AGREEMENT AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER
(the “Agreement”)
is made and entered into this 10th
day of March 2008, to be effective as of the 28th
day of February 2008 (the “Agreement
Date”),
by and among MICRO
MAMMOTH SOLUTIONS, INC.,
a
Nevada corporation (“MIMS”);
ADVANCED
BLAST PROTECTION, INC.,
a
Florida corporation (“ABP”);
ABP
ACQUISITION CORP.,
a
Florida corporation (“Mergerco”);
XXXXXX
XXXXXX (“Xxxxxx”),
XXXXX
XXXXX (“Xxxxx”),
XX.
XXXXXX X. XXXXXXXX
(“Xxxxxxxx”);
and
XXXXX
XXXXXX,
an
individual (the “XXXX
Principal Stockholder”).
Xxxxxx, Xxxxx and Xxxxxxxx are hereinafter collectively referred to as the
“ABP
Principal Stockholders.”
XXXX,
ABP, Mergerco, the ABP Principal Stockholders, and the XXXX Principal
Stockholder are hereinafter sometimes collectively referred to as the
“Parties.”
Recitals
A.
The
Board of Directors of XXXX, the Board of Directors of Mergerco and the XXXX
Principal Stockholder each deem it advisable and in the best interest of XXXX
and Mergerco for Mergerco to be merged with and into ABP under the laws of
the
State of Florida, with ABP as the surviving corporation of such merger (the
“Merger”),
and the Board of Directors of XXXX and Mergerco and the XXXX Principal
Stockholder have each approved and adopted the form, terms and provisions of
this Agreement and the Merger.
B. The
Board of Directors of ABP and the ABP Principal Stockholders each deems the
Merger advisable and in the best interest of ABP and its shareholders, and
the
Board of Directors of ABP and the ABP Principal Stockholders have each approved
and adopted the form, terms and provisions of this Agreement and the
Merger.
C.
The
ABP Principal Stockholders are directors, executive officers and/or principal
shareholders of ABP, and the XXXX Principal Stockholder is an executive officer
and the principal shareholder of XXXX, and such Parties are entering into this
Agreement as an inducement to the other Parties hereto.
Agreement
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants
contained herein, the Parties agree as follows:
ARTICLE
I. -
THE MERGER
1.1 The
Merger.
Upon the terms and subject to the conditions set forth in this Agreement, and
in
accordance with the Section 607.1101 et. seq. of the Florida Business
Corporation Act of the State of Florida (the “Florida
Corporation Law”),
as at the Effective Time of the Merger, Mergerco shall be merged with and into
ABP. Following the Effective Time, the separate corporate existence of Mergerco
shall cease and ABP shall continue as the surviving corporation of the Merger
(the “Surviving
Corporation”)
and shall succeed to and assume all the rights and obligations of Mergerco
in
accordance with the Florida Corporation Law.
1
1.2 Effective
Time.
Subject to the provisions of this Agreement, as soon as practicable on or after
the Closing Date, the Parties shall file an article of merger or other
appropriate documents (in any such case, the “Certificate
of Merger”)
executed in accordance with the relevant provisions of the Florida Corporation
Law and shall make all other filings or recordings required under the Florida
Corporation Law . The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Florida Secretary of State, or
at
such other time as XXXX and ABP shall agree should be specified in the
Certificate of Merger (the time the Merger becomes effective being referred
to
herein as the “Effective
Time”).
1.3 Effects
of the Merger.
The Merger shall have the effects set forth in the applicable provisions of
the
Florida Corporation Law.
1.4 Certificate
of Incorporation and Bylaws.
(a) The
Certificate of Incorporation of ABP as in effect immediately following the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
(b) The
bylaws of ABP as in effect immediately following the Effective Time shall be
the
bylaws of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
1.5 Directors.
(a) The
board of directors of ABP immediately prior to the Effective Time shall
constitute the entire members of be the board of directors of the Surviving
Corporation until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may
be.
(b) Subject
to the provision of paragraph 6.7 At the Effective Time of the Merger all of
the
members of the Board of Directors of XXXX shall tender their resignations and
the board of directors of ABP immediately prior to the Effective Time shall
constitute the entire members of be the board of directors of XXXX until the
earlier of their resignation or removal or until their respective successors
are
duly elected and qualified, as the case may be.
1.6 Officers.
(a) The
officers of ABP immediately prior to the Effective Time shall constitute all
of
the officers of the Surviving Corporation until the earlier of their resignation
or removal or until their respective successors are duly elected and qualified,
as the case may be.
(b) At
the Effective Time of the Merger all of the officers of XXXX shall tender their
resignations and officers of ABP immediately prior to the Effective Time shall
constitute all of the officers of XXXX until the earlier of their resignation
or
removal or until their respective successors are duly elected and qualified,
as
the case may be.
2
1.7 Effect
on Capital Stock.
As of the Effective Time, by virtue of the Merger and without any action on
the
part of the holder of any shares of the outstanding capital of ABP, Mergerco
or
XXXX:
(a) XXXX
Common Stock. Each
issued and outstanding share of XXXX Common Stock shall remain issued and
outstanding following the Effective Time of the Merger, except as otherwise
provided in Section
1.7(g)below.
(b) ABP
Treasury Stock. Each
share of ABP’s common stock, par value $0.001 per share (“ABP
Common Stock”)
that is held in the treasury of ABP or by any wholly owned subsidiary of ABP
and
each share of ABP Common Stock that is owned by XXXX shall automatically be
cancelled and returned and shall cease to exist and no consideration shall
be
delivered in exchange therefor.
(c) Mergerco
Common Stock.
Each share of common stock, $0.01 par value per share, of Mergerco issued and
outstanding immediately prior to the Effective Time shall be converted into
and
exchanged for one issued, fully paid and nonassessable share of common stock
,
par value $0.01 per share of the Surviving Corporation.
(d) ABP
Common Stock. As
at the Effective Time, by virtue of the Merger:
(i) Without
any action on the part of the holder of any shares of ABP Common Stock or any
shares of capital stock of XXXX, Mergerco or the Surviving Corporation, each
of
full share of ABP Common Stock that is issued and outstanding as at the
Effective Time of the Merger, shall be converted into the right to receive
one
(1) full share of Common Stock of XXXX (the “Exchange
Ratio”).
As of the Effective Time, all such shares of ABP Common Stock shall no longer
be
outstanding and shall automatically be canceled and retired and shall cease
to
exist, and each holder of a certificate representing any such shares of ABP
Common Stock shall cease to have any rights with respect thereto, except the
right to receive the applicable number of shares of XXXX Common Stock, without
interest.
(ii) In
addition to the shares of XXXX Common Stock issued pursuant to Section 1.7(d)(i)
above, as at the Effective Time, XXXX shall reserve for issuance from its
authorized and unissued shares of XXXX Common Stock, the difference between
(A)
Twenty-Six Million Four Hundred and Sixteen Thousand (26,416,000) shares of
XXXX
Common Stock, and (B) the aggregate number of shares of ABP Common Stock that
are issued and outstanding as at the Effective Time of the Merger (the
“Reserved
XXXX Merger Shares”).
Such Reserved XXXX Merger Shares have
been
reserved for issuance to the ABP Additional Stockholders. In the event and
to
the extent that any of such Reversed XXXX Shares are not so issued to the ABP
Additional Stockholders by June 30, 2008, such unissued Reserved XXXX Merger
Shares shall promptly thereafter be issued to Xxxxxx and Xxxxx on an pro-rata
basis, based upon the amount by which (x) the number of shares of XXXX Common
Stock issued to each of Xxxxxx and Xxxxx at as the Effective Time of the Merger,
bears to (y) all shares of XXXX Common Stock that were issued to both Xxxxxx
and
Xxxxx as at the Effective Time of the Merger.
