EXHIBIT 2.1
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AGREEMENT OF MERGER
by and among
Semotus Solutions, Inc.,
Semotus Acquisition Corp.
and
Expand Beyond Corporation
Dated: March 24, 2005
AGREEMENT OF MERGER
This Agreement of Merger (this "Agreement"), dated as of March 24,
2005, is by and among Semotus Solutions, Inc., a Nevada corporation ("Parent"),
Semotus Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of Parent ("Sub"), and Expand Beyond Corporation, a Delaware corporation (the
"Company").
RECITALS
WHEREAS, the Company is engaged in the business of developing, selling
and supporting mobile and web application, software products, application
extension technologies and services related to each of the foregoing (the
"Business"); and
WHEREAS, the Boards of Directors of each of Parent, Sub and the Company
determined that it would be advisable and in the respective best interests of
each such corporation and its shareholder(s) that: (i) the Company be merged
with Sub, with the Company as the surviving entity; and (ii) the shareholders of
the Company (the "Shareholders"), who, together own 100% of the issued and
outstanding shares of capital stock of the Company (the "Company Shares"), will
have the right to receive that certain number of shares of Common stock of
Parent, as appropriately adjusted for any stock splits, stock dividends or
similar recapitalization (the "Parent Shares") on a pro rata basis determined as
set forth in Schedule 2.5, and as provided in Article III below.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall have the
following meanings. Any of such terms, unless the context otherwise requires,
may be used in the singular or plural, depending upon the reference.
"Affiliate" shall have the meaning set forth in the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.
"Closing Date" shall mean the date of this Agreement or such
other date as Parent, Sub and the Company shall mutually agree upon.
"Contract" shall mean any agreement, contract, note, loan,
evidence of indebtedness, purchase order, letter of credit, franchise agreement,
undertaking, covenant not to
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compete, employment agreement, license, instrument, obligation or commitment to
which the Company is a party or is bound, whether oral or written, but excluding
all leases.
"Disclosure Schedule" shall mean a schedule executed and
delivered by the Company to Parent and Sub as of the date hereof which sets
forth the exceptions to the representations and warranties contained in Article
V hereof and certain other information called for by this Agreement. Unless
otherwise specified, each reference in this Agreement to any numbered schedule
is a reference to that numbered schedule which is included in the Disclosure
Schedule. Matters disclosed in any one such schedule shall be deemed disclosed
for purposes of any other schedule where such matters are reasonably related to
the information addressed in such other schedule.
"Effective Date" shall mean the date and time of receipt of
the Certificates of Merger for filing with the Secretary of State of the State
of Delaware, unless a delayed effective time is specified therein.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended
"Financial Statements" shall mean a) in the case of the
Company, its unaudited balance sheet dated as of December 31, 2004, and its
unaudited income statement for the period ended December 31, 2004, and (b) in
the case of Parent, (i) its consolidated audited balance sheet dated March 31,
2004, and its consolidated statements of income, cash flow and changes in
financial position for the twelve month period ended Xxxxx 00, 0000, (xx) its
reviewed consolidated balance sheet dated, and its reviewed consolidated
statements of income, cash flow and changes in financial position for the three
month period ending December 31, 2004. The definition of Financial Statements
shall also include an updated balance sheet and income statement of the Company
as of February 28, 2005.
"Gross Business Expenses" shall mean any and all costs (as
determined in accordance with generally accepted accounting principles) incurred
by the Surviving Corporation in connection with the operation of the Business.
"Material Adverse Effect" or "Material Adverse Change" shall
mean any adverse effect on or change in the financial condition, results of
operations, assets, liabilities or operations of the Company or Parent
(including its subsidiaries, taken as a whole), as applicable, or on the ability
of the Company or Parent, as applicable, to consummate the transactions
contemplated hereby, or any event or condition which would, solely with the
passage of time, constitute such a material adverse effect or material adverse
change.
"Parent Average Stock Price" ("PASP") shall mean the average
price per share (as determined by the closing sales price for the common stock
of Parent) that the common stock of Parent has traded on the American Stock
Exchange, or any other established stock exchange,
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automated quotation system or bulletin board, for the thirty consecutive market
trading days prior to the Closing Date.
"Parent MFN Rates" shall mean rates at least as favorable as
rates charged by Parent at such time to any third party for substantially
similar services.
"Parent Capital Investment" shall mean the dollar amount of
the funds invested by Parent into the Surviving Corporation.
"Permits" shall mean all licenses, permits, franchises,
approvals, authorizations, consents or orders of, or filings with, any
governmental authority, whether foreign, federal, state or local, or any other
person, necessary or desirable for the past, present or anticipated conduct of,
or relating to, the operation of the Business.
"Recognized Revenues" shall mean total revenues allowed to be
recognized as determined in accordance with the generally accepted accounting
principles of the Surviving Corporation that were earned by, or generated from,
the Business (including any and all products or services of Parent or its
Affiliates that are either sold through the Business or that are based on or
derivatives of the Company's technology in existence as of the Closing,
including without limitation the Company's XBanywhere technology), any profit
gained from sales of any of the Surviving Corporation's assets (including
without limitation any patents), as well as revenues attributed to the Business
that are developed in conjunction with the Parent or any other subsidiaries of
Parent, and that those subsidiaries may also count as revenue for their
financial statements.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shareholders Representative" shall mean Xxx Xxxxxx, or such
replacement representative as a majority of the outstanding Parent Shares then
held by the Shareholders may designate in writing from time to time.
"Year Period" shall mean the First Year Period, or the Second
Year Period, as applicable. The First Year Period and the Second Year Period
shall collectively be referred to as the "Year Periods".
1.2 Other Defined Terms. The following terms shall have the meanings
set forth in the indicated Sections. Certain other capitalized terms are defined
elsewhere in this Agreement.
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Term Section
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Action 5.15
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Budget 10.2
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Term Section
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Business Recitals
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Business Plan 5.14
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Claim Notice 10.5(d)
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Closing 4.1
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Company Preamble
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Company Shares Recitals
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Company Stock Options 2.8
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DGCL 2.1
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Dispute Notice 3.2
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Dissenting Shares 2.9
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Dissenting Shareholder 2.9
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Expiration Date 10.4
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First Year Base 3.1(b)
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First Year Period 3.1(b)
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First Year Shares 3.1(b)
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Indemnified Party 10.5
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Indemnifying Party 10.5
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Initial Stock Consideration 3.1(a)
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Merger Certificates 2.2
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Merger Consideration 3.1
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Parent Preamble
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Parent CFO 3.3
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Parent Services 10.3
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Parent Shares Recitals
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Term Section
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Proprietary Rights 5.21(a)
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Pro Rata Basis 2.5
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Second Year Base 3.1(c)
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Second Year Period 3.1(c)
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Second Year Shares 3.1(c)
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Set Off Rights 10.5
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Shareholders Recitals
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Special Meeting 2.7
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Sub Preamble
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Year End Statement 3.3
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ARTICLE II.
THE MERGER: SPECIAL MEETING
2.1 The Merger. Upon the terms and subject to the conditions hereof and
in accordance with the Delaware General Corporation Law (the "DGCL"), the
Company shall be merged with Sub (the "Merger") effective upon the filing of the
Certificate of Merger with the Delaware Secretary of State (the "Effective
Time"). Following the Merger, the separate existence of the Sub shall cease, and
the Company shall continue as the surviving corporation (the "Surviving
Corporation").
2.2 Effective Time. The parties hereto shall cause the Merger to be
consummated by filing the Certificate of Merger with respect thereto with the
Secretary of State of the State of Delaware (the "Certificate of Merger") in the
form attached hereto as Exhibit 2.2.
2.3 Effects of the Merger. The Merger shall have the effects set forth
in Section 259 of the DGCL. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, except as otherwise provided herein,
all of the property, rights, privileges, powers and franchises of the Company
and Sub shall rest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Sub shall become the debts, liabilities and duties of
the Surviving Corporation.
2.4 Certificate of Incorporation and By-laws of the Surviving
Corporation; Directors. The Certificate of Incorporation of the Sub shall be the
Certificate of Incorporation for the Surviving
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Corporation until thereafter changed or amended, and the By-laws of Sub shall be
the By-laws of the Surviving Corporation until thereafter changed or amended.
Immediately prior to the Effective Time, all directors of the Company shall
resign, except Xxx Xxxxxx, and Xx. Xxxxxx shall take all necessary action to
fill the resulting vacancies on the Board of Directors of the Company by
electing Xxxxxxx X. XxXxxx to the Board of Directors, and such directors shall
be the directors of the Surviving Corporation at the Effective Time. Such
directors will hold office until their respective successors are duly elected or
appointed and qualify in the manner provided in the Certificate of Incorporation
and bylaws of the Surviving Corporation, or as otherwise provided by applicable
law.
