PLAN AND AGREEMENT OF MERGER
AMONG:
PROVIDENCE CAPITAL IX, INC.,
a Colorado corporation;
CACHESTREAM CORPORATION,
a Colorado corporation;
___________________________
Dated as of June 27, 2001
___________________________
EXHIBITS
EXHIBIT DOCUMENT
(I) Certain Definitions
(II) Articles of Merger
(III) Bylaws of PROVIDENCE
(IV) Disclosure Schedule
(V) Articles of Incorporation of PROVIDENCE
(VI) Cache Investment Representation Letters to
be executed by each of the CACHE Shareholders
(VII) Legal Opinions of Xxxxxx & Xxxxxxx, P.C.;
(VIII) Schedule of Employees
(IX) Certificate of Board of Directors CACHE.
(X) Certificate of Board of Directors PROVIDENCE.
(XI) Investment Banking Services Agreement.
PLAN AND AGREEMENT
OF
MERGER
THIS PLAN AND AGREEMENT OF MERGER (hereinafter called the "Agreement"),
dated as of June 27, 2001, is by and between PROVIDENCE CAPITAL IX, INC., a
Colorado corporation (hereinafter referred to as "PROVIDENCE" and/or
"Surviving Corporation"), and CACHESTREAM CORPORATION, a Colorado
corporation (hereinafter called "CACHE" and/or "Disappearing Corporation"),
said corporations being hereafter sometimes collectively referred to as the
"Constituent Corporations."
WITNESSETH:
WHEREAS, PROVIDENCE is a corporation duly organized and existing under the
laws of the State of Colorado, having been incorporated in 1999, and CACHE
is a corporation duly organized and existing under the laws of the State of
Colorado, having been incorporated in 1999; and
WHEREAS, the authorized capital stock of PROVIDENCE consists of fifty
million (50,000,000) shares of $.001 par value common stock, of which one
million five hundred thousand 1,500,000 shares are outstanding, and fifty
million (50,000,000) shares of preferred stock, $.001 par value, of which
no shares are outstanding; and
WHEREAS, the authorized capital stock of CACHE consists of twenty million
(20,000,000) shares of $.01 par value common stock, of which Five Million,
Eight Hundred and Ninety Three Thousand, Six Hundred and One (5,893,601)
shares are outstanding or will be outstanding at Closing; and
WHEREAS, the Boards of Directors of the Constituent Corporations deem it
advisable for the general welfare and advantage of the Constituent
Corporations and their respective shareholders that the Constituent
Corporations merge pursuant to this Agreement and pursuant to the
applicable provisions of the laws of the State of Colorado; and
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereby agree, in accordance with
the applicable provisions of the laws of the State of Colorado, that the
Constituent Corporations shall merge, to wit: CACHE, a Colorado
corporation, one of the Constituent Corporations and which shall cease its
existence under the laws of the State of Colorado pursuant to the Merger
(said corporation hereafter being sometimes called the "Disappearing
Corporation"), and the terms and conditions of the Merger hereby agreed
upon (hereafter called the "Merger") which the parties covenant to observe,
keep and perform and the mode of carrying the same into effect are and
shall be as hereafter set forth:
A. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a)(1)(A) of the Internal Revenue
Code of 1986, as amended (the "Code"). For accounting purposes, it is
intended that the Merger be accounted for using purchase accounting;
B. This Agreement has been approved by the respective boards of
directors of PROVIDENCE and CACHE;
C. PROVIDENCE has one million five hundred thousand 1,500,000 shares of
common stock issued and outstanding, constituting all of the
outstanding capital stock of PROVIDENCE;
D. Up to Thirteen Million, Three Hundred Sixty Thousand, Seven Hundred
Ninety (13,360,790) of the total issued and outstanding shares of
PROVIDENCE common stock (the "Shares") will either be issued or
reserved for issuance to CACHE shareholders and various option and
warrant holders. Such Shares will cover all CACHE shares, options and
warrants issued as of the Closing Date on a fully diluted basis;
E. As of the Effective Time, no more than seven hundred fifty thousand
(750,000) shares of PROVIDENCE common stock will remain issued to
PROVIDENCE shareholders, Xxxxxx & Xxxxxxx, P.C., Xxxxxxx Xxxx & Co.,
LLC, and Emerging Securities Group, Inc., or their assigns
(collectively, the "Providence Shareholders");
F. CACHE will attempt to receive up to Four Hundred Eighty Four Thousand
and Eight Cents ($484,000.08) in additional "bridge financing" (the
"Bridge") that will be evidenced by the execution of debentures (the
"Debentures") between CACHE and "accredited investors" as that term is
defined in Rule 501 of Regulation D of the Securities Act of 1933 (the
"Securities Act"), and by employees of CACHE who have deferred salary
and/or the repayment of normal business travel and business expenses.