(iii) Notwithstanding
the foregoing, it is the intention of the Parties hereto that all of the ABP
Stockholders shall own and (including the subsequent issuance of Reserved XXXX
Merger Shares but excluding the Placement Agent Shares) be entitled own of
record immediately after giving effect to the Merger an aggregate of Twenty-Six
Million Four Hundred and Sixteen Thousand (26,416,000) shares of XXXX Common
Stock; which shares of XXXX Common Stock shall represent not less than 88.053%
of the issued and outstanding shares of XXXX Common Stock on a fully-diluted
basis, after giving effect to the exercise of all options or warrants or
securities convertible into XXXX Common Stock that are issued and outstanding
immediately prior to the Effective Time of the Merger (the “XXXX
Fully-Diluted Common Stock”).
Accordingly, it is expressly understood and agreed that in the event that the
aggregate number of issued and outstanding shares of XXXX Fully-Diluted Common
Stock immediately prior to the Effective Time of the Merger shall be less than
or greater than an aggregate of Three Million Five Hundred and Eighty Four
Thousand (3,584,000) shares XXXX Common Stock, then and in such event (A) the
aforesaid Exchange Ratio, (B) the aggregate number of shares of XXXX Common
Stock issued to all ABP Stockholders as at the Effective Time of the Merger,
and
(C) the aggregate number of Reserved XXXX Merger Shares issued to all ABP
Stockholders following the Effective Time of the Merger, shall each be
appropriately adjusted so that, immediately after the Effective Time of the
Merger, all of such ABP Stockholders shall own and be entitled to own of record
88.053% of the XXXX Fully-Diluted Common Stock.
3
(iv) Upon
the
Effective Date the Placement Agent Shares shall be converted into Xxxx Common
Stock in accordance with paragraph 1.7(d)(i) but such shares shall not be
included in the percentages set forth in paragraph 1.7(d)
(e) Outstanding
ABP Notes. By
virtue of the Merger and without any action on the part of any holder of a
maximum aggregate of (i) $15,000,000 principal amount of 10% convertible secured
promissory notes of ABP due February 28, 2009 that may be issued by ABP prior
to
the Effective Time of the Merger, and (ii) $1,500,000 principal amount of 10%
Notes of ABP that were exchanged for a like principal amount of 10% Interim
Notes of ABP issued prior to the date of this Agreement (collectively, the
“ABP
Notes”),
each of the ABP Notes issued and outstanding as of the Effective Time shall
automatically be deemed to be exchanged for and converted into an identical
principal amount of 10% convertible secured promissory note of XXXX, as the
Surviving Corporation (individually, an “XXXX
Note”
and collectively, as the “XXXX
Notes”).
Such XXXX Notes shall: (i) be due and payable on February 28, 2009, and (ii)
be
convertible by the holder at any time commencing ninety (90) days following
the
Effective Time and prior to their February 28, 2009 maturity date into shares
of
XXXX Common Stock (the “Conversion
Shares”)
at a conversion price (the “Conversion
Price”)
set forth in such XXXX Notes. A true copy of the form of the XXXX Notes is
annexed hereto as Exhibit
A
and made a part hereof.
(f) ABP
Warrants. As
at the
Effective Time, by virtue of the Merger and without any action on the part
of
the holders of any outstanding ABP Warrants, each
of the ABP Warrants issued and outstanding as of the Effective Time shall
automatically be deemed to be exchanged for and converted into an identical
amount of
warrants
(the “XXXX
Warrants”)
to
purchase that number of shares of XXXX Common Stock as shall equal the identical
number of shares of ABP Common Stock issuable upon exercise of the ABP Warrants,
and shall contain such other terms and conditions as are set forth in the forms
of the XXXX Warrants annexed hereto as Exhibits
B-1 through B-3
and made a part hereof.
(g) ABP
Options.
As
at the
Effective Time, by virtue of the Merger and without any action on the part
of
the holders of any outstanding ABP stock options, each
of the ABP stock options issued and outstanding as of the Effective Time shall
automatically be deemed to be exchanged for and converted into an identical
amount of
warrants
(the “XXXX
Options”)
to
purchase that number of shares of XXXX Common Stock as shall equal the identical
number of shares of ABP Common Stock issuable upon exercise of the ABP stock
options.
(h) XXXX
Common Stock Owned by ABP. As
at the
Effective Time, each issued and outstanding share of XXXX Common Stock, if
any,
that is owned of record by ABP immediately prior to the Effective Time
of
the Merger shall automatically be cancelled and returned and shall cease to
exist and no consideration shall be delivered in exchange therefor.
4
1.8 Exchange
of ABP Instruments.
(a) XXXX
shall designate Xxxxxxx
Xxxxxx LLC and Jesup & Xxxxxx Securities, Inc.,
or
another Person reasonably acceptable to ABP, to act as exchange agents in the
Merger (the “Exchange
Agents”),
and,
from time to time on, prior to or after the Effective Time, XXXX shall make
available, or cause the Surviving Corporation to make available, to the Exchange
Agents shares of XXXX Common Stock in amounts and at the times necessary for
the
delivery of the Merger Consideration, and the XXXX Notes and XXXX Warrants
(collectively, the “XXXX
Securities”)
to be
delivered upon surrender of certificates representing the shares of ABP Common
Stock converted into Merger Consideration and the ABP Notes and Inasmuch as
the
ABP Notes and ABP Warrants are automatically converted into a like amount of
XXXX Notes and XXXX Warrants upon consummation of the Merger, the physical
exchange of such ABP Notes and ABP Warrants for XXXX Notes and XXXX Warrants
is
not required, but such ABP Securities may be exchanged for XXXX Securities
at
the discretion of the holders thereof.
(b) As
soon
as reasonably practicable after the Effective Time, the Exchange Agents shall
mail to each holder of record on the Record Date of ABP Common Stock, ABP Notes
and ABP Warrants (collectively, “ABP
Securities”)
(i) a
letter of transmittal (which shall specify that delivery shall be effected,
and
risk of loss and title to the certificates evidencing shares of ABP Common
Stock
and ABP Notes and other ABP Securities (collectively, “ABP
Instruments”)
shall
pass, only upon delivery of the ABP Instruments to the Exchange Agents and
shall
be in a form and have such other provisions as XXXX may reasonably specify)
and
(ii) instructions for use in effecting the surrender of the ABP Instruments
in
exchange for the Merger Consideration and (if requested by the holders of ABP
Notes and ABP Warrants) the XXXX Notes and XXXX Warrants. Upon surrender of
a
ABP Instrument for cancellation to the Exchange Agents or to such other agent
or
agents as may be appointed by XXXX, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Exchange Agents, the holder of such ABP Instrument shall be entitled to receive
in exchange therefor the amount of Merger Consideration and amount of XXXX
Notes
and XXXX Warrants theretofore represented by such ABP Instruments which shall
have been converted or exchange pursuant to Section 1.7, and the ABP Instruments
so surrendered shall forthwith be canceled. In the event any ABP Instruments
shall have been lost, stolen or destroyed, XXXX may, in its discretion and
as a
condition precedent to the delivery of the Merger Consideration, and the XXXX
Notes and XXXX Warrants in respect of the ABP Instruments, require the owner
of
such lost, stolen or destroyed ABP Instrument to deliver a affidavit or bond
in
such amount or form as it may reasonably direct as indemnity against any claim
that may be made against XXXX, the Surviving Corporation or the Exchange
Agents.
(c) All
Merger Consideration delivered upon the surrender of shares of ABP Common Stock,
ABP Notes and ABP Warrants in accordance with the terms of this Section 1.8
shall be deemed to have been paid in full satisfaction of all rights pertaining
to the shares of ABP Common Stock, ABP Notes and ABP Warrants represented by
such ABP Instruments. At the Effective Time, the stock transfer books and note
register of ABP shall be closed, and there shall be no further registration
of
transfers on the stock transfer books of the Surviving Corporation of shares
of
ABP Common Stock, ABP Notes and ABP Warrants that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, ABP Instruments
are
presented to the Surviving Corporation or the Exchange Agents for any reason,
they shall be canceled and exchanged as provided in this Section
1.8.
5
1.9 Holders
of Record of ABP Common Stock.
Only holders of record of shares of ABP Common Stock as at the Effective Time
of
the Merger shall be entitled to receive shares of XXXX Common Stock, as Merger
Consideration as of the Effective Time of the Merger.