2.5 Effect of the Merger on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the Shareholders, or
the Board of Directors of the Parent, Sub or the Company, i) all of the Company
Shares held by the Shareholders (other than Dissenting Shares) shall be
converted into and represent the right to receive, on a pro rata basis as set
forth in Schedule 2.5 (the "Pro Rata Basis"), the Merger Consideration, rounded
to the nearest whole share, and ii) all shares of Common Stock and Series A
Preferred Stock and Series B Preferred Stock of the Company that are owned by
the Company as treasury stock shall be canceled and retired and shall cease to
exist and no Merger Consideration shall be delivered in exchange therefore.
Certificates representing the Parent Shares will be delivered to the
Shareholders upon surrender to the Parent of valid stock certificates
representing their Company Shares.
2.6 Surrender of Certificates. The procedures for surrendering
outstanding Company Shares for Merger Consideration pursuant to the Merger are
as follows:
(a) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Parent shall mail to each Shareholder of record
(a) a letter of transmittal in such form and with such provisions as Parent and
the Company may reasonably specify and (b) instructions for surrendering the
certificates representing such Company Shares in exchange for the Merger
Consideration applicable thereto. Upon surrender of such stock certificates for
cancellation to the Parent, together with such letter of transmittal, duly
executed, the holder of such certificate shall be entitled to receive the Merger
Consideration therefore, and the certificate so surrendered shall immediately be
canceled.
(b) No Further Ownership Rights in The Company Common Stock.
All shares of Parent's Common Stock issued upon the surrender for exchange of
Company Share certificates in accordance with the terms hereof shall be deemed
to have been issued in full satisfaction of all rights pertaining to such
Company Shares, and from and after the Effective Time there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the Shares which were outstanding immediately prior to the
Effective Time.
(c) No Fractional Shares. No certificate or scrip representing
fractional Parent Shares shall be issued upon the surrender for exchange of
Company Shares, and such fractional share interest will not entitle the owner
thereof to vote or to any other rights of a stockholder of Parent.
Notwithstanding any other provision of this Agreement, each holder of Shares
exchanged
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pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of a Parent Share (after taking into account all
Certificates delivered by such holder) shall be rounded to the nearest whole
Parent Share.
(d) Certificates representing the Parent's Shares of Common
Stock will bear the following two legends:
(i) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER SAID ACT OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE."
(ii) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THE AGREEMENT
AND PLAN OF MERGER DATED ----, A COPY OF WHICH MAY BE OBTAINED
FROM THE SECRETARY OF THE COMPANY. THE SHARES MAY NOT BE SOLD
OR OTHERWISE DISPOSED OF PRIOR TO -------------. THIS
RESTRICTION IS INDEPENDENT OF AND IN ADDITION TO THE OTHER
RESTRICTIONS ON TRANSFER NOTED HEREON."
2.7 Shareholder Consent. The Company and its Board of Directors shall
take all action necessary in accordance with applicable law and the Company's
Certificate of Incorporation and Bylaws to, prior to the Closing Date, have the
Shareholders execute a written consent without a meeting for the purpose of
consenting to, approving and adopting (a) this Agreement, (b) the Merger and (c)
any other action or transaction by the Company contemplated by this Agreement
that requires approval of the Shareholders under the Company's Certificate of
Incorporation, the Company's Bylaws or the DGCL.
2.8 Treatment of Company Stock Options. The Company has outstanding
certain options and warrants to purchase Company Shares (the "Company Stock
Options"). At the Effective Time, all such Company Stock Options shall terminate
and immediately expire. Any holders of Company Stock Options who decide to
exercise their Company Stock Options before the Closing Date shall become
Shareholders, and as such, shall be entitled to receive the Merger Consideration
on a Pro Rata Basis, and as set forth in Article III.
2.9 Dissenters' Rights. In the event the Merger becomes effective
without the approval of the holders of 100% of the outstanding shares of the
Company Shares, any Company Shares held by shareholders who properly exercise
and perfect the dissenters' rights set forth in Section 262 of the DGCL
("Dissenting Shares") shall not be converted pursuant to Section 2.5, but shall
instead be converted into the right to receive the fair value of the shares as
may be determined to be due with respect to such Dissenting Shares pursuant to
the provisions of the DGCL. Parent shall have the right to control all
negotiations and proceedings with respect to the
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determination of the fair value of the Company Shares. The Company agrees that,
without the prior written consent of Parent or as required under the DGCL, it
will not voluntarily make any payment with respect to, or determine or offer to
determine, the fair value of the Company's Common Stock. Each holder of
Dissenting Shares (a "Dissenting Shareholder") who, pursuant to the provisions
of the DGCL, becomes entitled to payment of the fair value of the Company Shares
shall receive payment therefor (but only after the fair value therefor shall
have been agreed upon or finally determined pursuant to the provisions of the
DGCL). In the event that any holder of the Company Shares fails to make an
effective demand for payment or otherwise loses his, her or its status as a
Dissenting Shareholder, Parent shall, as of the later of the Effective Time or
the occurrence of such event, issue and deliver, upon surrender by such
Dissenting Shareholder of his, her or its Certificate(s), the Merger
Consideration without interest thereon to which such Dissenting Shareholder
would have otherwise been entitled under this Agreement.
2.10 Certain Tax Positions. The parties intend the Merger to qualify as
a reorganization under Section 368(a)(1)(A) and 368(a)(2)(E) of the Internal
Revenue Code of 1986, as amended (the "Code"). Each party represents and
warrants to the other that it (i) has had an opportunity to consult with its own
tax advisor concerning the execution of this Agreement (and the transactions
contemplated hereby) and (ii) has not relied on the advice or opinion (either
written or oral) of the tax advisor for the other party. Each party agrees that
it shall not take any action (unless provided for in this Agreement) that would
cause the Merger to fail to qualify as a reorganization under Section
368(a)(1)(A) and 368(a)(2)(E) of the Code.
ARTICLE III.
MERGER CONSIDERATION
3.1 Merger Consideration. From and after the Effective Time, each
certificate of the Company Shares shall be deemed to represent the right to
receive, upon the surrender of such certificate, a certificate representing the
Merger Consideration, including the appropriate number Parent Shares, as
contemplated by this Article III. The Shareholders shall have the right to
receive a maximum of four million (4,000,000) Parent Shares (as may be adjusted
in accordance with Section 3.3 below) (the "Merger Consideration"). The Merger
Consideration shall be allocated and payable to the Shareholders on a Pro Rata
Basis as follows:
(a) 997,182 Parent Shares on the Effective Date, equal to 1.3
multiplied by the Company's Recognized Revenues for the twelve month period
ending on December 31, 2004 (the "Base Year"), divided by the PASP, and 913,773
Parent Shares on the Effective Date, equal to the Company's cash at Closing
divided by the PASP (together, the "Initial Stock Consideration");
(b) if the Surviving Corporation generates Recognized Revenues
that are greater than the Base Year's Recognized Revenues during the twelve
month period following the end of the Base Year (the "First Year Period"), then
the Shareholders shall receive, on a Pro Rata Basis,
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additional Parent Shares, equal to 1.3 multiplied by the difference between the
Base Year's Recognized Revenues and the First Year Period's Recognized Revenues,
divided by the PASP; the total maximum number of Parent Shares issuable pursuant
to Section 3.1(a) and (b) shall be four million (4,000,000) shares, as
appropriately adjusted for any stock splits, stock dividends or similar
recapitalization;
(c) if the maximum number of Parent Shares have not been
issued yet, and the Surviving Corporation generates Recognized Revenues during
the twelve month period following the end of the First Year Period (the "Second
Year Period") that are greater than the First Year Period, then the Shareholders
shall receive, on a Pro Rata Basis, additional Parent Shares equal to 1.3
multiplied by the difference between the First Year Period's Recognized Revenues
and the Second Year Period's Recognized Revenues, divided by the PASP; the
maximum number of Parent Shares issuable pursuant to Section 3.1(a), (b) and (c)
shall be four million (4,000,000) shares, as appropriately adjusted for any
stock splits, stock dividends or similar recapitalization; and
(d) Parent shall authorize the issuance of any Parent Shares
due to the Shareholders in accordance with clauses (b) or (c) of this Section
3.1, and shall deliver, or cause its transfer agent to deliver, to Shareholders
the certificates representing such Parent Shares within twenty five (25)
business days after the Shareholders' receipt of a Year End Statement.
