Exhibit 2.4
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT FOR SHARE EXCHANGE (this "Agreement") is dated as of the 5th
day of May 2008, by and among Merci Inc., a Delaware corporation ("Merci"), and
X.X. Xxxxxxxx Inc., a New York corporation ("Xxxxxxxx"), and Xxxxxxxx Xxxxxx the
sole shareholder of Xxxxxxxx (the "Shareholder") (collectively referred to as
the "Parties").
RECITALS
WHEREAS, Merci and Xxxxxxxx desire to complete a share exchange transaction
pursuant to which Merci shall acquire all of the issued and outstanding common
stock of Xxxxxxxx in exchange for the issuance of 13,238,200 shares of
restricted common stock of Merci to the Shareholder; and
WHEREAS, the Board of Directors of Merci and the Board of Directors of
Xxxxxxxx have each approved the proposed transaction, contingent upon
satisfaction prior to closing of all of the terms and conditions of this
Agreement; and
WHEREAS, the Shareholder is the owner of all of the issued and outstanding
common stock of Xxxxxxxx; and
WHEREAS, the Parties desire to make certain representations, warranties and
agreements in connection with completion of the proposed share exchange
transaction.
NOW, THEREFORE, in consideration of the foregoing recitals, which shall be
considered an integral part of this Agreement, and the covenants, conditions,
representations and warranties hereinafter set forth, the Parties hereby agree
as follows:
1. THE EXCHANGE. At the Closing (as hereinafter defined), Merci shall acquire
all of the issued and outstanding common stock of Xxxxxxxx from the Shareholder.
The consideration to be issued by Merci shall be a total of 13,238,200
restricted shares of its common stock (the "Merci Shares") in exchange for
116.35 shares of Xxxxxxxx (the "Xxxxxxxx Shares") which constitutes 100% of the
issued and outstanding common stock of Xxxxxxxx (the "Exchange"). The Exchange
shall take place upon the terms and conditions provided for in this Agreement
and in accordance with applicable law. Immediately following completion of the
Exchange through issuance of the Merci Shares, Merci shall have a total of
approximately 16,547,750 shares of its common stock issued and outstanding.
2. CLOSING. The Closing of the transactions contemplated by this Agreement
("Closing") shall take place at 1:00 P.M. on or before July 31, 2008 at 000
Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000, or such other place and date as the
parties hereto shall agree upon. At the Closing, the Merci Shares shall be
delivered to Sellers and the Xxxxxxxx Shares shall be delivered to Merci duly
endorsed for transfer and all other documents and items referred to herein in
order to consummate the transaction shall be exchanged.
3. REPRESENTATIONS AND WARRANTIES OF XXXXXXXX AND SELLERS. In order to induce
Merci to enter into the Agreement and to complete the transaction contemplated
hereby, Xxxxxxxx and each Seller severally represent and warrant to Merci that,
except as otherwise set forth herein or in any schedule annexed hereto:
(a) ORGANIZATION AND STANDING. Xxxxxxxx is a corporation duly organized,
validly existing and in good standing under the laws of New York, is
qualified to do business as a foreign corporation in every
jurisdiction in which it is required to be so qualified, except where
the failure to so qualify would not have a material adverse effect on
Xxxxxxxx, and has full corporate power and authority to carry on its
business as now conducted and to own its properties. Xxxxxxxx'x
Articles of Incorporation and By-Laws previously delivered to Merci
are true and correct copies
(b) CAPITALIZATION. The entire registered capital of Xxxxxxxx consists of
200 shares of common stock or units of ownership of which 116.35
shares or units are issued and outstanding. All of the issued and
outstanding Target Shares have been duly authorized and are validly
issued, fully paid, and nonassessable. Except as provided by this
Agreement, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require Xxxxxxxx
to issue, sell, or otherwise cause to become outstanding any of its
capital stock.
(c) OWNERSHIP OF XXXXXXXX SHARES. Seller owns beneficially all of the
Xxxxxxxx Shares free and clear of any restrictions on transfer, taxes,
security interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. The Seller is not a party
to any option, warrant, purchase right, or other contract or
commitment that could require Seller to sell, transfer, or otherwise
dispose of any capital stock of Xxxxxxxx (other than this Agreement)
and Seller has the unqualified right to sell, assign, and deliver the
shares to Merci.