1.10 Closing.
The
closing of the Merger (the “Closing”)
will
take place at the offices of Xxxxxxx Xxxx LLP, counsel to ABP, at its office
in
New York, New York, within five days following the delivery of satisfaction
or
waiver of the conditions precedent set forth in Section 4 or at such other
date
as XXXX and ABP shall agree (the “Closing
Date”),
but
in no event shall the Closing Date occur later than a date which shall be
the
earlier
to occur of (i) ten (10) business days following delivery of the audited
financial statements of Labock for the two fiscal years ended December 31,
2007
and the unaudited financial statements of Labock for the two comparative fiscal
quarters ended March 31, 2007 and March 31, 2008, or (ii) July 31, 2008.
On
the
Closing Date the Parties shall consummate the Merger and cause the Certificate
of Merger to be filed at such Closing with the Secretary of State of the State
of Florida.
1.11 Change
of Corporate Name. On
or
promptly following the Effective Time of the Merger, pursuant to the XXXX
Restated Charter, XXXX shall change its corporate name to “ADVANCED
BLAST PROTECTION CORPORATION”
or
such
other corporate name as shall be acceptable to the ABP Principal
Stockholders.
ARTICLE
II - CERTAIN DEFINITIONS
In
addition to other terms defined herein, as used in this Agreement, the following
terms shall have the meanings set forth below:
“Affiliate” shall
mean, with respect to any Person, any other person controlling, controlled
by or
under common control with such Person. The term “Control” as used in the
preceding sentence means, with respect to a corporation, the right to exercise,
directly or indirectly, more than 50% of the voting rights attributable to
the
shares of the controlled corporation and, with respect to any Person other
than
a corporation, the possession, directly or indirectly, of the power to direct
or
cause the direction of the management or policies of such Person.
“Applicable
Law”
means
any domestic or foreign law, statute, regulation, rule, policy, guideline or
ordinance applicable to the businesses of the Parties and/or the Merger.
“ABP
Common Stock”
means
the 100,000,000 shares of common stock, $0.001 par value per share, of ABP
authorized pursuant to its certificate of incorporation, as amended, through
the
Closing Date.
“ABP
Memorandum”
shall
mean the confidential private placement memorandum of ABP, dated as of February
28, 2008 with respect to the offering relating to the Bridge
Financing.
“ABP
Notes” shall
mean the collective reference to a
maximum aggregate of (i) $15,000,000 maximum principal amount of 10% convertible
secured promissory notes of ABP due February 28, 2009 that may be issued by
ABP
prior to the Effective Time of the Merger, and (ii) $1,250,000 principal amount
of 10% Notes of ABP that were exchanged for a like principal amount of 10%
Interim Notes of ABP issued prior to the date of this Agreement.
“ABP
Principal Stockholders”
shall
mean the collective reference to Miller, Phillips, and Xxxxx or their designated
Affiliates.
6
“ABP
Additional Stockholders”
means
the collective reference to all holders of XXXX Common Stock as at or following
the Effective Time of the Merger who are or were secured and unsecured creditors
of Labock prior to the Effective Time of the Merger.
“ABP
Stockholders”
shall
mean the collective reference to the holders of shares of ABP Common Stock
as at
the Effective Time of the Merger, including, without limitation, the ABP
Principal Stockholders and the ABP Additional Stockholders.
“ABP
Stockholders Meeting”
means
the special meeting of stockholders of ABP to be convened prior to the Closing
Date, if required.
“ABP
Warrants”
shall
mean the collective reference to:
(a) the
warrants included in the Units sold in the Bridge Financing entitling the
holder(s) to purchase a number of shares of ABP Common Stock equal to 100%
of
the number of shares of ABP Common Stock issuable upon conversion of the ABP
Notes (the “ABP
Note Conversion Shares”);
(b) the
warrants issued to Xxxxxxx Xxxxxx LLC and [Jesup & Xxxxxx Securities, Inc.]
(as placement agents in the Bridge Financing), entitling such Persons or their
Affiliates to purchase a number of shares of ABP Common Stock equal to 10%
of
the number of ABP Note Conversion Shares.
(c) the
warrants (“Interim
Warrants”)
issued
in connection with the Interim Financing.
“Affiliate”
means
any one or more Person controlling, controlled by or under common control with
any other Person or their affiliate.
“Bridge
Financing”
shall
mean the private placement of (i) up to $15,000,000 of units of securities
of
ABP (the “Units”)
consisting of a maximum of 250 Units of $50,000 principal amount of ABP Notes
and ABP Warrants, plus (ii) up to a maximum of 50 additional Units of $50,000
each, that may be sold to cover over-allotments, all as described in the ABP
Memorandum.
“Business
Day”
shall
mean any day, excluding Saturday, Sunday and any other day on which national
banks located in New York, New York shall be closed for business.
“Closing
Date”
shall
mean the date upon which the Merger shall be consummated.
“Creditor
Settlement Agreements”
shall
mean the executory agreements entered into by ABP with certain of the secured
and unsecured creditors of Labock prior to the Effective Time of the Merger,
pursuant to which, inter
alia,
ABP has
agreed or will agree to either (a) issue prior to the Effective Time of the
Merger shares of ABP Common Stock, or (b) cause to be issued following the
Effective Time of the Merger shares of XXXX Common Stock, representing Reserved
XXXX Merger Shares, to such secured and unsecured creditors of Labock in order
to consummate settlements of certain indebtedness and other obligations owed
by
Labock to such creditors.
“Dollar”
and
“$”
means
lawful money of the United States of America.
7
“Equity
Financing” shall
mean a
maximum $25,000,000 private placement or public offering of equity securities
of
XXXX to be commenced as soon as practicable after Effective Time, and, as
presently contemplated, shall consist of (A) $25,000,000 of convertible
securities of XXXX, currently anticipated to be XXXX Preferred Stock, and (B)
Equity Financing Warrants.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“GAAP”
means
generally accepted accounting principles in the United States of America as
promulgated by the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board or any successor Institutes concerning
the
treatment of any accounting matter.
“Interim
Financing”
shall
mean the private placement, consummated prior to the Bridge Financing, of (i)
up
to $1,500,000 10 % unsecured Notes (“Interim
Notes”)
and
(ii) warrants entitling the holder to purchase one share of ABP Common Stock
for
each $1.00 of Interim Notes purchased.
“Knowledge”
means
the knowledge after reasonable inquiry.
“Labock”
means
Labock Technologies, Inc., a Florida corporation.
“Lien”
means,
with respect to any property or asset, any mortgage, lien, pledge, charge,
security interest, encumbrance or other adverse claim of any kind in respect
of
such property or asset.
“Material
Adverse Effect”
with
respect to any entity or group of entities means any event, change or effect
that has or would have a materially adverse effect on the financial condition,
business or results of operations of such entity or group of entities, taken
as
a consolidated whole.
“Merger
Consideration”
shall
mean the collective reference to: (a) all shares of XXXX Common Stock issued
to
ABP Stockholders as at the Effective Time of the Merger pursuant to Section
1.7 (d)
of this
Agreement; (b) all Reserved XXXX Merger Shares to be issued following the
Effective Time of the Merger pursuant to Section
1.7 (d)
of this
Agreement; (c) all XXXX Notes into which all ABP Notes shall be automatically
converted as at the Effective Time of the Merger pursuant to Section
1.7(e)
of this
Agreement; and (d) all XXXX Warrants into which all ABP Warrants shall be
automatically converted as at the Effective Time of the Merger pursuant to
Section
1.7(f)
of this
Agreement.
“XXXX
Common Stock”
shall
mean the shares of common stock of XXXX, $0.0001 par value per
share.
“XXXX
Notes”
shall
have the meaning set forth in Section
1.7(e)
above,
and shall refer to the maximum aggregate principal amount of 10% notes of XXXX
issued at the Effective Time of the Merger, and in the form of Exhibit
A
annexed
hereto and made a part hereof.