G. PROVIDENCE is to receive equity financing ("Equity Financing")
within ten (10) business days after the date of this Agreement in the
form of a Series A convertible preferred stock in an amount up to
three million dollars ($3,000,000) to be issued by PROVIDENCE at the
Effective Time. The Series A convertible preferred stock will convert
into a post-merger equivalent of 2,111,420 shares of PROVIDENCE common
stock based on a conversion price of $1.4208 per share and the other
terms will be agreed upon.
AGREEMENT
The parties to this Agreement agree as follows:
ARTICLE I
DESCRIPTION OF TRANSACTION
1.1 MERGER OF CACHE INTO PROVIDENCE.
Upon the terms and subject to the conditions set forth in this Agreement,
at the Effective Time, CACHE shall be merged with and into PROVIDENCE, and
the separate existence of CACHE shall cease. PROVIDENCE will continue as
the surviving corporation in the Merger and will change its name to
CacheStream Corporation"
1.2 EFFECT OF THE MERGER.
The Merger shall have the effects set forth in this Agreement and in the
applicable provisions of the Colorado Business Corporation Act.
1.3 CLOSING; EFFECTIVE TIME
The consummation of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Xxxxxx & Xxxxxxx, P.C., 00
Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx, XX at such time and date as the parties
may agree (the "Scheduled Closing Time") (The date on which the Closing
actually takes place is referred to in this Agreement as the "Closing
Date.")
Contemporaneously with or within forty-eight (48) hours after the Closing,
a properly executed plan of merger, together with fully executed articles
of merger (a copy of which is attached hereto as Exhibit II conforming to
the requirements of Article 0-000-000 of the Colorado Business Corporation
Act, shall be filed with the Secretary of State of Colorado (the
"Secretary"). The Merger shall become effective at the time such agreement
and articles of merger are filed with the Secretary (the "Effective Time").
1.4 CONVERSION OF SHARES
The mode of carrying into effect the Merger provided in this Agreement, and
the manner and basis of converting the shares of the Constituent
Corporations into shares of the Surviving Corporation are as follows:
1:4:1 PROVIDENCE COMMON STOCK
None of the shares of PROVIDENCE common stock, $.001 par value, issued and
outstanding at the Effective Time of the Merger shall be converted as a
result of the Merger and of such shares, seven hundred fifty thousand
(750,000) shares shall remain issued and outstanding at the Effective Time.
1:4:2 MANNER AND BASIS OF CONVERSION OF CACHE COMMON STOCK
As of the Effective Time, by virtue of the Merger and without any action on
the part of the holder thereof, each outstanding share of CacheStream
common stock will be converted into the right to receive 1.2271 Shares.
Based on the shares of CacheStream common stock that will be issued and
outstanding at the Effective Time, an aggregate of Seven Million, Two
Hundred Thirty Two Thousand Fifty Three (7,232,053) Shares will be issuable
at the Effective Time.
1:4:3 ASSUMPTION OF CACHESTREAM OPTIONS AND WARRANTS
As of the date hereof, except as set forth in Section 2.5 of the Disclosure
Schedule, there are no outstanding options or warrants or other rights to
purchase shares of CacheStream common stock.
At the Effective Time, each outstanding option, warrant or other right to
purchase shares of CacheStream common stock ("CacheStream Option") will be
assumed by PROVIDENCE and will thereafter be deemed to constitute an
option, warrant or right to purchase, on the same terms and conditions as
were applicable to such CacheStream Option, the number of Shares which the
holder thereof would have been entitled to receive pursuant to the Merger
had such holder exercised such CacheStream Option in full immediately prior
to the Merger and been the holder of CacheStream common stock issuable upon
exercise of such CacheStream Option, at an exercise price per share
calculated by dividing the aggregate exercise price for the shares of
CacheStream common stock otherwise purchasable pursuant to such CacheStream
Option by the number of full Shares deemed purchasable pursuant to such
CacheStream Option.
