AGREEMENT AND PLAN OF MERGER
dated as of
December 7, 2001
among
SOLAR SATELLITE COMMUNICATION, INC.,
DOCUMENT PLANET, INC. (a Colorado Corporation),
and
DOCUMENT PLANET, INC. (a Delaware Corporation)
Table of Contents
Page
RECITALS 1
ARTICLE I THE MERGER..............................................................................................1
Section 1.1. The Merger...............................................................................1
Section 1.2. Closing..................................................................................1
Section 1.3. Effective Time...........................................................................2
Section 1.4. Effects of the Merger....................................................................2
Section 1.5. Articles of Incorporation................................................................2
Section 1.6. Bylaws...................................................................................2
Section 1.7. Directors of Surviving Corporation.......................................................2
Section 1.8. Officers of Surviving Corporation........................................................2
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES....3
Section 2.1. Conversion of DPI Stock..................................................................3
Section 2.2. Exchange of Certificates; Further Assurances.............................................3
(a) Exchange.................................................................................3
(b) No Further Ownership Rights in DPI Capital Stock.........................................3
(c) Further Assurances.......................................................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................................4
Section 3.1. Representations and Warranties of DPI....................................................4
(a) Organization and Standing of DPI.........................................................4
(b) Authority; No Conflicts..................................................................4
(c) Capitalization of DPI and Indebtedness for Borrowed Moneys...............................5
(d) DPI Financial Statements.................................................................5
(e) Present Status...........................................................................6
(f) Litigation...............................................................................6
(g) Compliance With the Law and Other Instruments............................................6
(h) Title to Properties and Assets...........................................................6
(i) Records..................................................................................7
(j) Absence of Certain Changes or Events.....................................................7
(k) Taxes....................................................................................7
(l) DPI Benefit Plans........................................................................7
(m) Finders and Advisors.....................................................................7
(n) Vote Required............................................................................7
(o) Full Disclosure..........................................................................7
Section 3.2. Representations and Warranties by SSCI...................................................8
(a) Organization and Standing of SSCI........................................................8
(b) Authority; No Conflicts..................................................................8
(c) Capitalization of SSCI and Indebtedness for Borrowed Moneys..............................9
(d) SSCI SEC Reports and Financial Statements................................................9
(e) Present Status..........................................................................10
(f) Litigation..............................................................................10
i
(g) Compliance With the Law and Other Instruments...........................................10
(h) Records.................................................................................10
(i) Absence of Certain Changes or Events....................................................10
(j) Taxes...................................................................................10
(k) SSCI Benefit Plans......................................................................11
(l) Finders and Advisors....................................................................11
(m) Vote Required...........................................................................11
(n) Full Disclosure.........................................................................11
Section 3.3. Representations and Warranties of SSCI and Merger Sub...................................11
(a) Organization and Standing of Merger Sub.................................................11
(b) Authority...............................................................................11
(c) Non-Contravention.......................................................................12
(d) No Business Activities by Merger Sub....................................................12
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS.............................................................12
Section 4.1. Covenants of DPI........................................................................12
Section 4.2. Covenants of SSCI and Merger Sub........................................................13
Section 4.3. Advice of Changes; Governmental Filings.................................................14
ARTICLE V ADDITIONAL AGREEMENTS..................................................................................15
Section 5.1. Due Diligence...........................................................................15
Section 5.2. Commercially Reasonable Efforts.........................................................15
Section 5.3. Restrictions on Transfer of SSCI Stock..................................................15
Section 5.4. Expenses................................................................................16
Section 5.5. Reorganization..........................................................................16
Section 5.6. Continuity of Business..................................................................16
Section 5.7. Nasdaq Listing..........................................................................16
Section 5.8. Additional Capital......................................................................16
Section 5.9. Escrowed Stock..........................................................................16
Section 5.10. 144 Opinions............................................................................17
Section 5.11. SSCI Board of Directors.................................................................17
Section 5.12. DPI Options and Warrants................................................................17
ARTICLE VI INDEMNIFICATION.......................................................................................17
Section 6.1. Indemnification.........................................................................17
Section 6.2. Notice and Defense of Third-Party Claims................................................17
Section 6.3. Exclusivity.............................................................................18
Section 6.4. Waiver of Consequential Damages.........................................................18
ARTICLE VII CONDITIONS TO CLOSING................................................................................18
Section 7.1. Conditions to Each Party's Obligation to Effect the Merger..............................18
(a) Shareholder Approval....................................................................18
(b) No Injunctions, Restraints or Illegality................................................18
(c) Closing on DPI's Purchase of SSCI Common Stock..........................................19
Section 7.2. Additional Conditions to Obligations of SSCI............................................19
(a) Representations and Warranties..........................................................19
(b) Performance of Obligations of DPI.......................................................19
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(c) No DPI Shareholder Litigation...........................................................19
(d) Certificate of Officer..................................................................19
Section 7.3. Additional Conditions to Obligations of DPI.............................................19
(a) Representations and Warranties..........................................................19
(b) Performance of Obligations of SSCI......................................................20
(c) Certificate of Officer..................................................................20
ARTICLE VIII TERMINATION AND AMENDMENT...........................................................................20
Section 8.1. Termination.............................................................................20
Section 8.2. Effect of Termination...................................................................21
Section 8.3. Amendment...............................................................................21
Section 8.4. Extension; Waiver.......................................................................22
ARTICLE IX MISCELLANEOUS.........................................................................................22
Section 9.1. Nature of Representations and Warranties; Survival......................................22
Section 9.2. Counterparts and Facsimile Signatures...................................................22
Section 9.3. Assignment..............................................................................22
Section 9.4. Entire Agreement........................................................................22
Section 9.5. Governing Law...........................................................................22
Section 9.6. Severability............................................................................23
Section 9.7. Notices.................................................................................23
Section 9.8. Attorney Fees...........................................................................24
Section 9.9. Certain Definitions.....................................................................24
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SCHEDULES/EXHIBITS
2.1 DPI Shareholder List
3.1 DPI Disclosure Schedule - None
3.1(f) Litigation - None
3.1(h) Title to Properties and Assets - None
3.1(j) Absence of Certain Changes or Events - None
3.1(k) Taxes - None
3.1(m) Finders and Advisors
3.2 SSCI Disclosure Schedule - None
5.9 Form of Escrow Agreement
iv
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into
this 7th day of December 2001 by and among Solar Satellite Communication, Inc.,
a Colorado corporation ("SSCI"), Document Planet, Inc., a Colorado corporation
and newly formed wholly owned subsidiary of SSCI ("Merger Sub") and Document
Planet, Inc., a Delaware corporation ("DPI").
RECITALS
WHEREAS, the respective Boards of Directors of SSCI, Merger Sub and DPI
have each determined that the merger of DPI with and into Merger Sub (the
"Merger") is advisable and is in their best interests and in the best interests
of their respective shareholders, and such Boards of Directors have approved
such Merger, upon the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, SSCI, Merger Sub and DPI desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated hereby and also to set forth various conditions to the
transactions contemplated hereby; and
WHEREAS, for federal income tax purposes it is intended that the Merger
qualify as a tax-free reorganization under Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated
thereunder and SSCI, Merger Sub and DPI intend by approving resolutions
authorizing this Agreement to adopt this Agreement as a plan of reorganization
within the meaning of Section 368(a) of the Code and the regulations promulgated
thereunder.
AGREEMENT
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the laws of Colorado and
Delaware, DPI shall be merged with and into Merger Sub at the Effective Time (as
defined in Section 1.3). Following the Merger, the separate corporate existence
of DPI shall cease and Merger Sub shall continue as the surviving corporation
(the "Surviving Corporation") and shall succeed to and assume all rights and
obligations of DPI in accordance with the corporate laws of Colorado and
Delaware.
Section 1.2 Closing. The closing of the Merger (the "Closing") will
take place at 10:00 a.m., Maryland time on the first business day after the
satisfaction or waiver (subject to applicable law) of the conditions set forth
in Article VII of this Agreement (the "Closing Date"), at the offices of
Shulman, Rogers, Gandal, Pordy & Xxxxxx, P.A. (the "Closing Agent") at 11921
0
Xxxxxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx unless another date or place is
agreed to in writing by the parties. The parties agree to use all reasonable
efforts to close the Merger as soon as practicable, subject to Article VII
hereof.
Section 1.3 Effective Time. Immediately following the Closing, the
parties shall execute and file articles of merger or other appropriate documents
(in any such case, the "Articles of Merger") in accordance with the relevant
provisions of the corporate laws of Colorado and Delaware and shall make all
other filings or recordings required under the corporate laws of Colorado and
Delaware. The Merger shall become effective at such time as the Articles of
Merger are duly filed with the Colorado Secretary of State and the Delaware
Secretary of State, or at such subsequent time as the parties shall agree, which
subsequent time shall be specified in the Articles of Merger (the time the
Merger becomes effective referred to as the "Effective Time").
Section 1.4 Effects of the Merger. At and after the Effective Time, the
Merger shall have the effects set forth in the corporate laws of Colorado and
Delaware. Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time all the property, rights, privileges, powers and
franchises of DPI and Merger Sub shall be vested in the Surviving Corporation
and all debts, liabilities and duties of DPI and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.