(d) TAXES. Except as set forth on Schedule 3D, annexed hereto, Xxxxxxxx
has filed all Federal and State income or other tax returns and
reports that, to its knowledge it is required to file with all
Federal, State, or U.S. governmental agencies, and has, to its
knowledge, paid or accrued for payment all taxes as shown on such
returns, such that a failure to file, pay or accrue will not have a
material adverse effect on Xxxxxxxx.
(e) PENDING ACTIONS. Except as described in Schedule 3E annexed hereto,
there are no legal actions, lawsuits, proceedings or investigations,
either administrative or judicial, pending or to the knowledge of the
Seller or Xxxxxxxx threatened against Xxxxxxxx, or against the Seller
that arise out of their operation of Xxxxxxxx, which if decided
adversely to Xxxxxxxx or the Seller, would have a material adverse
effect on Xxxxxxxx.
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(f) GOVERNMENTAL REGULATION. To the knowledge of Xxxxxxxx and the Seller,
Xxxxxxxx is not knowingly in violation of any law, material ordinance
or regulation to which it is subject, the violation of which would
have a material adverse effect on Xxxxxxxx.
(g) NO DEBT OWED BY XXXXXXXX TO SELLER. Except for salary and benefits
accrued in the ordinary course of business and consistent with
Xxxxxxxx'x past practices, Xxxxxxxx does not owe any money,
securities, or property to Seller or any member of his immediate
family or to any company controlled by such a person, directly or
indirectly.
(h) AUTHORIZATION OF TRANSACTION. Xxxxxxxx has full corporate power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of Xxxxxxxx, enforceable in accordance with
its terms and conditions. Xxxxxxxx need not give any notice to make
any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(i) NON-CONTRAVENTION. Neither the execution and the delivery of this
Agreement nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which
Xxxxxxxx is subject or any provision of its charter or bylaws or (B)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under
any agreement, contract, lease, license, instrument, or other
arrangement to which Xxxxxxxx is a party or by which it is bound or to
which any of its assets is subject.
4. REPRESENTATIONS AND WARRANTIES OF MERCI. In order to induce the Seller and
Xxxxxxxx to enter into the Agreement and to complete the transaction
contemplated hereby, Merci represents and warrants to Xxxxxxxx and Sellers that:
(a) ORGANIZATION AND STANDING. Merci is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, is qualified to do business as a corporation in every
jurisdiction in which such qualification is required, and has full
power and authority to carry on its business as now conducted and to
own and operate its assets, properties and business.
(b) CAPITALIZATION. As of the date hereof, and as of the Closing Date, the
entire authorized capital stock of Merci consists of 25,000,000 shares
of Common Stock, par value $.001 per share and 5,000,000 shares of
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Preferred Stock par value $.001 per share, of which 2,647,640 shares
of Common Stock are issued and outstanding and no shares of Preferred
Stock are issues and outstanding. All of the issued and outstanding
shares of Merci's common stock have been duly authorized and are
validly issued, fully paid, and nonassessable and have been issued
free of preemptive rights of any security holder. Except as provided
by this Agreement, there are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require
Merci to issue, sell, or otherwise cause to become outstanding any of
its capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights
with respect to Merci.
(c) AUTHORIZATION OF TRANSACTION. Merci has full corporate power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of Merci, enforceable in accordance with
its terms and conditions. Merci need not give any notice to, make any
filings with, or obtain any authorization, consent, or approval of any
government or governmental agency, in order to consummate the
transactions contemplated by this Agreement, other than (i) filings
that may be required or permitted under states securities law, the Act
and/or the Exchange Act resulting from the issuance of the Merci
Shares, and; ii) the filing of a Certificate of Amendment (the
"Amendment") to its Articles of Incorporation reflecting the change in
authorized capital as set forth in 4(b), above.
(d) NON-CONTRAVENTION. Neither the execution and the delivery of this
Agreement nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which
Merci is subject or any provision of its charter or bylaws or (B)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under
any agreement, contract, lease, license, instrument, or other
arrangement to which Merci is a party or by which it is bound or to
which any of its assets is subject.
