall continue as the surviving corporation (the
"Surviving Corporation") and the separate corporate existence of Acquisition
shall cease. As part of the Merger and as more fully described in Section 2.1,
(i) the sixty six million four hundred sixty thousand three hundred forty six
(66,460,346) issued and outstanding shares of CGMI Common Stock shall be
exchanged for Company Common Stock at the Exchange Ratio (as defined below),
(ii) the CGMI Options shall be exchanged for Company Options as provided in
section 2.8, and (ii) each share of Acquisition's issued and outstanding common
stock, par value $.001 per share (the "Acquisition Common Stock"), shall be
converted into one validly issued, fully paid and non-assessable share of common
stock, par value of $.001 per share, of the Surviving Corporation (the
"Surviving Corporation Common Stock").
1.2 Effective Time. The Merger shall be consummated as promptly
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as practicable after satisfaction of all conditions to the Merger set forth
herein, by filing with the Secretary of State of the States of Delaware and
Washington a certificate of merger (the "Certificate of Merger"), and all other
appropriate documents, executed in accordance with the relevant provisions of
the DGCL and WBCA. The Merger shall become effective upon the filing of the
Certificate of Merger. The time of such filing shall be referred to herein as
the "Effective Time."
1.3 Effects of the Merger. At the Effective Time, all the rights,
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privileges, immunities, powers and franchises of Acquisition and CGMI and all
property, real, personal and mixed, and every other interest of, or belonging to
or due to each of Acquisition and CGMI shall vest in the Surviving Corporation,
and all debts, liabilities, obligations and duties of Acquisition and CGMI,
including, without limitation, the performance of all obligations and duties of
CGMI pursuant to the Purchase Agreement, the CGMI Debentures and the exhibits,
schedules and all documents executed in connection therewith or any other
Transaction Document (as defined in the Purchase Agreement), shall become the
debts, liabilities, obligations and duties of the Surviving Corporation without
further act or deed, all in the manner and to the full extent provided by the
DGCL and WBCA. Whenever a conveyance, assignment, transfer, deed or other
instrument or act is necessary to vest any property or right in the Surviving
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Corporation, the directors and officers of the respective constituent
corporations shall execute, acknowledge and deliver such instruments and perform
such acts, for which purpose the separate existence of the constituent
corporations and the authority of their respective directors and officers shall
continue, notwithstanding the Merger.
1.4 Certificate of Incorporation. The Certificate of Incorporation of
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CGMI, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation and thereafter may be
amended or repealed in accordance with its terms and applicable law.
1.5 By-Laws. At the Effective Time and without any further action on the
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part of Acquisition and CGMI, the By-laws of CGMI shall be the By-laws of the
Surviving Corporation and thereafter may be amended or repealed in accordance
with their terms or the Certificate of Incorporation of the Surviving
Corporation and as provided by law.
1.6 Directors. The directors of CGMI Acquisition at the Effective Time
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shall be the directors of DLVN and the Surviving Corporation, until the earlier
of their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be. The directors of DLVN and
Acquisition immediately prior to the Effective Time shall resign at the
Effective Time.
1.7 Officers. The officers of CGMI Acquisition at the Effective Time shall
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be the officers of DLVN and the Surviving Corporation, until the earlier of
their resignation or removal or until their respective successors are duly
appointed and qualified, as the case may be. The officers of DLVN and
Acquisition immediately prior to the Effective Time shall resign at the
Effective Time.
1.8 Tax-Free Reorganization. The parties intend that the Merger shall be
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treated as a tax-free reorganization pursuant to Section 368(a) of the IRC, to
the extent permitted by applicable law.
1.9 BMW Sale. Simultaneously with the Merger, the Company shall transfer
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the BMW Capital Stock to the BMW Purchasers in exchange for the BMW Purchasers'
Company Capital Stock.
ARTICLE II
CONVERSION OF CGMI SHARES AND ASSUMPTION OF CGMI DEBENTURES
2.1 Conversion and Cancellation of CGMI Common Stock. As of the
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Effective Time, by virtue of the Merger and without any action on the part of
the Company, Acquisition or CGMI or the holders of any shares of the capital
stock of Acquisition or CGMI:
(a) Subject to the provisions of Sections 2.4 and 2.5, each share
of CGMI Common Stock (the "CGMI Common Stock Shares") issued and outstanding
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immediately prior to the Effective Time (other than shares canceled in
accordance with Section 2.1(b)), shall be converted into 1.00 (the "Exchange
Ratio") of a validly issued, fully paid and nonassessable share of Company
Common Stock (the "Company Common Stock Shares"). As of the Effective Time,
each CGMI Common Stock Share shall no longer be outstanding and shall
automatically be canceled and cease to exist, and each holder of a certificate
representing any CGMI Common Stock Share shall cease to have any rights with
respect thereto other than the right to receive Company Common Stock Shares to
be issued in consideration therefore upon the surrender of such certificate,
properly endorsed to the Company's stock transfer agent, Continental Stock
Transfer and Trust Company (the "Transfer Agent"). Promptly after the Effective
Time, CGMI shall deliver to the Transfer Agent a complete list of the names,
addresses and holdings of each holder of CGMI Common Stock and CGMI Options. The
Company shall thereafter instruct the Transfer Agent to send a letter of
transmittal to all of such holders that will instruct all of such holders how to
surrender their holdings in exchange for Company Common Stock and how to receive
Company Common Stock upon the exercise of CGMI Options. All of such holders
shall execute an agreement setting forth the same covenants, representations and
warranties that were made by such holder when such holder acquired the CGMI
Common Stock and CGMI Options to confirm that such holder's receipt of Company
Common Stock and Company Options, as the case may be, is exempt from the
registration requirements of the Securities Act of 1933, as amended. Each holder
of a certificate representing any CGMI Common Stock Share shall cease to have
any rights with respect thereto other than the right to receive Company Common
Stock Shares to be issued in consideration therefore.
(b) Each share of CGMI Capital Stock held in the treasury of the
CGMI and each share of CGMI Capital Stock owned by Acquisition or Company shall
be canceled without any conversion thereof and no payment, distribution or other
consideration shall be made with respect thereto.
(c) Each issued and outstanding share of Acquisition Common Stock
shall be converted into one validly issued, fully paid and nonassessable share
of Surviving Corporation Common Stock.
2.2 [Intentionally left blank].
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2.3 [Intentionally left blank].
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2.4 Adjustment of the Exchange Ratio. In the event that, prior to the
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Effective Time, any stock split, combination, reclassification or stock dividend
with respect to the Company Common Stock or CGMI Common Stock, any change or
conversion of Company Common Stock or CGMI Common Stock with or into other
securities or any other dividend or distribution with respect to the Company
Common Stock or CGMI Common Stock (other than regular quarterly dividends)
should occur or, if a record date with respect to any of the foregoing should
occur, appropriate and proportionate adjustments shall be made to the Exchange
Ratio, and thereafter all references to an Exchange Ratio shall be deemed to be
to such Exchange Ratio as so adjusted.
2.5 No Fractional Shares. No certificates or scrip representing
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fractional shares of Company Common Stock shall be issued upon the surrender for
exchange of certificates and such fractional share shall not entitle the record
or beneficial owner thereof to vote or to any other rights as a stockholder of
the Company. The number of shares of Company Common Stock to be issued shall be
rounded up to the nearest whole share.
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2.6 Further Assurances. If at any time after the Effective Time the
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Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation, its right, title or interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either CGMI
or Acquisition or (b) otherwise to carry out the purposes of this Agreement, the
Surviving Corporation and its proper officers and directors or their designees
shall be authorized (to the fullest extent allowed under applicable law) to
execute and deliver, in the name and on behalf of either CGMI or Acquisition ,
all such deeds, bills of sale, assignments and assurances and do, in the name
and on behalf of CGMI or Acquisition, all such other acts and things necessary,
desirable or proper to vest, perfect or confirm its right, title or interest in,
to or under any of the rights, privileges, powers, franchises, properties or
assets of CGMI or Acquisition, as applicable, and otherwise to carry out the
purposes of this Agreement.
2.7 CGMI Debentures. (a) As of the Effective Time, the Company
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assumes, jointly and severally with CGMI, all of the obligations and
responsibilities under the CGMI Debentures to the holder or holders of the CGMI
Debentures.