Section 1.5 Articles of Incorporation. The articles of incorporation of
Merger Sub as in effect at the Effective Time shall be the articles of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law.
Section 1.6 Bylaws. The bylaws of Merger Sub as in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
Section 1.7 Directors of Surviving Corporation. The directors of Merger
Sub immediately prior to the Effective Time shall be the 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.
Section 1.8 Officers of Surviving Corporation.The officers of Merger
Sub immediately prior to the Effective Time shall be 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.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of DPI Stock. At the Effective Time, by virtue
of the Merger, the total number of shares of DPI common and preferred stock
issued and outstanding immediately prior to the Effective Time shall be
automatically converted into a total of (i) 3,603,788 shares of SSCI common
stock, $.001 par value per share ("SSCI Common Stock") and (ii) 582,973 shares
2
of SSCI Series B preferred stock, $.001 par value per share ("SSCI Preferred
Stock"). Certificates representing the shares of SSCI Common Stock and SSCI
Preferred Stock to be issued shall be delivered to the shareholders of DPI as
listed on Schedule 2.1 in exchange for the surrender to SSCI of certificates
representing all of the DPI common and preferred stock issued and outstanding.
At the Effective Time, all such shares of DPI common and preferred stock shall
cease to be outstanding and shall automatically be canceled and retired and
shall cease to exist.
Section 2.2 Exchange of Certificates; Further Assurances.
(a) Exchange. SSCI shall deliver to the shareholders of DPI in
accordance with Schedule 2.1 certificates aggregating the number of shares of
SSCI Common Stock and SSCI Preferred Stock set forth in Section 2.1 and the
shareholders of DPI shall surrender to SSCI all certificates previously
representing all issued and outstanding shares of DPI common and preferred
stock.
(b) No Further Ownership Rights in DPI Capital Stock. All shares of
SSCI Common Stock and SSCI Preferred Stock issued upon the surrender of DPI
common and preferred stock certificates in accordance with the terms of this
Article II shall be deemed to have been issued and paid in full satisfaction of
all rights pertaining to the shares of DPI stock theretofore represented by such
certificates.
(c) Further Assurances. If at any time after the Effective Time, any
further assignments or assurances in law or any other things are necessary or
desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of either DPI or Merger Sub, or
otherwise to carry out the purposes and provisions of this Agreement, the
officers and directors of the Surviving Corporation are hereby authorized and
empowered, in the name of and on behalf of DPI and Merger Sub, to execute and
deliver any and all things necessary or proper to vest or perfect or confirm
title to such property or rights in the Surviving Corporation, and otherwise to
carry out the purposes and provisions of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of DPI. Except as set forth
in the DPI Disclosure Schedule attached to this Agreement as Schedule 3.1 (the
"DPI Disclosure Schedule") (each section of which qualifies the correspondingly
numbered representation and warranty to the extent specified therein), and DPI's
purchase of 242,636 shares of SSCI Common Stock referred to in Section 7.1 (c),
DPI represents and warrants to SSCI as follows:
(a) Organization and Standing of DPI. DPI is a corporation duly
organized and validly existing and in good standing under the laws of the state
of Delaware. DPI has all requisite power and authority to own, lease and operate
its properties and to carry on its business as now being conducted and is duly
qualified to do business and in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
3
qualification necessary other than in such jurisdictions where the failure to so
qualify would not, either individually or in the aggregate, have a material
adverse effect on DPI. DPI has all requisite power and authority to enter into
this Agreement and to carry out and perform the terms and provisions of this
Agreement. DPI has no direct or indirect interest, either by way of stock
ownership or otherwise, in any other firm, corporation, association or business.
The copies of the certificate of incorporation and bylaws of DPI which were
previously furnished to SSCI are true, complete and correct copies of such
documents as in effect on the date of this Agreement.
(b) Authority; No Conflicts.
(i) The execution, delivery and performance of this
Agreement have been duly authorized by all requisite corporate
action on the part of DPI. This Agreement has been executed
and delivered by DPI and constitutes valid and binding
obligations of DPI enforceable in accordance with its terms
(except as limited by bankruptcy, insolvency, or other laws
affecting the enforcement of creditors' rights).
(ii) The execution and delivery of this Agreement by
DPI does not, and the consummation of the Merger pursuant to
this Agreement and the other transactions contemplated hereby
will not, conflict with or result in any violation of, or
constitute a default (with or without notice or lapse of time,
or both) under, any provision of (A) the certificate of
incorporation or bylaws of DPI or (B) any loan or credit
agreement, note, mortgage, bond, indenture, lease, benefit
plan or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to DPI
or any of its properties or assets, except as would not have a
material adverse effect on DPI, subject to obtaining the
Required Consents (defined below).
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, any
governmental entity is required by or is necessary with
respect to DPI in connection with its execution and delivery
of this Agreement or the consummation of the Merger and the
other transactions contemplated thereby, except for those
required under or in relation to the corporate laws of
Delaware and Colorado with respect to the filing of the
Articles of Merger with the Colorado Secretary of State and
Certificate of Merger with the Delaware Secretary of State,
and such consents, approvals, and filings the failure of which
to make or obtain would not have a material adverse effect on
any party hereto. Consents, approvals, and filings required
under or in relation to any of the foregoing are referred to
as the "Required Consents."
(iv) Except as set forth in the DPI Disclosure
Schedule, all material contracts of DPI shall remain in full
force and effect following, and notwithstanding the
consummation of, the Merger.
(c) Capitalization of DPI and Indebtedness for Borrowed Moneys. DPI is
duly and lawfully authorized by its articles of incorporation to issue (i)
8,000,000 shares of DPI common stock, $.001 par value per share, of which as of
the date hereof there are issued and outstanding 1,619,500 shares, and (ii)
4
2,000,000 shares of DPI preferred stock, $.001 par value per share, of which as
of the date hereof there are issued and outstanding 582,973 preferred B shares
and 182,394 preferred A shares. The issued and outstanding shares are held by
the DPI shareholders identified in Schedule 2.1. All the outstanding shares of
DPI common and preferred stock have been duly authorized and validly issued and
are fully paid and nonassessable and free of preemptive rights. DPI has no
treasury stock and no other authorized series or class of stock. DPI has an
employee stock option plan for the issuance of up to 300,000 shares of DPI
common stock. DPI has issued options for 107,450 shares under the plan of which
56,618 are vested. Xxxxx Xxxxxx has options for 634,000 shares of DPI common
stock. DPI has issued warrants to purchase 1,047,868 shares of DPI common stock.
The options and warrants to purchase DPI stock shall be referred to as the "DPI
Options and Warrants." DPI is not obligated to issue any additional capital
stock or voting securities as a result of any options, warrants, rights,
conversion rights, obligations upon default, subscription agreements or other
obligations of any kind. DPI is not presently liable on account of any
indebtedness for borrowed moneys, except as reflected in the DPI Financial
Statements (as defined below) or the DPI Disclosure Schedule.
(d) DPI Financial Statements. DPI has furnished to SSCI its audited
balance sheet as of December 31, 2000, its audited statements of income and
retained earnings and cash flows for each of the two years ended December 31,
2000 and its unaudited balance sheet as of September 30, 2001, and its unaudited
statements of income and cash flows for the nine months ended September 30, 2001
(collectively, the "DPI Financial Statements"). All of the DPI Financial
Statements present fairly, in all material respects, the financial position of
DPI as of the respective balance sheet dates and the results of its operations
and cash flows for the respective periods specified therein. The DPI Financial
Statements have been prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis.
(e) Present Status. Except as otherwise disclosed in the DPI Disclosure
Schedule, from September 30, 2001 to the date of this Agreement, DPI has not
incurred any liabilities that are of a nature that would be required to be
disclosed on a balance sheet of DPI or the notes thereto prepared in accordance
with GAAP, other than liabilities incurred in the ordinary course of business of
DPI and which do not have a material adverse effect on DPI.
(f) Litigation. Except as disclosed in the DPI Financial Statements or
Schedule 3.1(f) hereto, there are no legal actions, suits, arbitrations or other
legal or administrative proceedings pending or, to the knowledge of DPI,
threatened against DPI which are material to DPI. In addition, DPI is not aware
of any facts, which to the best of its knowledge would reasonably be expected to
result in any action, suit, arbitration or other proceeding, which would
reasonably be expected to be material to DPI. DPI is not in default of any
judgment, order or decree of any court or, in any material respect of, any
requirements of a government agency or instrumentality, except as set forth in
the DPI Financial Statements or on the DPI Disclosure Schedule.
(g) Compliance With the Law and Other Instruments. The business
operations of DPI have been and are being conducted in all material respects in
compliance with all applicable laws, rules, and regulations. DPI is not in
violation of, or in default under, any term or provision of its certificate of
incorporation or its bylaws or in any material respect of any lien, mortgage,
lease, agreement, instrument, order, judgment or decree.