“XXXX
Restated Charter”
shall
mean the amended and restated certificate of incorporation of XXXX to be (a)
approved by the stockholders of XXXX, and (b) filed with the Secretary of State
of the State of Florida on or immediately prior to the Closing Date and in
the
form of Exhibit
C
annexed
hereto and made a part hereof.
“XXXX
Warrants”
shall
have the meaning set forth in Section
1.7(f)
above,
and shall be in the form of Exhibit
B
annexed
hereto and made a part hereof.
8
“Person”
means
any individual, corporation, partnership, trust or unincorporated organization
or a government or any agency or political subdivision thereof.
“Placement
Agent Shares”
means
the shares which may be issued to by APB to Xxxxxxx Xxxxx LLC and Jesup &
Xxxxxx Securities Inc. pursuant to the Bridge Financing.
“Placement
Agents Warrants”
means
the ABP warrants issued and to be issued by ABP to Xxxxxxx Xxxxx LLC and Jesup
& Xxxxxx Securities Inc. pursuant to the Bridge Financing; which Placement
Agents Warrants shall be exchanged for identical warrants to purchase XXXX
Common Stock pursuant to this Agreement.
“Reserved
XXXX Merger Shares” shall
have the meaning set forth in Section 1.7.
“Tax”
(and,
with correlative meaning, “Taxes”
and
“Taxable”)
means:
(i)
any
income, alternative or add-on minimum tax, gross receipts tax, sales tax, use
tax, ad valorem tax, transfer tax, franchise tax, profits tax, license tax,
withholding tax, payroll tax, employment tax, excise tax, severance tax, stamp
tax, occupation tax, property tax, environmental or windfall profit tax, custom,
duty or other tax, impost, levy, governmental fee or other like assessment
or
charge of any kind whatsoever together with any interest or any penalty,
addition to tax or additional amount imposed with respect thereto by any
governmental or Tax authority responsible for the imposition of any such tax
(domestic or foreign), and
(ii)
any
liability for the payment of any amounts of the type described in clause (i)
above as a result of being a member of an affiliated, consolidated, combined
or
unitary group for any Taxable period, and
(iii)
any
liability for the payment of any amounts of the type described in clauses (i)
or
(ii) above as a result of any express or implied obligation to indemnify any
other person.
“Tax
Return”
means
any return, declaration, form, claim for refund or information return or
statement relating to Taxes, including any schedule or attachment thereto,
and
including any amendment thereof.
ARTICLE
III -. REPRESENTATIONS AND WARRANTIES OF
ABP
AND THE APB PRINCIPAL SHAREHOLDERS.
ABP
and the
ABP
Principal Stockholders
hereby
jointly and severally represent and warrant to XXXX
as
follows:
3.1 Organization
and Good Standing: Ownership of Shares. ABP
is a
corporation duly organized and validly existing under the laws of the State
of
Florida. There are no outstanding subscriptions, rights, options, warrants
or
other agreements obligating ABP
to
issue, sell or transfer any stock or other securities of ABP
except
for the ABP Warrants to be issued in the Bridge Financing.
3.2 Corporate
Authority.
Each of
the ABP Principal Stockholders individually has the power and authority, and
ABP
has the
corporate power to enter into this Agreement and to perform their respective
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby have been duly authorized
by
the Board of Directors of ABP and is hereby authorized by the ABP Principal
Stockholders. The execution and performance of this Agreement will not
constitute a material breach of any agreement, indenture, mortgage, license
or
other instrument or document to which ABP
is a
party and will not violate any judgment, decree, order, writ, rule, statute,
or
regulation applicable to ABP
or its
properties. The execution and performance of this Agreement will not violate
or
conflict with any provision of the respective Articles of Incorporation or
by-laws of ABP.
9
3.3 ABP
Capitalization.
(a) As
at
February 28, 2008, the ABP Stockholders, including the ABP Principal
Stockholders are the persons set forth on Schedule
3.3
and,
together with subsequent ABP Additional Stockholders included in an updated
Schedule
3.3,
shall
be the owners of record and beneficially of 100% of the 26,416,000 shares of
ABP
Common Stock to be issued and outstanding as at the Closing Dateexclusive of
the
Placement Shares. Prior to the Effective Time of the Merger, ABP will update
Schedule
3.3
to
include all ABP Additional Stockholders and also list thereon the owners of
record of all outstanding ABP Notes and ABP Warrants sold in the Bridge
Financing (collectively, with the ABP Common Stock, the “ABP
Securities”).
(b) As
at the
date hereof (i) an aggregate of 22,416,000 shares of ABP Common Stock are issued
and outstanding, all of which shares of ABP Common Stock have been issued to
the
APB Stockholders, and (ii) an aggregate of 4,000,000 additional shares of ABP
Common Stock have been reserved for potential issuance to the ABP Additional
Stockholders.
(c) To
the
Knowledge of ABP and the ABP Principal Stockholder, all issued and outstanding
ABP Securities are or will be owned free and clear of all rights, claims, liens
and encumbrances, and have not been sold, pledged, assigned or otherwise
transferred except pursuant to this Agreement.
(d) As
at the
Closing Date, pursuant to its Certificate of Incorporation ABP shall be
authorized to issue an aggregate of 100,000,000 shares of ABP Common Stock,
of
which the ABP Stockholders shall own
of
record a maximum aggregate of 26,416,000 shares of ABP Common Stock.
(e) As
at the
Closing Date, ABP shall have issued and outstanding a maximum of $16,250,000
of
ABP Notes and the applicable number of ABP Warrants that may be issued pursuant
to the Bridge Financing, all as shall be set forth on Schedule
3.3;
as the
same shall be amended and updated through the Closing Date.
3.4 Access
to Records.
The
corporate financial records, minute books and other documents and records of
ABP
have
been made available to XXXX
prior to
the Closing hereof.
3.5 The
ABP Memorandum.
ABP has
supplied to XXXX a true copy of the ABP Memorandum issued in connection with
the
Bridge Financing. The disclosures set forth in the ABP Memorandum (as the same
may be supplemented and amended through the Closing Date) are true and correct
in all material respects and since the date of the ABP Memorandum there has
not
occurred any Material Adverse Event.
3.6 Taxes. ABP
has
filed all material tax, governmental and/or related forms and reports (or
extensions thereof) due or required to be filed and has (or will have) paid
or
made adequate provisions for all taxes or assessments which had become due
as of
the date hereof, and there are no deficiency notices outstanding.
10
3.7 Compliance
with Laws.
Except
as set forth on Schedule 3.7, ABP
has
complied with all federal, state, county and local laws, ordinances,
regulations, inspections, orders, judgments, injunctions, awards or decrees
applicable to it or its business which, if not complied with, would materially
and adversely affect the business of ABP.
3.8 No
Breach.
The
execution, delivery and performance of this Agreement and the consummation
of
the transactions contemplated hereby will not:
(a)
violate any provision of the Articles of Incorporation or By-Laws of
ABP;
(b)
violate, conflict with or result in the breach of any of the terms of, result
in
a material modification of, otherwise give any other contracting party the
right
to terminate, or constitute (or with notice or lapse of time, or both
constitute) a default under any contract or other agreement to which
ABP
is a
party or by or to which it or any of its assets or properties may be bound
or
subject;
(c)
violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon,
ABP
or upon
the properties or business of ABP;
or
(d) violate
any statute, law or regulation of any jurisdiction applicable to the
transactions contemplated herein which could have a materially adverse effect
on
the business or operations of ABP.
3.9 Actions
and Proceedings. ABP
is not a
party to any material pending litigation or, to its knowledge, any governmental
investigation or proceeding not reflected in the ABP
Financial Statements, and to its best knowledge, no material litigation, claims,
assessments or Non-governmental proceedings are threatened against ABP
except
as set forth on Schedule
3.9
attached
hereto and made a part hereof.
3.10 Agreements. Schedule
3.10
sets
forth any material contract or arrangement to which ABP
is a
party or by or to which it or its assets, properties or business are bound
or
subject, whether written or oral.
3.11 Brokers
or Finders.