It is the intention of the parties that, to the extent that any such
CacheStream Option constituted an "Incentive Stock Option" (within the
meaning of Section 422 of the Code) immediately prior to the Effective
Time, such CacheStream Option will continue to qualify as an Incentive
Stock Option to the maximum extent permitted by Section 422 of the Code,
and that the assumption of CacheStream Options provided by this Section
1.4.3 will satisfy the conditions of Section 424(a) of the Code.
From and after the date of this Agreement, no additional options or
warrants to purchase shares of CacheStream common stock shall be granted by
CacheStream. Except as otherwise agreed to by the parties, CacheStream
shall use reasonable efforts to ensure that no person shall have any right
under any stock option plan (or any option granted thereunder) or other
plan, program or arrangement with respect to, including the right to
acquire, equity securities of CacheStream following the Effective Date.
1.5 CLOSING OF CACHE'S TRANSFER BOOKS.
At the Effective Time, holders of certificates representing shares of
CACHE's common stock that were outstanding immediately prior to the
Effective Time shall cease to have any rights as stockholders of CACHE, and
the stock transfer books of CACHE shall be closed with respect to all
shares of such common stock outstanding immediately prior to the Effective
Time. As soon as practicable after the Effective Time, the stock ledger
representing CACHE common stock issued and outstanding at the time the
Merger becomes effective shall be delivered to the Surviving Corporation,
such that certificates for the Shares may be issued, as above provided. No
further transfer of any such shares of CACHE's common stock shall be made
on such stock transfer books after the Effective Time. If, after the
Effective Time, a valid certificate previously representing any of such
shares of CACHE common stock (a "CACHE Stock Certificate") is presented to
PROVIDENCE, such CACHE Stock Certificate shall be canceled and shall be
exchanged as provided in Section 1.6.
1.6 EXCHANGE OF CERTIFICATES.
(A) Upon surrender of a CACHE Stock Certificate to the Surviving
Corporation for exchange, together with such other documents as may be
reasonably required by the Surviving Corporation, the holder of such CACHE
Stock Certificate shall be entitled to receive in exchange therefor a
certificate representing the number of whole Shares of the Surviving
Corporation that such holder has the right to receive pursuant to the
provisions of Section 1.4, and the CACHE Stock Certificate so surrendered
shall be canceled. Until surrendered as contemplated by this Section 1.6,
each CACHE Stock Certificate shall be deemed, from and after the Effective
Time, to represent only the right to receive upon such surrender a
certificate representing Shares of the Surviving Corporation as
contemplated by Section 1.4. If any CACHE Stock Certificate shall have
been lost, stolen or destroyed, the Surviving Corporation may, in its
discretion and as a condition precedent to the issuance of any certificate
representing the Shares of the Surviving Corporation, require the owner of
such lost, stolen or destroyed CACHE Stock Certificate to provide an
appropriate affidavit and to deliver a bond (in such sum as the Surviving
Corporation may reasonably direct) as indemnity against any claim that may
be made against the Surviving Corporation with respect to such CACHE Stock
Certificate.
(B) No dividends or other distributions declared or made with respect
to the Shares of the Surviving Corporation with a record date after the
Effective Time shall be paid to the holder of any unsurrendered CACHE Stock
Certificate with respect to the Shares of the Surviving Corporation
represented thereby, until such holder surrenders such CACHE Stock
Certificate in accordance with this Section 1.6 (at which time such holder
shall be entitled to receive all such dividends and distributions and such
cash payment).
(C) No fractional Shares of the Surviving Corporation shall be issued
in connection with the Merger, and no certificates for any such fractional
shares shall be issued. In lieu of such fractional shares, any holder of
capital stock of CACHE who would otherwise be entitled to receive a
fraction of a Share of the Surviving Corporation (after aggregating all
fractional Shares of the Surviving Corporation issuable to such holder)
shall, upon surrender of such holder's CACHE Stock Certificate(s), have
such fractional interest rounded up to the nearest whole number.
(D) The Surviving Corporation shall not be liable to any holder or
former holder of common stock of CACHE for any Shares of the Surviving
Corporation (or dividends or distributions with respect thereto), or for
any cash amounts, delivered to any public official pursuant to any
applicable abandoned property, escheat or similar law.