3.2 Determination of Recognized Revenue and Gross Business Expenses.
The Shareholders acknowledge and agree that the Chief Financial Officer of
Parent (the "Parent CFO") shall determine the Recognized Revenue for each
respective Year Period (as determined in accordance with generally accepted
accounting principles). Promptly, but in no event later than thirty (30)
business days after each Year Period the Parent CFO shall provide to the
Shareholder Representative a statement which shall disclose the Recognized
Revenues for the preceding Year Period (a "Year End Statement"). The Surviving
Corporation agrees to provide any and all information, as reasonably requested
by the Parent CFO, that is necessary to calculate the Recognized Revenues for
any given Year Period, to Parent and the Shareholder Representative.
(a) Disputed Recognized Revenue Amount. If greater than twenty
percent (20%) of the Shareholders disagree with the Year End Statement, the
Shareholder Representative must notify Parent of such disagreement in writing
(the "Dispute Notice"), specifying the particulars of such disagreement, within
30 business days after the Shareholder Representative's receipt of the Year End
Statement. To the extent that any portion of the Year End Statement is not in
dispute, within 35 business days after the Shareholder Representative's receipt
of the Year End Statement, Parent shall (or cause its transfer agent to) issue
to the Shareholders those Parent Shares which have become issuable with respect
to that portion of the Year End Statement which is not in dispute.
(b) Resolution of Disputed Amounts. Parent and the Shareholder
Representative will use their best efforts for a period of thirty (30) calendar
days after the Shareholder Representative's delivery of such notice to resolve
any disagreements with respect to the Year End Statement. If, at the end of such
period, Parent and the Shareholder Representative are unable to
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resolve such disagreements, a mutually agreed upon third party CPA firm (the
"Independent Auditor") shall resolve any remaining disagreements. The
determination by the Independent Auditor shall be final, binding and conclusive
on the parties. Parent shall use its best efforts to cause the Independent
Auditor to make its determination within thirty (30) calendar days of accepting
the matter. Within ten (10) business days after the date of determination of the
Independent Auditor, Parent shall (or cause its transfer agent to) issue Parent
Shares as are due in accordance with this Article III. If the Recognized Revenue
calculation is off by 5% or more in favor of the Shareholders, provided that
such amount affects the determination of how many, if any, Parent Shares, as the
case may be, the Shareholders are entitled to receive, the fees and expenses of
the Independent Auditor retained to settle Year End Statement disputes shall be
borne by the Parent; otherwise, such fees and expenses shall be borne by the
Shareholders by reducing the number of shares in escrow by a number of shares
equal to such fees and expensesbased on the closing price of the common stock of
Parent on the Closing Date, and subject to a maximum of 10% of Parent Shares
held in the escrow account at the time of the dispute.
3.3 Changes in Parent Shares. If prior to the end of the Second Year
Period, the Parent Shares shall be recapitalized or reclassified or Parent shall
effect any stock dividend, stock split, or reverse stock split of Parent Shares,
then the Parent Shares to be issued as Merger Consideration under this
Agreement, shall be proportionately and equitably adjusted to reflect any
increase or decrease in the number of Parent Shares resulting from such
corporate event.
ARTICLE IV.
CLOSING
4.1 Closing Date and Location. The closing of the transactions
contemplated herein (the "Closing") shall be held at 10:00 a.m. local time on
the Closing Date at the offices of Parent (1) on the first business day
following the date on which the last of the conditions set forth in Articles
VIII and IX (other than the filing of the Merger Certificate) are satisfied or
to the extent permissible, waived, or (2) on such other date and at such other
time or place as is mutually agreed by the parties hereto.
4.2 Obligations of the Company. At the Closing, the Company shall
deliver to Parent and Sub the following documents:
(a) A certificate of good standing from the State of
California dated as of a date not more than ten (10) days prior to the Closing
Date and certifying that the Company is duly qualified and in good standing as
of the date of such certificate;
(b) The Officers' Certificate provided for in Section 9.3;
(c) The executed Certificate of Merger substantially in the
form of Exhibit 2.2; and
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(d) A certificate of the Secretary of the Company certifying
as to the matters described in Section 9.1.(e)
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Sub as
follows, except as otherwise set forth on the applicable Schedule, which
representations and warranties are, as of the date hereof, and will be, as of
the Closing Date, true and correct:
5.1 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where the character of its
properties owned or leased or the nature of its activities make such
qualification necessary, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect. Copies of the Certificate of
Incorporation and Bylaws of the Company, and all amendments thereto, heretofore
delivered to Parent and Sub are accurate and complete as of the date hereof.
Schedule 5.1 contains a true, correct and complete list of all jurisdictions in
which the Company is qualified to do business as a foreign corporation.
5.2 Capitalization. The authorized capital stock of the Company
consists of 26,000,000 shares, of which 17,500,000 shares are common stock, of
which 4,751,108 shares are outstanding, and 8,500,000 shares are preferred stock
of which 7,285,812 shares are outstanding, to be further adjusted for any
conversion of Company Stock Options and Warrants. All of the Company Shares have
been validly issued and are fully paid and non-assessable. No shares of common
stock are held by the Company as treasury stock. Except as set forth on Schedule
5.2, there is no existing option, warrant, call, commitment or other security or
agreement of any kind to which the Company is a party requiring, and there are
no convertible securities of the Company outstanding which upon conversion would
require, the issuance of any additional shares of capital stock of the Company
or other securities convertible into shares of capital stock or any debt or
equity security of the Company of any kind.
5.3 Subsidiaries. Except as set forth on Schedule 5.3, the Company does
not have any subsidiaries or any equity interest in another entity.
5.4 Authorization. The Company has all requisite corporate power and
authority, and, except for obtaining shareholder approval, as required by law,
has taken all corporate action necessary, to execute and deliver this Agreement,
to consummate the transactions contemplated hereby and to perform its
obligations hereunder. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly approved by the board of directors of the Company. No
other corporate proceedings on
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the part of the Company are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and is a legal, valid and binding obligation,
enforceable against it in accordance with its terms.
5.5 Employee Benefit Plans. Except as set forth on Schedule 5.5, the
Company does not have any Employee Benefit Plan as defined in the Employee
Retirement Income Security Act of 1974.
5.6 Tax Returns and Payments. The Company has filed all tax returns and
reports as required by law. These returns and reports are true and correct in
all material respects. The Company has paid, or has properly reserved cash for,
all taxes and other assessments due.
5.7 Title to Property and Assets. The Company owns its property and
assets free and clear of all mortgages, liens, loans and encumbrances, except
such encumbrances and liens which arise in the ordinary course of business and
do not materially impair the Company's ownership or use of such property or
assets. With respect to the property and assets it leases, the Company is in
material compliance with such leases and, to its knowledge, holds a valid
leasehold interest free of any liens, claims or encumbrances.
5.8 No Adverse Change. Since February 28, 2005, except as set forth on
Schedule 5.8, there has not been
(a) any change in the assets, liabilities, financial condition
or operating results of the Company from that reflected in the Financial
Statements, except changes in the ordinary course of business that have not had,
in the aggregate, a Material Adverse Effect;
(b) any damage, destruction or loss, whether or not covered by
insurance, that has had a Material Adverse Effect;
(c) any waiver or compromise by the Company of a material
right or of a material debt owed to it;
(d) any satisfaction or discharge of any material lien, claim,
or encumbrance or payment of any material obligation by the Company, except in
the ordinary course of business and that have not had, in the aggregate, a
Material Adverse Effect;
(e) any material change to a material contract or agreement by
which the Company or any of its assets is bound or subject;
(f) any material change in any compensation arrangement or
agreement with any employee, officer, director or shareholder;
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(g) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any
officer or key employee of the Company; and the Company is not aware of any
impending resignation or termination of employment of any such officer or key
employee;
(i) any mortgage, pledge, transfer of a security interest in,
or lien, created by the Company, with respect to any of its material properties
or assets, except liens for taxes not yet due or payable;
(j) any loans or guarantees made by the Company to or for the
benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(k) any declaration, setting aside or payment or other
distribution in respect to any of the Company's capital stock, or any direct or
indirect redemption, purchase, or other acquisition of any of such stock by the
Company; or
(l) any arrangement or commitment by the Company to do any of
the things described in this Section 5.8.
