This Agreement and Plan of Share Exchange (the "Agreement") is entered
into as of this 24th day of April, 2000, by and between DataMEG
Corporation, a Virginia corporation ("DataMEG") and The Xxxxx Group,
Inc., a New York corporation ("Xxxxx").
BACKGROUND
DataMEG and Xxxxx desire to enter into a binding share exchange
transaction pursuant to Section 13.1-717 et seq. of the Virginia Stock
Corporation Act and Section 913 of the New York Business Corporation Law
wherein shareholders of DataMEG shall transfer all of DataMEG's issued
and outstanding shares of capital stock ("Shares") to Xxxxx and such
Shares shall be converted into and exchanged for shares of Viola's common
stock, equaling upon completion of this share exchange ninety percent
(90%) of the issued and outstanding capital stock of Xxxxx (the "Share
Exchange"). Following the Share Exchange, DataMEG shall become the wholly
owned subsidiary of Xxxxx. The parties intend that the Share Exchange
qualify under both Sections 351 and Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code").
Therefore, in consideration of the mutual covenants, and in reliance
on the representations and warranties set forth in this Agreement,
the parties agree as follows:
TERMS
Section 1. Share Exchange. On the Closing Date, as defined in Section 2,
in accordance with applicable provision of the Virginia Stock Corporation
Act and the New York Business Corporation Law and Sections 351 and 368(a)(1)
(B) of the Internal Revenue Code, DataMEG shall deliver or cause to be
delivered certificates representing the Shares, accompanied by stock
powers duly signed in blank, together with, appropriate documentary evidence
establishing its capacity and authority to enter into this Agreement and
to sell, transfer and assign its Shares under this Agreement upon delivery
to it of the consideration therefor as set forth below.DataMEG agrees to
cure any deficiencies with respect to the endorsement of the certificates
representing the Shares or with respect to the stock powers accompanying
the Xxxxxx.Xx exchange for the Shares, Xxxxx shall issue and deliver
on the Closing Date to DataMEG for distribution to its shareholders
in accordance with their relative interests, shares of common stock of
Xxxxx, equaling upon the completion of the Share Exchange ninety percent
(90%) of the issued and outstanding voting capital stock of Xxxxx
("Xxxxx Stock").
Section 2. Closing; Effective Date.
(a) Closing; Effective Date. The closing of the transactions
contemplated by this Agreement will occur at the close of business on
June 6, 2000 (the "Closing Date"). On or before the Closing Date, the
parties shall execute and deliver the documents and certificates
contemplated by this Agreement to be executed and delivered.
(b) Legends. Xxxxx shall place on each certificate evidencing
shares of Xxxxx Stock the restrictive legend set forth below in order
to comply with applicable securities laws and Xxxxx may condition the
issuance of the share certificates to DataMEG shareholders upon their
execution and delivery to Xxxxx of the representations, warranties, and
covenants set forth in Section 3 to the extent such apply to each DataMEG
Shareholders and such additional representation, warranties and covenants
as Xxxxx may reasonably request in order to comply with such laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAW. THESE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED
IN ANY MANNER ABSENT EITHER REGISTRATION UNDER THE ACT AND UNDER APPLICABLE
STATE SECURITIES LAW, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
THAT REGISTRATION UNDER THOSE LAWS IS NOT REQUIRED.
Section 3. Representations and Warranties of DataMEG and DataMEG
Shareholders. DataMEG and, where the context requires, each DataMEG
Shareholder, represent, warrant, and agree as follows:
(a) No encumbrances. All of the Shares will on the Closing Date be
free and clear of all liens, encumbrances and claims of every kind. The
delivery of such Shares to Xxxxx pursuant to the provisions of this
Agreementwill transfer valid title thereto, free and clear of all liens,
encumbrances, and claims of every kind.
(b) Authority. DataMEG has full legal right, power, legal capacity and
authority to enter into and to perform its obligations under this Agreement,
and all other agreements, instruments and documents to be executed by it
pursuant to this Agreement. Its execution, delivery and performance of
this Agreement, has been duly authorized by all necessary action, including
approval by its board of directors and stockholders, and no other approval
or consent of, or notice to any person, entity or governmental agency or
authority is necessary. The Agreement and the other documents to be
delivered by DataMEG pursuant to this Agreement (when executed and
delivered) will be, valid and enforceable, binding on it in accordance
with their terms.