(b) At the Effective Time, (i) all references in the CGMI Debentures to
Company Common Stock (as defined in the CGMI Debentures) shall be references to
Company Common Stock (as defined herein) and (ii) all references to the Company
(as defined in the CGMI Debentures) in the CGMI Debentures shall be read as
references to the Company (as defined herein) as if the CGMI Debentures were
issued on the date the CGMI Debentures were issued, by the Company (as defined
herein), specifically including all calculations in the CGMI Debentures such as
the determination of the conversion price, the Conversion Price, the Fixed
Conversion Price and the Floating Conversion Price. The Exchange Ratio (as
defined herein) shall have no effect on the CGMI Debentures or the assumption
thereof by the Company (as defined herein).
(c) At the Effective Time, CGMI shall assign and the Company shall
assume all of CGMI's obligations and covenants under the Purchase Agreement as
if the Company executed the Purchase Agreement instead of CGMI on the date
thereof. At the Effective Time, all references to the Company (as defined in
the Purchase Agreement) in the Purchase Agreement shall mean the Company (as
defined herein) and all references to dates or tolling of periods shall be read
as if the Company (as defined herein) executed the Purchase Agreement instead of
the Company (as defined in the Purchase Agreement). At the Effective Time, all
of the remedies available to the current and future holders of the CGMI
Debentures under the Purchase Agreement against the Company (as defined in the
Purchase Agreement) shall be available against the Company (as defined herein).
(d) The provisions described in this Section 2.7 shall not be amended
and shall be in effect until the earlier of (i) the date all of the CGMI
Convertible Debentures have been converted into Company Common Stock Shares and
(ii) six (6) years from the date the CGMI Debentures were issued.
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(e) The current and future holders of the CGMI Debentures shall be
third party beneficiaries of this Agreement. There shall be no other third
party beneficiaries to this Agreement or any part hereof.
2.8 CGMI Options. At the Effective Time, the CGMI Options shall be
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converted into Company Options as hereinafter provided. At the Effective Time,
each unexercised CGMI Option shall be converted into a Company Option on the
same terms and conditions as the CGMI Options, and all references in the CGMI
Options to CGMI Common Stock shall be deemed thereafter to be references to
Company Common Stock. The Exchange Ratio shall apply to the shares of Company
Common Stock issuable upon the exercise of the CGMI Options that have been
converted into Company Options.
2.9 CGMI Unvested Shares. Prior to the execution of this Agreement, CGMI
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has taken all the actions necessary for all CGMI Unvested Shares (the "CGMI
Unvested Shares") to fully vest in the holders thereof. The CGMI Unvested Shares
are treated in this Agreement for all purposes as if they were issued and
outstanding shares of CGMI Common Stock as of the Effective Time and shall be
converted into Company Common Stock as provided in section 2.1 hereof.
ARTICLE III
CLOSING
Subject to satisfaction of the conditions to closing set forth in this
Agreement and unless this Agreement is otherwise terminated in accordance with
the provisions contained herein, the closing of the Merger shall take place at
the offices of Gottbetter & Partners, LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx as promptly as practicable after satisfaction of the conditions set forth
in this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Company and Acquisition.
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Except as disclosed in the Reports (as defined below) or in a document of even
date herewith referring to the representations and warranties in this Agreement
and delivered by Company to CGMI prior to the execution and delivery of this
Agreement (the "Company Disclosure Schedule"), Acquisition and the Company
hereby make the following representations and warranties to CGMI, all of which
shall survive the Closing, subject to the limitations set forth in Section 8.1
hereof:
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(a) Organization and Good Standing. Acquisition is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware, with full corporate power and authority to conduct its business as it
is now being conducted, to own or use the properties and assets that it owns or
uses, and to perform all its obligations under this Agreement. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with full corporate power and authority to conduct its
business as it is now being conducted, to own or use the properties and assets
that it owns or uses, and to perform all its obligations under this Agreement
and, upon the Closing the CGMI Debentures. Company has no subsidiaries other
than Acquisition and BMW and other than as set forth on the Company Disclosure
Schedule (individually, a "Subsidiary" and collectively, the "Subsidiaries").
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Acquisition has no subsidiaries. Each of the Company and Acquisition is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which either the ownership or use of the properties owned
or used by it, or the nature of the activities conducted by it, requires such
qualification, except for such failures to be so qualified or in good standing
would not have a Material Adverse Effect as defined in Section 4.1(f).
(b) Authority; No Conflict.
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i. This Agreement and any agreement executed in connection herewith by
Company or Acquisition constitute the legal, valid and binding obligations of
the Company and Acquisition, as the case may be, enforceable against the Company
and Acquisition, as the case may be, in accordance with their respective terms,
except as such enforceability is limited by bankruptcy, insolvency and other
laws affecting the rights of creditors and by general equitable principles. The
Company has the absolute and unrestricted right, power, authority and capacity
to execute and deliver this Agreement and any agreement executed by it in
connection herewith and to perform its obligations hereunder and thereunder.
ii. Neither the execution and delivery of this Agreement by each of the
Company and Acquisition, nor the consummation or performance by each of any of
its respective obligations contained in this Agreement or in connection with the
Merger will, directly or indirectly (with or without notice or lapse of time):
a. contravene, conflict with or result in a violation of (x) any
provision of the certificate of incorporation or by-laws (the "Organizational
Documents") of the Company or Acquisition, as the case may be, or (y) any
resolution adopted by the board of directors or the stockholders of the Company
or Acquisition, as the case may be;
b. contravene, conflict with or result in a violation of, or give
any governmental body or other Person the right to challenge any of the Merger
or to exercise any remedy or obtain any relief under, any legal requirement or
any order to which the Company or Acquisition or any of the assets owned or used
by the Company or Acquisition may be subject;
c. contravene, conflict with or result in a violation or breach of
any provision of, or give any person the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate or modify, this Agreement, the CGMI Debentures (once assumed by
Company) or any contract or agreement to which Company and Acquisition are
bound;
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d. result in the imposition or creation of any material
encumbrance upon or with respect to any of the material assets owned or used by
the Company or Acquisition;
e. cause the Company or Acquisition to become subject to, or to
become liable for the payment of, any tax; or
f. cause any of the assets owned by the Company or Acquisition to
be reassessed or revalued by any taxing authority or other governmental body,
except in connection with the transfer of real estate pursuant to this Agreement
or the Merger, if any.
(c) Capitalization. The capitalization of the Company as of September
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30, 2003 is as set forth in the Form 10-QSB for the period ended June 30, 2003
(the "June 10-QSB"), increased as set forth in the next sentence. The Company
has not issued any capital stock since that date other than pursuant to (i)
employee benefit plans disclosed in the Reports (as defined in Section 4.1(d)),
(ii) outstanding warrants, options or other securities disclosed in the Reports
and (iii) a 10:1 forward stock split that was effective as of October 10, 2003.
All of the issued and outstanding shares of the Company Capital Stock have been
duly authorized and validly issued and are fully paid and non-assessable.
Except for this Agreement and as disclosed in the Reports, there are no
outstanding options, warrants, script, rights to subscribe to, registration
rights, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of the
Company Common Stock, or contracts, commitments, understandings, or arrangements
by which the Company or any Subsidiary is or may become bound to issue
additional shares of the Company Common Stock, or securities or rights
convertible or exchangeable into shares of the Company Common Stock. None of
the outstanding Company Capital Stock was issued in violation of the Securities
Act of 1933 as amended, or any other legal requirement.
(d) Financial Statements. The Company has delivered or made available to
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CGMI copies of its Form 10-KSB Annual Report for the fiscal year ended September
30, 2002 and copies of its quarterly reports on Form 10-QSB for the quarter
ended June 30, 2003, each as filed with the SEC and including, in each case, any
amendments thereto (collectively, the "Reports"). The financial statements
contained in the Reports are in all material respects in accordance with the
books and records of the Company and have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods indicated, all as more
particularly set forth in the notes to such statements. The consolidated
balance sheets contained in such Reports (the "Company Balance Sheets") present
fairly in all material respects as of their dates the consolidated financial
condition of the Company and its subsidiaries. Except as and to the extent
reflected or reserved against in the Company Balance Sheets (including the notes
thereto), the Company did not have, as of the date of any such Company Balance
Sheet, any material liabilities or obligations (absolute or contingent) of a
nature customarily reflected in a balance sheet or the notes thereto. The
consolidated statements of operations, consolidated statements of stockholders'
equity and changes in consolidated statements of cash flows present fairly in
all material respects the results of operations and changes in financial
position of the Company and its subsidiaries for the periods indicated.