5.9 Contracts and Commitments.
(a) Contracts. Schedule 5.9(a) sets forth a complete and
accurate list of all Contracts of the following categories:
(i) Contracts not made in the ordinary course of
business;
(ii) Employment contracts and severance agreements;
(iii) Labor or union contracts;
(iv) Distribution, franchise, license, sales,
commission, consulting agency or advertising contracts which are not cancelable
on thirty (30) calendar days notice or less;
(v) Contracts involving expenditures or liabilities,
actual or potential, in excess of $10,000 or otherwise material to the Company,
taken as a whole, and not cancelable (without liability) within thirty (30)
calendar days or less;
(vi) Contracts or commitments relating to commission
arrangements with others;
Page 13
(vii) Promissory notes, loans, agreements,
indentures, evidences of indebtedness, letters of credit, guarantees, or other
instruments relating to an obligation to pay money, whether the Company shall be
the borrower, lender or guarantor thereunder or whereby any assets are pledged
(excluding credit provided by the Company to purchasers in the ordinary course
of business;
(viii) Contracts containing covenants limiting the
freedom of the Company or any officer, director, shareholder or affiliate, to
engage in any line of business or compete with any person;
(ix) Any Contract with the United States, state or
local government or any agency or department thereof;
(x) Leases of real property;
(xi) Leases of personal property not cancelable
(without liability) within thirty (30) calendar days; and
(xii) Governmental or regulatory Permits or approvals
required to conduct the Business as presently conducted.
The Company has delivered to Sub and Parent true, correct and complete copies of
all of the written Contracts listed on Schedule 5.9, including all amendments
and supplements thereto and, to the best of Company's knowledge, a written
summary setting forth the material terms and conditions of each and every oral
Contract listed on Schedule 5.9, including all amendments and supplements
thereto.
(b) Absence of Breaches or Defaults. Except as set forth in
Schedule 5.9(b), all of the Contracts are valid and in full force and effect,
subject to bankruptcy and equity exceptions. The Company has duly performed all
of its obligations under the Contracts, and no violation of, or default or
breach under, any Contracts by the Company or, to its knowledge, by any other
party to such Contracts, has occurred.
5.10 Permits. The Company has all Permits required to conduct its
business except such Permits the failure of which to obtain would not have a
Material Adverse Effect. All such permits are valid and in full force and effect
and are listed on Schedule 5.10. Except for filing the Certificate of Merger
with the Delaware Secretary of State, no notice to, declaration, filing or
registration with, or Permit from, any domestic or foreign governmental or
regulatory body or authority, or any other person or entity, is required to be
made or obtained by the Company or any Shareholder in connection with the
execution, delivery or performance of this Agreement and the consummation of the
transactions contemplated hereby.
Page 14
5.11 Corporate Documents. The Certificate of Incorporation and Bylaws
of the Company are in the form provided to counsel for Parent and Sub. The copy
of the minute books of the Company provided to counsel for the Parent and Sub
contains minutes of all meetings of directors and shareholders and all actions
by written consent without a meeting by the directors and shareholders since the
date of incorporation and reflects all actions by the directors (and any
committee of directors) and shareholders with respect to all transactions
referred to in such minutes accurately in all material respects.
5.12 No Conflict or Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transactions
contemplated hereby, nor compliance by the Shareholders or the Company with any
of the provisions hereof, will (1) violate or conflict with any provision of the
Company's Certificate of Incorporation or Bylaws, (2) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under any of the terms,
conditions or provisions of any Contract, agreement, or other instrument or
obligation (a) to which the Company is a party or (b) by which the Company is
bound, (c) violate any statute, rule, regulation, ordinance, code, order,
judgment, ruling, writ, injunction, decree or award, or (d) impose any
encumbrance restriction or charge on the Company or the Business except in the
case of each of clauses (a), (b), and (c) above, for such violations, conflicts,
breaches, defaults, terminations or accelerations which, in the aggregate would
not have a Material Adverse Effect.
5.13 Financial Statements. Except as set forth on Schedule 5.13, the
Financial Statements (1) have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
covered thereby and (2) fairly and accurately present the assets, liabilities
(including all reserves) and financial position of the Company as of the
respective dates thereof and the results of operations and changes in cash flows
for the periods then ended. The Financial Statements have been compiled by
Xxxxxxxxx X. Xxxx & Co., certified public accountants. At the respective dates
of the Financial Statements, there were no liabilities of the Company, which, in
accordance with generally accepted accounting principles, should have been shown
or reflected in the Financial Statements or the notes thereto, which are not
shown or reflected in the Financial Statements or the notes thereto.
5.14 Disclosure. The Company has fully provided Parent and Sub with all
the written information that has been requested by the Parent's due diligence
request letter. No representation or warranty of the Company contained in this
Agreement, the Exhibits or Schedules attached hereto, or any certificate to be
furnished to Parent and Sub at the Closing (when read together) contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein not misleading in
light of the circumstances under which they were made.
Page 15
5.15 Litigation. There is no action, order, writ, injunction, judgment
or decree outstanding or any claim, suit, litigation, proceeding, labor dispute,
arbitral action, governmental audit or investigation (collectively, "Actions")
pending, or, to the Company's knowledge, threatened or anticipated (1) against,
related to or affecting: (a) the Company, or (b) any officers or directors of
the Company, (2) seeking to delay, limit or enjoin the transactions contemplated
by this Agreement, (3) that involve the risk of criminal liability, or (4) in
which the Company is a plaintiff, including any derivative suits. The Company is
not in default with respect to or subject to any judgment, order, writ,
injunction or decree of any court or governmental agency, and there are no
unsatisfied judgments against the Company.
5.16 Labor Matters. The Company is not a party to any labor agreement
with any labor organization, union, group or association; there are no employee
unions (nor any other similar labor or employee organizations) under local
statutes, custom or practice; there has not been any attempt by organized labor
or its representatives to make the Company conform to demands of organized labor
relating to its employees or to enter into a binding agreement with organized
labor. There is no labor strike or labor disturbance pending or threatened, nor
is any grievance currently being asserted. The Company is in compliance in all
material respects with all applicable laws respecting employment practices,
employee documentation, terms and conditions of employment and wages and hours
and has not engaged in any unfair labor practice.
5.17 Liabilities. The Company does not have any liabilities,
obligations or commitments of any nature (whether absolute, accrued, contingent
or otherwise and whether matured or unmatured), including without limitation tax
liabilities due or to become due, except (1) liabilities which are reflected and
reserved against on the Financial Statements, which have not been paid or
discharged since the date thereof, (2) liabilities arising under Contracts,
leases, letters of credit, purchase orders, licenses, Permits, purchase
agreements and other agreements, business arrangements and commitments described
in the Disclosure Schedule (and under those Contracts which are not required to
be disclosed on the Disclosure Schedule) and (3) liabilities incurred since the
date of the Financial Statements in the ordinary course of business and
consistent with past practice and in accordance with this Agreement (none of
which relates to any breach of Contract, breach of warranty, tort, infringement
or violation of law or arose out of any Action) which, individually or in the
aggregate, has or would reasonably be expected to have a Material Adverse
Effect.
5.18 Compliance with Law. The Company has not violated and is in
compliance with all laws, statutes, ordinances, regulations, rules and orders of
any foreign, federal, state or local government and any other governmental
department or agency, and any judgment, decision, decree or order of any court
or governmental agency, department or authority, except where the violation or
failure to comply, individually or in the aggregate, would not have a Material
Adverse Effect. The Company has not received any notice to the effect that it is
not in compliance with any such statutes, regulations, rules, judgments,
decrees, orders, ordinances or other laws. The Company has
Page 16
committed no act, and there has been no omission, which may result in, and there
has been no occurrence which may give rise to, product liability or liability
for breach of warranty (whether covered by insurance or not) on the part of the
Company, with respect to products designed, manufactured, assembled, repaired,
maintained, delivered, shipped or installed or services rendered prior to or on
the Closing Date which, in the aggregate, would have a Material Adverse Effect.
5.19 No Brokers. Neither the Company nor any of its officers,
directors, employees, shareholders or affiliates has employed or made any
agreement with any broker, finder or similar agent or any person or firm which
will result in the obligation of Parent or Sub or any of its affiliates to pay
any finder's fee, brokerage fees or commission or similar payment in connection
with the transactions contemplated hereby.
5.20 No Other Agreements. Neither the Company nor its officers,
directors or affiliates have any commitment or legal obligation, absolute or
contingent, to any other person or firm other than Parent and Sub to sell,
assign, transfer or effect a sale of any assets of the Company (other than
inventory in the ordinary course of business), to sell or effect a sale of a
majority of the capital stock of the Company, to effect any merger,
consolidation, liquidation, dissolution or other reorganization of the Company,
or to enter into any agreement or cause the entering into of an agreement with
respect to any of the foregoing.
