EXHIBIT 7.3
Plan of Reorganization and Exchange Agreement
This Plan of Reorganization and Exchange Agreement (the "Agreement") is
made and entered into as of the 1st day of July 1999 by and between Commercial
Labor Management, Inc., a Nevada corporation ("CLMI"), Zeros & Ones, Inc., a
Delaware corporation ("ZOI"), Xxxxxx Xxxxx, an individual ("Xxxxx"), Xxxxxx
Xxxxxx-Xxxxx, an individual ("Xxxxxx-Xxxxx"), and Polygonal Research
Corporation, a Delaware corporation ("Polygonal"), with respect to the following
facts:
RECITALS
A. This Agreement hereby supercedes and replaces the Plan of
Reorganization and Exchange Agreement made and entered into as
of March 26, 1999 by and between Zeros & Ones, Inc. ("ZOI"),
Xxxxx, Xxxxxx-Xxxxx, and Polygonal.
X. Xxxxx and Xxxxxx-Xxxxx own 100% of the total issued and
outstanding capital stock of Polygonal.
C. Polygonal is engaged in the business of developing an image
compression technology called Dynamic Polygonal Compression
("DPC"), and manufacturing products that utilize the DPC
engine.
D. CLMI is a public reporting company trading on the OTC Bulletin
Board. CLMI was incorporated for the purpose of engaging in
any lawful business.
E. CLMI desires to acquire 100% of the total issued and
outstanding stock of Polygonal in exchange for a total of
600,000 shares of the Common Stock of CLMI, to be issued
300,000 shares to Xxxxx and 300,000 shares to Xxxxxx-Xxxxx in
accordance with this Agreement.
F. The plan of reorganization evidenced by this Agreement is
intended to be a tax free reorganization under Section 368 of
the Internal Revenue Code of 1986, as amended. It is part of
an overall tax free plan of reorganization pursuant to which
CLMI is also acquiring 100% of the assets of ZOI and 100% of
the total issued and outstanding stock of Quantum Arts, Inc.,
Wood Ranch Technology Group, Inc., Kidvision, Inc. EKO
Corporation, and Pillar West Entertainment, Inc.
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NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency to which are hereby acknowledged by the parties to this Agreement,
and in light of the above recitals to this Agreement, the parties to this
Agreement hereby agree as follows:
1. Exchange of Equity Interests
----------------------------
In consideration for the issuance of a total of 600,000 shares of the
Common Stock, par value $.001 per share, of CLMI to Xxxxx and Xxxxxx-Xxxxx, and
the other covenants of CLMI in this Agreement, Xxxxx and Xxxxxx-Xxxxx hereby
agree to convey to CLMI all of Xxxxx' and Xxxxxx-Xxxxx'x capital stock and
right, title and interest in and to Polygonal, effective as of the date first
above written.
2. Closing and Further Acts
------------------------
The closing of the exchange (the "Closing") will occur as soon
practicable after the execution of this Agreement by all parties hereto, but not
later than July 1, 1999 (the "Closing Date"). At the Closing, Xxxxx and
Xxxxxx-Xxxxx will tender to CLMI certificates and any other documents evidencing
100% of Xxxxx' and Xxxxxx-Xxxxx'x ownership in Polygonal, and CLMI will deliver
to Xxxxx and Xxxxxx-Xxxxx each a stock certificate evidencing 300,000 shares of
the Common Stock, par value $.001 per share, of CLMI being issued to Xxxxx and
Xxxxxx-Xxxxx pursuant to this Agreement. All parties to this Agreement hereby
agree to execute all other documents and take all other action which are
reasonably necessary or appropriate in order to effect all of the transactions
contemplated by this Agreement.