Except
for fees paid and payable to the Placement Agents and other broker/dealers
in
connection with the Bridge Financing, no broker’s or finder’s fee will be
payable by ABP
in
connection with the transactions contemplated by this Agreement, nor will any
such fee be incurred as a result of any actions by ABP
or any
of its Shareholders.
3.12 Full
Disclosure.
No
representation or warranty by ABP
in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to
be
furnished by ABP
pursuant
hereto or in connection with the negotiation, execution or performance of this
Agreement contains or will contain any untrue statement of a material fact
or
omits or will omit to state any fact necessary to make any statement herein
or
therein not materially misleading or necessary to a complete and correct
presentation of all material aspects of the business of ABP.
11
ARTICLE
IV - REPRESENTATIONS AND WARRANTIES OF XXXX
XXXX
hereby
represents and warrants to ABP and the ABP Stockholders, as
follows:
4.1 Organization
and Good Standing. XXXX
is a
corporation duly organized, validly existing and in good standing under the
laws
of the State of Nevada. XXXX has the corporate power to own its own property
and
to carry on its business as now being conducted and is duly qualified to do
business in any jurisdiction where so required except where the failure to
so
qualify would have no material negative impact.
4.2 Corporate
Authority.
XXXX has
the corporate power to enter into this Agreement and to perform their respective
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors and stockholders of XXXX
as
required by Nevada law. The execution and performance of this Agreement will
not
constitute a material breach of any agreement, indenture, mortgage, license
or
other instrument or document to which XXXX
is a
party and will not violate any judgment, decree, order, writ, rule, statute,
or
regulation applicable to XXXX
or its
properties. The execution and performance of this Agreement will not violate
or
conflict with any provision of the respective Certificate of Incorporation
or
by-laws of XXXX.
4.3 XXXX
Capitalization.
As of
the date of this Agreement, XXXX is authorized to issue 100,000,000 shares
of
XXXX Common Stock, $0.0001 par value per share. An aggregate of 10,034,000
shares of XXXX Common Stock are issued and outstanding, and no other shares
of
XXXX Common Stock are reserved for issuance pursuant to any convertible
securities, options or warrants. The XXXX
Principal Stockholder
currently owns in the aggregate 6,500,000 outstanding shares of XXXX Common
Stock. Prior to the Effective Time of the Merger, XXXX shall effect the Charter
Amendment contemplated by Section
6.6
of this
Agreement.
4.4 XXXX
Financial Statements; Assets and Liabilities.
(a) The
Form
SB2 of XXXX filed with the SEC on July 17, 2007 includes the audited balance
sheet as at June 30, 2007, and the statement of operations and statement of
cash
flows of XXXX for the fiscal period then ended (the “XXXX
2007 Audited Financial Statements”).
The
Form 10QSB for the first quarter of fiscal 2008 of XXXX and the Form 10QSB
for
the second quarter of fiscal 2008 of XXXX includes the unaudited balance sheets
as at September 30, 2007 and December 31, 2007, respectively, and the statement
of operations and statement of cash flows of XXXX for the three months and
six
months ended September 30, 2007 and December 31, 2007, respectively (the
“XXXX
2007 Financial Statements”).
Except as set forth on the XXXX Balance Sheet as at December 31, 2007 or
otherwise disclosed on Schedule
3.4,
as at
December 31, 2007 and for all periods subsequent thereto, XXXX has no other
assets and has incurred no other liabilities, debts or obligations, whether
fixed, contingent or otherwise required to be set forth on a balance sheet
prepared in accordance with GAAP. The books of account and other financial
records of XXXX
are in
all respects complete and correct in all material respects and are maintained
in
accordance with good business and accounting practices.
(b) XXXX
has
no operating assets or liabilities, and has not conducted any trade or business
activities whatsoever, other than as set forth on Schedule
3.4
annexed
hereto.
12
4.5 No
Material Adverse Changes. Since
December 31, 2007:
(a) except
for indebtedness of approximately $18,000 that will be outstanding as at the
Closing Date, there
has
not been
any
liabilities or other indebtedness incurred by XXXX;
(b) there
has
not been
any
material adverse changes in the financial position of XXXX
except
changes arising in the ordinary course of business, which changes will in no
event materially and adversely affect the financial position of XXXX,
and
will be consistent with the representations made by XXXX hereunder.
(c) there
has
not been
any
damage, destruction or loss materially affecting the assets, prospective
business, operations or condition (financial or otherwise) of XXXX
whether
or not covered by insurance;
(d) there
has
not been
any
declaration setting aside or payment of any dividend or distribution with
respect to any redemption or repurchase of XXXX
capital
stock;
(e) there
has
not been
any sale
of an asset (other than in the ordinary course of business) or any mortgage
pledge by XXXX
of any
properties or assets; or
(f) there
has
not been
adoption
or modification of any pension, profit sharing, retirement, stock bonus, stock
option or similar plan or arrangement.
(g) there
has
not been
any loan
or advance to any shareholder, officer, director, employee, consultant, agent
or
other representative or made any other loan or advance otherwise than in the
ordinary course of business;
(h) there
has
not been
any
increase in the annual level of compensation of any executive employee of
XXXX;
(i) except
in
the ordinary course of business, XXXX has not entered into or modified any
contract, agreement or transaction; and
(j) XXXX
has
not issued any equity securities or rights to acquire equity
securities.
4.6 Taxes. XXXX
has
timely filed all material tax, governmental and/or related forms and reports
(or
extensions thereof) due or required to be filed and has paid or made adequate
provisions for all taxes or assessments which have become due as of the Closing
Date, and there are no deficiencies outstanding.
4.7 Compliance
with Laws. XXXX
has
complied with all federal, state, county and local laws, ordinances,
regulations, inspections, orders, judgments, injunctions, awards or decrees
applicable to it or its business, which, if not complied with, would materially
and adversely affect the business of XXXX
or the
trading market for the XXXX
Shares
and specifically, and XXXX
has
complied with provisions for registration under the Securities Act of 1933
and
all applicable blue sky laws in connection with its public stock offering and
there are no outstanding, pending or threatened stop orders or other actions
or
investigations relating thereto.
13
4.8 Actions
and Proceedings. XXXX
is not a
party to any material pending litigation or, to its knowledge, any governmental
proceedings are threatened against XXXX.
4.9 Reports
and Registration Statements. XXXX
is
current in the filing of all forms or reports with the Securities and Exchange
Commission (“SEC”),
and
has been a reporting company under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”).
All
such reports and registration statements pursuant to the Securities Act of
1933,
as amended, filed by XXXX with the SEC (collectively, “SEC
Reports”)
did
not contain any untrue statement of a 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 circumstance under which they were made, not misleading.
4.10 Disclosure. XXXX
has (and
at the Closing it will have) disclosed in writing to ABP all events, conditions
and facts materially affecting the business, financial conditions or results
of
operation of XXXX
all of
which have been set forth herein. XXXX
has not
now and will not have, at the Closing, withheld disclosure of any such events,
conditions, and facts which they have knowledge of or have reasonable grounds
to
know may exist.
4.11 Access
to Records.
The
corporate financial records, minute books, and other documents and records
of
XXXX
have
been made available to ABP
prior to
the Closing hereof.
4.12 No
Breach.
The
execution, delivery and performance of this Agreement and the consummation
of
the transactions contemplated hereby will not:
(a) violate
any provision of the Articles of Incorporation or By-Laws of XXXX;
(b) violate,
conflict with or result in the breach of any of the terms of, result in a
material modification of, otherwise give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time or both constitute)
a default under, any contract or other agreement to which XXXX
is a
party or by or to which it or any of its assets or properties may be bound
or
subject;
(c) violate
any order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body against, or binding upon, XXXX
or upon
the securities, properties or business to XXXX;
or
(d) violate
any statute, law or regulation of any jurisdiction applicable to the
transactions contemplated herein.
4.14 Brokers
or Finders.
No
broker’s or finder’s fee will be payable by XXXX
in
connection with the transactions contemplated by this Agreement, nor will any
such fee be incurred as a result of any actions of XXXX.