(c) Organization. DataMEG is a corporation duly organized and validly
existing under the laws of Virginia and its status is active. It has all
necessary corporate power to own and operate its assets and to carry on its
business as presently conducted and as proposed to be conducted after the
Share Exchange, and it is duly authorized to conduct business in, and is
in good standing under the laws of, each jurisdiction in which the nature
of its business or the ownership or operation of its properties requires
such qualification. It is not in default under or in violation of any
provisions of its Certificate of Incorporation or Bylaws.
(d) Investment Purposes Only. DataMEG is acquiring Xxxxx Stock in
connection with the transactions contemplated by this Agreement solely for
his or her own account, for investment purposes only and not with a view to
or any present intention of or effecting a resale in connection with, any
distribution of such securities or underwriting of any of such stock,
except through underwriters pursuant to a registration statement filed
with the Securities and Exchange Commission or pursuant to an exemption
from the registration requirements of federal and state securities laws.
(e) No Sale of Securities. No DataMEG shareholder shall sell, transfer,
pledge or otherwise dispose of any shares of Xxxxx Stock unless the shares
are registered under the Securities Act of 1933 and under every applicable
state securities law or unless to the satisfaction of Xxxxx and its counsel,
they are to be transferred in a transaction for which registration under
those laws is not required.
(f) No Intention to Sell. No DataMEG shareholder has any plan or
intention to engage, directly or indirectly, in a sale, exchange, transfer,
redemption or reduction in any way of his or her ownership of any of the
Xxxxx Stock, and did not engage in any sale, exchange, transfer or
redemption in any way of his or her ownership of stock in contemplation
of the Share Exchange.
(g) Expenses. DataMEG will pay all expenses incurred in the
transactions contemplated by this Agreement.
Section 4. Representations and Warranties of Xxxxx. Xxxxx represents
and warrants to DataMEG as follows:
(a) Authority. It has the full right, power, legal capacity and
authority to enter into, and to perform its obligations under, this
Agreement and all other agreements, instruments, and documents to be
executed by it pursuant to this Agreement. Its execution, delivery, and
performance of this Agreement, have been duly authorized by all necessary
action, including approval by its board of directors, and no other approval
or consent of, or notice to, any person, entity, or governmental agency or
authority is necessary. This Agreement and the other documents to be
delivered by Xxxxx pursuant to this Agreement (when executed and delivered)
will be, Viola's valid and enforceable obligations, binding on it in
accordance with their terms.
(b) Organization. It is a corporation duly organized and validly
existing under the laws of New York and its status is active. It has all
necessary corporate power to own and operate its assets and to carry on its
business as presently conducted and as proposed to be conducted after the
Share Exchange, and it is duly authorized to conduct business in, and is in
good standing under the laws of, each jurisdiction in which the nature of
its business or the ownership or operation of its properties requires such
qualification. It is not in default under or in violation of any provisions
of its Certificate of Incorporation or Bylaws.
(c) Issuance of Stock. The shares of Xxxxx Stock to be issued by Xxxxx
pursuant to the Share Exchange shall be validly issued, fully paid, and
nonassessable voting common stock. As of the date of Closing, the authorized
number of shares of Xxxxx capital stock shall be eighty million (80,000,000),
seventy-five million (75,000,000) of which are common stock, $.01 par value,
of which 3,300,000 shall be issued and outstanding, and five million
(5,000,000) of which are preferred stock, $.01 par value, none of which
shall be issued and outstanding.
(d) Reports. Beginning in 1995, Xxxxx has timely filed all reports
required to be filed with the Commission pursuant to the Exchange Act or
the Securities Act (collectively, the "SEC Reports"), and has previously
made available to DataMEG true and complete copies of all such SEC Reports
as have been requested by DataMEG. Such SEC Reports, as of their respective
dates, complied in all material respects with the applicable requirements of
the Securities Act and the Exchange Act, as the case may be, and none of the
such SEC Reports contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.(e) Investment Purposes Only. Xxxxx is purchasing
the Shares solely for its own account, for investment purposes only and not
with a view to, or any present intention of resale in connection with
effecting a distribution of such securities or any part thereof or
underwriting of any such stock except through underwriters pursuant to a
registration or an available exemption under applicable law. Xxxxx
acknowledges that the Shares have not been registered under the Securities
Act or the securities laws of any state or other jurisdiction and cannot be
disposed of unless they are subsequently registered under the Securities Act
and any applicable state laws or exemption from such registration is
available.