5
(h) Title to Properties and Assets. Except as set forth on Schedule
3.1(h), DPI has good and defensible title to all of its material properties and
assets including, without limitation, those reflected in the DPI Financial
Statements and those used or located on property controlled by DPI in its
business (except assets leased or sold in the ordinary course of business),
subject to no mortgage, pledge, lien, charge, security interest, encumbrance or
restriction except those which (a) are disclosed in the DPI Financial Statements
as securing specified liabilities; or (b) do not materially adversely affect the
use thereof. Except as set forth on Schedule 3.1(h), DPI owns, free and clear of
any liens, claims, encumbrances, royalty interests, or other restrictions or
limitations of any nature whatsoever, intellectual property, including trade
secrets, copyrights, procedures, techniques, business plans, methods of
management, or other information, used in connection with DPI's business. The
products and services DPI markets, or plans to market, and its plan of operation
do not infringe on the patents, copyrights, trade secrets, or other proprietary
rights of any third person.
(i) Records. To the best of DPI's knowledge, the books of account and
other records of DPI are complete and correct in all material respects, and
there have been no material transactions involving the business of DPI which
properly should have been set forth in such records, other than those set forth
therein.
(j) Absence of Certain Changes or Events. Except as set forth in
Schedule 3.1(j), since September 30, 2001 (i) there has not been any material
adverse change in the condition (financial or otherwise), properties, assets,
liabilities or, to the best of DPI's knowledge, the present or prospective
status of the business of DPI, and (ii) DPI has not declared or paid any
dividend or made any other distribution in respect of any of its capital stock
or repurchased or redeemed or otherwise acquired any shares of its capital stock
or obligated itself to do any of the foregoing.
(k) Taxes. Except as set forth in Schedule 3.1(k) hereto, DPI has duly
filed all federal, state, county, local and foreign income, franchise, excise,
real and personal property and other tax returns and reports (including, but not
limited to, those relating to social security, withholding, unemployment
insurance and occupation (sales) and use taxes) required to have been filed up
to the date hereof. All of the foregoing returns are true and correct in all
material respects and DPI has paid or provided for all taxes, interest and
penalties shown on such returns or reports as being due. DPI has no liability
for any amount of taxes, interest or penalties of any nature whatsoever, except
for those taxes which may have arisen up to the Closing Date in the ordinary
course of business and are properly accrued on the books of DPI as of the
Closing Date.
(l) DPI Benefit Plans. DPI has no employee Benefit Plans subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
(m) Finders and Advisors. Except as set forth in Schedule 3.1(m), there
are no investment bankers, brokers, finders or other intermediaries which have
been retained by or are authorized to act on behalf of DPI who might be entitled
to any fee or commission in connection with the transactions contemplated by
this Agreement.
(n) Vote Required. The affirmative vote of the holders of 50% of the
outstanding shares of DPI common and preferred stock (the "Required DPI Vote")
6
is the only vote of the shareholders of DPI required to approve the Merger. DPI
has already obtained the Required DPI Vote as of the date of this Agreement.
(o) Full Disclosure. This Agreement and any schedules and certificates
delivered by DPI in connection herewith or with the transactions contemplated
hereby, taken as a whole, neither contain any untrue statement of a material
fact nor omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. To the best of DPI's knowledge,
there are no facts which (individually or in the aggregate) materially adversely
affect the business, prospects, assets, liabilities, financial condition or
operations of DPI that have not been set forth in this Agreement, the schedules
hereto or in other documents delivered by DPI in connection herewith which DPI
should reasonably recognize (i) are not known to SSCI, and (ii) would if known
be material to SSCI with respect to this Agreement and the transactions provided
for herein.
Section 3.2. Representations and Warranties by SSCI. Except as set
forth in the SSCI Disclosure Schedule attached to this Agreement as Schedule 3.2
(the "SSCI Disclosure Schedule") (each section of which qualifies the
correspondingly numbered representation and warranty or covenant to the extent
specified therein), SSCI hereby represents and warrants to DPI as follows:
(a) Organization and Standing of SSCI. SSCI is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Colorado, has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted, and is duly
qualified to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties make
such qualification necessary other than in jurisdictions where the failure to so
qualify would not, either individually or in the aggregate, be materially
adverse to SSCI. SSCI has all requisite power and authority to enter into this
Agreement and to carry out and perform the terms and provisions of this
Agreement. SSCI has no direct or indirect interest, either by way of stock
ownership or otherwise, in any other firm, corporation, association or business
other than Merger Sub. The copies of the articles of incorporation and bylaws of
SSCI which were previously furnished to DPI are true, complete and correct
copies of such documents as in effect on the date of this Agreement.
(b) Authority; No Conflicts.
(i) The execution, delivery and performance of this
Agreement have been duly authorized by all requisite corporate
action on the part of SSCI. This Agreement has been executed
and delivered by SSCI and constitutes a valid and binding
obligation of SSCI enforceable in accordance with its terms
(except as limited by bankruptcy, insolvency, or other laws
affecting the enforcement of creditors' rights).
(ii) The execution and delivery of this Agreement by
SSCI does not, and the consummation by SSCI of the Merger and
the other transactions contemplated hereby will not, conflict
with or result in a violation or constitute a default (with or
7
without notice or lapse of time, or both) under, any provision
of (A) any provision of the articles of incorporation or
bylaws of SSCI, (B) any loan or credit agreement, note,
mortgage, bond, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to SSCI or any of its
properties or assets, except as would not be materially
adverse to SSCI.
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, a
governmental entity is required by or with respect to SSCI in
connection with the execution and delivery of this Agreement
by SSCI or the consummation of the Merger and the other
transactions contemplated hereby, except for such consents,
approvals, orders, authorizations, registrations, declarations
and filings the failure of which to make or obtain would not
be materially adverse to SSCI.
(iv) Except as set forth in the SSCI Disclosure
Schedule, all material contracts of SSCI, if any, shall remain
in full force and effect following, and notwithstanding the
consummation of, the Merger.
(c) Capitalization of SSCI and Indebtedness for Borrowed Moneys. SSCI
is duly and lawfully authorized by its articles of incorporation to issue
100,000,000 shares of SSCI Common Stock, of which as of the date hereof there
are 830,000 shares issued and outstanding (after the sale and cancellation of
the 242,636 shares of SSCI Common Stock referred to in Section 7.1(c)). All the
outstanding shares of SSCI Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable and free of preemptive rights. SSCI
is authorized by its articles of incorporation to issue 1,000,000 shares of SSCI
Preferred Stock, of which as of the date hereof, there are no shares
outstanding. SSCI has no other authorized class of stock. Except with respect to
this Agreement, SSCI is not obligated to issue any additional capital stock or
voting securities as a result of any options, warrants, rights, conversion
rights, obligations upon default, subscription agreement or other obligation of
any kind. SSCI is not presently liable on account of any indebtedness for
borrowed moneys.
(d) SSCI SEC Reports and Financial Statements. SSCI is current with all
reports, schedules, forms, statements and other documents required to be filed
with the SEC (collectively, including all exhibits thereto, the "SSCI SEC
Reports") other than filings the failure of which to make would not be
materially adverse to SSCI. None of the SSCI SEC Reports, as of their respective
dates (and, if amended or superseded by filings prior to the date of this
Agreement or the Closing Date, then on the date of such filing), 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. Each of the
financial statements (including the related notes) included in the SSCI SEC
Reports presents fairly, in all material respects, the financial position of
SSCI as of the respective dates or for the respective periods set forth therein,
all in accordance with GAAP consistently applied during the periods involved
except as otherwise noted therein. All of such SSCI SEC Reports, as of their
respective dates (and as of the date of any amendment to the respective SSCI SEC
Report), complied as to form in all material respects with the applicable
8
requirements of the Securities Act of 1933, as amended (the "Securities Act")
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the rules and regulations promulgated thereunder.
(e) Present Status. Except as otherwise disclosed in the SSCI
Disclosure Schedule, from July 31, 2001 to the date of this Agreement, SSCI has
not incurred any liabilities that are of a nature that would be required to be
disclosed on a balance sheet of SSCI or the notes thereto prepared in accordance
with GAAP, other than liabilities incurred in the ordinary course of business of
SSCI and which do not have a material adverse effect on SSCI. On the Closing
Date, there shall be a sum of $400,000 remaining in the capital account of SSCI
held in its Schwab or any other operating accounts or transferred to the Closing
Agent, after (i) the payment of the purchase price of $420,000 for the 242,636
shares of common stock referred to in Section 7.1(c), and (ii) the payment (or
reserve for payment) of all current expenses of SSCI up through the Closing
(including fees of SSCI's attorneys and transfer agent).
(f) Litigation. There are no legal actions, suits, arbitrations, or
other legal or administrative proceedings pending or, to the knowledge of SSCI,
threatened against SSCI which are material to SSCI. SSCI is not in default of
any judgment, order or decree of any court or, in any material respect of, any
requirements of a government agency or instrumentality.
(g) Compliance With the Law and Other Instruments. The business
operations of SSCI have been and are being conducted in compliance in all
material respects with all applicable laws, rules, and regulations of all
authorities. SSCI is not in violation of, or in default under, any term or
provision of its articles of incorporation or its bylaws or in any material
respect of any lien, mortgage, lease, agreement, instrument, order, judgment or
decree.
(h) Records. To the best of SSCI's knowledge, the books and other
records of SSCI are complete and correct in all material respects, and there
have been no material transactions involving the business of SSCI which properly
should have been set forth in such records, other than those set forth therein.