4.15 Authority
to Execute and Perform Agreements. XXXX
has the
full legal right and power and all authority and approval required to enter
into, execute and deliver this Agreement and to perform fully its obligations
hereunder. This Agreement has been duly executed and delivered and is the valid
and binding obligation of XXXX
enforceable in accordance with its terms, except as may be limited by
bankruptcy, moratorium, insolvency or other similar laws generally affecting
the
enforcement of creditors’ rights. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby and the performance
by XXXX
of this
Agreement, in accordance with its respective terms and conditions will
not:
14
(a) require
the approval or consent of any governmental or regulatory body or the approval
or consent of any other person;
(b) conflict
with or result in any breach or violation of any of the terms and conditions
of,
or constitute (or with any notice or lapse of time or both would constitute)
a
default under, any order, judgment or decree applicable to XXXX,
or any
instrument, contract or other agreement to which XXXX
is a
party or by or to which XXXX
is bound
or subject; or
(c) result
in
the creation of any lien or other encumbrance on the assets or properties of
XXXX.
4.16 Mergerco. Mergerco
was incorporated on February 1, 2008, solely for the purpose of consummating
the
Merger, and from its date of formation to the Closing Date of the Merger, shall
conduct no business or incur any assets or liabilities, except relating to
the
Merger.
4.17 Full
Disclosure.
No
representation or warranty by XXXX
in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to
be
furnished by XXXX
pursuant
hereto or in connection with the negotiation, execution or performance of this
Agreement contains or will contain any untrue statement of a material fact
or
omits or will omit to state any fact necessary to make any statement herein
or
therein not materially misleading or necessary to complete and correct
presentation of all material aspects of the business of XXXX.
ARTICLE
V - CONDITIONS PRECEDENT
5.1 Conditions
Precedent to the Obligations of ABP
and
the ABP Principal Stockholders.
All
obligations of ABP
and the
ABP Principal Stockholders under this Agreement are subject to the fulfillment,
prior to or as of the Closing Date, as indicated below, of each of the following
conditions; any one of which may be waived at Closing by Xxxxxx, as the
representative of the ABP Principal Stockholders (the “ABP
Stockholders’ Representative):
(a) The
representations and warranties by or on behalf of XXXX
and
Mergerco contained in this Agreement or in any certificate or document delivered
pursuant to the provisions hereof shall be true in all material respects at
and
as of Closing Date as though such representations and warranties were made
at
and as of such time.
(b) XXXX,
Mergerco and
the
XXXX Principal Stockholder shall have performed and complied in all material
respects, with all covenants, agreements, and conditions set forth in, and
shall
have executed and delivered all documents required by this Agreement to be
performed or complied with or executed and delivered by it prior to or at the
Closing, including, without limitation, all of the covenants and agreements
of
XXXX, Mergerco and the XXXX Principal Stockholder set forth in Section
6.6
and
Section
6.7
of this
Agreement..
(c) On
the
Closing Date, XXXX shall, pursuant to such agreements and instruments of
guaranty and assumption acceptable to ABP and its legal counsel, expressly
(i)
guaranty and assume all of the obligations of ABP under and pursuant to the
securities purchase agreement between ABP and each of the holders of the Units
sold in the Bridge Financing (the “Bridge
Financing SPA”),
and
all exhibits to such Bridge Financing SPA, including, without limitation, the
ABP Notes, ABP Warrants, Registration Rights Agreement and Pledge Agreement
(collectively, with the Bridge Financing SPA, the “Bridge
Financing Documents”)
and
(ii) assume
all of the obligations of ABP under and pursuant to the
Creditor
Settlement Agreements (other than agreements which Xxxx is a Party).
15
(d) On
the
Closing Date, the XXXX Principal Stockholder and an executive officer of
Mergerco shall have delivered to ABP a certificate, duly executed by such
Person(s) and certifying, that to the best of such Person’s knowledge and
belief, the representations and warranties of XXXX and Mergerco set forth in
this Agreement are true and correct in all material respects.
(e) On
or
before the Closing, the Certificate of Merger shall have been duly executed
and
ready to be filed with the Secretary of State of the State of
Florida.
(f) By
their
execution of this Agreement, each of the ABP Principal Stockholders and the
XXXX
Principal Stockholder have approved the Merger, the Restated XXXX Charter and
all of the other transactions contemplated by this Agreement.
(g) On
or
before the Closing Date, the XXXX Principal Stockholder shall have contributed
back to the capital of XXXX an aggregate of six million four hundred and fifty
thousand (6,450,000) shares of XXXX Common Stock currently owned of record
and
beneficially by the XXXX Principal Stockholder (the “Capital
Contribution”).
The
6,450,000 shares of XXXX Common Stock contributed back to capital by the XXXX
Principal Stockholder shall be cancelled immediately prior to the Effective
Time. As a result of such Capital Contribution and cancellation, not more than
3,584,000 shares of XXXX Common Stock shall be issued and outstanding as at
the
Effective Time of the Merger, of which 50,000 shares of XXXX Common Stock shall
be owned of record and beneficially by the XXXX Principal
Stockholder.
(h) On
or
before the Closing Date, XXXX shall have amended the certificate of
incorporation of XXXX to (i) increase to 250,000,000 shares of XXXX Common
Stock
the authorized number of shares of XXXX Common Stock, (ii) authorize for
issuance up to 10,000,000 shares of preferred stock, containing such rights,
privileges and preferences as the board of directors may, from time to time
determine, and (iii) change the corporate name of XXXX to Advanced
Blast Protection Corporation
or such
other name as shall be acceptable to the ABP Principal Stockholders, all
pursuant to the XXXX Restated Charter. On the Closing Date, XXXX shall have
sufficient authorized shares of XXXX
Common
Stock authorized to complete the Merger and issue the maximum number of shares
of XXXX Common Stock that may constitute Merger Consideration.
(i) At
the
Closing, all instruments and documents delivered to ABP
and the
Shareholders pursuant to provisions hereof shall be reasonably satisfactory
to
legal counsel for ABP.
(j) XXXX
shall have issued to the ABP Stockholders or the Exchange Agents (to be held
on
behalf of the ABP Stockholders pending delivery of their ABP Notes) the XXXX
Common Stock, the XXXX Notes and the XXXX Warrants.
(k) As
at the
Closing Date, other than a maximum of $18,000, XXXX shall have no outstanding
expenses, obligations, liabilities or contingencies of any kind.
(l) Immediately
prior to the Effective Time of the Merger, there shall not be issued or
committed to be issued any warrants, stock options, stock rights or other
commitments of any character relating to the issued or unissued shares of either
XXXX Common Stock or preferred stock of XXXX.
16
(m) As
at the
Closing, the XXXX Principal Stockholder and all other officers and directors
of
XXXX shall have tendered their resignations and shall release XXXX from any
further liability or obligation (including accrued wages or compensation) owed
to such Persons.
(n) At
the
Closing, the Merger Consideration to be issued and delivered hereunder will,
when so issued and delivered, constitute valid and legally issued shares of
XXXX
Common
Stock, XXXX Notes, and XXXX Warrants that are fully paid and
non-assessable.
(o) ABP
shall
have completed an amount of the Bridge Financing reasonably acceptable to the
board of directors of ABP.
5.2 Conditions
Precedent to the Obligations of XXXX.
All
obligations of XXXX
under
this Agreement are subject to the fulfillment, prior to or at Closing, of each
of the following conditions (any one of which may be waived at Closing by
XXXX):
(a) The
representations and warranties by ABP
and the
ABP Principal Stockholders contained in this Agreement or in any certificate
or
document delivered pursuant to the provisions hereof shall be true in all
material respects at and as of the Closing as though such representations and
warranties were made at and as of such time;
(b) ABP
and
the ABP Principal Stockholders shall have performed and complied with, in all
material respects, with all covenants, agreements, and conditions set forth
in,
and shall have executed and delivered all documents required by this Agreement
to be performed or complied or executed and delivered by them prior to or at
the
Closing.
(d) On
or
before the Closing, the Certificate of Merger shall have been duly executed
and
ready for filing with the Secretary of State of the State of
Florida.