(f) No Sale of Securities. Xxxxx shall not sell, transfer, pledge or
otherwise dispose of any of the Shares unless the shares are registered
under the Securities Act of 1933 and under every applicable state
securities law or unless transferred in a transaction satisfactory to
DataMEG and its counsel for which registration under those laws is not
required.
(g) No Intention to Sell. Xxxxx has no plan or intention to engage,
directly or indirectly, in a sale, exchange, transfer, redemption or
reduction in any way of its ownership of any of the Shares, and did not
engage in any sale, exchange, transfer or redemption in any way of its
ownership of stock in contemplation of the Share Exchange.
(h) Certificate of Incorporation and Bylaws. Attached hereto as
Exhibit A are true and complete copies of Viola's Certificate of
Incorporation and Bylaws and Viola's Amended and Restated Certificate of
Incorporation to be submitted to and approved by Viola's Shareholders and
to become effective prior to the Closing.
(i) Fair Market Value of Xxxxx Stock. [The fair market value of the
Xxxxx Stock received by DataMEG in the Share Exchange will approximately
equal the fair market value of the stock surrendered in the Share Exchange
by DataMEG.]
Section 5. Conduct of Business Pending Closing. Pending the consummation
of the Share Exchange, Xxxxx shall operate only in the ordinary course of
business and shall take all necessary actions to preserve their goodwill
and operations, and will not enter into any material contract except in the
ordinary course of business or incur any material liability. Without
limiting the generality of the foregoing, DataMEG shall take such actions
as shall be necessary to cause the conditions specified in Section 6, as
they relate to DataMEG, to be fulfilled.
Section 6. Further Agreements.
(a) Third Party Notices and Consents. During the period between the
execution of this Agreement and the Closing Date, DataMEG will give any
notices to third parties, and will diligently use all reasonable efforts to
obtain any third-party consents, that Xxxxx may reasonably request in
connection with the Share Exchange.
(b) Notice of Developments. Pending consummation of the Share
Exchange, Xxxxx and the DataMEG shall give prompt written notice to each
other of any material development affecting the ability of the parties to
consummate the Share Exchange.
(c) Nondisclosure. DataMEG agrees not to make or permit any
announcement or public disclosure, and not to issue or permit issuance
of any press release, concerning this Agreement or the transactions
contemplated by this Agreement prior to the Closing Date, without the prior
approval of Xxxxx, except as required by law.
(d) Change of Board Control. Promptly, upon compliance with the
requirements of Section 14(f) of the Exchange Act and Rule 14(f)-1
promulgated thereunder two designees of DataMEG shall be appointed to serve
the vacant unexpired terms of office of former members of Viola's Board of
Directors.
Section 7. Conditions Precedent to Obligations of Xxxxx. The obligations
of Xxxxx to consummate the Share Exchange are subject to satisfaction of
the following conditions on or before the Closing Date:
(a) Representations and Covenants. The representations and warranties
of DataMEG contained in this Agreement shall be true and correct when made
and shall continue to be true and correct on the Closing Date with the same
full force and effect as if then made. DataMEG shall have performed all
obligations in this Agreement required to be performed by it on or before
the Closing Date.
(b) No Litigation. There shall be no effective injunction, writ, or
preliminary restraining order of any nature issued by a court or governmental
agency of competent jurisdiction restraining or prohibiting the consummation
of implementation of the Share Exchange and threatened by any governmental or
regulatory agency, or, except as disclosed, any other person with respect to
the Share Exchange that Xxxxx in good faith, and with the advice of counsel,
reasonably believes (i) is likely to result in any of the foregoing or (ii)
may result in the payment of substantial damages by Xxxxx.
(c) Consents. DataMEG and Xxxxx shall have obtained such consents,
approvals, and assurances as are necessary or advisable in the opinion of
Xxxxx, including approvals of applicable regulatory bodies, lenders and
landlords, and other parties to material contracts.
(d) Legal Matters. The Share Exchange shall be legally permitted by all
applicable laws and regulations, including all applicable securities law, and
Xxxxx shall have completed its review of legal issues and shall have obtained
such written representations and warranties of the DataMEG as it deems
advisable, including representations and warranties of DataMEG Shareholders
concerning their intent and obligation to hold the shares of Xxxxx issued to
them in connection with the Share Exchange as an investment, for their own
account, and not for resale or distribution.