3. Covenants of CLMI
-----------------
3.1 Management of CLMI and Polygonal After Closing.
----------------------------------------------
After the Closing, Xxxxx will be a director of CLMI and a director of
Polygonal, and Xxxxxx-Xxxxx will be a director of CLMI and the President and
Chairman of the Board of Directors of Polygonal. CLMI agrees that for the first
year after the Closing, Polygonal will have a Board of Directors consisting of
three to five members, one of which will be Xxxxxx-Xxxxx, one of which will be
Xxxxx or another person designated by Xxxxx, and the other one or more of whom
will be mutually agreed upon by Xxxxx and Xxxxxx-Xxxxx.
3.2 Percentage Ownership in CLMI.
----------------------------
After the Closing and after the acquisition by CLMI of 100% of the assets
of ZOI and 100% of the outstanding stock of Polygonal Research Corporation, EKO
Corporation, Kidvision, Inc., Wood Ranch Technology Corporation, and Pillar West
Entertainment, Inc., CLMI will have a total of 7,000,000 shares of its Common
Stock outstanding, and 320,000 warrants to purchase an additional 320,000 shares
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of CLMI's Common Stock for a purchase price of $3.00 per share for a period of
three years from the date of issue of the Warrants, which is expected to occur
on or about July 1, 1999. CLMI will have no other equity securities or
securities convertible into equity securities of CLMI outstanding on the Closing
Date.
4. Representations and Warranties of Polygonal, Xxxxx and Xxxxxx-Xxxxx.
-------------------------------------------------------------------
Polygonal, Xxxxx and Xxxxxx-Xxxxx represent and warrant to CLMI as
follows:
4.1 Power and Authority; Binding Nature of Agreement.
------------------------------------------------
Polygonal, Xxxxx and Xxxxxx-Xxxxx have full power and authority to
enter into this Agreement and to perform their obligations hereunder. The
execution, delivery and performance of this Agreement by them has been duly
authorized by all necessary action on their part. Assuming that this Agreement
is a valid and binding obligation of each of the other parties hereto, this
Agreement is a valid and binding obligation of Polygonal, Xxxxx and
Xxxxxx-Xxxxx.
4.2 Subsidiaries.
------------
There is no corporation, general partnership, limited partnership,
joint venture, association, trust or other entity or organization which
Polygonal directly or indirectly controls or in which Polygonal directly or
indirectly owns any equity or other interest.
4.3 Good Standing.
-------------
Polygonal (i) is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated, (ii) has all
necessary power and authority to own its assets and to conduct its business as
it is currently being conducted, and (iii) is duly qualified or licensed to do
business and is in good standing in every jurisdiction (both domestic and
foreign) where such qualification or licensing is required.
4.4 Charter Documents and Corporate Records.
---------------------------------------
Polygonal has delivered to CLMI complete and correct copies of (i) the
articles of incorporation, bylaws and other charter or organizational documents
of Polygonal, including all amendments thereto, (ii) the stock records of
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Polygonal, and (iii) the minutes and other records of the meetings and other
proceedings of the shareholders and directors of Polygonal. Polygonal is not in
violation or breach of (i) any of the provisions of its articles of
incorporation, bylaws or other charter or organizational documents, or (ii) any
resolution adopted by its shareholders or directors. There have been no meetings
or other proceedings of the shareholders or directors of Polygonal that are not
fully reflected in the appropriate minute books or other written records of
Polygonal.
4.5 Capitalization.
--------------
The authorized capital stock of Polygonal consists of fifteen hundred
(1,500) shares of common stock, no par value per share, of which 1,500 shares
are issued and outstanding. All of the outstanding shares of the capital stock
of Polygonal are validly issued, fully paid and nonassessable, and have been
issued in full compliance with all applicable federal, state, local and foreign
securities laws and other laws. There are no (i) outstanding options, warrants
or rights to acquire any shares of the capital stock or other securities of
Polygonal, (ii) outstanding securities or obligations which are convertible into
or exchangeable for any shares of the capital stock or other securities of
Polygonal, or (iii) contracts or arrangements under which Polygonal is or may
become bound to sell or otherwise issue any shares of its capital stock or any
other securities.