5.21 Proprietary Rights. With respect to the Company:
(a) Proprietary Rights. Schedule 5.21 lists all of its
domestic or foreign, federal, state and foreign registrations of trademarks and
of other marks, trade names or other trade rights, and all pending applications
for any such registrations, and all of its patents and copyrights and all
pending applications therefor, all other trademarks and other marks, trade names
and other trade rights or in which it has any interest whatsoever, and all other
trade secrets, designs, plans, specifications, technical information and other
proprietary rights, whether or not registered, created or used by or on behalf
of it (collectively, "Proprietary Rights"). The Proprietary Rights listed in the
Disclosure Schedule are all those owned or used by the Company in connection
with the Business.
(b) Ownership and Protection of Proprietary Rights. Except as
set forth on Schedule 5.21, (i) to the best of its knowledge, the Company owns
and has the sole right to use each of the Proprietary Rights. None of the
Proprietary Rights is involved in any pending or threatened litigation, (ii) the
Company has not received any notice of invalidity or infringement of any rights
of others with respect to such Proprietary Rights, and (iii) no other firm,
corporation, association or person (a) has the right to use any such Proprietary
Rights, (b) has notified the Company that it is claiming any ownership of or
right to use such Proprietary Rights, or (c) to the best of its knowledge, is
infringing upon any such Proprietary Rights in any way. To the best of the
Company's knowledge, the Company's use of the Proprietary Rights is not
infringing upon or otherwise violating the rights of any third party in or to
such Proprietary Rights. To the best of its knowledge,
Page 17
all of the Proprietary Rights are valid and enforceable, except where the
failure to be so valid and enforceable would not have a Material Adverse Effect.
5.22 Transactions with Certain Persons. Except as set forth on Schedule
5.22, no officer, director or employee of the Company, nor any member of any
such person's immediate family, is presently a party to any transaction with the
Company, including without limitation, any contract, agreement or other
arrangement(1) providing for the furnishing of services by, (2) providing for
the rental of real or personal property from, or (3) otherwise requiring
payments to (other than for services as officers, directors or employees of the
Company ) any such person or corporation, partnership, trust or other entity in
which any such person has an interest as a shareholder, officer, director,
trustee or partner.
5.23 Insurance. Schedule 5.23 contains a complete and accurate list of
all policies or binders of fire, liability, title, worker's compensation,
product liability (which list shall be since the Company's inception) and other
forms of insurance (showing as to each policy or binder the carrier, policy
number, coverage limits, expiration dates, annual premiums and a general
description of the type of coverage provided) maintained by the Company. Such
insurance provides, and during such period provided, coverage to the extent
required by law and by any and all Contracts. The Company is not in default
under any of such policies or binders, and has not failed to give any material
notice or to present any material claim under any such policy or binder in a due
and timely fashion. Except as set forth on Schedule 5.23, there are no
outstanding unpaid claims under any such policies or binders. All policies and
binders are in full force and effect on the date hereof and shall be kept in
full force and effect through the Closing Date.
5.24 Accounts Receivable. The accounts receivable set forth in the
Financial Statements, and all accounts receivable arising since the date of the
Financial Statements, represent bona fide claims of the Company against debtors
for sales, services performed or other charges arising on or before the date
hereof, and all the goods delivered and services performed which gave rise to
said accounts were delivered or performed in accordance with the applicable
orders, Contracts or customer requirements.
5.25 Material Misstatements Or Omissions. No representations or
warranties by the Company in this Agreement, nor any exhibit, certificate or
schedule furnished to Parent and Sub pursuant hereto, including without
limitation the Disclosure Schedules, contains any untrue statement of a material
fact, or omits to state any material fact necessary to make the statements or
facts contained therein not misleading. To the best of the Company's knowledge,
the Company has disclosed all events, conditions and facts materially affecting
the business, prospects and financial condition of the Company.
5.26 Vote Required. The only vote of Shareholders required under the
DGCL, the Company's Certificate of Incorporation and the Company's bylaws in
order to approve and adopt the Merger
Page 18
Proposals was the affirmative vote of a majority of the aggregate voting power
of the issued and outstanding Company Shares and no other vote or approval of or
other action of holders of capital stock of the Company was required.
5.27 Dissenter Rights Procedures. The Company has performed and is in
compliance with any and all obligations required of a domestic corporation under
Section 259 of the DGCL and the Company has informed the Parent of any and all
Shareholders who have notified the Company of their appraisal rights in
accordance with Section 262 of the DCGL.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub hereby represent and warrant to the Company as follows,
which representations and warranties are, as of the date hereof, and will be, as
of the Closing Date, true and correct:
6.1 Organization of Parent and Sub. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada, and and Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
6.2 Authorization. Both Parent and Sub have all requisite corporate
power and authority, and have taken all corporate action necessary, to execute
and deliver this Agreement, to consummate the transactions contemplated hereby
and to perform their obligations thereunder. The execution and delivery of this
Agreement by Parent and Sub and the consummation by Parent and Sub of the
transactions contemplated hereby have been duly approved by the boards of
directors of Parent and Sub. No other corporate proceedings on the part of
Parent or Sub are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Parent and Sub and is a legal, valid and binding obligation of Parent and Sub,
enforceable against Parent and Sub in accordance with its terms.
6.3 No Conflict or Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transactions
contemplated hereby, nor compliance by Parent or Sub with any of the provisions
hereof, will (1) violate or conflict with any provision of (i) the Articles of
Incorporation or Bylaws of Parent or (ii) the Articles of Incorporation or
Bylaws of any of Parent's subsidiaries, (2) violate, conflict with, or result in
a breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, any of the terms, conditions or
provisions of any contract, indebtedness, note, bond, indenture, security or
pledge agreement, commitment, license, lease, franchise, permit, agreement,
authorization, concession, or other instrument or obligation to which Parent or
any of its subsidiaries is a party, or (3) violate any statute, rule,
regulation, ordinance, code, order, judgment, ruling, writ, injunction, decree
or award except, in the case of each
Page 19
of clauses (a), (b) and (c) above, for such violations, conflicts, breaches,
defaults, terminations, accelerations or creations of encumbrances which, in the
aggregate, would not have a Material Adverse Effect on the Business or its
ability to consummate the transactions contemplated hereby.
6.4 SEC Reports. Parent has timely filed all required reports,
statements and documents with the Securities Exchange Commission (the
"Commission"), all of which have, to the best of Parent's knowledge, complied in
all material respects with all applicable requirements of the Securities Act and
the Exchange Act. Parent has made available to the Company true and complete
copies of all forms, reports, statements and documents filed with the Commission
and all reports, statements and other information provided by Parent to its
stockholders (collectively, the "Parent Reports"). As of their respective dates,
the Parent Reports did not contain any untrue statement of any material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
6.5 Capitalization. As provided in Parent's SEC Form 10-QSB, as of
December 31, 2004, the authorized capital stock of Parent consists of 50,000,000
shares of common stock, of which 22,785,846 shares are outstanding, and
5,000,000 shares of preferred stock, of which none are outstanding. All Parent
Shares have been validly issued and are fully paid and non- assessable. No
shares of common stock are held by Parent as treasury stock. Except as set forth
on Schedule 6.5, there is no existing option, warrant, call, commitment or other
security or agreement of any kind to which Parent is a party requiring, and
there are no convertible securities of Parent outstanding which upon conversion
would require, the issuance of any additional shares of capital stock of Parent
or other securities convertible into shares of capital stock or any debt or
equity security of Parent of any kind.
6.6 No Adverse Change. Since December 31, 2004, there has not been any
change in the assets, liabilities, financial condition or operating results of
Parent from that reflected in Parent's consolidated financial statements
attached to its quarterly report on Form 10-QSB dated as of December 31, 2004
("Parent's Financial Statements"), except changes in the ordinary course of
business that have not had and would not reasonably be expected to have, in the
aggregate, a Material Adverse Effect.
6.7 Litigation. There is no action, order, writ, injunction, judgment
or decree outstanding or any claim, suit, litigation, proceeding, labor dispute,
arbitral action, governmental audit or investigation (collectively, "Actions")
pending, or, to the Parent's knowledge, threatened or anticipated (1) against,
related to or affecting: (a) the Parent, or (b) any officers or directors of the
Parent, (2) seeking to delay, limit or enjoin the transactions contemplated by
this Agreement, (3) that involve the risk of criminal liability, or (4) in which
the Parent is a plaintiff, including any derivative suits. The Parent is not in
default with respect to or subject to any judgment, order, writ, injunction or
decree of any court or governmental agency, and there are no unsatisfied
judgments against the Parent.
Page 20
6.8 Financial Statements. The Parent's financial statements (including
the notes thereto) included in Parent's most recently filed SEC Forms 10K and
10QSB (1) have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods covered thereby and (2)
fairly and accurately present the assets, liabilities (including all reserves)
and financial position of the Parent as of the respective dates thereof and the
results of operations and changes in cash flows for the periods then ended.