(e) OWNERSHIP OF SHARES. The Merci Shares have been duly authorized and,
when issued pursuant to the Agreement, will have been validly issued,
fully paid and non-assessable, with no personal liability attaching to
the holders of such shares, free of preemptive rights of any security
holder and, free and clear of all liens, encumbrances and restrictions
of any nature whatsoever, except by reason of the fact that such Merci
Shares will not have been registered under the Act and state
securities laws.
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(f) MATERIAL AGREEMENTS. Merci is not a party to or bound by any:
(i) employment, advisory or consulting contract;
(ii) plan providing for employee benefits of any nature;
(iii) lease with respect to any property or equipment;
(iv) contract, agreement, understanding or commitment for any future
expenditure in excess of $1,000 in the aggregate;
(v) contract or commitment pursuant to which it has assumed,
guaranteed, endorsed, or otherwise become liable for any
obligation of any other person, firm or organization;
(vi) agreement with any person relating to the dividend, purchase or
sale of securities, that has not been settled by the delivery or
payment of securities when due, and which remains unsettled upon
the date of the Agreement.
(g) TAXES. Merci has filed all federal, state and local income or other
tax returns and reports that it is required to file with all
governmental agencies, wherever situate, and has paid all taxes as
shown on such returns. All of such returns are true and complete.
(h) ABSENCE OF LIABILITIES. As of the Closing date, Merci will have no
liabilities (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated and whether due or to become due, including
any liability for taxes, except for the costs, including legal and
accounting fees and other expenses, in connection with this
transaction for which Merci agrees to be responsible.
(i) NO PENDING ACTIONS. There are no legal actions, lawsuits, proceedings
or investigations, either administrative or judicial, pending or
threatened, against or affecting Merci, or against any of Merci's
officers or directors and arising out of their operation of business.
Merci has been in compliance with, and has not received notice of
violation of any law, ordinance or regulation of any kind whatever,
including, but not limited to, the Act, the Securities Exchange Act of
1934, as amended, (the "Exchange Act") the rules and regulations of
the SEC, or the securities laws and regulations of any state. Merci is
not an "investment company" as such term is defined by the Investment
Company Act of 1940, as amended.
(j) CORPORATE RECORDS. All of Merci's books and records, including,
without limitation, its books of account, corporate records, minute
book, stock certificate books and other records are up-to-date,
complete and reflect accurately and fairly the conduct of its business
in all respects since its date of incorporation.
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(k) FILINGS WITH THE SEC; FINANCIAL STATEMENTS. Merci has or by the time
of the closing hereunder will have made all filings with the SEC that
it has been required to make under the Act and the Exchange Act (such
reports, together with Merci's Registration Statement on Form 10-SB,
as amended from time to time, are hereinafter collectively referred to
as the "PUBLIC REPORTS"). Each of the Public Reports has complied or
will comply with the Act and the Exchange Act, as the case may be, in
all material respects. None of the Public Reports, as of their
respective dates, contained or will contain any untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Merci's Form 10-SB, at the
time it became effective under the Exchange Act, did not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading. The
financial statements (including the notes thereto) included in the
Public Reports have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and present
fairly the financial condition of Merci as of such dates and the
results of operations of Merci for such periods; PROVIDED, HOWEVER,
that the financial statements for all interim periods are subject to
normal year-end adjustments and lack footnotes and other presentation
items.
(l) Access to Information; Speculative Investment. Merci has had a full
opportunity to request from Xxxxxxxx and review, and has received all
information which it deems relevant in making a decision to acquire
the Target Shares to be acquired by it hereunder.
5. TERM. All representations and warranties made herein and in the exhibits
attached hereto shall survive the execution and delivery of the Agreement for
the three months period following the date hereof.