(i) Absence of Certain Changes or Events. Since July 31, 2001, (i)
there has not been any material adverse change in the condition (financial or
otherwise), properties, assets, liabilities or, to the best of SSCI's knowledge,
the present or prospective status of the business of SSCI, and (ii) SSCI has not
declared or paid any dividend or made any other distribution in respect of any
of its capital stock.
(j) Taxes. SSCI has duly filed all federal, state, county, local and
foreign income, franchise, excise, real and personal property and other tax
returns and reports (including, but not limited to, those relating to social
security, withholding, unemployment insurance, and occupation (sales) and use
taxes) required to have been filed by SSCI up to the date hereof.
(k) SSCI Benefit Plans. SSCI has no employee Benefit Plans subject to
ERISA.
(l) Finders and Advisors. There are no investment bankers, brokers,
finders or other intermediaries which have been retained by or are authorized to
act on behalf of SSCI who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement.
9
(m) Vote Required. The affirmative vote of the holders of the majority
of the outstanding shares of Merger Sub common stock (the "Required Merger Sub
Vote") is the only vote of the shareholders of Merger Sub required to approve
the Merger. Merger Sub has already obtained the Required Merger Sub Vote as of
the date of this Agreement.
(n) Full Disclosure. To the best of SSCI's knowledge, this Agreement,
and any Schedules and certificates delivered by SSCI in connection herewith or
with the transactions contemplated hereby, taken as a whole, neither contain any
untrue statement of a material fact nor omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. To the
best of SSCI's knowledge, there are no facts which (individually or in the
aggregate) materially adversely affect the business, prospects, assets,
liabilities, financial condition or operations of SSCI that have not been set
forth in this Agreement, the Schedules hereto, the SSCI SEC Reports or in other
documents delivered by SSCI in connection herewith which SSCI should reasonably
recognize (i) are not known to DPI, and (ii) would if known be material to DPI
with respect to this Agreement and the transactions provided for herein.
Section 3.3. Representations and Warranties of SSCI and Merger Sub.
SSCI and Merger Sub represent and warrant to DPI as follows:
(a) Organization and Standing of Merger Sub. Merger Sub is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Colorado. Merger Sub is a wholly owned subsidiary of SSCI.
(b) Authority. Merger Sub has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Merger Sub of
this Agreement and the consummation by Merger Sub of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Merger Sub. This Agreement has been duly executed and delivered
by Merger Sub and constitutes a valid and binding agreement of Merger Sub,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors generally.
(c) Non-Contravention. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of transactions
contemplated hereby do not and will not contravene or conflict with the articles
of incorporation or bylaws of Merger Sub.
(d) No Business Activities by Merger Sub. Merger Sub has not conducted
any activities other than in connection with the organization of Merger Sub, the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby.
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ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1. Covenants of DPI. During the period from the date of this
Agreement and continuing until the Effective Time, DPI (except as expressly
contemplated or permitted by this Agreement (including DPI's purchase of 242,636
shares of SSCI Common Stock referred to in Section 7.1(c)) or as otherwise
indicated on the DPI Disclosure Schedule or as required by a governmental entity
of competent jurisdiction or to the extent that SSCI shall otherwise consent in
writing) will:
(a) Conduct its affairs and business only in the ordinary course of
business;
(b) Not create or incur any material liabilities other than current
liabilities incurred in the ordinary course of business;
(c) Not create or incur, or suffer to exist, any mortgage, lien,
pledge, hypothecation, charge, encumbrance, or restriction of any kind which is
not otherwise disclosed in this Agreement;
(d) Not make any capital expenditures, or capital additions or
betterment, except as many be involved in ordinary repairs, maintenance, and
replacement;
(e) Not enter into any contract or commitment, except in the ordinary
course of business;
(f) Maintain its assets and properties in good condition and repair,
and not sell, or otherwise dispose of, any of its material assets or properties,
except sales in the ordinary course of business;
(g) Not declare or pay any dividend on, or make any other distribution
upon, or purchase, retire, or redeem, any shares of its common stock, or set
aside any funds for any such purpose;
(h) Not issue or sell, or obligate itself to issue or sell any
additional shares of its common or preferred stock, whether or not such shares
have been previously authorized or issued, or issue or sell any warrants,
rights, or options to acquire any such shares, or acquire any stock of any
corporation or any interest in any business enterprise;
(i) Not amend its certificate of incorporation or bylaws;
(j) Not discharge or satisfy any material lien, charge, or encumbrance,
nor pay any obligation or liability, absolute or contingent, except (i) current
liabilities shown on DPI's Financial Statements or current liabilities incurred
since the date of DPI's Financial Statements in the ordinary course of business,
and (ii) expenses incurred in connection with the transactions contemplated by
this Agreement (including, without limitation, reasonable attorneys' fees,
accounting fees, and costs);
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(k) Use reasonable commercial efforts to preserve its business
organization intact;
(l) Use reasonable commercial efforts to preserve the goodwill of its
suppliers, customers, and those having business relations with it;
(m) Except with respect to this transaction, not merge or consolidate,
or obligate itself to do so, with, or into any other entity;
(n) Not enter into any transactions, or take any acts which if effected
or performed prior to the date of this Agreement, would constitute a breach of
the representations, warranties, and agreements contained herein; and
(o) Not institute, settle, or agree to settle any action or proceeding
before any court or governmental body.
Section 4.2. Covenants of SSCI and Merger Sub. During the period from
the date of this Agreement and continuing until the Effective Time, SSCI and
Merger Sub (except as expressly contemplated or permitted by this Agreement or
as otherwise indicated on the SSCI Disclosure Schedule or as required by a
governmental entity of competent jurisdiction or to the extent that DPI shall
otherwise consent in writing) will each:
(a) Conduct its affairs and business only in the ordinary course of
business;
(b) Not create or incur any liabilities other than current liabilities
incurred in the ordinary course of business;
(c) Not create or incur, or suffer to exist, any mortgage, lien,
pledge, hypothecation, charge, encumbrance, or restriction of any kind;
(d) Not make any capital expenditures or capital additions or
betterment except as many be involved in ordinary repairs, maintenance, and
replacement;
(e) Not enter into any contract or commitment, except in the ordinary
course of business;
(f) Not declare or pay any dividend on or make any other distribution
upon, or purchase, retire or redeem, any shares of SSCI Common Stock or SSCI
Preferred Stock, or set aside any funds for any such purpose other than for
purposes of consummation of this Agreement or with the express written consent
of DPI;
(g) Except as necessary to accomplish the transactions contemplated
herein, not amend its articles of incorporation or bylaws;
(h) Not issue or sell, or obligate itself to issue or sell any
additional shares of its common or preferred stock, whether or not such shares
have been previously authorized or issued, or issue or sell any warrants,
rights, or options to acquire any such shares, or acquire any stock of any
corporation or any interest in any business enterprise;
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(i) Not pay, or agree to pay, conditionally or otherwise, any bonus,
extra compensation, pension, or severance pay to any director, stockholder,
officer, consultant, agent, or employee under any pension plan or otherwise, or
increase the compensation paid by it to any officer, director, agent,
consultant, or employee other than the expenses in connection with the Merger
and the transactions contemplated herein;
(j) Not enter into any transactions, or take any acts which if effected
or performed prior to the date of this Agreement, would constitute a breach of
the representations, warranties, and agreements contained herein; and
(k) Not institute, settle, or agree to settle any action or proceeding
before any court or governmental body; and
Section 4.3. Advice of Changes; Governmental Filings. Each party shall
keep the other parties apprised of any material adverse change with respect to
the operation and conduct of its business prior to the Closing Date. SSCI shall
file all reports required to be filed with the SEC and any other governmental
entities between the date of this Agreement and the Effective Time and shall
deliver to DPI copies of all such reports promptly after the same are filed.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1. Due Diligence. Each party shall provide the others with
adequate opportunity to conduct such reviews and examinations of the business,
properties and conditions (financial and otherwise) of the others as each party
shall deem prudent, provided that such investigations shall not interfere
unreasonably with the normal operations of the party being reviewed.
Section 5.2. Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement, each party
will use its commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate the Merger and the
other transactions contemplated by this Agreement as soon as practicable after
the date hereof.
(b) In furtherance and not in limitation of the covenants of the
parties contained in Section 5.3(a), if any administrative or judicial action or
proceeding, including any proceeding by a private party, is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement, each of the parties shall cooperate in all respects with each other
and use its respective commercially reasonable efforts to contest and resist any
such action or proceeding and to have vacated, lifted, reversed or overturned
any decree, judgment, injunction or other order, whether temporary, preliminary
or permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement.
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Section 5.3. Restrictions on Transfer of SSCI Stock. The SSCI Common
Stock and the SSCI Preferred Stock to be issued to the shareholders of DPI
listed on Schedule 2.1 are not registered under the Securities Act and are being
issued pursuant to an exemption from registration. The certificates representing
the shares of SSCI Common Stock and SSCI Preferred Stock to be issued to the
shareholders of DPI pursuant to this Agreement shall be stamped or otherwise
imprinted with a legend substantially similar to the following:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND
ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE
144 OF THE ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
Section 5.4. Expenses. Each party shall be responsible for its own
expenses including, but not limited to, legal and accounting fees, incurred with
respect to this Agreement and the transactions provided for herein.