Parent's Financial Statements have been audited (in the case of year-end
financial statements) and reviewed (in the case of interim financial
statements), by LL Bradford & Co. At the respective dates of the Parent's
financial statements, there were no liabilities of Parent and its subsidiaries,
taken as a whole, which, in accordance with generally accepted accounting
principles, should have been shown or reflected in the Parent's financial
statements or the notes thereto, which are not shown or reflected in the
Parent's financial statements or notes thereto.
6.9 No Brokers. Neither the Parent nor any of its officers, directors,
employees, shareholders or affiliates has employed or made any agreement with
any broker, finder or similar agent or any person or firm which will result in
the obligation of Company or any of its affiliates to pay any finder's fee,
brokerage fees or commission or similar payment in connection with the
transactions contemplated hereby.
ARTICLE VII.
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligations of the Company to consummate the transactions provided for
hereby are subject, in the discretion of the Company, to the satisfaction, on or
prior to the Closing Date, of each of the following conditions, any of which may
be waived by the Company:
7.1 Representations, Warranties and Covenants. All representations and
warranties of Parent and Sub contained in this Agreement shall be true and
correct in all material respects at and as of the date of this Agreement and at
and as of the Closing Date, except to the extent expressly required or permitted
to be changed by the terms hereof, and Parent and Sub shall have performed and
satisfied all agreements and covenants required hereby to be performed by them
prior to or on the Closing Date.
7.2 No Proceedings, Litigation or Laws. No Action by any governmental
authority or other person shall have been instituted or threatened against
Parent, Sub, the Company, or the Shareholders which questions the validity or
legality of the transactions contemplated hereby and which, in the reasonable
opinion of the Company, makes it inadvisable to consummate such transaction.
Page 21
7.3 Certificates. Parent and Sub shall furnish the Company with such
certificates of their officers and others to evidence compliance with the
conditions set forth in this Article VII as may be reasonably requested by the
Company.
7.4 Corporate Documents. The Company shall have received from Parent
and Sub a certificate of a duly authorized officer of each of Parent and Sub,
dated the Closing Date, setting forth resolutions adopted by the Boards of
Directors of Parent and Sub authorizing the execution and delivery of this
Agreement, and the consummation of the transactions contemplated hereby, and
certifying that such resolutions were duly adopted and have not been rescinded
as of the Closing Date.
7.5 Exchange Listing. The Parent Shares to be issued as Merger
Consideration shall have been authorized for listing on the American Stock
Exchange, subject to official notice of issuance.
7.6 No Adverse Change. Since December 31, 2004, there has not been any
change in the assets, liabilities, financial condition or operating results of
Parent from that reflected in Parent's consolidated financial statements
attached to its quarterly report on Form 10-QSB dated as of December 31, 2004
("Parent's Financial Statements"), except changes in the ordinary course of
business that have not had, in the aggregate, a Material Adverse Effect.
7.7 SEC Reports. Parent has timely filed all required reports,
statements and documents with the Securities Exchange Commission (the
"Commission"), all of which have complied in all material respects with all
applicable requirements of the Securities Act and the Exchange Act. Parent has
made available to the Company true and complete copies of all forms, reports,
statements and documents filed with the Commission and all reports, statements
and other information provided by Parent to its stockholders (collectively, the
"Parent Reports"). As of their respective dates, the Parent Reports did not
contain any untrue statement of any material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
ARTICLE VIII.
CONDITIONS TO PARENT'S AND SUB'S OBLIGATIONS
The obligations of Parent and Sub to consummate the transactions
provided for hereby are subject, in the discretion of Parent, to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived by Parent and Sub.
8.1 Representations, Warranties and Covenants. All representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects at and as of the date of this Agreement and at and as
of the Closing Date, except to the extent expressly required or permitted to be
changed by the terms hereof, and the Company shall have performed and satisfied
Page 22
all agreements and covenants required hereby to be performed by them prior to or
on the Closing Date.
8.2 No Proceedings or Litigation. No Action by any governmental
authority or other person shall have been instituted or threatened against
Parent, Sub, or the Company which questions the validity or legality of the
transactions contemplated hereby and which, in the reasonable opinion of the
Parent and Sub, makes it inadvisable to consummate such transaction.
8.3 Certificates. The Company shall furnish Parent and Sub with such
certificates of its officers and others to evidence compliance with the
conditions set forth in this Article VIII as may be reasonably requested by
Parent and Sub.
8.4 Material Changes. There shall not have been any Material Adverse
Change with respect to the Business or the Company since the date of this
Agreement.
8.5 Corporate Documents. Parent and Sub shall have received a
certificate of a duly authorized officer of the Company, dated the Closing Date,
setting forth resolutions of the Board of Directors of the Company authorizing
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and certifying that such resolutions were duly
adopted and have not been rescinded or amended as of the Closing Date.
8.6 Approval of the Shareholders. This Agreement and the Merger
Proposal shall have been approved and adopted by the Shareholders, including the
separate vote of the Series A and Series B Preferred Stock, as set forth in
Sections 2.7 and 5.26. Further, no more than five percent of the Shareholders
shall have notified the Company of their appraisal rights in accordance with
Section 262 of the DCGL.
ARTICLE IX.
ACTIONS BY PARTIES AFTER THE CLOSING
9.1 Registration of Parent Shares.
(a) By no later than July 30, 2005, Parent shall prepare and
file with the Securities and Exchange Commission a registration statement on
Form S-3 (the "S-3") containing a form of prospectus (as amended or
supplemented, if applicable) registering under the Securities Act of 1933, as
amended, the Initial Stock Consideration issued to the Shareholders on the
Effective Date. If and when the registration statement does become effective,
the Shareholders may sell, on a pro rata basis, an amount of shares not to
exceed the daily average trading volume of Parent's common stock in the prior
month, per week. However, this trading restriction will not apply to any
Shareholder who holds less than one thousand (1,000) shares of Parent's common
stock; for purposes of this calculation, a Shareholder shall include the
Shareholder and all of its affiliates.
Page 23
(b) With respect to the Form S-3 filed by Parent hereunder,
Parent shall use its reasonable best efforts to cause such registration
statement to become effective as soon as practicable after filing, and to keep
the S-3 effective for so long as Shareholders continue to hold Parent Shares.
The S-3 and the prospectus included therein shall be made available to
Shareholders through the website at url, xxx.xxxxxxxx.xxx. Parent does not need
to register or qualify the Parent Shares covered by such S-3 under such
securities or Blue Sky laws of any jurisdictions within the United States
because Parent is listed on the American Stock Exchange, and its common stock is
listed for trading. Furthermore, Parent shall not be required to (i) qualify
generally to do business in any jurisdiction where, but for the requirements of
this Section 9.1(b), it would not be obligated to be so qualified, (ii) subject
itself to taxation in any such jurisdiction, or (iii) consent to general service
of process in any such jurisdiction. All expenses incident to Parent's
performance of its obligations under this Section 9.1, including without
limitation all registration and filing fees, fees, including expenses of counsel
for Parent and of Parent's independent certified public accountants shall be
borne by Parent.
(c) Indemnification by Parent. Parent and Surviving Company
shall jointly and severally indemnify, to the full extent permitted by law, each
Shareholder and its officers, directors and constituent partners and each person
who controls such Shareholder (within the meaning of the Securities Act and the
Exchange Act) against all losses, claims, damages, liabilities and expenses (or
actions in respect thereof) arising out of or based upon any untrue or alleged
untrue statement of a material fact contained in any registration statement,
prospectus or preliminary prospectus relating to the registration of such
Shareholder's Parent Shares or any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are made in
conformity with any information furnished in writing to Parent by or on behalf
of such Shareholder or other indemnified person expressly for use therein or
caused by such Shareholder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after Parent
has furnished such Shareholder with a sufficient number of copies of the same or
by the breach by any indemnified person of any of its obligations under this
Section 9.1. Subject to the provisions of Section 9.1(f), Parent will reimburse
each Shareholder and its officers, directors, constituent partners and
controlling persons for any reasonable legal and other expenses as incurred in
connection with investigating or defending any such losses, claims, damages,
liabilities, expenses or actions for which such person is entitled to
indemnification hereunder. In connection with an underwritten offering, Parent
will indemnify the underwriters and their officers, directors, constituent
partners and each person who controls such underwriters (within the meaning of
the Securities Act and the Exchange Act) to the same extent as provided above
with respect to the indemnification of the Shareholders.