1.7 CACHE STOCKHOLDER APPROVAL; DISSENTING SHARES.
At the Closing CACHE shall deliver to Providence a certificate or
resolution signed by each of the stockholders of CACHE (the "CACHE
Stockholders") whereby each agrees and acknowledges the following:
(A) that the terms of the Merger, this Agreement, and all other
agreements contemplated herein are hereby approved, ratified and confirmed
and the officers of CACHE are, and each of them hereby is, authorized and
directed, in the name and on behalf of CACHE, to consummate the
transactions contemplated by this Agreement, on the terms set forth in such
documents and such other agreements, and any amendments thereto, as the
officers executing such agreements may in their discretion deem reasonable
and appropriate; and
(B) that he or she hereby agrees to waive any "appraisal rights"
within the meaning of the Colorado Business Corporation Act with respect to
the Merger.
1.8 GOVERNING LAW; ARTICLES OF INCORPORATION
The laws which are to govern the Surviving Corporation are the laws of
the State of Colorado. The Articles of Incorporation of PROVIDENCE, as
heretofore amended, shall, prior to the Effective Time of the Merger, be
amended to the extent set forth in Paragraph three of the Articles of
Merger, attached hereto, to amend the name of PROVIDENCE CAPITAL IX, INC.
As so amended, such Articles of Incorporation shall remain in effect
thereafter until the same shall be further amended or altered in accordance
with the provisions thereof.
1.9 BYLAWS.
The Bylaws of PROVIDENCE (a copy of which is attached as Exhibit III)
at the Effective Time shall be the Bylaws of the Surviving Corporation
until the same shall be altered or amended in accordance with the
provisions thereof.
1.10 DIRECTORS AND OFFICERS
DIRECTORS. At the Effective Time, the Directors of the Surviving
Corporation shall be as set forth below, until their respective successors
are duly elected and qualified at the next annual meeting of shareholders
of the Surviving Corporation. As of the Effective Time, the previous
directors of PROVIDENCE shall resign.
The names and addresses of the Directors of the Surviving Corporation are
as follows:
NAME AGE POSITION
Xxxx X. Xxxxxx 53 Chairman
00 Xxxxxxxxxx Xxxxx,
Xxxxx 000
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxx 45 Director
000 Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
XXXXXXX X. XXXXX 46 DIRECTOR
0000 Xxxxxxx Xxxx, XX,
Xxxxx 000
Xxxxxxxx, XX 00000
OFFICERS. The names, titles and addresses of the persons who, upon
the Effective Time, shall constitute the officers of the Surviving
Corporation, and who shall hold office, subject to the Bylaws, until the
first meeting of directors following the next annual meeting of
shareholders, are as follows:
NAME AGE POSITION
Xxxxxxx X. Xxxxx 46 President
0000 Xxxxxxx Xxxx, XX,
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxx X. Xxx 36 Vice President of Engineering
0000 Xxxxxxx Xxxx, XX,
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 46 Chief Technical Officer
0000 Xxxxxxx Xxxx, XX,
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxx X. Xxxxxx 37 Senior Vice President of Business
0000 Xxxxxxx Xxxx, XX, Xxxxxxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxx, Xx. 36 Chief Operating Officer
0000 Xxxxxxx Xxxx, XX,
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxx 44 Chief Marketing Officer
0000 Xxxxxxx Xxxx, XX,
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxx X. Xxxx 43 Secretary and Treasurer
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
1.11 TAX CONSEQUENCES.
For federal income tax purposes, the Merger is intended to constitute a
reorganization within the meaning of Section 368(a)(1)(A) of the Code. The
parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of
the Internal Revenue Service Regulations.
1.12 Accounting Treatment.
For accounting purposes, the Merger is intended to be accounted for as a
purchase under GAAP.
1.13 Further Action.
If, at any time after the Effective Time, any further action is determined
by the Surviving Corporation to be necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full
right, title and possession of and to all rights and property of CACHE, the
officers and directors of the Surviving Corporation shall be fully
authorized (in the name of CACHE and otherwise) to take such action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CACHE AND ITS STOCKHOLDERS.
Except as set forth in the Disclosure Schedule attached as Exhibit IV (the
"Disclosure Schedule"), CACHE hereby represents and warrants as follows:
2.1 Organization, Standing and Qualification.
CACHE is a corporation in existence under the laws of the State of
Colorado, and has all requisite corporate power and authority to own, to
lease or to operate its properties and to carry on its business as it is
now being conducted. Section 2.1 of the Disclosure Schedule sets forth a
true, complete and correct list of each jurisdiction, foreign or domestic,
in which it (a) owns or leases property, has employees or otherwise
conducts operations and/or (b) is licensed or qualified to do business as a
foreign corporation. CACHE is duly licensed or qualified to do business as
a foreign corporation in each jurisdiction in which the character of its
properties, owned or leased, or the nature of its activities, makes such
licensing or qualification necessary, except for where the failure to be so
licensed and qualified would not have a material adverse effect on the
business of CACHE.