4.6 Financial Statements.
--------------------
Polygonal has delivered to CLMI the following financial statements (the
"Polygonal Financial Statements"): the unaudited balance sheet of Polygonal as
of December 31, 1998 (the "December 31, 1998 Balance Sheet"). Except as stated
therein or in the notes thereto, the Polygonal Financial Statements: (a) present
fairly the financial position of Polygonal as of the respective dates thereof;
and (b) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods covered.
4.7 Absence of Changes.
------------------
Except as otherwise disclosed to CLMI in writing in Exhibit A to this
Agreement, since December 31, 1998:
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(a) There has not been any material adverse change in the
business, condition, assets, operations or prospects of Polygonal and
no event has occurred that might have an adverse effect on the
business, condition, assets, operations or prospects of Polygonal.
(b) Polygonal has not (i) declared, set aside or paid any
dividend or made any other contribution in respect of any shares of
capital stock, nor (ii) repurchased, redeemed or otherwise reacquired
any shares of capital stock or other securities.
(c) Polygonal has not sold or otherwise issued any shares of
capital stock or any other securities.
(d) Polygonal has not amended its articles of incorporation,
bylaws or other charter or organizational documents, nor has it
effected or been a party to any merger, recapitalization,
reclassification of shares, stock split, reverse stock split,
reorganization or similar transaction.
(e) Polygonal has not formed any subsidiary or contributed any
funds or other assets to any subsidiary.
(f) Polygonal has not purchased or otherwise acquired any
assets, nor has it leased any assets from any other person, except in
the ordinary course of business consistent with past practice.
(g) Polygonal has not made any capital expenditure outside the
ordinary course of business or inconsistent with past practice, or in
an amount exceeding three thousand dollars ($3,000), and the total
amount of the capital expenditures made by Polygonal has not exceeded
ten thousand dollars ($10,000).
(h) Polygonal has not sold or otherwise transferred any assets
to any other person, except in the ordinary course of business
consistent with past practice and at a price equal to the fair market
value of the assets transferred.
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(i) There has not been any loss, damage or destruction to any
of the properties or assets of Polygonal (whether or not covered by
insurance).
(j) Polygonal has not written off as uncollectible any
indebtedness or accounts receivable, except for write-offs that were
made in the ordinary course of business consistent with past practice
and that involved less than one hundred dollars ($100) singly and less
than one thousand dollars ($1,000) in the aggregate.
(k) Polygonal has not leased any assets to any other person
except in the ordinary course of business consistent with past practice
and at a rental rate equal to the fair rental value of the leased
assets.
(l) Polygonal has not mortgaged, pledged, hypothecated or
otherwise encumbered any assets, except in the ordinary course of
business consistent with past practice.
(m) Polygonal has not entered into any contract or incurred
any debt, liability or other obligation (whether absolute, accrued,
contingent or otherwise), except for (i) contracts that were entered
into in the ordinary course of business consistent with past practice
and that have terms of less than six months and do not contemplate
payments by or to Polygonal which will exceed, over the term of the
contract, three thousand dollars ($3,000) in the aggregate, and (ii)
current liabilities incurred in the ordinary course of business
consistent with the past practice.
(n) Polygonal has not made any loan or advance to any other
person, except for advances that have been made to customers in the
ordinary course of business consistent with past practice and that have
been properly reflected as "accounts receivables."
(o) Polygonal has not paid any bonus to, or increased the
amount of the salary, fringe benefits or other compensation or
remuneration payable to, any of the directors, officers or employees of
Polygonal.
(p) No contract or other instrument to which Polygonal is or
was a party or by which Polygonal or any of Polygonal's assets are or
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were bound has been amended or terminated, except in the ordinary
course of business consistent with past practice.
(q) Polygonal has not discharged any lien or discharged or
paid any indebtedness, liability or other obligation, except for
current liabilities that (i) are reflected in the December 31, 1998
Balance Sheet or have been incurred since December 31, 1998 in the
ordinary course of business consistent with past practice, and (ii)
have been discharged or paid in the ordinary course of business
consistent with past practice.