Section 5.5. Reorganization. Each party shall each use commercially
reasonable efforts to cause the Merger to be treated as a reorganization within
the meaning of Section 368(a) of the Code. From and after the date of this
Agreement and after the Effective Time, each party shall use its commercially
reasonable efforts to cause the Merger to qualify as such and shall not
knowingly take any actions or cause any actions to be taken which could prevent
the Merger from qualifying as a reorganization under the provisions of Section
368(a) of the Code.
Section 5.6. Continuity of Business. Following the Merger, SSCI intends
to cause the Surviving Corporation to continue to a significant extent the
historic business of DPI or to use a significant portion of the historic
business assets of DPI in the business substantially the same as the business
conducted by DPI prior to the Closing.
Section 5.7. Nasdaq Listing. On or before the first anniversary of the
Closing DateSSCI shall make appropriate notice to the SEC regarding the Merger.
Upon notice by the SEC of no further comments to such filings, the SSCI Common
Stock shall have been approved upon official notice of issuancemake appropriate
application for quotation on Nasdaq or the OTC Bulletin Board if not qualified
for such Nasdaq listing. SSCI shall make timely response to SEC and NASD
comments.
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Section 5.8. Additional Capital. On or before the first anniversary of
the Closing Date, SSCI shall have raised $1,500,000 in additional capital by
sale of SSCI Common Stock or otherwise be subject to the terms of the escrow
agreement referred to in Section 5.9.
Section 5.9. Escrowed Stock. A total of 200,000 shares of SSCI Common
Stock to be issued to HFS Venture Fund I, LLLP pursuant to Article II shall be
deposited into escrow ("Escrowed Stock") pursuant to an escrow agreement
substantially in the form attached hereto as Exhibit 5.9. In addition to any
other restrictions, the holders of the Escrowed Stock shall not make any
disposition by sale, pledge or any other transfer of all of any portion of the
Escrowed Stock unless and until the conditions set forth in Section 5.7 and
Section 5.8 have both been met. Notwithstanding the foregoing, HFS Venture Fund
I, LLLP may (i) exercise any other rights it would otherwise have regarding the
shares including the right to vote or receive any dividends, and (ii) transfer
the Escrowed Stock pursuant to the laws of descent and distribution and for
customary estate planning purposes provided that the transferees shall be
subject to all of the restrictions contained in the escrow agreement.
Section 5.10. 144 Opinions. Any time after the Effective Date, SSCI
shall promptly, upon request of any shareholder holding SSCI stock
certificate(s) containing a Rule 144 legend, issue or have issued necessary
opinions and instructions to the transfer agent to permit removal of such legend
from the stock certificate(s) as may be requested in accordance with Rule 144.
The requesting shareholder shall be required to pay any reasonable expenses of
such removal including attorney's fees for the necessary opinions.
Notwithstanding anything to the contrary herein, for purposes of this Section
5.10, shareholders requesting 144 legend removal shall be deemed to be third
party beneficiaries under this Agreement and the provisions of this Section 5.10
shall survive any termination of this Agreement.
Section 5.11. SSCI Board of Directors. At the Effective Time, SSCI
shall cause the Board of Directors of SSCI to consist of Xxxxxx X. Xxxxxx, Xxxxx
Xxxxxxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxx Xxxxxxxx, and Xxxxxx Xxxxxxxxxx.
Section 5.12. DPI Options and Warrants. At the Effective Time, SSCI
shall cause the Board of Directors to take all actions necessary and proper to
convert the DPI Options and Warrants to rights in SSCI Common Stock pursuant to
any of the agreements, contracts or plans governing the DPI Options and
Warrants.
ARTICLE VI
INDEMNIFICATION
Section 6.1. Indemnification. Each party agrees to and shall defend,
indemnify and hold harmless each of the other parties and each of the other
parties' stockholders, officers, directors, employees, counsel, agents,
successors, assigns and legal representatives (each of the other parties and
such other persons collectively referred to as the "Indemnified Persons") from
and against, and shall reimburse the Indemnified Persons for, each and every
Loss (defined in Section 9.9(c)) paid, imposed on or incurred by the Indemnified
Persons, or any claim by a third party against an Indemnified Person, resulting
from or arising out of any inaccuracy in any representation or warranty of the
Indemnifying Party (defined below) under this Agreement, the Disclosure or other
15
schedules hereto, or any certificate delivered or to be delivered by the
Indemnifying Party pursuant hereto.
Section 6.2. Notice and Defense of Third-Party Claims. If any
proceeding shall be brought or asserted under this Article against an
Indemnified Person in respect of which indemnity may be sought under this
Article from another party or any successor thereto (the "Indemnifying Party"),
the Indemnified Person shall give prompt written notice of such proceeding to
the Indemnifying Party who shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Person and the
payment of all expenses; provided, that any delay or failure to so notify the
Indemnifying Party shall relieve the Indemnifying Party of its obligations
hereunder only to the extent, if at all, that the Indemnifying Party is
prejudiced by reason of such delay or failure. In no event shall any Indemnified
Person be required to make any expenditure or bring any cause of action to
enforce the Indemnifying Party's obligations and liability under and pursuant to
the indemnifications set forth in this Article. Actual or threatened action is
not a condition or prerequisite to the Indemnifying Party's obligations under
this Article.
Section 6.3. Exclusivity. After the Effective Time, the provisions of
this Article shall be the exclusive basis for the assertion of claims by or
imposition of liability on the parties hereto arising under or as a result of
this Agreement; provided, however, nothing herein shall preclude a party from
asserting a claim for equitable non-monetary remedies.
Section 6.4. Waiver of Consequential Damages. With respect to any and
all Losses for which indemnification may be available, each party hereby
expressly waives any consequential and punitive damages with respect to a claim
against the Indemnifying Party; provided, however, that this waiver shall not
apply to the extent such consequential or punitive damages are awarded in a
proceeding brought or asserted by a third party against an Indemnified Person.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1. Conditions to Each Party's Obligation to Effect the
Merger. Except as may be waived in writing by the parties, all of the
obligations of the parties under this Agreement are subject to the fulfillment,
prior to or at the Closing, of each of the following conditions:
(a) Shareholder Approval. DPI shall have obtained the Required DPI Vote
and Merger Sub shall have obtained the Required Merger Sub Vote in connection
with the approval of the Merger.
(b) No Injunctions, Restraints or Illegality. No laws shall have been
adopted or promulgated, and no temporary restraining order, preliminary or
permanent injunction or other order issued by a court or other governmental
entity of competent jurisdiction shall be in effect, having the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger,
provided, however, that the provisions of this Section 7.1(b) shall not be
available to any party whose failure to fulfill its obligations pursuant to
Section 5.3 shall have been the cause of, or shall have resulted in, such order
or injunction.
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(c) Closing on DPI's Purchase of SSCI Common Stock. Closing will have
occurred on that Agreement tofor the Purchase of Common Stock of even date
herewith between DPI and Satellite Investment Group, LLC, the controlling
shareholder of SSCI ("SIG"), under which SIG has agreed to sell to DPI 242,636
shares of SSCI Common Stock, which shares shall be cancelled and retired and
cease to be outstanding.
Section 7.2. Additional Conditions to Obligations of SSCI. The
obligations of SSCI to effect the Merger are subject to the satisfaction of, or
waiver by SSCI, on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties
of DPI set forth in Sections 3.1 shall be true and correct in all material
respects as of the Closing Date as if made on the Closing Date subject to any
changes contemplated by this Agreement.
(b) Performance of Obligations of DPI. DPI shall have performed or
complied in all material respects with all agreements and covenants required to
be performed by it under this Agreement at or prior to the Closing Date.
(c) No DPI Shareholder Litigation. There shall be no legal actions,
suits, arbitrations or other proceedings brought by one or more shareholder of
DPI pending or threatened by which the Merger could be materially delayed or
prevented.
(d) Certificate of Officer. DPI shall have delivered to SSCI
certificates dated as of the Closing Date, and verified by the oath of its
president, certifying to the fulfillment of the conditions specified in
subsections (a), (b) and (c) of this Section 7.2.
Section 7.3. Additional Conditions to Obligations of DPI. The
obligations of DPI to effect the Merger are subject to the satisfaction of, or
waiver by DPI, on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties
of SSCI set forth in Section 3.2 and the representations and warranties of SSCI
and Merger Sub set forth in Section 3.3 shall be true and correct in all
respects as of the Closing Date as if made on the Closing Date, subject to any
changes contemplated by this Agreement.
(b) Performance of Obligations of SSCI. SSCI shall have performed or
complied in all material respects with all agreements and covenants required to
be performed by it under this Agreement at or prior to the Closing Date.,
including wire transfer funds to the Closing Agent the $400,000 referred to in
Section 3.2(e).
(c) Certificate of Officer. SSCI shall have delivered to DPI a
certificate dated as of the Closing Date and verified by the oath of its
president certifying to the fulfillment of the conditions specified in
subsections (a) and (b) of this Section 7.3.