6. COVENANTS.
(a) Merci and Xxxxxxxx agree that, between the date of this Agreement and
the Closing, except as contemplated by any other provisions of this
Agreement, unless the other shall otherwise agree in writing, which
agreement shall not be unreasonably withheld or delayed, the business
of Merci and Xxxxxxxx shall be conducted only in the ordinary course
of business consistent with past practice. By way of amplification and
not limitation, except as set forth herein, Merci and Xxxxxxxx shall
not, between the date of this Agreement and the Closing, directly or
indirectly, do, or agree to do, any of the following:
(i) issuance, sell, pledge, dispose of, grant, transfer, or authorize
the issuance, sale, pledge, disposition, grant, transfer or
encumbrance of, any shares of its capital stock or securities
convertible or exchangeable or exercisable for any shares of such
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capital stock, or any options, warrants or other rights of any
kind to acquire any shares of such capital stock, or any other
ownership interest (including, without limitations, any phantom
interest) of such entity; and
(ii) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock.
(b) Each of Merci and Xxxxxxxx shall give prompt notice the other of (i)
any notice or other communication from any person alleging that the
consent of such person is or may be required in connection with the
transactions contemplated by this Agreement, (ii) any notice or other
communication from any governmental entity or any person in connection
with the transactions contemplated by this Agreement, (iii) any
actions, suits, claims, investigations or proceedings commenced or, to
the best of its knowledge, threatened in writing against, relating to
or involving or otherwise affecting Merci or Xxxxxxxx; and (iv) any
inaccuracy in or inability to perform such representations,
warranties, or covenants. No such notice shall be deemed to constitute
a cure of any breach or representation, warranty, covenant or
agreement.
(c) Merci will make all filings (collectively the "Future SEC Reports")
with the SEC that is required to make between the date of this
Agreement and the Closing Date under the Act and the Exchange Act.
Each of the Future SEC Reports will comply with the requirements of
the Act and the Exchange Act, as the case may be, in all material
respects.
(d) Merci and Xxxxxxxx shall use all reasonable efforts to (i) take, or
cause to be taken, all appropriate action, and do, or cause to be
done, all things necessary, proper or advisable under applicable law
or otherwise consummate and make effective the transactions
contemplated by this Agreement as promptly as practicable, (ii) obtain
from any governmental entities any consents, licenses, permits,
waivers, approvals, authorizations or orders required to be obtained
or made by Merci or Xxxxxxxx in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein, and (iii)make all necessary filings,
and thereafter make any other required submissions, with respect to
this Agreement and the transaction contemplated hereby required under
(x) the Securities Act and the Exchange Act, and any other applicable
federal or state securities laws, (y) the General Corporation Law of
Delaware and (z) any other applicable law; provided that Merci and
Xxxxxxxx shall cooperate with each other in connection with the making
of all such filings, including providing copies of all such documents
to the non - filing party and its advisors prior to filing and
considering all reasonable additions, deletions or changes suggested
in connection therewith.
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7. CONDITIONS TO CLOSING.
(a) The respective obligations of each party to effect the transactions
contemplated herein shall be subject to the satisfaction at or prior
to the Closing of the following condition, any or all of which be
waived, in whole or in part, to the extent permitted by applicable
law:
(i) No governmental entity or federal or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree,
judgment, injunction or other order (whether temporary,
preliminary or permanent), in any case which is in effect and
which prevents or prohibits consummation of the transactions
contemplated in this which is in effect and which prevents or
prohibits consummation of the transactions contemplated in this
Agreement; provided, however, that the parties shall use their
best efforts to cause any such decree, judgment, injunction or
other order to be vacated or lifted.
(b) The obligations of Xxxxxxxx to effect the transactions contemplated
herein shall be subject to the satisfaction at or prior to the Closing
of the following conditions, any or all of which may be waived, in
whole or in part, to the extent permitted by applicable law:
(i) Each of the representations and warranties of Merci contained in
this Agreement shall be true and correct in all material respects
as of the Closing, except that those representations and
warranties which address matters only as of a particular date
shall remain true and correct in all material respects as of such
date. Xxxxxxxx shall have received a certificate of the principal
executive officer of Merci to such effect.
(ii) Merci shall have performed or complied in all material respects
with all agreements and covenants required by this Agreement to
be performed or complied with by it on or prior to the Closing
including filing of all required reports with the SEC pursuant to
the Exchange Act. Xxxxxxxx shall have received a certificate of
the principal executive officer of Merci to such effect.