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(e) SEC Filings. The Company has filed all reports required to be filed
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with the Securities and Exchange Commission (the "SEC") under the rules and
regulations of the SEC and all such reports have complied in all material
respects, as of their respective filing dates and effective dates, as the case
may be, with all the applicable requirements of the Securities Exchange Act of
1934, as amended. As of the respective filing and effective dates, none of such
reports (including without limitation, the Reports) contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(f) Absence of Material Adverse Change. Since the date of the latest
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Company Balance Sheets, there have been no events, changes or occurrences which
have had or are reasonably likely to have, individually or in the aggregate, a
material adverse effect on the results of operations, assets, prospects or
financial condition of the Company or Acquisition (a "Material Adverse Effect").
(g) Issuance of Company Securities. The Company Common Stock Shares, and
---------------------------------
when issued in accordance with this Agreement, the Purchase Agreement, the CGMI
Debentures, and the Company Underlying Shares shall be duly authorized, validly
issued, fully-paid and nonassessable. The Company currently has, and at all
times while the CGMI Debentures are outstanding will maintain, an adequate
reserve of shares of the Company Common Stock to enable it to perform its
obligations under this Agreement and the CGMI Debentures. Except as set forth
in the Reports, there is no equity line of credit or convertible security or
instrument outstanding of the Company.
(h) Undisclosed Liabilities. Except as disclosed in any Schedule to this
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Agreement, none of the Company, Acquisition or the Subsidiaries has any material
obligations and liabilities (contingent or otherwise) except those liabilities
(i) that are reflected in the Company Balance Sheets or in the notes thereto, or
disclosed in the notes therein in accordance with Generally Accepted Accounting
Principles ("GAAP") or, in accordance with GAAP, are not required to be so
reflected or disclosed, or (ii) that were incurred after the date of the Company
Balance Sheets in the ordinary course of business, none of which results from,
arises out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, or violation of law or could
reasonably be expected to have a Material Adverse Effect.
(i) Taxes.
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i. The Company has filed or caused to be filed on a timely basis all
tax returns that are or were required to be filed by it pursuant to applicable
legal requirements. The Company has paid, or made provision for the payment of,
all taxes that have or may have become due pursuant to those tax returns or
otherwise, or pursuant to any assessment received by the Company, except such
taxes, if any, as are listed in the Company Disclosure Schedule and are being
contested in good faith as to which adequate reserves have been provided in the
Company Balance Sheets.
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ii. All tax returns filed by the Company are true, correct and complete in
all material respects.
(j) Employee Benefits. Except as disclosed in the Reports, the Company
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does not sponsor or otherwise maintain a "pension plan" within the meaning of
Section 3(2) of ERISA or any other retirement plan other than the Company Profit
Sharing and 401(k) Plan and Trust that is intended to qualify under Section 401
of the IRC, nor do any unfunded liabilities exist with respect to any employee
benefit plan, past or present. No employee benefit plan, any trust created
thereunder or any trustee or administrator thereof has engaged in a "prohibited
transaction," as defined in Section 4975 of the IRC, which may have a Material
Adverse Effect.
(k) Governmental Authorizations. The Company and Acquisition have all
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permits that are legally required to enable them to conduct their business in
all material respects as now conducted.
(l) Legal Proceedings; Orders.
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i. Except as set forth in the Reports, there is no material pending
legal or administrative proceeding:
a. that has been commenced by or against the Company, Acquisition
or the Subsidiaries, or any of the assets owned or used by, the Company,
Acquisition or the Subsidiaries; or
b. that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with the Merger.
ii. Except as set forth in the Reports:
a. there is no material order to which the Company or the
Subsidiaries, or any of the assets owned or used by the Company, Acquisition or
the Subsidiaries, is subject; and
b. no officer, director, agent, or employee of the Company or
Acquisition is subject to any material order that prohibits such officer,
director, agent or employee from engaging in or continuing any conduct, activity
or practice relating to the business of the Company or Acquisition, as the case
may be.
(m) Absence of Certain Changes and Events. Except as set forth in the
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Reports, since the date of the most recent Company Balance Sheets, the Company
and the Subsidiaries and Acquisition, since the date of its inception, have
conducted their business only in the ordinary course of business, and other than
as contemplated by this Agreement or the Merger there has not been any:
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i. change in the authorized or issued Company Capital Stock or the
authorized or issued capital stock of Acquisition and the Subsidiaries; grant of
any stock option or right to purchase shares of capital stock of the Company;
issuance of any equity lines of credit, security convertible into such capital
stock; grant of any registration rights; purchase, redemption, retirement, or
other acquisition or payment of any dividend or other distribution or payment in
respect of shares of capital stock;
ii. amendment to the Organizational Documents of the Company, Acquisition
or the Subsidiaries;
iii. damage to or destruction or loss of any material asset or property of
the Company, Acquisition or the Subsidiaries, whether or not covered by
insurance, causing a Material Adverse Effect;
iv. receipt of notice that any of their substantial customers have
terminated or intends to terminate their relationship, which termination would
have a Material Adverse Effect;
v. entry into any transaction other than in the ordinary course of
business;
vi. entry into, termination of, or receipt of written notice of termination
of any material (i) license, distributorship, dealer, sales representative,
joint venture, credit, or similar agreement, or (ii) contract or transaction;
vii. sale (other than sales of inventory in the ordinary course of
business), lease, or other disposition of any asset or property of the Company,
Acquisition or the Subsidiaries or mortgage, pledge, or imposition of any lien
or other encumbrance on any material asset or property of the Company,
Acquisition or the Subsidiaries;
viii. cancellation or waiver of any claims or rights with a value to the
Company in excess of $10,000;
ix. material change in the accounting methods used by the Company,
Acquisition or the Subsidiaries; or
x. agreement, whether oral or written, by the Company, Acquisition or the
Subsidiaries to do any of the foregoing.
(n) No Default or Violation. The Company, Acquisition and the
--------------------------
Subsidiaries (i) are in material compliance with all applicable material terms
and requirements of each material contract under which they have or had any
obligation or liability or by which they or any of the assets owned or used by
them is or was bound and (ii) is not in material violation of any legal
requirement.
(o) Certain Payments. Since the most recent date of the Company Balance
-----------------
Sheets, neither the Company, Acquisition or the Subsidiaries, nor any director,
officer, agent or employee of the Company or the Subsidiaries has directly or
indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback or other payment to any Person, private or public, regardless
of form, whether in money, property or services (i) to obtain favorable
treatment in securing business, (ii) to pay for favorable treatment for business
secured, (iii) to obtain special concessions or for special concessions already
obtained, for or in respect of the Company, Acquisition or the Subsidiaries or
(iv) in violation of any legal requirement, or (b) established or maintained any
fund or asset that has not been recorded in the books and records of the
Company, Acquisition or the Subsidiaries.
35
(p) Brokers or Finders. The Company and Acquisition have not incurred any
--------------------
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement.
4.2 Representations and Warranties of CGMI. CGMI hereby makes the
------------------------------------------
following representations and warranties to the Company, all of which shall
survive the Closing, subject to the limitations set forth in Section 8.2 hereof:
(a) Organization, Good Standing and Purpose. CGMI is a corporation
-------------------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Washington with full power and authority to conduct its businesses as
it is now being conducted, to own or use the properties and assets that it owns
or uses, and to perform all of its obligations under this Agreement. CGMI has
no subsidiaries except for CanOnline Media Corporation. CGMI is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification, except for such failures to be so qualified or in good standing
would not have a Material Adverse Effect.
(b) Authority; No Conflict.
------------------------
i. This Agreement and any agreement executed in connection herewith
have been duly authorized by all required action of CGMI and constitute the
legal, valid and binding obligations of CGMI, enforceable against CGMI in
accordance with their respective terms. CGMI has the absolute and unrestricted
right, power and authority to execute and deliver this Agreement and any
agreements executed in connection herewith and to perform its obligations
hereunder and thereunder.
ii Neither the execution and delivery of this Agreement by CGMI, nor the
consummation or performance by it of any of its obligations contained in this
Agreement or in connection with the Merger by the Company will, directly or
indirectly (with or without notice or lapse of time):
a. contravene, conflict with or result in a violation of (x) any
provision of the Organizational Documents of CGMI or (y) any resolution adopted
by the board of directors or the stockholders of CGMI;
b. contravene, conflict with or result in a violation of, or
give any governmental body or other Person the right to challenge any of the
Merger or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which CGMI or any of the assets owned or used by
CGMI may be subject;
36
c. contravene, conflict with or result in a violation or breach of
any provision of, or give any Person the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate or modify, this Agreement, the Purchase Agreement, the CGMI Debentures
or any Applicable Contract;
d. result in the imposition or creation of any material
encumbrance upon or with respect to any of the material assets owned or used by
CGMI;
e. cause CGMI to become subject to, or to become liable for the
payment of, any tax; or
f. cause any of the assets owned by CGMI to be reassessed or revalued
by any taxing authority or other governmental body, except in connection with
the transfer of real estate pursuant to this Agreement or the Merger.
iii. CGMI is not required to obtain any consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Merger, other than the requisite approval of its
stockholders (the "CGMI Stockholder"), which approval has been obtained.