(r) Polygonal has not forgiven any debt or otherwise released
or waived any right or claim, except in the ordinary course of business
consistent with past practice.
(s) Polygonal has not changed its methods of accounting or its
accounting practices in any respect.
(t) Polygonal has not entered into any transaction outside the
ordinary course of business or inconsistent with past practice.
(u) Polygonal has not agreed or committed (orally or in
writing) to do any of the things described in clauses (b) through (t)
of this Section 4.7.
4.8 Absence of Undisclosed Liabilities.
----------------------------------
Polygonal has no debt, liability or other obligation of any nature
(whether due or to become due and whether absolute, accrued, contingent or
otherwise) that is not reflected or reserved against in the December 31, 1998
Balance Sheet, except for obligations incurred since December 31, 1998 in the
ordinary course of business consistent with past practice.
4.9 Contracts.
---------
Polygonal has delivered to CLMI complete and correct copies of all of
the contracts and other instruments including all amendment hereto. All of such
contracts and other instruments are valid and in full force and effect, and are
enforceable in accordance with their terms. There is no existing default by any
person under any of said contracts or other instruments, and there exists no
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condition or set of circumstance which, with notice or lapse of time or both,
would constitute such a default.
4.10 Title to Personal Property.
--------------------------
Polygonal has good, valid and marketable title to all of its personal
property (both tangible and intangible) and interests therein, including without
limitation all of the personal property reflected in the December 31, 1998
Balance Sheet. All of such personal property and interests therein are owned
free and clear of any liens, pledges, security interests, claims, equities,
options, charges, encumbrances or restrictions.
4.11 Tax Matters.
-----------
All federal, state, local and foreign tax returns required to be filed
by Polygonal have been properly prepared and duly filed, and all taxes required
to be paid by, or claimed by any federal, state, local or foreign taxing
authority to be payable by, the Company have been paid in full. The provisions
for taxes reflected in the December 31, 1998 Balance Sheet are adequate for all
taxes payable with respect to the period prior to December 31, 1998. There is no
(i) pending audit or examination of Polygonal (or of any of the tax returns
thereof) being conducted by any federal, state, local or foreign taxing
authority, (ii) pending or threatened claim or dispute relating to the payment
of any taxes by Polygonal, (iii) basis upon which any federal, state, local or
foreign taxing authority may make any claim for the payment of additional taxes
by Polygonal, or (iv) outstanding agreement or waiver extending the statutory
limitations period applicable to the payment of any taxes by Polygonal.
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4.12. Compliance With Laws; Licenses and Permits.
------------------------------------------
Polygonal, to its knowledge, is not in violation of, nor has it failed
to conduct its business in full compliance with, any applicable federal, state,
local or foreign laws, regulations, rules, treaties, rulings, orders, directives
or decrees. Polygonal has delivered to CLMI complete and correct copies of all
of the licenses, permits, authorizations and franchises to which Polygonal is
subject and all said licenses, permits, authorizations and franchises are valid
and in full force and effect. Said licenses, permits, authorizations and
franchises constitute all of the licenses, permits, authorizations and
franchises necessary to permit Polygonal to conduct its business in the manner
in which it is now being conducted, and Polygonal is not in violation or breach
of any of the terms, requirements or conditions of any of said licenses,
permits, authorizations or franchises.
4.13. Title to Xxxxx and Xxxxxx-Xxxxx'x Stock.
---------------------------------------
Xxxxx and Xxxxxx-Xxxxx have good, valid and marketable title to all of
Xxxxx and Xxxxxx-Xxxxx'x stock in Polygonal, and can convey good title to said
stock to CLMI free and clear of any liens, claims, encumbrances or security
interests.
4.14. Litigation.
----------
There is no action, suit, proceeding, dispute, litigation, claim,
complaint or investigation by or before any court, tribunal, governmental body,
governmental agency or arbitrator pending or, to Polygonal's knowledge,
threatened against or with respect to Polygonal which (i) if adversely
determined would have an adverse effect on the business, condition, assets,
operations or prospects of Polygonal, or (ii) challenges or would challenge any
of the actions required to be taken by the Polygonal under this Agreement. There
exists no basis for any such action, suit, proceeding, dispute, litigation,
claim, complaint or investigation.