(e) Closing Documents. At or before the closing, DataMEG shall have
executed and delivered to Xxxxx all documents required by this Agreement to
be delivered to Xxxxx by DataMEG. All documents and proceedings incident to
the authorization, execution, and delivery of this Agreement by DataMEG and
to the transactions contemplated by this Agreement that have not been
previously approved by Xxxxx and its counsel shall be satisfactory to Xxxxx
and its counsel.
(f) Full Participation. DataMEG's Board of Directors and all of its
Shareholders shall have approved and Share Exchange and waived any appraisal
rights.
Section 8. Conditions Precedent to Obligations of DataMEG. The obligations
of DataMEG to consummate the Share Exchange are subject to satisfaction of
the following conditions on or before the Closing Date:
(a) Representations and Covenants. (i) The representations and
warranties of Xxxxx contained in this Agreement shall be true and correct
when made and shall continue to be true and correct on the Closing Date with
the same full force and effect as if then made; (ii) there shall not have
been any material adverse change with respect to Xxxxx prior to the Closing
Date; and (iii) Xxxxx shall have performed all obligations in this Agreement
required to be performed by it on or before the Closing Date.
(b) No Litigation. There shall be no effective injunction, writ, or
preliminary restraining order of any nature issued by a court or governmental
agency of competent jurisdiction restraining or prohibiting the consummation
or implementation of the Share Exchange and threatened by any governmental or
regulatory agency, or any other person with respect to the Share Exchange
that DataMEG, in good faith and with the advice of counsel, believe (i) is
likely to result in any of the foregoing, or (ii) may result in the payment
of substantial damages by Xxxxx.
(c) Legal Matters. The Share Exchange shall be legally permitted by all
applicable laws and regulations, including all applicable securities laws.
(d) Appraisal Rights. The waiver or expiration of all existing Xxxxx
shareholders' rights to receive payment for shares under Section 623 of the
New York Business Corporation Law.
(e) Full Participation. DataMEG's Board of Directors and all of its
Shareholders shall have approved the Share Exchange and waived any appraisal
rights.
Section 9. Conditions Precedent to Obligations of DataMEG and Xxxxx.
The obligations of DataMEG and Xxxxx to consummate the Share Exchange are
subject to satisfaction of the following conditions on or before the Closing
Date:
(a) Further Assurances. If at any time Xxxxx determines that any further
assignments, conveyances, or assurances are necessary or desirable to vest in
Xxxxx the title to the Shares, DataMEG shall execute such assignments,
conveyances, or assurances and do all acts that may be necessary or
appropriate to vest title in the Shares in Xxxxx and otherwise to carry out
the intent and purposes of this Agreement.
(b) Governing Law and Choice of Venue. This Agreement, in every respect,
shall be governed by and construed in accordance with the laws of New York,
except any choice of law principles of New York that may direct the
interpretation or enforcement of this Agreement to the law of any other
jurisdiction, notwithstanding that some of the parties to this Agreement are
or may be residents of another state.
(c) Successors and Assigns. A party shall not assign any of its rights
or delegate any of its obligations under this Agreement without the prior,
written consent of the other parties. All of the terms of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by and
against the successors, legal representatives and permitted assigns of the
parties to this Agreement.
(d) Entire Agreement. This Agreement, including the exhibit and the
other documents delivered pursuant to this Agreement, constitute the full
and entire understanding and agreement among the parties concerning the
subject matter of this Agreement, and supersedes all prior agreements and
negotiations, oral or written, concerning that subject matter, all of which
are merged into this Agreement.
(e) Amendment. A modification or amendment of this Agreement is
effective only if it is in writing and executed by all the parties.
(f) Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
(h) Delays or Omissions. No delay or omission in exercising any right,
power, or remedy of any party to this Agreement, upon any breach or default
of any other party to this Agreement, shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of or in any similar breach or
default thereafter occurring. To be effective, any waiver, permit, consent
or approval of any kind on the part of any party to this Agreement of any
breach or default under this Agreement, or any waiver of any provisions or
conditions of this Agreement, must be in writing. Unless otherwise
specified in this Agreement, all remedies of a party for a breach of this
Agreement shall be cumulative.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
THE XXXXX GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
_____________________
Xxxxxx X. Xxxxx
Its President
DATAMEG
By: /s/ Xxxxxx Xxxxxx
_____________________
Xxxxxx Xxxxxx
Its President