(c) The obligations of Merci to effect the transactions contemplated
herein shall be subject to the satisfaction at or prior to the Closing
of the following conditions, any or all of which may be waived, in
whole or in part, to the extent permitted by applicable law:
(i) Each of the representations and warranties of Xxxxxxxx contained
in this Agreement shall be true and correct in all material
respects as of the Closing, except, that those representations
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and warranties which address matters only as of a particular date
shall remain true and correct in all material respects as of such
date. Merci shall each have received a certificate of the
principal executive officer of Xxxxxxxx to such effect.
(ii) Xxxxxxxx shall have performed or complied in all material
respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to
the Closing. Merci shall have received a certificate of the
principal executive officer of Xxxxxxxx to such effect.
8. TERMINATION: AMENDMENT: WAIVER.
(a) This Agreement may be terminated at any time prior to the Closing:
(i) by mutual consent of Merci and Xxxxxxxx;
(ii) by Xxxxxxxx, if there has been a material breach by Merci of any
of its material representations, warranties, covenants or
agreements contained in this Agreement including but not limited
to the filing of the Public Reports;
(iii)by Merci, if there has been a material breach by Xxxxxxxx of any
of its material representations, warranties, covenants or
agreements contained in this Agreement;
(iv) by either Merci or Xxxxxxxx if any decree, permanent injunction,
judgment, order or other action by any court of competent
jurisdiction or any governmental entity preventing or prohibiting
consummation of the transactions contemplate hereby shall have
become final and nonappealable; or
(v) by either Merci or Xxxxxxxx if the transaction contemplated
hereby shall not have been consummated before July 31 2008, if
and only if no willful breach of any representation, warranty or
covenant by the party seeking to terminate is a substantial cause
of the failure of the transactions contemplated hereby to be
consummated by such date.
(b) In the event of the termination of this Agreement by either Merci or
Xxxxxxxx pursuant to Section 8(a), this Agreement shall forthwith
become void, there shall be no liability under this Agreement on the
part of Merci or Xxxxxxxx, other than the provisions of this Section
8(b), and except to the extent that such termination results from the
breach by a party of any of its representations, warranties, covenants
or agreements set forth in this Agreement.
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(c) Except as otherwise required by law, this Agreement may be amended by
the parties hereto by action taken by or on behalf of their respective
Boards of Directors at any time prior to the Closing. This Agreement
may not be amended except by an instrument in writing signed by the
parties hereto.
(d) At any time prior to the Closing, any party hereto may (i) extend the
time for the performance of any of the obligations or other parties
hereto, (ii) waive any inaccuracies in the representations and
warranties of the other parties contained herein or in any document
delivered pursuant hereto and (iii) waive compliance by the other
parties with any of the agreements of conditions contained herein. Any
such extension or waiver shall be valid if set forth in an instrument
in writing signed by the party or parties to be bound thereby.
9. NOTICES. All notices and other communications given or made pursuant hereto
shall be sent by reputable overnight courier next day delivery, and shall be
deemed to have been duly given or made as of the date delivered, if delivered
personally, to the parties at the addresses set forth in the preamble to this
Agreement (or at such other address for a party as shall be specified by like
changes of address.)
10. EXHIBITS. All Exhibits attached hereto are incorporated herein by this
reference as if they were set forth in their entirety.
11. MISCELLANEOUS PROVISIONS. This Agreement is the entire agreement between the
parties in respect of the subject matter hereof, and there are no other
agreements, written or oral, nor may this Agreement be modified except in
writing and executed by all of the parties hereto. The failure to insist upon
strict compliance with any of the terms, covenants or conditions of this
Agreement shall not be deemed a waiver or relinquishment of such right or power
at any other time or times.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware.
13. VENUE. Any action or proceedings brought with respect to our arrangement of
the agreement shall be brought in the appropriate State of Federal Court in the
County and State of New York.
14. COUNTERPARTS. This Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together shall
constitute one and the same binding Agreement, with one counterpart being
delivered to each party hereto.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date and year above first written.
MERCI, INC.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, President
X.X. XXXXXXXX SYSTEMS INC.
By: /s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx Xxxxxx, President
SELLERS:
/s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx Xxxxxx
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