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ARTICLE VIII
TERMINATION AND AMENDMENT
Section 8.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time whether before or after approval of the Merger by
the shareholders of DPI, as follows:
(a) by mutual written consent of SSCI, Merger Sub and DPI, by action of
their respective Boards of Directors;
(b) by DPI or by SSCI if the Effective Time shall not have occurred on
or before January 31, 2002 (the "Termination Date"); provided, however, that the
right to terminate this Agreement under this Section 8.1(b) shall not be
available to a party whose failure to fulfill any obligation under this
Agreement (including without limitation Section 5.3) has to any extent been the
cause of, or resulted in, the failure of the Effective Time to occur on or
before the Termination Date;
(c) By SSCI if there has been a material breach of a representation,
warranty, covenant or agreement contained in this Agreement on the part of DPI,
and as a result of such breach the conditions precedent set forth in Section 7.1
or Section 7.2, as the case may be, would not then be satisfied; provided,
however, that if such breach is curable by DPI through the exercise of
commercially reasonable efforts within the earlier of (i) thirty days from the
receipt of notice of breach by DPI from SSCI or (ii) January 31, 2002, then for
so long as DPI continues to exercise such commercially reasonable efforts, SSCI
may not terminate this Agreement under this Section 8.1(c) unless the breach is
not cured in full within such time period; and
(d) By DPI if there has been a material breach of a representation,
warranty, covenant or agreement contained in this Agreement on the part of SSCI,
and as a result of such breach the conditions precedent set forth in Section 7.1
or Section 7.3, as the case may be, would not then be satisfied; provided,
however, that if such breach is curable by SSCI through the exercise of
commercially reasonable efforts within the earlier of (i) thirty days from
receipt of notice of breach by SSCI from DPI or (ii) January 31, 2002, then for
so long as SSCI continues to exercise such commercially reasonable efforts, DPI
may not terminate this Agreement under this Section 8.1(d) unless the breach is
not cured in full within such time period.
Section 8.2. Effect of Termination.
(a) In the event of termination of this Agreement by DPI or by SSCI as
provided in Section 8.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of SSCI or DPI or their
respective employees, officers, directors or counsel, except with respect to
this Section 8.2.
(b) If SSCI shall terminate this Agreement pursuant to Section 8.1(c)
and prior to such termination DPI shall have breached (and not cured as provided
therein) any of its representations, warranties, covenants, or agreements set
forth in this Agreement, SSCI may elect to require DPI to pay to it the sum of
$50,000 (the "Termination Fee") or it may elect (i) in lieu of the Termination
Fee, to exercise its legal right to assert a claim for damages against DPI with
18
respect to such breach, or (ii) to complete the Closing, if all other conditions
thereto have been met in accordance with Article VII, and rely upon the
indemnification provisions of Article VI with respect to such breach. DPI
acknowledges that SSCI will have incurred significant costs and will have
invested significant amounts of time and resources investigating and negotiating
the Merger, and agrees that the Termination Fee constitutes, if applicable,
reasonable liquidated damages in light of the anticipated or actual harm to SSCI
that would be caused by a termination subject to this Section 8.2(b).
(c) If DPI shall terminate this Agreement pursuant to Section 8.1(d)
and prior to such termination SSCI shall have breached (and not cured as
provided therein) any of its representations, warranties, covenants, or
agreements set forth in this Agreement, DPI may elect to require SSCI to pay to
it the Termination Fee or it may elect (i) in lieu of the Termination Fee, to
exercise its legal right to assert a claim for damages against SSCI with respect
to such breach, or (ii) to complete the Closing, if all other conditions thereto
have been met in accordance with Article VII, and rely upon the indemnification
provisions of Article VI with respect to such breach. SSCI acknowledges that DPI
will have incurred significant costs and will have invested significant amounts
of time and resources investigating and negotiating the Merger, and agrees that
the Termination Fee, if applicable, constitutes reasonable liquidated damages in
light of the anticipated or actual harm to DPI that would be caused by a
termination subject to this Section 8.2(c).
(d) Any payment required to be made pursuant to Sections 8.2(b) or (c)
shall be made by wire transfer not later than ten business days after first due.
Notwithstanding anything to the contrary in this Agreement, the provisions of
this Section 8.2 shall survive any termination of this Agreement.
Section 8.3. Amendment. This Agreement may be amended by the parties,
by action taken or authorized by their respective Boards of Directors, at any
time but no amendment shall be made which by law requires approval by
shareholders of DPI or SSCI. This Agreement may not be amended except by an
instrument in writing signed on behalf of all of the parties.
Section 8.4. Extension; Waiver. At any time prior to the Effective
Time, the parties, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties, (ii)
waive any inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto and (iii) waive compliance with any of
the agreements or conditions contained herein. Any agreement on the part of a
party to any such extension or waiver shall be valid only if set forth in a
written instrument signed by that party. The failure of a party to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver of
those rights.
19
ARTICLE IX
MISCELLANEOUS
Section 9.1. Nature of Representations and Warranties; Survival. The
representations and warranties of the parties under this Agreement shall survive
for a period of one year from the Closing Date.
Section 9.2. Counterparts and Facsimile Signatures. In order to
facilitate the execution of this Agreement, the same may be executed in any
number of counterparts and signature pages may be delivered by telefax, with
original executed signature pages to be furnished promptly thereafter.
Section 9.3. Assignment. Neither this Agreement nor any right created
hereby shall be assignable by any party without the prior written consent of the
other parties. Other than as provided in Section 5.10, nothing in this
Agreement, express or implied, is intended to confer upon any person, other than
the parties hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
Section 9.4. Entire Agreement. This Agreement, the schedules and
exhibits hereto, and the other documents delivered hereunder constitute the full
and entire understanding and agreement among the parties with regard to the
subject hereof and no party shall be liable or bound to any other in any manner
by any representations, warranties, covenants or agreements except as
specifically set forth herein. All prior agreements and understandings are
superseded by this Agreement and the schedules and exhibits hereto.
Section 9.5. Governing Law. This Agreement shall be governed by the
laws of the State of Colorado.
Section 9.6. Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 9.7. Notices. Any notice, communication, request, reply or
advice, hereinafter severally and collectively called "notice," in this
Agreement provided or permitted to be given, made or accepted by a party to
another must be in writing and may be given by personal delivery or U.S. mail or
confirmed telefax. If given by mail, such notice must be sent by registered or
certified mail, postage prepaid, mailed to the party at the respective address
set forth below, and shall be effective only if and when received by the party
to be notified. For purposes of notice, the addresses of the parties shall,
until changed as hereinafter provided, be as follows:
20
If to SSCI and/or Merger Sub:
Xxxxxx Xxxxxx
0000 Xxxxx Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Telefax: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Telefax: (000) 000-0000
If to DPI:
Xxxxx Xxxxxx
President/CEO
DocumentPlanet, Inc.
0000 X Xxxxxxxxx Xxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telefax: (000) 000-0000
Xxxxx Xxxxxxxxxx
x/x XXX Xxxxxxx Xxxx
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000000
Xxxxxx Xxxxxx
XxXxxx, Xxxxxxxx 00000
Telefax: (000) 000-0000
With copies to:
Power House Management Group, Inc.
Xxxx X. Xxxx
00000 XX 00 Xxxx, Xxxxx 000000
Xxx Xxxxxxx, Xxxxx 00000
Telefax: (000) 000-0000
Xxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxx
00000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxxxx, Xxxxxxxx 00000
Telefax: (000) 000-0000
or at such other address or telefax number as any party may have advised the
others in writing.
Section 9.8. Attorney Fees. In the event any party hereto institutes a
proceeding against any other party hereto for a claim arising out of or to
enforce this Agreement, the parties agree that the judge in any such proceeding
shall be entitled to determine the extent to which any party shall pay the
21
reasonable attorneys' fees incurred by the other party in connection with such
proceeding, which determination shall take into consideration the outcome of
such proceeding and such other factors as the judge may determine to be
equitable in the circumstances.
Section 9.9. Certain Definitions.
(a) "Person" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).
(b) "Knowledge" means (i) with respect to DPI, the actual conscious
knowledge of the officers of DPI, and (ii) with respect to SSCI, the actual
conscious knowledge of Xxxxxx Xxxxxx.
(c) "Loss" means any loss, damage, injury, diminution in value,
liability, claim, demand, proceeding, judgment, punitive damage, fine, penalty,
tax, cost or expense (including reasonable costs of investigation and the fees,
disbursements and expenses of attorneys, accountants and other professionals
incurred in proceedings, investigations or disputes involving third parties,
including governmental agencies).
[SPACE LEFT INTENTIONALLY BLANK]
22
IN WITNESS WHEREOF, this Agreement is hereby duly executed by each
party hereto as of the date first written above.
SSCI Merger Sub
Solar Satellite Communication, Inc. Document Planet, Inc.
By: By:
Xxxxxx Xxxxxx Xxxxxx Xxxxxx,
Its President Its President
DPI
Document Planet, Inc.