(d) Indemnification by Shareholders. Each Shareholder agrees
to indemnify, to the full extent permitted by law, Parent and Surviving Company
and their directors and officers, each person who controls Parent or Surviving
Company (within the meaning of the Securities
Page 24
Act and the Exchange Act) and all other prospective sellers and their respective
directors, officers, constituent partners and controlling persons (within the
meaning of the Securities Act and the Exchange Act) against all losses, claims,
damages, liabilities and expenses (or actions in respect thereof) arising out of
or based upon any untrue or alleged untrue statement of a material fact
contained in any registration statement, prospectus or preliminary prospectus
relating to the registration of such Shareholder's Parent Shares or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, to the
extent that such untrue statement or omission or alleged untrue statement or
omission is made in conformity with any written information or affidavit
furnished by or on behalf of such Shareholder for such registration statement,
prospectus or preliminary prospectus and then only to the extent of the total
proceeds received by such Shareholder. Subject to the provisions of Section
9.1(f), the Shareholders will reimburse, to the extent of the total proceeds
received by such Shareholders, Parent, its officers, directors and controlling
persons and all other prospective sellers and their respective directors,
officers and controlling persons for any reasonable legal and other expenses as
incurred in connection with investigating or defending any such losses, claims,
damages, liabilities, expenses or actions. In connection with an underwritten
offering, each Shareholder will indemnify the underwriters and officers,
directors, constituent partners and each person who controls such underwriters
(within the meaning of the Securities Act and the Exchange Act) to the same
extent as provided above with respect to the indemnification of Parent and
Surviving Company.
(e) Conduct of Indemnification Proceedings. Any person
entitled to indemnification under this Section 9.1 will (i) give prompt notice
to the indemnifying party of any claim with respect to which it seeks
indemnification (but omission of such notice shall not relieve the indemnifying
party from liability hereunder except to the extent such indemnifying party is
actually prejudiced by such failure to give notice), and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest may exist between
the indemnified and indemnifying parties with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If the indemnifying party so assumes the
defense of such claim, after notice from the indemnifying party to the
indemnified party of its election to so assume the defense thereof, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses subsequently incurred by the indemnified party in connection with
the defense of such claim. If such defense is not assumed by the indemnifying
party, the indemnifying party will not be subject to any liability for any
settlement made without its consent (but such consent will not be unreasonably
withheld). No indemnifying party will consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of an
unconditional release of all indemnified parties from all liability with respect
to such claim or litigation. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim (i) will not be obligated to pay
the fees and expenses of more than one counsel for all parties indemnified by
such indemnifying party with respect to
Page 25
such claim, and (ii) shall be entitled to participate in (at its own cost and
expense), but not control, the defense of such claim.
(f) Contribution. If the indemnification provided for in
Section 9.1(c) or Section 9.1(d) is unavailable or insufficient to hold harmless
each of the indemnified parties against any losses, claims, damages, liabilities
and expenses (or actions in respect thereof) referred to therein, then the
indemnifying party shall, in lieu of indemnifying each party entitled to
indemnification hereunder, contribute to the amount paid or payable by such
party as a result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified parties on the other in
connection with the statements or omissions or alleged statements or omissions
that resulted in such losses, claims, damages, liabilities or expenses. The
relative fault of such persons shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact, or
omission or alleged omission to state a material fact, relates to information
supplied by or concerning the indemnifying party on the one hand, or by such
indemnified person on the other, and such person's relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9.1(f) were determined by pro rata
allocation or by any other allocation that does not take into account the
equitable considerations referred to in this Section 9.1(f). No person guilty of
fraudulent misrepresentation within the meaning of the Securities Act shall be
entitled to contribution from any person that is not guilty of such fraudulent
misrepresentation.
9.2 Parent Services. Parent will use commercially reasonable efforts to
extend to the Surviving Corporation, for the benefit of the Surviving
Corporation, non-monetary contributions in the form of sales, marketing,
engineering and technical support services (including personnel) to assist the
Surviving Corporation during any Year Period (the "Parent Services").
9.3 Survival of Representations, Etc. All statements contained in the
Disclosure Schedule or in any certificate, schedule, exhibit or instrument or
conveyance delivered by or on behalf of the parties pursuant to this Agreement
or in connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the parties hereunder. The representations,
warranties, covenants and agreements of the Company, Parent, Shareholders and
Sub contained herein shall survive the consummation of the transactions
contemplated hereby and the Closing Date, without regard to any investigation
made by any of the parties hereto. Except as provided in this sentence, all such
representations and warranties and all claims and causes of action with respect
thereto (other than the provisions of Sections 5.6 and 5.22 and this Section
9.3, and all claims and causes of action with respect thereto) shall terminate
upon expiration of two (2) years after the Closing Date ("Expiration Date"). The
representations and warranties in Sections 5.6 and 5.22 shall survive until the
expiration of the applicable statute of limitations (with extensions) with
respect to the matters addressed in such sections. The representations and
warranties in Sections 5.2 shall survive indefinitely. The termination of the
representations and warranties provided herein shall not
Page 26
affect the rights of a party in respect of any Claim made by such party in a
writing received by the other party prior to the expiration of the applicable
survival period provided herein.
9.4 Indemnifications; Set Off Rights.
(a) Indemnification By Parent and Sub. Parent and Sub, jointly
and severally, shall indemnify and save and hold harmless the Company and each
of their affiliates and subsidiaries, and their respective representatives from
and against any and all Damages incurred in connection with, arising out of,
resulting from or incident to (1) any breach of any representation or warranty
or the inaccuracy of any representation, made by Parent or Sub in or pursuant to
this Agreement, or (2) any breach of any covenant or agreement made by Parent or
Sub in or pursuant to this Agreement; provided, however, that the Company makes
a written claim for indemnification against Parent or Sub within the applicable
survival period.
Page 27
(b) Damages. The term "Damages" as used in this Section 9.4 is
not limited to matters asserted by third parties against the Company, the
Shareholders, Parent or Sub, but includes Damages incurred or sustained by the
Company, the Shareholders, Parent or Sub in the absence of third party claims.
Payments by Parent or Sub of amounts for which Parent or Sub is indemnified or
has a Right of Offset hereunder, and payments by the Company of amounts for
which the Company is indemnified, shall not be a condition precedent to
recovery. . The Company's or the Shareholder's obligation to indemnify Parent or
Sub, and Parent's or Sub' obligation to indemnify the Company or the Shareholder
shall not limit any other rights, including without limitation rights of
contribution which any such party may have under statute or common law.
(c) Cooperation. The indemnified party shall cooperate in all
reasonable respects with the indemnifying party and the attorneys defending the
indemnification claims in the investigation, trial and defense of such lawsuit
or action and any appeal arising therefrom; provided, however, that the
Indemnified Party may, at its own cost, participate in the investigation, trial
and defense of such lawsuit or action and any appeal arising therefrom. The
parties shall cooperate with each other in any notifications to insurers.
(d) Defense of Claims. If a claim for Damages (a "Claim") is
made by a party entitled to Indemnification or Set Off Rights hereunder against
the Indemnifying Party, the party claiming such indemnification or Set Off
Rights shall give written notice (a "Claim Notice") to the other Party (the
("Indemnifying Party") as soon as practicable after the party entitled to
indemnification or Set Off Rights (the "Indemnified Party") becomes aware of any
fact, condition or event which may give rise to Damages for which
indemnification or Set Off Rights may be sought under this Section 9.4. If any
lawsuit or enforcement action is filed against any party entitled to the benefit
of indemnity or Set Off Rights hereunder, the Claim Notice thereof shall be
given to the Indemnifying Party as promptly as practicable (and in any event
within thirty (30) calendar days after the service of the citation or summons).
After such notice, if the Indemnifying Party shall acknowledge in writing to the
Indemnified Party that the Indemnifying Party shall be obligated under the terms
of its indemnity or Set Off Rights hereunder in connection with such lawsuit or
action, then the Indemnifying Party shall be entitled, if it so elects, (1) to
take control of the defense and investigation of such lawsuit or action, (2) to
employ and engage attorneys of its own choice to handle and defend the same, at
the Indemnifying Party's cost, risk and expense unless the named parties to such
action or proceeding include both the Indemnifying Party and the Indemnified
Party and the Indemnified Party has been advised in writing by counsel that
there may be one or more legal defenses available to such Indemnified Party that
are different from or additional to those available to the Indemnifying Party,
and (3) to compromise or settle such claim, which compromise or settlement shall
be made only with the written consent of the Indemnified Party, such consent not
to be unreasonably withheld. If the Indemnifying Party fails to assume the
defense of such claim within fifteen (15) calendar days after receipt of the
Claim Notice, the Indemnified Party against which such claim has been asserted
will (upon delivering notice to such effect to the Indemnifying Party) have the
right to
Page 28
undertake, at the Indemnifying Party's cost and expense, the defense, compromise
or settlement of such claim on behalf of and for the account and risk of the
Indemnifying Party. In the event the Indemnified Party assumes the defense of
the claim, the Indemnified Party will keep the Indemnifying Party reasonably
informed of the progress of any such defense, compromise or settlement. The
Indemnifying Party shall be liable for any settlement of any action effected
pursuant to and in accordance with this Section 9.4 and for any final judgment
(subject to any right of appeal), and the Indemnifying Party agrees to indemnify
and hold harmless an Indemnified Party from and against any Damages by reason of
such settlement or judgment.