2.2 Authority.
THE EXECUTION AND DELIVERY OF THIS AGREEMENT HAS BEEN AUTHORIZED BY THE
BOARD OF DIRECTORS OF CACHE AND APPROVED BY THE CACHE STOCKHOLDERS IN
ACCORDANCE WITH SECTION 0-000-000 OF THE COLORADO BUSINESS CORPORATION ACT
AND NO FURTHER CORPORATE PROCEEDINGS ON THE PART OF CACHE WILL BE
NECESSARY. THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY CACHE
AND, ASSUMING THE DUE AND VALID EXECUTION AND DELIVERY OF THIS AGREEMENT BY
PROVIDENCE, THIS AGREEMENT CONSTITUTES THE LEGAL, VALID AND BINDING
OBLIGATION OF CACHE, TO THE EXTENT APPLICABLE, ENFORCEABLE IN ACCORDANCE
WITH ITS TERMS, ALL AS MAY BE SUBJECT TO OR AFFECTED BY ANY BANKRUPTCY,
REORGANIZATION, INSOLVENCY, MORATORIUM OR SIMILAR LAWS OF GENERAL
APPLICATION FROM TIME TO TIME IN EFFECT AND RELATING TO OR AFFECTING THE
RIGHTS OR REMEDIES OF CREDITORS GENERALLY.
2.3 No Conflict, Breach, Default or Violation.
THE EXECUTION AND DELIVERY OF THIS AGREEMENT DOES NOT, AND THE COMPLETION
OF TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WILL NOT CONFLICT WITH,
RESULT IN A BREACH OF OR THE ACCELERATION OF ANY OBLIGATION UNDER, OR
CONSTITUTE A DEFAULT OR EVENT OF DEFAULT (OR EVENT WHICH WITH NOTICE OR
LAPSE OF TIME OR BOTH WOULD CONSTITUTE A DEFAULT) UNDER, ANY PROVISION OF
ANY CHARTER, BYLAW, INDENTURE, MORTGAGE, LIEN, LEASE, LICENSE, AGREEMENT,
CONTRACT, PERMIT, ORDER, JUDGMENT, OR, TO THE BEST OF THE CACHE'S
KNOWLEDGE, ANY JUDICIAL OR ADMINISTRATIVE DECREE, ORDINANCE OR REGULATION,
OR ANY RESTRICTION TO WHICH ANY PROPERTY OF CACHE IS SUBJECT OR BY WHICH
CACHE IS BOUND, THE RESULT OF WHICH WOULD HAVE A MATERIAL ADVERSE EFFECT ON
THE BUSINESS OF CACHE.
2.4 Approvals.
EXCEPT FOR THE FILINGS WITH THE SECRETARY CONTEMPLATED HEREBY, NO CONSENT,
APPROVAL, ORDER OR AUTHORIZATION OF, OR REGISTRATION, DECLARATION OR FILING
WITH, ANY COURT, ADMINISTRATIVE AGENCY OR COMMISSION OR OTHER GOVERNMENTAL
AGENCY OR INSTRUMENTALITY, DOMESTIC OR FOREIGN (A "GOVERNMENTAL ENTITY"),
OR THIRD PARTY IS REQUIRED BY OR WITH RESPECT TO CACHE IN CONNECTION WITH
THE EXECUTION AND DELIVERY BY CACHE OF THIS AGREEMENT, OR THE COMPLETION OF
THE TRANSACTIONS CONTEMPLATED HEREBY, THE ABSENCE OF WHICH WOULD HAVE A
MATERIAL ADVERSE EFFECT ON CACHE.
2.5 Capitalization.
The authorized capital stock of CACHE consists of twenty million
(20,000,000) shares of CACHE common stock, $.01 par value per share, of
which Eight Million, Two Hundred Sixty Seven Thousand, One Hundred
(8,267,100) shares are issued and outstanding or are reserved for issuance
prior to the Closing Date. The CACHE shares are validly issued, fully paid
and non-assessable and not subject to preemptive rights. Section 2.5 of
the Disclosure Schedule sets forth a true, complete and correct list of
(i) the holders of record of the issued and outstanding shares of CACHE
common stock, and (ii) all claims, commitments or agreements to which CACHE
is a party or by which it is bound, obligating CACHE to issue, deliver or
sell, or to cause to be issued, delivered or sold, additional shares of
common stock of CACHE or obligating CACHE to grant, extend or enter into
any such option, warrant, call, right or agreement with respect to its
capital stock. There are, and as of the Effective Time there will be, no
agreements obligating CACHE to redeem, repurchase or otherwise acquire the
common stock of CACHE, or any other securities issued by it, or to register
the sale of the common stock of CACHE under applicable securities laws.