4.15 Non-Contravention.
-----------------
Neither (a) the execution and delivery of this Agreement, nor (b) the
performance of this Agreement will: (i) contravene or result in a violation of
any of the provisions of the articles of incorporation, bylaws or other charter
or organizational documents of Polygonal; (ii) contravene or result in a
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violation of any resolution adopted by the shareholders or directors of
Polygonal; (iii) result in a violation or breach of, or give any person the
right to declare (whether with or without notice or lapse of time) a default
under or to terminate, any agreement or other instrument to which Polygonal,
Xxxxx or Xxxxxx-Xxxxx is a party or by which Polygonal or any of its assets or
Xxxxx or Xxxxxx-Xxxxx is bound; (iv) give any person the right to accelerate the
maturity of any indebtedness or other obligation of Polygonal; (v) result in the
loss of any license or other contractual right of Polygonal; (vi) result in the
loss of, or in a violation of any of the terms, provisions or conditions of, any
governmental license, permit, authorization or franchise of Polygonal; (vii)
result in the creation or imposition of any lien, charge, encumbrance or
restriction on any of the assets of Polygonal or on Xxxxx and Xxxxxx-Xxxxx'x
stock in Polygonal; (viii) result in the reassessment or revaluation of any
property of Polygonal or by any taxing authority or other governmental
authority; (ix) result in the imposition of, or subject Polygonal to any
liability for, any conveyance or transfer tax or any similar tax; or (x) result
in a violation of any law, rule, regulation, treaty, ruling, directive, order,
arbitration award, judgment or decree to which Polygonal or any of its assets or
any of Xxxxx and Xxxxxx-Xxxxx'x stock in Polygonal is subject.
4.16. Approvals.
---------
No authorization, consent or approval of, or registration or filing
with, any governmental authority or any other person is required to be obtained
or made by Polygonal, Xxxxx or Xxxxxx-Xxxxx in connection with the execution,
delivery or performance of this Agreement, including the sale to CLMI of the
shares of Xxxxx and Xxxxxx-Xxxxx'x stock in Polygonal being acquired by CLMI
hereunder.
4.17. Brokers.
-------
Polygonal has not agreed to pay any brokerage fees, finder's fees or
other fees or commissions with respect to the transactions contemplated by this
Agreement, and, to Polygonal's knowledge, no person is entitled, or intends to
claim that it is entitled, to receive any such fees or commissions in connection
with such transaction.
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4.18. Full Disclosure.
---------------
Neither this Agreement (including the exhibits hereto) nor any
statement, certificate or other document delivered to CLMI by or on behalf of
Polygonal, Xxxxx, or Xxxxxx-Xxxxx contains any untrue statement of a material
fact or omits to state a material fact necessary to make the representations and
other statements contained herein and therein not misleading.
4.19. Representations True on Closing Date.
------------------------------------
The representations and warranties of Polygonal, Xxxxx and Xxxxxx-Xxxxx
set forth in this Agreement are true and correct on the date hereof, and will be
true and correct on the Closing Date as though such representations and
warranties were made as of the Closing Date.
4.20 Non-Distributive Intent.
-----------------------
The shares of CLMI stock being acquired by Xxxxx and Xxxxxx-Xxxxx
pursuant to this Agreement are not being acquired by Xxxxx and Xxxxxx-Xxxxx with
a view to the public distribution of them. Xxxxx and Xxxxxx-Xxxxx acknowledge
and agree that the CLMI stock acquired by them pursuant to this Agreement has
not been registered or qualified under federal or state securities laws, and may
not be sold, conveyed, transferred, assigned or hypothecated without being
registered under the Securities Act of 1933, as amended, and applicable state
law, or in the alternative submission of evidence reasonably satisfactory to
CLMI that an exemption from registration is available.