-----------------
(c) Capitalization. The entire authorized CGMI Capital Stock consists
--------------
of 300,000,000 shares CGMI Common Stock, of which 66,470,346 shares are issued
and outstanding and held by the CGMI Stockholders and 50,000,000 shares of
preferred stock, of which no shares are issued and outstanding. CGMI has
outstanding 14,886,702 CGMI Options to acquire CGMI common Stock. With the
exception of the CGMI Common Stock Shares, the CGMI Options, and the CGMI
Debentures, there are no other outstanding equity or debt securities of the
Company. No legend or other reference to any purported encumbrance appears upon
any certificate representing the CGMI Common Stock Shares, other than applicable
Securities Act legends. The CGMI Common Stock Shares have been duly authorized
and validly issued and are fully paid and non-assessable. Except for the CGMI
Debentures and the agreements relating thereto set forth in the Purchase
Agreement, there are no outstanding options, voting agreements or arrangements,
warrants, script, rights to subscribe to, registration rights, calls or
commitments of any character whatsoever relating to, or, securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of CGMI Capital Stock or other
securities, or contracts, commitments, understandings, or arrangements by which
CGMI is or may become bound to issue additional shares of CGMI Capital Stock or
other securities, or securities or rights convertible or exchangeable into
shares of CGMI Capital Stock or other securities. Except as set forth in this
Section 4.2(c), CGMI has no outstanding equity, debt, debt or equity equivalent
security, or debt or equity lines of credit. None of the outstanding CGMI
Common Stock Shares were issued in violation of the Securities Act or any other
legal requirement. CGMI does not own, and has no contract to acquire, any
equity securities or other securities of any Person or any direct or indirect
equity or ownership interest in any other business. The CGMI Underlying Shares
have been duly authorized, and when and if issued pursuant to the terms of the
Purchase Agreement, will be fully paid and nonassessable.
37
(d) Financial Statements. CGMI is currently undergoing an audit,
---------------------
accordingly, until the audit is duly completed CGMI is unable to has delivered
its financial statements to the Company. Upon completion of the audit, CGMI will
deliver an audited balance sheet of CGMI as at December 31, 2002 (the "CGMI
Balance Sheet"), and an audited statement of operations for the period from
inception to December 31, 2002. Such financial statements were are being
prepared in accordance with GAAP, are set forth in Schedule 4.2(d) hereto and
will fairly present the financial condition and the results of operations of
CGMI as at December 31, 2002 and for the period then ended. A review of CGMI's
financial statements as at September 30, 2003 is also being prepared by CGMI's
auditors and will be delivered to the Company once it is available to CGMI.
(e) Absence of Material Adverse Change. Since the date of the most recent
------------------------------------
CGMI Balance Sheet provided under Section 4.2(d) hereof, there have been no
events, changes or occurrences which have had or are reasonably likely to have,
individually or in the aggregate, a material adverse effect on CGMI.
(f) Books and Records. The books of account, minute books, stock record
-------------------
books, and other records of CGMI, all of which have been made available to the
Company and original copies of which will be delivered to the Company at the
Closing, are complete and correct and have been maintained in accordance with
sound business practices, including the maintenance of an adequate system of
internal controls. The minute books of CGMI contain accurate and complete
records of all meetings held of, and corporate action taken by, the
stockholders, the Board of Directors, and any committees of the Board of
Directors of CGMI.
(g) No Undisclosed Liabilities. There are no material liabilities of CGMI,
---------------------------
whether absolute, accrued, contingent, or otherwise, other than the CGMI
Debentures and as set forth in Schedule 4.2(g).
(h) Title to Properties; Encumbrances. CGMI has good and marketable title
-----------------------------------
to all the properties, interest in such properties and assets, real and
personal, reflected in the CGMI Balance Sheet or acquired after the date of such
balance sheet, free and clear of all mortgages, liens, pledges, charges or
encumbrances except (i) mortgages and other encumbrances referred to in the
notes to the CGMI Balance Sheet. CGMI neither does not owns nor leases any real
property. CGMI rents a single office in Issaquah, Washington.
(i) Legal Proceedings; Orders.
---------------------------
i. Except as set forth in Schedule 4.2(i) hereto, there is no pending
legal or administrative proceeding:
a. that has been commenced or threatened by or against CGMI or
any of its officers, directors, agents or employees as such or that otherwise
relates to or may affect the business of, or any of the assets owned or used by,
CGMI; or
b. that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any Merger.
38
ii. Except as set forth in Schedule 4.2(i) hereto:
a. there is no order to which CGMI, or any of the assets owned or
used by CGMI, is subject; and
b. no officer, director, agent, or employee of CGMI is subject
to any order that prohibits such officer, director, agent or employee from
engaging in or continuing any conduct, activity or practice relating to the
business of CGMI.
(j) Brokers or Finders. CGMI has incurred no liability, contingent or
-------------------
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.
(k) No Default or Violation. Schedule 4.2(k) hereto lists each contract,
--------------------------
agreement and commitment to which CGMI is a party or otherwise bound (each, an
"CGMI Contract") or has any obligation or liability pursuant thereto. CGMI (i)
is in compliance with all terms and requirements of each CGMI Contract and (ii)
is not in violation of any legal requirement applicable to CGMI.
(l) Taxes.
-----
i. CGMI has filed or caused to be filed on a timely basis all tax
returns that are or were required to be filed by it pursuant to applicable Legal
Requirements. CGMI has paid, or made provision for the payment of, all taxes
that have or may have become due pursuant to those tax returns or otherwise, or
pursuant to any assessment received by CGMI, except such taxes, if any, as are
listed in Schedule 4.2(l) hereto and are being contested in good faith as to
which adequate reserves have been provided in the CGMI Balance Sheets.
ii. All tax returns filed by CGMI are true, correct and complete in all
material respects and no taxes are currently owed or tax returns due by or on
behalf of CGMI.
(m) Absence of Certain Changes and Events. Except as set forth in
------------------------------------------
Schedule 4.2(m) hereto, since the date of the CGMI Balance Sheet, CGMI has
conducted its business only in the Ordinary Course of Business, there has not
been any material adverse effect on CGMI's business or operations, and there has
not been any:
i. change in the authorized or issued capital stock of CGMI; grant of
any stock option or right to purchase shares of capital stock of CGMI; issuance
of any security convertible into such capital stock; grant of any registration
rights; purchase, redemption, retirement, or other acquisition or payment of any
dividend or other distribution or payment in respect of shares of capital stock;
ii. amendment to the Organizational Documents of CGMI;
iii. damage to or destruction or loss of any asset or property of CGMI,
whether or not covered by insurance or any other event or circumstance,
materially and adversely affecting the properties, assets, business, financial
condition, or prospects of CGMI;
39
iv. receipt of notice that any of its substantial customers have terminated
or intends to terminate their relationship, which termination would have a
material adverse effect on its financial condition, results or operations,
business assets or properties of CGMI;
v. entry into any transaction other than in the ordinary course of
business;
vi. entry into, termination of, or receipt of written notice of termination
of any (i) license, distributorship, dealer, sales representative, joint
venture, credit, or similar agreement, or (ii) contract or transaction;
vii. sale (other than sales of inventory in the ordinary course of
business), lease, or other disposition of any asset or property of CGMI or
mortgage, pledge, or imposition of any lien or other encumbrance on any asset or
property of CGMI;
viii. cancellation or waiver of any claims or rights with a value to CGMI
in excess of $10,000;
ix. material change in the accounting methods used by CGMI;
x. accrual or payment of any salaries or other compensation, increase in
salaries, compensation or bonuses or retention or hiring of, any consultant or
employee;
xi. debt or other liability incurred, other than the CGMI Debentures; or
xii. agreement, whether oral or written, by CGMI to do any of the
foregoing.