There are, and as of the Effective Time there will be, no agreements or
arrangements prohibiting or otherwise restricting the payment of dividends
or distributions to the CACHE Shareholders by CACHE.
2.6 Financial Statements.
CACHE HAS FURNISHED TO PROVIDENCE TRUE, COMPLETE AND CORRECT COPIES OF THE
CACHE CONSOLIDATED AUDITED BALANCE SHEET AT SEPTEMBER 30, 2000 AND THE
RELATED AUDITED CONSOLIDATED STATEMENTS OF OPERATIONS, CASH FLOWS AND
CHANGES IN STOCKHOLDERS EQUITY FOR THE PERIOD THEN ENDED (ALL OF THESE
FINANCIAL STATEMENTS BEING COLLECTIVELY REFERRED TO HEREIN AS THE "CACHE
FINANCIALS"). THE CACHE FINANCIALS ARE IN ACCORDANCE IN ALL MATERIAL
RESPECTS WITH THE BOOKS AND RECORDS OF CACHE, HAVE BEEN PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLIED ON A
CONSISTENT BASIS DURING THE PERIODS INVOLVED (EXCEPT AS MAY BE INDICATED IN
THE NOTES THERETO) AND FAIRLY PRESENT THE FINANCIAL POSITION OF CACHE AS AT
THE DATE THEREOF. THE CACHE FINANCIALS ARE SET FORTH IN SECTION 2.6 OF THE
DISCLOSURE SCHEDULE.
2.7 Liabilities.
TO THE BEST OF CACHE'S KNOWLEDGE, CACHE HAS NO LIABILITIES OR OBLIGATIONS,
EITHER ACCRUED, ABSOLUTE, CONTINGENT, OR OTHERWISE, REQUIRED TO BE BUT NOT
REFLECTED OR RESERVED AGAINST IN THE CACHE FINANCIALS IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, EXCEPT THOSE THAT ARE NOT
MATERIAL, AND CACHE KNOWS OF NO POTENTIAL LIABILITY THAT WOULD RESULT IN A
MATERIAL ADVERSE EFFECT ON THE BUSINESS OF CACHE, OTHER THAN THOSE (A)
REFLECTED OR RESERVED AGAINST IN THE CACHE FINANCIALS, (B) INCURRED IN THE
ORDINARY COURSE OF BUSINESS SINCE SEPTEMBER 30, 2000 OR (C) UP TO ONE
MILLION, ONE HUNDRED FIFTY NINE THOUSAND DOLLARS AND EIGHT CENTS
($1,159,000.08) OF NOTES AND DEBENTURES THAT HAVE BEEN ON WILL BE ISSUED BY
CACHE SINCE SEPTEMBER 30, 2000.
2.8 Additional Information.
SECTION 2.8 OF THE DISCLOSURE SCHEDULE SETS FORTH A TRUE, COMPLETE AND
CORRECT LIST, OR REFERENCES AN ATTACHMENT THERETO, OF THE FOLLOWING ITEMS:
2.8.1 Real Property
ALL REAL PROPERTY AND STRUCTURES THEREON, PRESENTLY (I) OWNED BY, OR
SUBJECT TO A CONTRACT OF PURCHASE AND SALE OR OPTION AGREEMENT INVOLVING
CACHE (COLLECTIVELY, THE "REAL PROPERTY"), (II) LEASED BY, OR SUBJECT TO A
LEASE COMMITMENT INVOLVING, CACHE (COLLECTIVELY, THE "LEASED PROPERTY"),
WITH A DESCRIPTION OF: (X) THE GENERAL USE TO WHICH SUCH REAL PROPERTY IS
OR WAS PUT; (Y) THE GENERAL NATURE AND AMOUNT OF ANY ENCUMBRANCES THEREON;
AND (Z) IF LEASED THE NAME OF THE LESSOR AND A TRUE, COMPLETE AND CORRECT
COPY OF ANY WRITTEN AGREEMENT PURSUANT TO WHICH SUCH REAL PROPERTY IS
LEASED.