5. Representations and Warranties of CLMI.
--------------------------------------
CLMI represents and warrants to Polygonal, Xxxxx and Xxxxxx-Xxxxx as
follows:
5.1 Power and Authority; Binding Nature of Agreement.
------------------------------------------------
CLMI has full power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance of
this Agreement by CLMI has been duly authorized by all necessary action on its
part. Assuming that this Agreement is a valid and binding obligation of each of
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the other parties hereto, this Agreement is a valid and binding obligation of
CLMI.
5.2 Good Standing.
-------------
CLMI (i) is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated, (ii) has all necessary
power and authority to own its assets and to conduct its business as it is
currently being conducted, and (iii) is duly qualified or licensed to do
business and is in good standing in every jurisdiction (both domestic and
foreign) where such qualification or licensing is required.
5.3 Charter Documents and Corporate Records.
---------------------------------------
CLMI has delivered to Xxxxx, Xxxxxx-Xxxxx and Polygonal complete and
correct copies of (i) the articles of incorporation, bylaws and other charter or
organizational documents of CLMI, including all amendments thereto, (ii) the
stock records of CLMI, and (iii) the minutes and other records of the meetings
and other proceedings of the shareholders and directors of CLMI. CLMI is not in
violation or breach of (i) any of the provisions of its articles of
incorporation, bylaws or other charter or organizational documents, or (ii) any
resolution adopted by its shareholders or directors. There have been no meetings
or other proceedings of the shareholders or directors of CLMI that are not fully
reflected in the appropriate minute books or other written records of the
Company.
5.4 Capitalization.
The authorized capital stock of CLMI consists of 50,000,000 shares of
common stock, par value $.001 per share, of which 7,000,000 shares will be
issued and outstanding as indicated in Section 3.2 of this Agreement, and
2,000,000 shares of preferred stock par value $.001 per share, none of which is
issued and outstanding. All of the outstanding shares of the capital stock of
CLMI are validly issued, fully paid and nonassessable, and have been issued in
full compliance with all applicable federal, state, local and foreign securities
laws and other laws. Except as disclosed in Section 3.2 or pursuant to Section
5.5 or elsewhere in this Agreement, there are no (i) outstanding options,
warrants or rights to acquire any shares of the capital stock or other
securities of CLMI, (ii) outstanding securities or obligations which are
convertible into or exchangeable for any shares of the capital stock or other
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securities of CLMI, or (iii) contracts or arrangements under which CLMI is or
may become bound to sell or otherwise issue any shares of its capital stock or
any other securities.
5.5 Financial Statements.
--------------------
CLMI has delivered to Xxxxx, Xxxxxx-Xxxxx and Polygonal the following
financial statements (the "CLMI Financial Statements"): (i) the balance sheet of
CLMI as of December 31, 1998; and (ii) the statements of income and retained
earnings, stockholders' equity and changes in financial position of CLMI for the
year ended December 31, 1998; and (iii) supporting supplemental schedules.
Except as stated therein or in the notes thereto, the CLMI Financial Statements:
(a) present fairly the financial position of CLMI as of the respective dates
thereof and the results of operations and changes in financial position of CLMI
for the respective periods covered thereby; and (b) have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered.
5.6 Absence of Changes.
------------------
Except as otherwise disclosed to Xxxxx, Xxxxxx-Xxxxx or Polygonal in
writing in Exhibit A to this Agreement, since December 31, 1998, there has not
been any material adverse change in the business, condition, assets, operations
or prospects of CLMI and no event has occurred that might have an adverse effect
on the business, condition, assets, operations or prospects of CLMI.
5.7 Absence of Undisclosed Liabilities.
----------------------------------
CLMI has no debt, liability or other obligation of any nature (whether
due or to become due and whether absolute, accrued, contingent or otherwise)
that is not reflected or reserved against in the December 31, 1998 Balance
Sheet, except for obligations incurred since December 31, 1998 in the ordinary
course of business consistent with past practice.