(n) Compliance with Law. Except as set forth in Schedule 4.2(n)
---------------------
hereto:
i. CGMI has complied in all material respects with, and is not in
violation of, in any material respect, any Law to which it or its business is
subject; and
ii. CGMI has obtained all licenses, permits, certificates or other
governmental authorizations (collectively "Authorizations") necessary for the
ownership or use of its assets and properties or the conduct of its business;
and
iii. CGMI has not received written notice of violation of, or knows of any
material violation of, any Laws to which it or its business is subject or any
Authorization necessary for the ownership or use of its assets and properties or
the conduct of its business.
(o) Environmental Laws. CGMI has not received any notice or claim
-------------------
(and is not aware of any facts that would form a reasonable basis for any
claim), or entered into any negotiations or agreements with any other person,
and, to the best knowledge of CGMI, CGMI is not the subject of any investigation
40
by any governmental or regulatory authority, domestic or foreign, relating to
any material or potentially material liability or remedial action under any
environmental laws. There are no pending or, to the knowledge of CGMI,
threatened, actions, suits or proceedings against CGMI or any of its properties,
assets or operations asserting any such material liability or seeking any
material remedial action in connection with any environmental laws.
(p) Intellectual Property. (i) CGMI owns, or is validly licensed
----------------------
or otherwise has the right to use, all patents, and patent rights ("Patents")
and all trademarks, trade secrets, trademark rights, trade names, trade name
rights, service marks, service xxxx rights, copyrights and other proprietary
intellectual property rights and computer programs (the "Intellectual Property
Rights"), in each case, which are material to the conduct of the business of
CGMI.
ii. To the best knowledge of CGMI, CGMI has not interfered with,
infringed upon (without license to infringe), misappropriated or otherwise come
into conflict with any Patent of any other Person. CGMI has not interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property Rights of any other Person. CGMI has not received any
written charge, complaint, claim, demand or notice alleging any such
interference, infringement, appropriation or violation (including any claim that
CGMI must license or refrain from using any Patents or Intellectual Property
Rights of any other Person) which has not been settled or otherwise fully
resolved. To the best knowledge of CGMI, no other Person has interfered with,
infringed upon (without license to infringe), misappropriated or otherwise come
into conflict with any Patents or Intellectual Property Rights of CGMI.
(q) Employees. (a) CGMI has complied in all respects with all
---------
applicable Laws respecting employment and employment practices, terms and
conditions of employment, wages and hours, and CGMI is not liable for any
arrears of wages or any taxes or penalties for failure to comply with any such
Laws; (b) CGMI believes that CGMI's relations with its employees is
satisfactory; (c) there are no controversies pending or, to the best knowledge
of CGMI, threatened between CGMI and any of its employees or former employees;
(d) CGMI is not a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by CGMI, nor, to the best
knowledge of CGMI, are there any activities or proceedings of any labor union to
organize any such employees; (e) there are no unfair labor practice complaints
pending against CGMI before the National Labor Relations Board or any current
union representation questions involving employees of CGMI; (f) there is no
strike, slowdown, work stoppage or lockout existing, or, to the best knowledge
of CGMI, threatened, by or with respect to any employees of CGMI; (g) no charges
are pending before the Equal Employment Opportunity Commission or any state,
local or foreign agency responsible for the prevention of unlawful employment
practices with respect to CGMI; (h) there are no claims pending against CGMI
before any workers' compensation board; (i) CGMI has not received notice that
any Federal, state, local or foreign agency responsible for the enforcement of
labor or employment laws intends to conduct an investigation of or relating to
CGMI and, to the best knowledge of CGMI, no such investigation is in progress;
and (j) CGMI has no consultants or independent contractors.
(r) Employee Benefit Plans. There no "employee pension benefit plans" (as
------------------------
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) or "employee welfare benefit plans" (as defined in Section
3(1) of ERISA) maintained, or contributed to, by CGMI for the benefit of any
current or any former employees, officers or directors of CGMI.
41
ARTICLE V
COVENANTS
5.1 Covenants of the Company and Acquisition.
---------------------------------------------
(a) Conduct of Business. Between the date hereof and up to and
---------------------
including the Closing Date, each of the Company and Acquisition shall:
i. conduct its business only in the ordinary course of business;
ii. use its commercially reasonable efforts to preserve intact the current
business organization of the Company and Acquisition, as the case may be, keep
available the services of the current officers, employees and agents of the
Company and Acquisition, as the case may be, and maintain the relations and good
will with suppliers, customers, landlords, creditors, employees, agents and
others having business relationships with the Company and Acquisition, as the
case may be;
iii. not pay, incur or declare any dividends or distributions with respect
to its stockholders or amend its Certificate of Incorporation or By-Laws;
iv. not authorize, issue, sell, purchase or redeem any shares of its
capital stock or any options or other rights to acquire ownerships interests;
v. not incur any indebtedness for money borrowed or issue any debt
securities, or incur or suffer to be incurred any liability or obligation of any
nature whatsoever, except those incurred in the ordinary course of business, or
cause or permit any material lien, encumbrance or security interest to be
created or arise on or in respect of any material portion of its properties or
assets;
vi. not make any investment of a capital nature either by purchased stock
or securities, contribution to capital, property transfer or otherwise, or by
the purchase of any property or assets of any other Person;
vii. not do any other act which would cause any representation or warranty
of the Company in this Agreement to be or become untrue in any material respect
or that is not in the Ordinary Course of Business;
(b) Proposals; Other Offers. Commencing on the date of execution of
-------------------------
this Agreement up to and including the Closing Date, each of the Company and
Acquisition shall not, directly or indirectly (whether through an employee, a
representative, an agent or otherwise), solicit or encourage any inquiries or
proposals, engage in negotiations for or consent to or enter into any agreement
providing for the acquisition of its business. Each of the Company and
Acquisition shall not, directly or indirectly (whether through an employee, a
representative, an agent or otherwise) disclose any nonpublic information
relating to the Company and Acquisition or afford access to any of the books,
42
records or other properties of the Company and Acquisition to any person or
entity that is considering, has considered or is making any such acquisition
inquiry or proposal relating to the Company's and Acquisition's business.
(c) Further Assurances. Prior to the Closing Date, with the cooperation of
-------------------
CGMI where appropriate, each of the Company and Acquisition shall use
commercially reasonable efforts to:
i. promptly comply with all filing requirements which federal, state or
local law may impose on the Company or Acquisition, as the case may be, with
respect to the Merger and this Agreement; and
ii. take all actions necessary to be taken, make any filing and obtain any
consent, authorization or approval of or exemption by any governmental
authority, regulatory agency or any other third party (including without
limitation, any landlord or lessor of the Company and any party to whom
notification is required to be delivered or from whom any form of consent is
required) which is required to be filed or obtained by the Company or
Acquisition in connection with the Merger by this Agreement.
5.2 Covenants of CGMI.
-------------------
(a) Conduct of Business. Between the date hereof and up to and
---------------------
including the Closing Date, CGMI shall:
i. conduct its business only in the Ordinary Course of Business;
ii. use its commercially reasonable efforts to preserve intact the current
business organization of CGMI, keep available the services of the current
officers, employees and agents of CGMI, and maintain the relations and good will
with suppliers, customers, landlords, creditors, employees, agents and others
having business relationships with CGMI;
iii. not pay, incur or declare any dividends or distributions with respect
to its stockholders or amend its Certificate of Incorporation or By-Laws;
iv. not authorize, issue, sell, purchase or redeem any shares of its
capital stock or any options or other rights to acquire ownerships interests;
v. not incur any indebtedness for money borrowed or issue and debt
securities, or incur or suffer to be incurred any liability or obligation of any
nature whatsoever, or cause or permit any material lien, encumbrance or security
interest to be created or arise on or in respect of any material portion of its
properties or assets;
vi. not make any investment of a capital nature either by purchased stock
or securities, contribution to capital, property transfer or otherwise, or by
the purchase of any property or assets of any other person;
43
vii. not do any other act which would cause representation or warranty of
CGMI in this Agreement to be or become untrue in any material respect or that is
not in the ordinary course of business consistent with past practice;
(b) Proposals; Other Offers. Commencing on the date of execution of
-------------------------
this Agreement through the Closing Date, CGMI shall not, directly or indirectly
(whether through an employee, a representative, an agent or otherwise), solicit
or encourage any inquiries or proposals, engage in negotiations for or consent
to or enter into any agreement providing for the acquisition of its business.
CGMI shall not, directly or indirectly (whether through an employee, a
representative, an agent or otherwise) disclose any nonpublic information
relating to CGMI or afford access to any of the books, records or other
properties of CGMI to any person or entity that is considering, has considered
or is making any such acquisition inquiry or proposal relating to the CGMI's
business.