2.8.2 Machinery and Equipment.
ALL MACHINERY, WORK PRODUCT, TOOLS, EQUIPMENT, FURNISHINGS, AND FIXTURES
(EXCLUDING SUCH ITEMS THAT HAD A COST BASIS OF $20,000 OR LESS AT THE DATE
OF THE DISCLOSURE SCHEDULE) OWNED, LEASED OR SUBJECT TO A CONTRACT OF
PURCHASE AND SALE OR LEASE COMMITMENT, BY CACHE WITH, TO THE EXTENT
PRACTICAL, A DESCRIPTION WITH RESPECT TO EACH SUCH OF: (I) THE SERIAL
NUMBER OF SUCH ITEM; (II) THE GENERAL LOCATION AT WHICH SUCH ITEM IS KEPT;
(II) WHETHER SUCH ITEM IS OWNED OR LEASED; (IV) IF OWNED, A GENERAL
DESCRIPTION OF THE NATURE AND AMOUNT OF ANY ENCUMBRANCES THEREON; AND (V)
IF LEASED, THE NAME OF THE LESSOR AND A TRUE, COMPLETE AND CORRECT COPY OF
ANY WRITTEN AGREEMENT PURSUANT TO WHICH SUCH ITEM IS LEASED.
2.8.3 Receivables.
ALL ACCOUNTS AND NOTES RECEIVABLE PRESENTLY OWNED BY CACHE, TOGETHER WITH
AN APPROPRIATE AGING SCHEDULE, AS OF SEPTEMBER 30, 2000, WHICH LIST
SEPARATELY ALL AMOUNTS RECEIVABLE FROM THE CACHE SHAREHOLDERS, DIRECTORS,
OFFICERS, EMPLOYEES, OR AGENTS OF CACHE, FROM OR FROM ANY OF THEIR
RESPECTIVE AFFILIATES. TO THE BEST OF CACHE'S KNOWLEDGE, ALL ACCOUNTS AND
NOTES RECEIVABLE OF CACHE REPRESENT BONA FIDE CLAIMS AGAINST DEBTORS FOR
SERVICES PERFORMED OR OTHER CHARGES ARISING IN THE ORDINARY COURSE OF
BUSINESS AND ARE SUBJECT TO NO MATERIAL DEFENSES, COUNTERCLAIMS OR RIGHTS
OF SET-OFF.
2.8.4 Payables.
All accounts and notes payable owed by CACHE, together with an appropriate
aging schedule, as of September 30, 2000, which list separately all such
amounts payable to any CACHE shareholder, director, officer, employee, or
agent of CACHE, to CACHE shareholders or to any of their irrespective
affiliates. To the best of CACHE's knowledge, all accounts and notes
payable of CACHE represent bona fide claims against CACHE for services
performed or other charges arising in the ordinary course of business.
2.8.5 Contracts.
All contracts, agreements and commitments of CACHE, whether or not made in
the ordinary course of business, including leases under which CACHE is
lessor or lessee, which are to be performed in whole or in part after the
Effective Time, and which (i) involve or may involve aggregate payments by
or to CACHE of $20,000 or more after the Effective Time, (ii) are not
terminable by CACHE without premium or penalty on 60 (or fewer) days'
notice, (iii) purport to prohibit or restrict the ability of CACHE to
participate or compete in any material line of business or with any person,
(iv) purport to prohibit or restrict another person's ability to be in the
line of business of CACHE or to compete with CACHE or (v) are otherwise
material to the business or properties of CACHE. To the best of CACHE's
knowledge, CACHE has complied in all material respects with all
commitments, contracts, agreements and obligations pertaining to it listed
on Section 2.8.5 of the Disclosure Schedule and is not and will not be as
of the date of the Disclosure Schedule, in material default under any such
contracts and agreements and no notice of material default has been
received, in each case which would have a material adverse effect on the
business of CACHE.