5.8 Litigation.
----------
There is no action, suit, proceeding, dispute, litigation, claim,
complaint or investigation by or before any court, tribunal, governmental body,
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governmental agency or arbitrator pending or, to CLMI's knowledge, threatened
against or with respect to CLMI which (i) if adversely determined would have an
adverse effect on the business, condition, assets, operations or prospects of
CLMI, or (ii) challenges or would challenge any of the actions required to be
taken by CLMI under this Agreement. There exists no basis for any such action,
suit, proceeding, dispute, litigation, claim, complaint or investigation.
5.9 Non-Contravention.
-----------------
Neither (a) the execution and delivery of this Agreement, nor (b) the
performance of this Agreement will: (i) contravene or result in a violation of
any of the provisions of the articles of incorporation, bylaws or other charter
or organizational documents of CLMI; (ii) contravene or result in a violation of
any resolution adopted by the shareholders or directors of CLMI; (iii) result in
a violation or breach of, or give any person the right to declare (whether with
or without notice or lapse of time) a default under or to terminate, any
agreement or other instrument to which CLMI is a party or by which CLMI or any
of its assets are bound; (iv) give any person the right to accelerate the
maturity of any indebtedness or other obligation of CLMI; (v) result in the loss
of any license or other contractual right of CLMI; (vi) result in the loss of,
or in a violation of any of the terms, provisions or conditions of, any
governmental license, permit, authorization or franchise of CLMI; (vii) result
in the creation or imposition of any lien, charge, encumbrance or restriction on
any of the assets of CLMI; (viii) result in the reassessment or revaluation of
any property of CLMI by any taxing authority or other governmental authority;
(ix) result in the imposition of, or subject CLMI to any liability for, any
conveyance or transfer tax or any similar tax; or (x) result in a violation of
any law, rule, regulation, treaty, ruling, directive, order, arbitration award,
judgment or decree to which CLMI or any of its assets is subject.
5.10 Approvals.
---------
No authorization, consent or approval of, or registration or filing
with, any governmental authority or any other person is required to be obtained
or made by CLMI in connection with the execution, delivery or performance of
this Agreement.
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5.11 Brokers.
-------
CLMI has not agreed to pay any brokerage fees, finder's fees or other
fees or commissions with respect to the transactions contemplated by this
Agreement, and, to CLMI's knowledge, no person is entitled, or intends to claim
that it is entitled, to receive any such fees or commissions in connection with
such transactions.
5.12 Full Disclosure.
---------------
Neither this Agreement (including the exhibits hereto) nor any
statement, certificate or other document delivered to Xxxxx, Xxxxxx-Xxxxx or
Polygonal by or on behalf of CLMI contains any untrue statement of a material
fact or omits to state a material fact necessary to make the representations and
other statements contained herein and therein not misleading.
5.13 Representations True on Closing Date.
------------------------------------
The representations and warranties of CLMI set forth in this Agreement
are true and correct on the date hereof, and will be true and correct on the
Closing Date as though such representations and warranties were made as of the
Closing Date.
6. Injunctive Relief
-----------------
6.1. Damages Inadequate.
------------------
Each party acknowledges that it would be impossible to measure in money
the damages to the other party if there is a failure to comply with any
covenants and provisions of this Agreement, and agrees that in the event of any
breach of any covenant or provision, the other party to this Agreement will not
have an adequate remedy at law.
6.2. Injunctive Relief.
-----------------
It is therefore agreed that the other party to this Agreement who is
entitled to the benefit of the covenants and provisions of this Agreement which
have been breached, in addition to any other rights or remedies which they may
have, shall be entitled to immediate injunctive relief to enforce such covenants
and provisions, and that in the event that any such action or proceeding is
brought in equity to enforce them, the defaulting or breaching party will not
urge a defense that there is an adequate remedy at law.
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7. Waivers.