(c) Further Assurances. Prior to the Closing Date, with the cooperation of
-------------------
the Company where appropriate, CGMI shall:
i. promptly comply with all filing requirements which federal, state or
local law may impose on CGMI with respect to the Merger and this Agreement and
cooperate with the Company regarding the same; and
ii. take all actions necessary to be taken, make any filing and obtain any
consent, authorization or approval of or exemption by any governmental
authority, regulatory agency or any other third party (including without
limitation, any landlord or lessor of CGMI and any party to whom notification is
required to be delivered or from whom any form of consent is required) which is
required to be filed or obtained by CGMI in connection with the Merger and this
Agreement.
(d) Actions by CGMI. CGMI shall take no action or enter into any
-----------------
agreements or arrangements except as may be required by this Agreement.
(e) No Change in Capital Stock. Prior to the Effective Time, no change will
--------------------------
be made in the authorized, issued or outstanding capital stock of CGMI, and no
subscriptions, options, rights, warrants, calls, commitments or agreements
relating to the authorized, issued or outstanding capital stock of CGMI will be
entered into, issued, granted or created.
(f) Access to Additional Agreements and Information. Prior to the Closing
-------------------------------------------------
Date, CGMI shall make available to the Company (as well as its counsel,
accountants and other representatives) any and all agreements, contracts,
documents, other instruments and personnel material of CGMI's business,
including without limitation, those contracts to which CGMI is a party and those
by which its business or any of CGMI's assets are bound.
(g) Further Assurances. Prior to the Closing Date, with the cooperation of
-------------------
the Company where appropriate, CGMI shall use commercially reasonable efforts
to:
i. promptly comply with all filing requirements which federal, state or
local law may impose on CGMI with respect to the Merger and this Agreement; and
44
ii. take all actions necessary to be taken, make any filing and obtain
any consent, authorization or approval of or exemption by any governmental
authority, regulatory agency or any other third party (including without
limitation, any landlord or lessor of CGMI and any party to whom notification is
required to be delivered or from whom any form of consent is required) which is
required to be filed or obtained by CGMI in connection with the Merger and this
Agreement.
5.3 Governmental Filings and Consents. The Company, Acquisition and
------------------------------------
CGMI shall cooperate with one another in filing any necessary applications,
reports or other documents with any federal or state agencies, authorities or
bodies having jurisdiction with respect to the business of the Company,
Acquisition or CGMI and in seeking any necessary approval, consultation or
prompt favorable action of, with or by any of such agencies, authorities or
bodies.
5.4 Publicity. Any public announcement or press release relating to this
---------
Agreement or the Merger must be approved by CGMI and the Company in writing
before being made or released. The Company shall have the right to issue a
press release or make other disclosure without CGMI's written approval if in the
opinion of the Company's counsel such a release is necessary to comply with SEC
Rules and Regulations or other Law; provided that, CGMI receives a copy of such
-------- ----
prepared press release or other disclosures for purposes of review at least 24
hours before it is issued. This 24 hour period may be shortened if in the
opinion of the Company's counsel it is required by Law; provided that, the CGMI
-------- ----
Debenture Holder and the Company receives a copy of such release as long as
reasonably practical before it is issued.
5.5 Tax Returns. The current officers of the Company shall have the right
------------
to prepare any tax returns of the Company with respect to any period that ends
on or before the Closing Date. Such tax returns shall be timely filed by the
Company. CGMI shall cooperate with said officers in the preparation of such tax
returns.
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligations of CGMI. The obligation of CGMI to
-------------------------------------
consummate the Merger is subject to the fulfillment of each of the following
conditions, any of which may be waived by CGMI in its sole discretion:
(a) Copies of Resolutions. At the Closing (i) the Company shall have
-----------------------
furnished CGMI with a certificate of its CEO or President, as the case may be,
in the form of EXHIBIT 6.1(A)(1) annexed hereto, certifying that attached
------------------
thereto are copies of resolutions duly adopted by the board of directors of the
Company authorizing the execution, delivery and performance of this Agreement
and all other necessary or proper corporate action to enable the Company to
comply with the terms of this Agreement and (ii) Acquisition shall have
furnished CGMI with a certificate of its CEO or President, as the case may be,
in the form of EXHIBIT 6.1(A)(2) annexed hereto, certifying that attached
------------------
thereto are copies of resolutions duly adopted by the board of directors of
Acquisition authorizing the execution, delivery and performance of this
Agreement and all other necessary or proper corporate action to enable
Acquisition to comply with the terms of this Agreement.
45
(b) Opinion of Company's Counsel. The Company shall have furnished to CGMI,
----------------------------
at the Closing, an opinion of its legal counsel, dated as of the Closing Date,
substantially in the form of EXHIBIT 6.1(B) annexed hereto.
---------------
(c) [Intentionally omitted].
-----------------------
(d) [Intentionally omitted]
------------------------
(e) Accuracy of Representations and Warranties; Performance of Covenants.
----------------------------------------------------------------------
Each of the representations and warranties of the Company and Acquisition set
forth in this Agreement was true, correct and complete in all material respects
when made (except for representations and warranties that speak as of a specific
date, which representations and warranties shall be true, correct and complete
in all material respects as of such date) and shall also be true, correct and
complete in all material respects at and as of the Closing Date (except for
representations and warranties that speak as of a specific date, which
representations and warranties shall be true, correct and complete in all
material respects as of such date), with the same force and effect as if made at
and as of the Closing Date. The Company shall have performed and complied in
all material respects with all agreements and covenants required by this
Agreement to be performed by the Company and Acquisition at or prior to the
Closing Date.
(f) Delivery of Certificate. (A) The Company shall have delivered to CGMI a
-----------------------
certificate, in the form of EXHIBIT 6.1(F)(1) annexed hereto, dated the Closing
-----------------
Date, and signed by the CEO or President of the Company affirming that the
representations and warranties as set forth in Section 4.1 were and are true,
correct and complete as required by Section 6.1(e) and (B) Acquisition shall
have delivered to CGMI a certificate, in the form of EXHIBIT 6.1(F)(2) annexed
-----------------
hereto, dated the Closing Date, and signed by the CEO or President of
Acquisition affirming that the representations and warranties as set forth in
Section 4.1 were and are true, correct and complete as required by Section
6.1(e).
(g) Consents and Waivers. At the Closing, any and all necessary consents,
----------------------
authorizations, orders or approvals shall have been obtained, except as the same
shall have been waived by CGMI.
(h) Litigation. On the Closing Date, there shall be no effective
----------
injunction, writ or preliminary restraining order or any order of any kind
whatsoever with respect to the Company issued by a court or governmental agency
(or other governmental or regulatory authority) of competent jurisdiction
restraining or prohibiting the consummation of the Merger or making consummation
thereof unduly burdensome to CGMI. On the Closing Date and immediately prior to
consummation of the Merger, no proceeding or lawsuit shall have been commenced,
be pending or have been threatened by any governmental or regulatory agency or
authority or any other Person restraining or prohibiting the consummation of the
Merger.
(i) Delivery of Documents and Other Information. Prior to the Closing Date,
-------------------------------------------
the Company and Acquisition shall have made available or delivered to CGMI all
of the agreements, contracts, documents and other instruments requested by CGMI.
46
6.2 Conditions to Obligations of the Company and Acquisition. The
---------------------------------------------------------------
obligations of the Company and Acquisition to consummate the Merger is subject
to the fulfillment of each of the following conditions, any of which may be
waived by the Company and Acquisition, in their sole discretion:
(a) Copies of Resolutions. At the Closing, CGMI shall have furnished the
-----------------------
Company with a certificate of its President, in the form of EXHIBIT 6.2(A)
--------------
annexed hereto, certifying that attached thereto are copies of resolutions duly
adopted by the board of directors of CGMI authorizing the execution, delivery
and performance of the terms of this Agreement and all other necessary or proper
corporate action to enable CGMI to comply with the terms of this Agreement.
(b) Opinion of CGMI's Counsel. CGMI shall have furnished to the Company, at
-------------------------
the Closing, with an opinion of counsel to CGMI, dated as of the Closing Date,
substantially in the form of EXHIBIT 6.2(B) annexed hereto.
---------------
(c) [Intentionally omitted].
-----------------------
(d) Accuracy of Representations and Warranties; Performance of Covenants.