(e) On
or
before the Closing, the ABP Principal Stockholders shall continue to own a
majority of the issued and outstanding shares of ABP Common Stock and shall
have
ratified and approved the Merger and all of the other transactions contemplated
by this Agreement.
(g) Not
in
excess of 5% of the total issued and outstanding shares of ABP Common Stock
shall advise XXXX or ABP that they dissent from or otherwise object to the
Merger.
(h) On
the
Closing Date, the ABP Principal Executive Officer shall have delivered to XXXX
a
certificate, duly executed by such Person and certifying, that to the best
of
such Person’s knowledge and belief, the representations and warranties of ABP
set forth in this Agreement are true and correct in all material
respects.
17
ARTICLE
VI - COVENANTS
6.1 Corporate
Examinations and Investigations.
Prior to
the Closing Date, the Parties acknowledge that they have been entitled, through
their employees and representatives, to make such investigation of the assets,
properties, business and operations, books, records and financial condition
of
the other as they each may reasonably require. No investigations, by a party
hereto shall, however, diminish or waive any of the representations, warranties,
covenants or agreements of the party under this Agreement.
6.2 Further
Assurances.
The
Parties shall execute such documents and other papers and take such further
actions as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby. Each such party shall use
its
best efforts to fulfill or obtain the fulfillment of the conditions to the
Closing, including, without limitation, the execution and delivery of any
documents or other papers, the execution and delivery of which are necessary
or
appropriate to the Closing.
6.3 Confidentiality.
In the
event the transactions contemplated by this Agreement are not consummated,
XXXX,
the ABP
Principal Stockholders and
the
ABP Principal Executive Officer agree to keep confidential any information
disclosed to each other in connection therewith for a period of three (3) years
from the date hereof; provided, however, such obligation shall not apply to
information which:
(i)
|
at
the time of the disclosure was public
knowledge;
|
(ii)
|
is
required to be disclosed publicly pursuant to any applicable federal
or
state securities laws;
|
(iii)
|
after
the time of disclosure becomes public knowledge (except due to the
action
of the receiving party);
|
(iv)
|
the
receiving party had within its possession at the time of disclosure;
or
|
(v) |
is
ordered disclosed by a Court of proper
jurisdiction.
|
6.4 SEC
Filings. On
or
prior to the Closing Date, XXXX shall continue to file and be current in its
filings of all periodic reports required to be filed with the SEC under the
Securities and Exchange Act of 1934, as amended (the “Exchange
Act”).
In
addition, XXXX shall, not later than four (4) Business Days following the Merger
file with the SEC a Form 8-K Interim Report containing therein full disclosure
of the Merger and the business, management and risk factors attributable to
ABP,
including, to the extent required under the Exchange Act or Regulation S-X
of
the Securities Act of 1933, as amended, requisite certified financial statements
of Labock.
6.5 Voting
of Shares. By
their
execution of this Agreement, each of the ABP Principal Stockholders (subject
only to satisfaction of the conditions precedent set forth in Section 5.1),
on
one hand, and the XXXX Principal Stockholder (subject only to satisfaction
of
the conditions precedent set forth in Section 5.2), on the other hand, do hereby
irrevocably and unconditionally covenant and agree, to vote all of their voting
shares of ABP Common Stock and all of their voting shares of XXXX Common Stock
at such Stockholders Meetings IN
FAVOR
of the
Merger, the XXXX Restated Charter and all other transactions contemplated hereby
requiring XXXX stockholder approval.
6.6 XXXX
Restated Charter. Immediately
following the Effective Time of the Merger, XXXX shall have filed the XXXX
Restated Charter in the form of Exhibit
C
or
otherwise in form and content satisfactory to the ABP Principal Stockholders
with the Secretary of State of the State of Nevada.
18
6.7 Boards
of Directors. At
the
Effective Time of the Merger, the initial Board of Directors of XXXX shall
consist of five (5) Persons, all of whom shall be Persons designated by the
ABP
Principal Stockholders. In addition, two (2) of such directors shall be
independent directors (as defined in the Sarbanes Oxley Act of 2002 or rules
of
the stock exchange on which XXXX trades, and one of whom shall be a financial
expert).
6.8 Lock-up
Agreements. On
the
Effective Time of the Merger, each of the ABP Principal Stockholders, and the
Placement Agents in the Bridge Financing, and their Affiliates shall execute
and
deliver to XXXX identical agreements (the “Lock-up
Agreements”),
pursuant to which:
(a) the
ABP
Principal Stockholders shall agree not to effect any public sales of their
XXXX
Common Stock for a minimum of 12 months from the Effective Time of the Merger,
and thereafter, to the extent any of such Persons shall elect to make public
sales, such selling stockholders shall effect sales every ninety (90) days
of
not more than 25% of their aggregate number of shares of XXXX Common Stock
and
then in pro-rata amounts as their respective individual holdings in XXXX Common
Stock bears to all of the shares of XXXX Common Stock owned by all ABP Principal
Stockholders; and
(b)
the
Placement Agents
or their
Affiliates shall agree
not
to effect any public sales of their XXXX Common Stock for a minimum of 12 months
from the Effective Time of the Merger, and thereafter, to the extent any of
such
Persons shall elect to make public sales under Rule 144 or otherwise, such
selling stockholders shall effect sales every ninety (90) days of not more
than
25% of their aggregate number of shares of XXXX Common Stock and then in
pro-rata amounts as their respective individual holdings in XXXX Common Stock
bears to all of the shares of XXXX Common Stock owned by both Placement Agents
or their Affiliates.
6.9 Stock
Option Plan. Prior
to
the Effective Time of the Merger, the board of directors of XXXX shall approve
and shall submit to the vote of the XXXX stockholders, an incentive stock option
plan for key employees, directors, consultants and others providing services
to
XXXX, pursuant to which up to 10,000,000 shares of XXXX Common Stock shall
be
authorized for issuance upon such terms and conditions as shall be recommended
by the compensation committee and approved by a majority of the members of
the
board of directors (the “XXXX
Stock Option Plan”).
6.10 Indemnification
of Officers and Directors. It
is the
intention of the Parties that XXXX shall indemnify its officers and directors
to
the fullest extent permitted by Nevada law. In such connection, the Parties
agree not to amend the certificates of incorporation or by-laws of XXXX or
ABP
if such amendment shall have the effect of reducing, terminating or otherwise
adversely affecting the indemnification rights and privileges applicable to
officers and directors of each of XXXX and ABP, as the same are in effect
immediately prior to the Effective Time of the Merger.
6.11 Expenses. It
is
understood and agreed that following the execution of this Agreement, any and
all expenses with respect to any filings, documentation and related matters
with
respect to the consummation of the transactions contemplated hereby shall be
the
sole responsibility of ABP, and neither XXXX nor the XXXX Principal Stockholder
shall be responsible for any such expenses or fees associated with such
filings.
19
6.12 Equity
Financing. Following
the Effective Time of the Merger, all of the Parties hereto shall use their
collective best efforts to consummate the Equity Financing.
6.13 Specific
Performance.
(a) Each
of
ABP and the ABP Principal Stockholders acknowledge and agree that the Bridge
Financing is being consummated in partial reliance upon the fact that ABP or
its
successor entity would become a publicly traded corporation by not later than
twenty Business Days following completion of the Bridge Financing (scheduled
to
occur on or before June 30, 2008). Accordingly, each of ABP and the ABP
Principal Stockholders do hereby acknowledge and agree that, absent only a
material breach by XXXX of its representations and warrants or the failure
on
the part of XXXX to perform any of its material covenants and agreements
contained herein, if ABP or the ABP Principal Stockholders shall fail or refuse
to timely perform their respective covenants and agreements contained herein
(including those set forth in Section 5) that would make it impossible or
impracticable for XXXX to consummate by July 31, 2008 (the “Outside
Merger Date”),
the
Merger contemplated hereby, the holders of the ABP Notes and ABP Warrants as
well as XXXX would have no adequate remedy at law. Accordingly, each of ABP
and
the ABP Principal Stockholders do hereby agree that, in addition to any other
remedies available to it or them at law or in equity, any of the holders of
the
ABP Notes and ABP Warrants and/or XXXX or their legal representative may seek
and obtain from any federal or state court of competent jurisdiction in New
York, New York, specific performance of this Agreement. Each of ABP and the
ABP
Principal Stockholders do hereby consent to the jurisdiction of such federal
or
state court of competent jurisdiction in New York, New York.