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If any party shall at any time waive any rights hereunder resulting
from any breach by the other party of any of the provisions of this Agreement,
such waiver is not to be construed as a continuing waiver of other breaches of
the same or other provisions of this Agreement. Resort to any remedies referred
to herein shall not be construed as a waiver of any other rights and remedies to
which such party is entitled under this Agreement or otherwise.
8. Successors and Assigns.
----------------------
Each covenant and representation of this Agreement shall inure to the
benefit of and be binding upon each of the parties, their personal
representatives, assigns and other successors in interest.
9. Entire and Sole Agreement.
-------------------------
This Agreement supercedes and replaces the Plan of Reorganization and
Exchange Agreement made and entered into on March 26, 1999 by and between ZOI,
Xxxxx, Xxxxxx-Xxxxx, and Polygonal. This Agreement constitutes the entire
agreement between the parties and supersedes all other agreements,
representations, warranties, statements, promises and undertakings, whether oral
or written, with respect to the subject matter of this Agreement. This Agreement
may be modified or amended only by a written agreement signed by the parties
against whom the amendment is sought to be enforced.
10. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of California, and the venue for any action hereunder
shall be in the appropriate forum in the County of Los Angeles, State of
California.
11. Counterparts.
------------
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
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12. Attorneys' Fees and Costs.
-------------------------
In the event that either party must resort to legal action in order to
enforce the provisions of this Agreement or to defend such action, the
prevailing party shall be entitled to receive reimbursement from the
nonprevailing party for all reasonable attorneys' fees and all other costs
incurred in commencing or defending such action, or in enforcing this Agreement,
including but not limited to post judgment costs.
13. Assignment.
----------
This Agreement shall not be assignable by any party without prior
written consent of the other parties.
14. Remedies.
--------
Except as otherwise expressly provided herein, none of the remedies set
forth in this Agreement are intended to be exclusive, and each party shall have
all other remedies now or hereafter existing at law, in equity, by statute or
otherwise. The election of any one or more remedies shall not constitute a
waiver of the right to pursue other available remedies.
15. Section Headings.
----------------
The section headings in this Agreement are included for convenience
only, are not a part of this Agreement and shall not be used in construing it.
16. Severability.
------------
In the event that any provision or any part of this Agreement is held
to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall not affect the validity or enforceability of any other
provision or part of this Agreement.
17. Notices.
-------
Each notice or other communication hereunder shall be in writing and
shall be deemed to have been duly given on the earlier of (i) the date on which
such notice or other communication is actually received by the intended
recipient thereof, or (ii) the date five (5) days after the date such notice or
other communication is mailed by registered or certified mail (postage prepaid)
to the intended recipient at the following address (or at such other address as
the intended recipient shall have specified in a written notice given to the
other parties hereto);
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If to ZOI:
---------
Zeros & Ones, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to CLMI:
----------
Commercial Labor Management, Inc.
c/o Richardson & Associates
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Polygonal, Xxxxx or Xxxxxx-Xxxxx:
--------------------------------------
Xxxxxx Xxxxxx-Xxxxx or Xxxxxx Xxxxx
Polygonal Research Corporation
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
18. Publicity.
---------
No press release, notice to any third party or other publicity
concerning the transactions contemplated by this Agreement shall be issued,
given or otherwise disseminated without the prior approval of each of the
parties hereto; provided, however, that such approval shall not be unreasonably
withheld.
-18-
IN WITNESS WHEREOF, this Agreement has been entered into as of the date
first above written.
CLMI: COMMERCIAL LABOR MANAGEMENT, INC.
By: --------------------------------
Xxxxxx X. Xxxxxx, President
ZOI: ZEROS & ONES, INC.
By: --------------------------------
Xxxxxx Xxxxx, President
Xxxxx: By: --------------------------------
Xxxxxx Xxxxx
Xxxxxx-Xxxxx By: --------------------------------
Xxxxxx Xxxxxx-Xxxxx
Polygonal: Polygonal Research Corporation
By: --------------------------------
Xxxxxx Xxxxx, President
-19-
EXHIBIT A
MATERIAL CHANGES
None.