----------------------------------------------------------------------
Each of the representations and warranties of CGMI was true, correct and
complete in all material respects when made (except for representations and
warranties that speak as of a specific date, which representations and
warranties shall be true, correct and complete in all material respects as of
such date) and shall also be true, correct and complete in all material respects
at and as of the Closing Date (except for representations and warranties that
speak as of a specific date, which representations and warranties shall be true,
correct and complete in all material respects as of such date), with the same
force and effect as if made at and as of the Closing Date. CGMI shall have
performed and complied in all material respects with all agreements and
covenants required by this Agreement to be performed by CGMI at or prior to the
Closing Date.
(e) Delivery of Certificate. CGMI shall have delivered to the Company a
-------------------------
certificate, in the form of EXHIBIT 6.2(E) annexed hereto, dated the Closing
--------------
Date and signed by the CEO or President of CGMI, affirming that the
representations and warranties of CGMI as set forth in Section 4.2 were and are
true, correct and complete and CGMI's agreements and covenants have been
performed as required by Section 6.2(d).
(f) [Intentionally omitted].
------------------------
(g) Consents and Waivers. On or prior to the Closing Date, any and all
----------------------
necessary consents, authorizations, orders or approvals shall have been
obtained, except as the same shall have been waived by the Company.
(h) Litigation. On the Closing Date, there shall be no effective
----------
injunction, writ or preliminary restraining order or any order of any kind
whatsoever with respect to CGMI issued by a court or governmental agency (or
other governmental or regulatory authority) of competent jurisdiction
restraining or prohibiting the consummation of the Merger or making the
consummation thereof unduly burdensome to the Company or CGMI. On the Closing
Date, no proceeding or lawsuit shall have been commenced, threatened or be
pending or by any governmental or regulatory agency or authority or any other
person with respect to the Merger.
47
(i) Delivery of Documents and Other Information. Prior to the Closing Date,
-------------------------------------------
CGMI shall have made available or delivered to the Company all of the
agreements, contracts, documents and other instruments required to be delivered
pursuant to the provisions of this Agreement.
ARTICLE VII
TERMINATION
7.1 Termination by Mutual Agreement. This Agreement may be terminated
--------------------------------
at any time by mutual consent of the parties hereto, provided that such consent
to terminate is in writing and is signed by each of the parties hereto.
7.2 Termination for Failure to Close. This Agreement shall be automatically
--------------------------------
terminated if the Closing shall not have occurred within ten (10) days of the
date hereof (except if such 10th day is not a Business Day, then the next
Business Day).
7.3 Termination by Operation of Law. This Agreement may be terminated by
----------------------------------
any party hereto if there shall be any statute, rule or regulation that renders
consummation of the Merger illegal or otherwise prohibited, or a court of
competent jurisdiction or any government (or governmental authority) shall have
issued an order, decree or ruling, or has taken any other action restraining,
enjoining or otherwise prohibiting the consummation of such transactions and
such order, decree, ruling or other action shall have become final and
nonappealable.
7.4 Termination for Failure to Perform Covenants or Conditions. This
-----------------------------------------------------------------
Agreement may be terminated prior to the Closing Date:
(a) by CGMI if: (i) any of the representations and warranties made in this
Agreement by the Company or Acquisition shall not be materially true and
correct, when made or at any time prior to consummation of the Merger as if made
at and as of such time; (ii) any of the conditions set forth in Section 6.1
hereof have not been fulfilled in all material respects by the Closing Date;
(iii) the Company or Acquisition shall have failed to observe or perform any of
its material obligations under this Agreement; or (iv) as otherwise set forth
herein; or
(b) by the Company or Acquisition if: (i) any of the representations and
warranties of CGMI or the CGMI Stockholder shall not be materially true and
correct when made or at any time prior to consummation of the Merger as if made
at and as of such time; (ii) any of the conditions set forth in Section 6.2
hereof have not been fulfilled in all material respects by the Closing Date;
(iii) CGMI shall have failed to observe or perform any of their material
respective obligations under this Agreement; or (iv) as otherwise set forth
herein.
7.5 Effect of Termination or Default; Remedies. In the event of termination
------------------------------------------
of this Agreement as set forth above, this Agreement shall forthwith become void
and there shall be no liability on the part of any party hereto, provided that
such party is a Non-Defaulting Party (as defined below). The foregoing shall
not relieve any party from liability for damages actually incurred as a result
of such party's breach of any term or provision of this Agreement.
48
7.6 Remedies; Specific Performance. In the event that any party shall fail
-------------------------------
or refuse to consummate the Merger or if any default under or beach of any
representation, warranty, covenant or condition of this Agreement on the part of
any party (the "Defaulting Party") shall have occurred that results in the
failure to consummate the Merger, then in addition to the other remedies
provided herein, the non-defaulting party (the "Non-Defaulting Party") shall be
entitled to seek and obtain money damages from the Defaulting Party, or may seek
to obtain an order of specific performance thereof against the Defaulting Party
from a court of competent jurisdiction, provided that the Non-Defaulting Party
seeking such protection must file its request with such court within forty-five
(45) days after it becomes aware of the Defaulting Party's failure, refusal,
default or breach. In addition, the Non-Defaulting Party shall be entitled to
obtain from the Defaulting Party court costs and reasonable attorneys' fees
incurred in connection with or in pursuit of enforcing the rights and remedies
provided hereunder.
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
8.1 Survival of Representations and Warranties of the Company. All
-------------------------------------------------------------
representations and warranties of the Company shall survive the execution and
delivery of this Agreement and the Closing hereunder and shall thereafter
survive until the first anniversary of the Closing Date and shall then terminate
except to the extent that notice of the Company's or Acquisition liability in
respect of any inaccuracy in or breach of any representation or warranty shall
have been given on or prior to such date.
8.2 Survival of Representations and Warranties of CGMI. All representations
--------------------------------------------------
and warranties of CGMI shall survive the execution and delivery of this
Agreement and the Closing hereunder and shall thereafter survive until the first
anniversary of the Closing Date and shall then terminate except to the extent
that notice of CGMI's liability in respect of any inaccuracy in or breach of any
representation or warranty shall have been given on or prior to such date.
8.3 Obligation of the Company to Indemnify. The Company agrees to
-------------------------------------------
indemnify, defend and hold harmless CGMI (and its directors, officers,
employees, affiliates, stockholders, debenture holders, agents, attorneys,
successors and assigns) from and against all losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties and reasonable
attorneys' and consultants' fees and disbursements) (collectively, "Losses")
based upon, arising out of or otherwise in respect of any (i) inaccuracy in any
representation or warranty of the Company contained in this Agreement or in the
Schedules and Exhibits hereto or (ii) breach by the Company of any covenant or
agreement contained in this Agreement.
8.4 Obligation of and CGMI to Indemnify. CGMI agrees to indemnify, defend
-------------------------------------
and hold harmless the Company (and its directors, officers, employees,
affiliates, stockholders, agents, attorneys, successors and assigns) from and
against any Losses based upon, arising out of or otherwise in respect of any (i)
inaccuracy in any representation or warranty of CGMI contained in this Agreement
or in the Schedules and Exhibits hereto or (ii) breach by CGMI of any covenant
or agreement contained in this Agreement.
49
8.5 Notice and Opportunity to Defend. (a) Promptly after receipt by any
-----------------------------------
Person entitled to indemnity under this Agreement (an "Indemnitee") of notice of
any demand, claim or circumstances which, with the lapse of time, would or might
give rise to a claim or the commencement (or threatened commencement) of any
action, proceeding or investigation (an "Asserted Liability") that may result in
a Loss, the Indemnitee shall give notice thereof (the "Claims Notice") to any
other party (or parties) who is or may be obligated to provide indemnification
pursuant to Section 8.3 or 8.4 (the "Indemnifying Party"). The Claims Notice
shall describe the Asserted Liability in reasonable detail and shall indicate
the amount (estimated, if necessary and to the extent feasible) of the Loss that
has been or may be suffered by the Indemnitee.