(b) Each
of
XXXX and the XXXX Principal Stockholder acknowledge and agree that the Bridge
Financing is being consummated in partial reliance upon the fact that ABP or
its
successor entity would become a publicly traded corporation. Accordingly, each
of XXXX and the XXXX Principal Stockholder do hereby acknowledge and agree
that,
absent only a material breach by ABP and the ABP Principal Stockholders of
their
representations and warrants or the failure on the part of ABP or the ABP
Principal Stockholders to perform any of their material covenants and agreements
contained herein, if XXXX or the XXXX Principal Stockholder shall fail or refuse
to timely perform their respective covenants and agreements contained herein
(including those set forth in Section 5) that would make it impossible or
impracticable for ABP to consummate by the Outside Merger Date the Merger
contemplated hereby, ABP, the ABP Principal Stockholders and/or the holders
of
ABP Notes would have no adequate remedy at law. Accordingly, each of XXXX and
the XXXX Principal Stockholder do hereby agree that, in addition to any other
remedies available to it or them at law or in equity, any of ABP, the ABP
Principal Stockholders and/or the holders of the ABP Notes or their legal
representative may seek and obtain from any federal or state court of competent
jurisdiction in New York, New York, specific performance of this Agreement.
Each
of XXXX and the XXXX Principal Stockholder do hereby consent to the jurisdiction
of such federal or state court of competent jurisdiction in New York, New
York.
20
ARTICLE
VII - SURVIVAL OF REPRESENTATIONS AND WARRANTIES
7.1 Notwithstanding
any right of either party to investigate the affairs of the other party and
its
Shareholders, each party has the right to rely fully upon representations,
warranties, covenants and agreements of the other party and its Shareholders
contained in this Agreement or in any document delivered to one by the other
or
any of their representatives, in connection with the transactions contemplated
by this Agreement. All such representations, warranties, covenants and
agreements shall survive the execution and delivery hereof and the closing
hereunder for eighteen (18) months following the Closing.
ARTICLE
VIII - MISCELLANEOUS
8.1 Waivers.
The
waiver of a breach of this Agreement or the failure of any party hereto to
exercise any right under this Agreement shall in no way constitute waiver as
to
future breach whether similar or dissimilar in nature or as to the exercise
of
any further right under this Agreement.
8.2 Amendment.
This
Agreement may be amended or modified only by an instrument of equal formality
signed by the Parties or the duly authorized representatives of the respective
Parties.
8.3 Assignment.
This
Agreement is not assignable except by operation of law.
8.4 Notice.
Until
otherwise specified in writing, the mailing addresses and fax numbers of the
Parties of this Agreement shall be as follows:
To:
XXXX:
|
|
Micro
Mammoth Solutions
|
|
0000
Xxxx Xxxx
|
|
Xxxxxx
Xxxx, Xxxxxxx 00000
|
|
Attn:
Xxxxx Xxxxxx, President
|
|
tel:
(000)
000-0000
|
|
email:
xxxxxx@xxxxxxxxxxx00.xxx
|
|
with
a copy to:
|
Xxxxxxx
Xxxxx,
Esq.
|
Law
Office of Xxxxxxx X. Xxxxx
|
|
0000
Xxxxxxx Xxxxxxxxx
|
|
Xxxxxxxxxxx,
XX 00000
|
|
(000)
000-0000
|
|
email:
xxxxxxxxxx@xxxxx.xxx
|
|
To:
ABP
and the ABP Principal Stockholders:
|
|
Advanced
Blast Protection, Inc.
|
|
Biscayne
Center
|
|
00000
Xxxxxxxx Xxxxxxxxx
|
|
Xxxxx
000
|
|
Xxxxx,
XX 00000
|
|
Tel:
(000) 000-0000
|
|
Attention:
Xx. Xxxxxx X. Xxxxxxxx, President
|
|
email:
xxxxxxxxxxxxxxx@xxx.xxx
|
21
with
a copy to:
|
Xxxxxxx
X. Xxxxx, Esq.
|
Xxxxxxx
Xxxx, LLP
|
|
0000
Xxxxxxxx
|
|
00xx
Xxxxx
|
|
Xxx
Xxxx, XX 00000
|
|
(000)
000-0000
|
|
email:
xxxxxx@xxxxxxxxxxx.xxx
|
Any
notice or statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address which shall have been furnished in
writing to the addressor.
8.5 Governing
Law.
This
Agreement shall be construed, and the legal relations between the Parties
determined, in accordance with the laws of the State of Florida, thereby
precluding any choice of law rules which may direct the application of the
laws
of any other jurisdiction.
8.6 Publicity.
No
publicity release or announcement concerning this Agreement or the transactions
contemplated hereby shall be issued by either party hereto at any time from
the
signing hereof without advance approval in writing of the form and substance
by
the other party.
8.7 Entire
Agreement.
This
Agreement (including the Schedules to be attached hereto) and the collateral
agreements executed in connection with the consummation of the transactions
contemplated herein contain the entire agreement among the Parties with respect
to the transactions contemplated hereby, and supersedes all prior agreements,
written or oral, with respect hereof.
8.8 Headings.
The
headings in this Agreement are for reference purposes only and shall not in
any
way affect the meaning or interpretation of this Agreement.
8.9 Severability
of Provisions.
The
invalidity or unenforceability of any term, phrase, clause, paragraph,
restriction, covenant, agreement or provision of this Agreement shall in no
way
affect the validity or enforcement of any other provision or any part
thereof.
8.10 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed, shall constitute an original copy hereof, but all of which together
shall consider but one and the same document.
8.11 Binding
Effect.
This
Agreement shall be binding upon the Parties hereto and inure to the benefit
of
the Parties, their respective heirs, administrators, executors,
successors
and assigns.
8.12 Press
Releases.
The
Parties will mutually agree as to the wording and timing of any informational
releases concerning this transaction prior to and through Closing.
[the
balance of this page intentionally left blank - signature pages
follow]
22
IN
WITNESS WHEREOF, the
Parties have executed this Agreement on the date first above
written.
ATTEST:
|
MICRO
MAMMOTH SOLUTIONS, INC.
|
||||
(a
Florida corporation)
|
|||||
|
By:
|
/s/
Xxxxx Xxxxxx
|
|||
|
, Secretary |
Xxxxx
Xxxxxx, President
|
|||
ATTEST:
|
ABP
ACQUISITION CORP.
|
||||
(a
Florida corporation)
|
|||||
|
By:
|
/s/
Xxxxx Xxxxxx
|
|||
Secretary
|
Xxxxx
Xxxxxx, President
|
||||
ATTEST:
|
ADVANCED
BLAST PROTECTION, INC.
|
||||
(a
Florida corporation)
|
|||||
|
By:
|
/s/
Xx. Xxxxxx X. Xxxxxxxx
|
|||
Secretary
|
Xx.
Xxxxxx X. Xxxxxxxx,
|
||||
Chairman
and Chief Executive Officer
|
|||||
|
|||||
ABP
PRINCIPAL STOCKHOLDERS:
|
|||||
/s/
Xxxxxx Xxxxxx
|
|||||
Xxxxxx
Xxxxxx
|
|||||
/s/
Xx. Xxxxxx X. Xxxxxxxx
|
|||||
Xx.
Xxxxxx X. Xxxxxxxx
|
|||||
/s/
Xxxxx Xxxxx
|
|||||
Xxxxx
Xxxxx
|
|||||
XXXX
PRINCIPAL STOCKHOLDERS:
|
|||||
/s/
Xxxxx Xxxxxx
|
|||||
|
Xxxxx
Xxxxxx
|
23