(e) Parent's Right of Offset. Anything in this Agreement to
the contrary notwithstanding, Parent may withhold and set off against any Merger
Consideration (including, but not limited to, ten percent (10%) of the Initial
Stock Consideration that shall be withheld in an escrow account at the Effective
Date) otherwise due to the Shareholders, any amounts as to which the
Shareholders are obligated to indemnify or pay to Parent, Sub or a third party
pursuant to any provision of this Agreement (the "Set Off Rights" or "Right of
Offset").
(f) Product and Warranty Liability. The provisions of this
Section 9.4 shall cover, without limitation, all obligations and liabilities of
whatsoever kind, nature or description relating, directly or indirectly, to
product liability, litigation or claims against Parent, Sub or the Surviving
Corporation in connection with, arising out of, or relating to products
developed or sold by Parent, Sub or the Surviving Corporation in connection with
the Business.
(g) Value of Parent Shares. In calculating the amount of
Parent Shares which Parent may withhold and set off against under Section 9.4
hereof, the value of one Parent Share shall be deemed to be equal to the average
closing price per share that Parent's Common Stock is traded on the American
Stock Exchange, or any other established stock exchange, automated quotation
system or bulletin board, for the thirty consecutive market trading days ending
on the date on which the Claim Notice is delivered.
9.5 Patents. If Parent or the Surviving Company decide not to
pay maintenance fees or to otherwise constructively dispose of the patents of
the Company as set forth in Schedule 9.5 (the "Patents"), Parent and Sub hereby
grant Xxx Xxxxxx a Right of First Refusal to assume ownership of the Patents.
ARTICLE X.
MISCELLANEOUS
10.1 Termination.
(a) Termination. This Agreement may be terminated at any time
prior to Closing:
(i) By mutual written consent of Parent, Sub, and the
Company;
Page 29
(ii) By Parent, Sub, or the Company: (i) if the
Merger shall not have been consummated on or before March 31,
2005, provided that the right to terminate this Agreement
pursuant to this clause (a) (ii) shall not be available to any
party whose failure to perform any of its obligations under
this Agreement resulted in, or has been the cause of a or a
substantial cause of, the failure of the Merger to be
consummated on or before such date, and provider further that
if the Merger has not been consummated on or before March 31,
2005 solely or primarily as a result of the failure of the
conditions set forth in Sections 7.2 or 8.2 to be satisfied or
waived, any party, by written notice to each other party, may
extend such date up to April 10, 2005;
(iii) By Parent or Sub if there is a material breach
of any representation or warranty set forth in Articles V
hereof or any covenant or agreement to be complied with or
performed by the Company pursuant to the terms of this
Agreement or the material failure of a condition set forth in
Article VIII to be satisfied (and such condition is not waived
in writing by Parent or Sub) on or prior to the Closing Date,
or the occurrence of any event which results or would result
in the failure of a condition set forth in Article VIII to be
satisfied on or prior to the Closing Date, provided that
Parent or Sub may not terminate this Agreement prior to the
Closing Date if the Company or the Shareholders have not had
an adequate opportunity to cure such failure; or
(iv) By the Company if there is a material breach of
any representation or warranty set forth in Article VI hereof
or of any covenant or agreement to be complied with or
performed by Parent or Sub pursuant to the terms of this
Agreement or the failure of a condition set forth in Article
VII to be satisfied or the occurrence of a Material Adverse
Effect upon Parent or Sub (and such condition is not waived in
writing by the Company or the Shareholders) on or prior to the
Closing Date, or the occurrence of any event which results or
would result in the failure of a condition set forth in
Article VII to be satisfied on or prior to the Closing Date;
provided that, the Company and the Shareholders may not
terminate this Agreement prior to the Closing Date if Parent
or Sub has not had an adequate opportunity to cure such
failure; or
(v) By Parent or Sub if the holders of more than five
percent (5%) of the issued and outstanding Company Shares
exercise their right to dissent to the Merger in accordance
with Section 262 of the DGCL.
(b) In the Event of Termination. In the event of termination
of this Agreement:
(i) Each party will redeliver all documents, work
papers and other material of any other party relating to the
transactions contemplated hereby, whether so obtained before
or after the execution hereof, to the party furnishing the
same;
(ii) The provisions of the Mutual Non-Disclosure
Agreement (the "Mutual Non-Disclosure Agreement"), dated as of
____________, by and between Parent and the Company shall
continue in full force and effect; and
Page 30
(iii) No party hereto shall have any liability or
further obligation to any other party to this Agreement,
except as stated in subsections (i), (ii) and (iii) of this
Section 10.1(b), except for any willful breach of this
Agreement occurring prior to the proper termination of this
Agreement. The foregoing provisions shall not limit or
restrict the availability of specific performance or other
injunctive relief to the extent that specific performance or
such other relief would otherwise be available to a party
hereunder.
10.2 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party without the prior written
consent of the other parties. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and no other person shall have any right,
benefit or obligation under this Agreement as a third party beneficiary or
otherwise.
10.3 Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to:
If to the Company before the Effective Time, addressed to:
Expand Beyond Corporation
Facsimile:
With a copy to:
Facsimile:
If to Parent or Sub at any time or the Surviving Corporation, addressed
to:
Semotus Solutions, Inc.
00000 Xxxx Xxx., Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Facsimile: (000)-000-0000
Page 31
With a copy to:
Xxxxx Xxxxxx
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
10.4 Choice of Law. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws of the State of
California (without reference to the choice of law provisions of California
law), except with respect to matters of law concerning the internal corporate
affairs of any corporate entity which is a party to or the subject of this
Agreement, and as to those matters the law of the jurisdiction under which the
respective entity derives its powers shall govern.
10.5 Entire Agreement; Amendments and Waivers. This Agreement, the
Mutual Non-Disclosure Agreement and the Employment Agreement, together with all
exhibits and schedules hereto and thereto (including the Disclosure Schedule)
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto. No amendment, supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided. Notwithstanding the foregoing, if, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Sub, the officers and directors of the
Company, Parent and Sub will take all such lawful and necessary action so long
as such action is consistent with this Agreement.
10.6 Multiple Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The parties hereby agree
that signatures transmitted and received via facsimile or other electronic means
shall be treated for all purposes of this Agreement as original signatures and
shall be deemed valid, binding and enforceable by and against both parties.
Page 32
10.7 . Expenses. Except as otherwise specified in this Agreement, each
party hereto shall pay its own legal, accounting, out-of-pocket and other
expenses incident to this Agreement and to any action taken by such party in
preparation for carrying this Agreement into effect.
10.8 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
10.9 Titles. The titles, captions or headings of the Articles and
Sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
10.10 Cumulative Remedies. All rights and remedies of either party
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.
10.11 Attorneys' Fees. If any party to this Agreement brings an action
to enforce its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees, incurred in connection with such action, including
any appeal of such action.
10.12 No Third Party Beneficiary. Except as provided in this Section
10.11, nothing express or implied in this Agreement is intended, or shall be
construed, to confirm upon or give any person or entity other than the parties
hereto and the respective successors, assigns or representatives, as applicable,
any rights or remedies under or by reason of this Agreement; provided, however,
that the Shareholders shall be entitled to the rights provided to them under
this Agreement.
Page 33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their respective behalf, by their respective officers thereunto
duly authorized, all as of the day and year first above written.
PARENT:
SEMOTUS SOLUTIONS, INC.
By: /s/ Xxxxxxx X. XxXxxx
---------------------------------
Name: Xxxxxxx X. XxXxxx
Its: President and CEO
SUB:
SEMOTUS ACQUISITION CORP.
By: /s/ Xxxxxxx X. XxXxxx
---------------------------------
Name: Xxxxxxx X. XxXxxx
Its: President and CEO
COMPANY:
EXPAND BEYOND CORPORATION
By: /s/ Xxx Xxxxxx
---------------------------------
Name: Xxx Xxxxxx
Its: CEO
EXHIBIT 2.2
-----------
MERGER CERTIFICATE
DISCLOSURE SCHEDULES
--------------------