(b) The Indemnifying Party may elect to compromise or defend, at its own
expense and by its own counsel, any Asserted Liability. If the Indemnifying
Party elects to compromise or defend such Asserted Liability, it shall within 30
days after the date the Claims Notice is given (or sooner, if the nature of the
Asserted Liability so requires) notify the Indemnitee of its intent to do so,
and the Indemnitee shall cooperate, at the expense of the Indemnifying Party, in
the compromise of, or defense against, such Asserted Liability. If the
Indemnifying Party elects not to compromise or defend the Asserted Liability,
fails to notify the Indemnitee of its election as herein provided or contests
its obligation to indemnify under this Agreement, the Indemnitee may pay,
compromise or defend such Asserted Liability and all reasonable expenses
incurred by the Indemnitee in defending or compromising such Asserted Liability,
all amounts required to be paid in connection with any such Asserted Liability
pursuant to the determination of any court, governmental or regulatory body or
arbitrator, and amounts required to be paid in connection with any compromise or
settlement consented to by the Indemnitee, shall be borne by the Indemnifying
Party. Except as otherwise provided in the immediately preceding sentence, the
Indemnitee may not settle or compromise any claim over the objection of the
Indemnifying Party. In any event, the Indemnitee and the Indemnifying Party may
participate, at their own expense, in (but the Indemnitee may not control) the
defense of such Asserted Liability. If the Indemnifying Party chooses to defend
any claim, the Indemnitee shall make available to the Indemnifying Party any
books, records or other documents within its control that are necessary or
appropriate for such defense.
ARTICLE IX
DEFINITIONS
The following terms, which are capitalized in this Agreement, shall have
the meanings set forth below for the purpose of this Agreement.
"Contract" means any Contract (a) to which the Company, Acquisition or CMGI, is
--------
a party and under which the Company, Acquisition or CMGI, has or may acquire any
material rights, (b) under which the Company, Acquisition or CGMI, as the case
may be, is a party and has or may become subject to any material obligation or
material liability or (c) by which the Company, Acquisition or CGMI, as the case
may be, or any of the material assets owned or used by it is or may become
bound.
50
"Environmental Laws" means all applicable federal, state, local or foreign
-------------------
laws, rules and regulations, orders, decrees, judgments, permits, filings and
licenses relating (i) to protection and clean-up of the environment and
activities or conditions related thereto, including those relating to the
generation, handling, disposal, transportation or release of hazardous
substances and (ii) the health or safety of employees in the workplace
environment, all as amended from time to time, and shall also include any common
law theory based on nuisance, trespass, negligence or other tortious conduct.
"ERISA" means the Employee Retirement Income Security Act of 1974 or any
-----
successor law, and regulations and rules issued pursuant to such law or any
successor law.
"GAAP" means generally accepted accounting principles in the United States,
----
applied on a consistent basis.
"Law" means all applicable laws, statutes, ordinances, rules, regulations,
---
orders, writs, injunctions, judgments or decrees entered, enacted, promulgated,
enforced or issued by any court or other governmental or regulatory authority,
domestic or foreign.
"Legal Requirement" means any federal, state, local, municipal, foreign,
------------------
international, multinational or other administrative law, ordinance, principle
of common law, regulation, statute, treaty, court or arbitrator.
"Material Adverse Effect" means a material adverse effect upon the business
-------------------------
or financial condition of the Company (when used in Section 4.1) or CGMI (when
used in Section 4.2), taken as a whole with any subsidiaries.
"Order" means any award, decision, injunction, judgment, order, ruling,
-----
subpoena or verdict entered, issued, made or rendered by any court,
administrative agency or other governmental body or by any arbitrator.
"Ordinary Course of Business" means an action taken by a Person where:
------------------------------
(1) such action is consistent with the past practices of such Person and is
taken in the ordinary course of the normal day-to-day operations of such Person;
(2) such action is not required to be authorized by the board of directors
of such Person (or by any Person or group of Persons exercising similar
authority); and
(3) such action is similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors (or by any Person or
group of Persons exercising similar authority), in the ordinary course of the
normal day-to-day operations of other Persons that are in the same line of
business as such Person.
"Organizational Documents" means the articles or certificate of
-------------------------
incorporation and the by-laws of a corporation and any amendment thereto.
51
"Person" means any individual, corporation (including any non-profit
------
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or governmental body.
"Proceeding" means any action, arbitration, audit, hearing, investigation,
----------
litigation or suit (whether civil, criminal, administrative, investigative or
informal) commenced, brought, conducted or heard by or before, or otherwise
involving, any governmental body or arbitrator.
"SEC" means the United States Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended.
---------------
ARTICLE X
MISCELLANEOUS
10.1 Fees and Expenses. Except as otherwise provided in this
-------------------
Agreement, each party hereto will bear its own legal, accounting and other fees
and expenses incident to the Merger herein. Any fees and expenses required to
be paid by any party hereunder shall be limited to reasonable and necessary fees
and expenses.
10.2 Modification, Amendments and Waiver. The parties hereto may amend,
--------------------------------------
modify or otherwise waive any provision of this Agreement by mutual consent,
provided that such consent and any amendment, modification or waiver is in
writing and is signed by each of the parties hereto.
10.3 Assignment. Neither the Company, Acquisition nor CGMI shall have the
----------
authority to assign its respective rights or obligations under this Agreement.
10.4 Successors. This Agreement shall be binding upon and, to the extent
----------
permitted in this Agreement, shall inure to the benefit of the parties and their
respective successors and permitted assigns.
10.5 Entire Agreement. This Agreement and the exhibits, schedules and other
----------------
documents referred to herein contain the entire agreement among the parties
hereto with respect to the Merger and supersede all prior agreements with
respect thereto, whether written or oral.
10.6 Governing Law. This Agreement and the exhibits hereto shall
--------------
be governed by and construed in accordance with the laws of the State of New
York, without giving effect to principles of conflicts or choice of laws
thereof. Any action to enforce the terms of this Agreement or any of its
exhibits shall be brought exclusively in the state and/or federal courts
situated in the County and State of New York. Service of process in any action
by either party to enforce the terms of this Agreement may be made by serving a
copy of the summons and complaint, in addition to any other relevant documents,
by commercial overnight courier to the other party at its principal address set
forth in this Agreement.
52
10.7 Notices. Any notice, request, demand, waiver, consent, approval,
-------
or other communication which is required or permitted to be given to any party
hereunder shall be in writing and shall be deemed given only if delivered to the
party personally or sent to the party by facsimile upon electronic confirmation
of receipt (promptly followed by a hard-copy delivered in accordance with this
Section 10.7) or three days after being mailed by registered or certified mail
(return receipt requested), with postage and registration or certification fees
thereon prepaid, or if sent by nationally recognized overnight courier, one day
after being mailed, addressed to the party at its address set forth below:
If to CGMI:
CanOnline Global Media, Inc.
Xxxxx 000, 0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attn: Xxx Xxxx, VP-Legal Affairs
Tel: 000-000-0000
Fax: 000-000-0000
with copies to:
Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
If to Acquisition:
Delivery Now Corp
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
with copies to:
Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000- 000-0000
If to Company: Delivery Now Corp.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
with copies to:
Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Tel: 000- 000-0000
Fax: 000- 000-0000
53
or to such other persons or addresses as may be designated in writing by the
party to receive such notice. If mailed as aforesaid, the day of mailing or
transmission shall be the date any such notice shall be deemed to have been
delivered.
10.8 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be an original, but all of which shall
constitute but one agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
10.9 Rights Cumulative. All rights, powers and privileges conferred
------------------
hereunder upon the parties, unless otherwise provided, shall be cumulative and
shall not be restricted to those given by law. Failure to exercise any power
given any party hereunder or to insist upon strict compliance by any other party
shall not constitute a waiver of any party's right to demand exact compliance
with any of the terms or provisions hereof.
10.10 Severability of Provisions. The provisions of this Agreement shall be
--------------------------
considered severable in the event that any of such provisions are held by a
court of competent jurisdiction to be invalid, void or otherwise unenforceable.
Such invalid, void or otherwise unenforceable provisions shall be automatically
replaced by other provisions which are valid and enforceable and which are as
similar as possible in term and intent to those provisions deemed to be invalid,
void or otherwise unenforceable and the remaining provisions hereof shall remain
enforceable to the fullest extent permitted by law.
10.11 Headings. The headings set forth in the articles and sections of this
--------
Agreement and in the exhibits and the schedules to this Agreement are inserted
for convenience of reference only and shall not be deemed to constitute a part
hereof.
[SIGNATURE PAGE FOLLOWS]
54
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or have
caused this Agreement to be executed and delivered on the date and year first
above written.
DELIVERY NOW CORP.
By: /s/ Xxxxxxx Xxxxx
-------------------
Xxxxxxx Xxxxx,
President
CANONLINE GLOBAL MEDIA, INC.
By: /s/Xxxxx Xxxxxxxxxx
--------------------
Xxxxx Xxxxxxxxxx,
President
DLVN ACQUISITION, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------
Xxxxxxx Xxxxx,
President
55