By:
Xxxxx Xxxxxx
Its President
23
SCHEDULE 2.1
DPI SHAREHOLDERS
--------------------------------------- ----------------------------------------
Name # of Shares of Common Stock
--------------------------------------- ----------------------------------------
Xxxxx Xxxxxx 167,000
--------------------------------------- ----------------------------------------
HFS Venture Fund I, LLLP 1,268,000
--------------------------------------- ----------------------------------------
Xxxxxx Xxxx 1,447,000
--------------------------------------- ----------------------------------------
Xxxxx Xxxxxxxxxxx 20,000
--------------------------------------- ----------------------------------------
Xxxxxx X. Xxxxxx 20,000
--------------------------------------- ----------------------------------------
Xxxxxxx Xxxxxxxx 40,000
--------------------------------------- ----------------------------------------
CyberCFO, Inc. 75,000
--------------------------------------- ----------------------------------------
Xxxx Xxxxxx 8,000
--------------------------------------- ----------------------------------------
Xxxxx Xxxxxx 8,000
--------------------------------------- ----------------------------------------
Xxxxxxx Securities 100,000
--------------------------------------- ----------------------------------------
Xxxxxxx Xxxxx Xxxxxxxx 20,000
--------------------------------------- ----------------------------------------
Xxxxxx XxXxxx 8,000
--------------------------------------- ----------------------------------------
Xxxx Xxxxxxxx 10,000
--------------------------------------- ----------------------------------------
Namaste 97,824
--------------------------------------- ----------------------------------------
GR Capital/Xxxxxxx 28,000
--------------------------------------- ----------------------------------------
Xxxxxx X. Xxxxxx 14,592
--------------------------------------- ----------------------------------------
Xxxxx Xxxxx 9,728
--------------------------------------- ----------------------------------------
X.X. Xxxxxx 19,456
--------------------------------------- ----------------------------------------
Xxxxxx X. Xxxxxxx 7,782
--------------------------------------- ----------------------------------------
Xxxxx Xxxxxx 19,456
--------------------------------------- ----------------------------------------
Xxxxxx X. Xxxxxx 38,912
--------------------------------------- ----------------------------------------
Xxxxx X. Xxxxxx 19,456
--------------------------------------- ----------------------------------------
T S & B, LLC 19,456
--------------------------------------- ----------------------------------------
Phil & Xxxxxx Xxxxxxx 9,728
--------------------------------------- ----------------------------------------
Xxxxxx X. Xxxxxxx 38,912
--------------------------------------- ----------------------------------------
Xxxxx Xxxx 29,000
--------------------------------------- ----------------------------------------
I Quest Solutions, Inc. 60,486
--------------------------------------- ----------------------------------------
TOTAL 3,603,788
--------------------------------------- ----------------------------------------
Name # of Shares of Series B Preferred Stock
--------------------------------------- ----------------------------------------
HFS Venture Fund I, LLLP 582,973
--------------------------------------- ----------------------------------------
Page 1 of 1
Schedule 3.1
DPI DISCLOSURE SCHEDULE: none
There exist no exceptions to 3.1(f)
There exist no exceptions to 3.1(h)
There exist no exceptions to 3.1(j)
Thee exists no exceptions to 3.1(k)
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SCHEDULE 3.1(m)
FINDERS AND ADVISORS
On June 25, 2001, DPI. entered into an agreement with HFS Capital LLLP ("HFS
Capital") to act as its exclusive financial advisor and investment banking
representative in connection with the exploration of potential strategic
transactions, including private equity offerings, effecting a merger with a
publicly traded vehicle and a subsequent public equity offering, and effecting
mergers and acquisitions of print brokers and other print related companies.
On June 27, 2001, DPI. entered into an agreement with Power House Management
Group, Inc. to provide services related to the acquisition of a public company.
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Schedule 3.2
SSCI DISCLOSURE SCHEDULE: none
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EXHIBIT 5.9
FORM OF ESCROW AGREEMENT
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ESCROW AGREEMENT
This ESCROW AGREEMENT, dated this 7th day of December, 2001, is by and
among Solar Satellite Communication, Inc. a Colorado corporation (the
"Company"), HFS Venture Fund I, LLLP, (the "Shareholder") and Xxxxx X. Xxxxx,
attorney at law (the "Escrow Agent").
RECITALS:
WHEREAS, pursuant to the Agreement and Plan of Merger (the "Merger
Agreement") among the Company, Document Planet, Inc. ("Merger Sub"), and
Document Planet, Inc. ("DPI"), stock certificates representing 200,000 shares of
the Company common stock are to be held in escrow until certain conditions are
met; and
WHEREAS, the Company, the Shareholder and the Escrow Agent wish to
provide for the appointment of an escrow agent to hold the stock certificates in
escrow, and to set forth the terms and conditions under which the stock
certificates held in escrow shall be released to the Shareholder or cancelled.
AGREEMENT:
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties agree as follows:
Section 1.1 Appointment of Escrow Agent. The Company and Shareholder
hereby appoint the Escrow Agent as the escrow agent under this Escrow Agreement
and the Escrow Agent hereby accepts such appointment and agrees to hold the
stock certificates (the "Escrowed Stock Certificates") representing 200,000
shares of the Company common stock, $.001 par value per share ("Escrowed Stock")
deposited into escrow with it pursuant to Section 5.9 of the Merger Agreement in
accordance with the terms hereof, and to perform its other duties hereunder.
Section 1.2 Establishment of Escrow. The Company will deliver to the
Escrow Agent the Escrowed Stock Certificates. The Escrow Agent shall provide
written confirmation to the Company and the Shareholder that the Escrowed Stock
Certificates have been deposited with it. In addition to any other restrictions,
unless and until the Escrowed Stock Certificates are released from escrow, the
Shareholder shall not make any disposition by sale, pledge or any other transfer
of all of any portion of its Escrowed Stock. Notwithstanding the foregoing, the
Shareholder may (i) exercise all other rights of a shareholder of such shares of
Escrowed Stock including the right to vote and receive dividends, if any, and
(ii) transfer its Escrowed Stock pursuant to the laws of descent and
distribution and for customary estate planning purposes provided that the
transferees shall be subject to all of the restrictions contained in this Escrow
Agreement and the Merger Agreement.
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Section 1.3 Release of Escrowed Stock Certificates. The Escrow Agent
shall release the Escrowed Stock Certificates by delivering them to the
Shareholder in the event that the Company delivers to the Escrow Agent a
certificate verified by oath of the chief executive officer of the Company that
both of the following conditions have been met:(a) Nasdaq Listing. The Company
common stock shall have been approved upon official notice of issuance for
quotation on Nasdaq or the OTC Bulletin Board if not qualified for such Nasdaq
listing; and
(b) Additional Capital. The Company shall have raised $1,500,000 in
additional capital by sale of Company common stock or otherwise.
Section 1.4 Cancellation of Escrowed Stock. The Escrow Agent shall
cancel and retire the Escrowed Stock and destroy the Escrowed Stock Certificates
so that they cease to exist in the event that Escrow Agent fails to receive from
the Company on or before the first anniversary of this Escrow Agreement one of
the following:
(a) The certificate of the Company described in Section 1.3 above; or
(b) Written notice from the Company verified by oath of the chief
executive officer of the Company that the condition set forth in Section 1.3(b)
has been met but delays in satisfying the condition set forth in Section 1.3(a)
have been caused by events which have occurred outside its control and despite
its reasonable efforts. In the event that Escrow Agent receives the notice of
such delay as described in the preceding sentence, the Escrow Agent shall cancel
and retire the Escrowed Stock and destroy the Escrowed Stock Certificates so
that they cease to exist only in the event that it fails to receive a
certificate of the Company verified by oath of the chief executive officer that
the condition set forth in Section 1.3(a) has been met on or before the second
anniversary of this Escrow Agreement. If Escrow Agent receives on or before the
second anniversary of the date of this Agreement a certificate of the Company
verified by the oath of the chief executive officer that the condition set forth
in Section 1.3(a) has been met, the Escrow Agent shall release the Escrowed
Stock Certificates to the Shareholder as provided in Section 1.3.
The Escrow Agent shall provide ten (10) days written notice to the
Company and Shareholder prior to cancellation of the Escrowed Stock. Upon the
cancellation of the Escrowed Stock as provided hereunder, any and all interests
of the Shareholder that it had in the Escrowed Stock theretofore shall terminate
and be extinguished for all purposes.
Section 1.5 Suspension of Performance; Disbursement into Court. If, at
any time, there shall exist any dispute between the Company and the Shareholder
with respect to the holding or release of Escrowed Stock Certificates or any
other obligations of Escrow Agent hereunder, or if at any time the Escrow Agent
is unable to determine, to the Escrow Agent's sole satisfaction, the proper
disposition of the Escrowed Stock Certificates or the Escrow Agent's proper
actions with respect to its obligations hereunder, or if a successor Escrow
Agent has not been appointed within 30 days of the furnishing by the Escrow
Agent of a notice of resignation as provided below, then Escrow Agent may, in
its sole discretion, take either or both of the following actions:
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(a) suspend the performance of any of its obligations (including
without limitation any distribution obligations) under this Escrow Agreement
until such dispute or uncertainty shall be resolved to the sole satisfaction of
Escrow Agent or until a successor Escrow Agent shall have been appointed, as the
case may be; and/or
(b) petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction for instructions with
respect to such dispute or uncertainty, and to the extent required by law,
deposit into such court, for holding and disposition in accordance with the
instructions of such court, all Escrowed Stock Certificates held by it.
The Escrow Agent shall have no liability to the Company or the
Shareholder or any other person with respect to any such suspension of
performance or deposit into court, specifically including any liability or
claimed liability that may arise, or be alleged to have arisen, out of or as a
result of any delay in the release of the Escrowed Stock Certificates, or any
delay in or with respect to any other action required or requested of Escrow
Agent.
Section 1.6 Resignation and Removal of Escrow Agent. The Escrow Agent
may resign from the performance of its duties hereunder at any time by giving
ten (10) days' prior written notice to the Company and the Shareholder, or may
be removed, with or without cause, by the Company by furnishing written notice
to the Escrow Agent, at any time by the giving of ten (10) days' prior written
notice to the Escrow Agent. Such resignation or removal shall take effect upon
the appointment of a successor Escrow Agent as provided herein. Upon any such
notice of resignation or removal, the Company shall appoint a successor Escrow
Agent hereunder. Upon the acceptance in writing of any appointment as Escrow
Agent hereunder by a successor Escrow Agent, such successor Escrow Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Escrow Agent, and the retiring Escrow Agent shall be
discharged from its duties and obligations under this Escrow Agreement, but
shall not be discharged from any liability for actions taken as Escrow Agent
hereunder prior to such succession. After any retiring Escrow Agent's
resignation or removal, the provisions of this Escrow Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Escrow Agent under this Escrow Agreement. The retiring Escrow Agent shall
transmit all records pertaining to the Escrowed Stock Certificates and shall
release all the Escrowed Stock Certificates to the successor Escrow Agent, after
making copies of such records as the retiring Escrow Agent deems advisable.
Section 1.7 Liability of Escrow Agent.
(a) The duties of the Escrow Agent hereunder are entirely
administrative and not discretionary. The duties and responsibilities of the
Escrow Agent hereunder shall be determined solely by the express provisions of
this Escrow Agreement. The Escrow Agent undertakes to perform only such duties
as are expressly set forth herein and no further duties or responsibilities
shall be implied. The Escrow Agent is obligated to act only in accordance with
written instructions received by it as provided in this Escrow Agreement, is
authorized hereby to comply with any orders, judgments or decrees of any court
or arbitration panel and shall not incur any liability as a result of its
compliance with such instructions, orders, judgments or decrees.
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(b) The Escrow Agent may rely and shall be protected in acting upon any
instrument, not only as to its due execution, validity and effectiveness, but
also as to the truth and accuracy of any information contained therein, which
the Escrow Agent shall in good faith believe to be genuine, to have been signed
or presented by the persons or parties purporting to sign the same and to
conform to the provisions of this Escrow Agreement. The Escrow Agent shall be
under no duty to inquire into or investigate the validity, accuracy or content
of any such instrument.
(c) The Company and the Shareholder hereby waive any suit, claim,
demand or cause of action of any kind which may now or hereafter be asserted
against the Escrow Agent arising out of or relating to the execution or
performance by the Escrow Agent of this Escrow Agreement, unless such suit,
claim, demand or cause of action is based upon the willful misappropriation by
the Escrow Agent or unless a court of competent jurisdiction determines that the
Escrow Agent's gross negligence was the primary cause of a loss to the Company
or the Shareholder.
(d) In the administration of this Escrow Agreement, the Escrow Agent
may execute any of its powers and perform its duties hereunder directly or
through agents or attorneys and may consult with counsel and other skilled
persons to be selected and retained by it. The Escrow Agent shall not be liable
for anything done, suffered or omitted in good faith by it in accordance with
the advice or opinion of any such counsel or other skilled persons.
Section 1.8 Indemnification of Escrow Agent. The Company and the
Shareholder, jointly and severally, hereby indemnify and hold harmless the
Escrow Agent and each director, officer, employee, attorney, agent and affiliate
of the Escrow Agent (the "Indemnitees") against any and all actions, claims,
losses, damages, liabilities, fines, penalties, costs and expenses of any kind
or nature whatsoever (including, without limitation, reasonable attorneys' fees,
costs and expenses and the reasonable allocated costs and expenses of in-house
counsel) ("Losses") incurred by or asserted against any of them from and after
the date hereof, whether direct, indirect or consequential, as a result of or
arising from or in any way relating to any claim, demand, suit, action,
proceeding or investigation by any person, including without limitation the
Company or the Shareholder, whether threatened or initiated, asserting a claim
for any legal or equitable remedy against any person under any statute or
regulation, or common law or equitable cause or otherwise arising from or in
connection with the negotiation, preparation, execution, performance or failure
of performance of this Escrow Agreement or any transaction contemplated herein;
except for any such Losses arising from any liability resulting solely from the
gross negligence or willful misconduct of the party claiming indemnification or
from a breach of this Escrow Agreement by the Escrow Agent. In addition to and
not in limitation of the immediately preceding sentence, the Company and the
Shareholder, jointly and severally, also hereby indemnify and hold harmless the
Indemnitees and each of them from and against any and all Losses that may be
imposed on, incurred by, or asserted against the Indemnitees or any of them for
following any instruction or other direction upon which the Escrow Agent is
authorized to rely pursuant to the terms of this Escrow Agreement. The
provisions of this Section shall survive the termination of this Escrow
Agreement and the resignation or removal of the Escrow Agent for any reason.
Anything in this Escrow Agreement to the contrary notwithstanding, in no event
shall the Escrow Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Escrow Agent has been advised of such loss or damage and regardless of
the form of action.
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Section 1.9 Fees and Expenses of Escrow Agent. The Company shall
compensate the Escrow Agent for its services hereunder in accordance with
Schedule A attached hereto and, in addition, shall reimburse the Escrow Agent
for all of its reasonable out-of-pocket expenses, including attorneys' fees,
travel expenses, telephone and facsimile transmission costs, postage (including
express mail and overnight delivery charges), copying charges and the like. All
of the compensation and reimbursement obligations set forth in this section
shall be payable by the Company upon demand by the Escrow Agent. The obligations
of the Company under this Section shall survive any termination of this Escrow
Agreement and the resignation or removal of the Escrow Agent.
Section 1.10 Notices. Any notice required or permitted hereunder shall
be in writing and shall be deemed duly given if (and then two business days
after) it is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:
(a) If to Company:
Solar Satellite Communication, Inc.
0000 Xxxxx Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Telefax: (000) 000-0000
(b) If to Shareholder:
HFS Venture Fund I, LLLP
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxxx
XxXxxx, Xxxxxxxx 00000
Telefax: (000) 000-0000
(c) If to the Escrow Agent:
Xxxxx X. Xxxxx, Esq.
0000 Xxxxxx X
Xxxxx, Xxxxx 00000
Telefax: (000) 000-0000
Any party may send any notice required or permitted hereunder to the
intended recipient at the address set forth above using any other means of
communication (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail or electronic mail), but no such notice
shall be deemed to have been duly given unless and until it actually is received
by the intended recipient. Any party may change the address to which notices
required or permitted hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.
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Section 1.11 Miscellaneous. This Escrow Agreement and Merger Agreement
set forth the entire understanding of the parties with respect to the subject
matter hereof. All of the terms and provisions of this Escrow Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto.
Section 1.12 Governing Law. This Escrow Agreement shall be governed by
and construed in accordance with the laws of the State of Colorado, without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Colorado or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Colorado.
Section 1.13 Consent to Jurisdiction and Venue. In the event that any
party hereto commences a lawsuit or other proceeding relating to or arising from
this Agreement, the parties hereto agree that the United States District Court
for the State of Colorado shall have the sole and exclusive jurisdiction over
any such proceeding. If all such courts lack federal subject matter
jurisdiction, the parties agree that the State court sitting in Denver, Colorado
shall have sole and exclusive jurisdiction. Any of these courts shall be proper
venue for any such lawsuit or judicial proceeding and the parties hereto waive
any objection to such venue. The parties hereto consent to and agree to submit
to the jurisdiction of any of the courts specified herein and agree to accept
service or process to vest personal jurisdiction over them in any of these
courts.
Section 1.14 Amendments. No amendment to any provision of this Escrow
Agreement shall be valid unless it is in writing and signed by the Company, the
Shareholder and the Escrow Agent.
Section 1.15 Counterparts. This Escrow Agreement may be signed in
counterparts, each of which shall be an original and all of which shall
constitute one instrument.
Section 1.16 Termination. Upon the first to occur of the release to the
Company of the Escrowed Stock Certificates, or the cancellation of the Escrowed
Stock Certificates, or deposit of the Escrowed Stock Certificates into court,
this Escrow Agreement shall terminate and the Escrow Agent shall have no further
obligation or liability whatsoever with respect to this Escrow Agreement or the
Escrowed Stock Certificates.
[SPACE LEFT INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, this Escrow Agreement has been executed as of the
date and year first above written.
Solar Satellite Communication, Inc.
By:
Name:
Title:
HFS Venture Fund I, LLLP
By:
Name:
Title:
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SCHEDULE A
Fees Payable to Escrow Agent
$500.00
1 of 1