2.8.6 Licenses; Permits.
ALL APPROVALS, AUTHORIZATIONS, CONSENTS, LICENSES, ORDERS, FRANCHISES,
RIGHTS, REGISTRATIONS AND PERMITS OF ANY TYPE HELD BY CACHE, WHICH TOGETHER
CONSTITUTE ALL MATERIAL APPROVALS, AUTHORIZATIONS, CONSENTS, LICENSES,
ORDERS, FRANCHISES, RIGHTS, REGISTRATIONS AND PERMITS (THE "PERMITS")
REQUIRED TO OPERATE ITS BUSINESS AS PRESENTLY CONDUCTED. TO THE BEST OF
CACHE'S KNOWLEDGE, ALL SUCH PERMITS ARE CURRENTLY IN FULL FORCE AND EFFECT
AND CACHE IS IN COMPLIANCE THEREWITH, EXCEPT TO THE EXTENT NONCOMPLIANCE
WOULD NOT HAVE A MATERIAL ADVERSE EFFECT ON THE BUSINESS OF CACHE. THE
EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE COMPLETION OF THE
TRANSACTIONS CONTEMPLATED HEREBY WILL NOT RESULT IN ANY REVOCATION,
CANCELLATION, SUSPENSION OR MODIFICATION OF ANY SUCH APPROVAL,
AUTHORIZATION, CONSENT, LICENSE, ORDER, FRANCHISE, RIGHT, REGISTRATION OR
PERMIT, WHICH REVOCATION, CANCELLATION, SUSPENSION OR MODIFICATION WOULD
HAVE A MATERIAL ADVERSE EFFECT ON THE BUSINESS OF CACHE.
2.8.7 Employment Agreements.
ALL ORAL OR WRITTEN EMPLOYMENT OR CONSULTING AGREEMENTS TO WHICH CACHE IS A
PARTY OR BY WHICH CACHE IS BOUND, INCLUDING, WITHOUT LIMITATION, ALL ORAL
OR WRITTEN EMPLOYMENT OR CONSULTING AGREEMENTS OR ANY OTHER ARRANGEMENTS
WITH ANY PERSON WHICH PROVIDE FOR THE PAYMENT OF ANY CONSIDERATION BY CACHE
TO SUCH PERSON AS A RESULT OF THE TERMINATION OF SUCH PERSON'S EMPLOYMENT
WITH CACHE, OR ON THE COMPLETION OF THE TRANSACTIONS CONTEMPLATED HEREBY.
2.8.8 Insurance Policies.
ALL (I) POLICIES OF PROPERTY, FIRE AND CASUALTY, PRODUCT LIABILITY,
WORKER'S COMPENSATION, PROFESSIONAL LIABILITY AND TITLE INSURANCE AND OTHER
FORMS OF INSURANCE, UNDER WHICH CACHE IS INSURED, AND (II) BONDS ISSUED OR
POSTED BY ANY PERSON WHICH RESPECT TO ANY OPERATION OR OTHER ACTIVITIES OF
CACHE.
2.8.9 Transactions with Management.
ALL MATERIAL CONTRACTS, LEASES AND COMMITMENTS BY AND BETWEEN CACHE AND ANY
OF ITS OFFICERS, DIRECTORS, STOCKHOLDERS, EMPLOYEES, OR AGENTS, OR ANY
AFFILIATE OF ANY SUCH PERSON. EXCEPT AS SET FORTH IN SECTION 2.9 OF THE
DISCLOSURE SCHEDULE, NONE OF THE OFFICERS, DIRECTORS, STOCKHOLDERS, OR
EMPLOYEES OF CACHE OWNS, LEASES OR LICENSES ANY INTEREST IN ANY ASSET USED
BY CACHE IN ITS BUSINESS, OTHER THAN SOLELY BY AND THROUGH OWNERSHIP OF THE
CAPITAL STOCK OF CACHE.
2.8.10 Assumed Names.
ALL ASSUMED OR FICTITIOUS NAMES UNDER WHICH CACHE ENGAGES IN OR CONDUCTS
ANY BUSINESS.
2.9 Litigation
THERE IS NO SUIT, ACTION, PROCEEDING OR INVESTIGATION PENDING OR, TO THE
BEST KNOWLEDGE OF CACHE, THREATENED AGAINST OR AFFECTING CACHE (OR ANY OF
ITS OFFICERS OR DIRECTORS IN CONNECTION WITH THE BUSINESS OF CACHE), NOR IS
THERE ANY OUTSTANDING JUDGMENT, ORDER, WRIT, INJUNCTION OR DECREE AGAINST
CACHE.
2.10 Absence of Certain Changes.
EXCEPT AS IS SET FORTH IN SECTION 2.10 OF THE DISCLOSURE SCHEDULE, TO THE
BEST OF CACHE'S KNOWLEDGE, SINCE SEPTEMBER 30, 2000, THERE HAS NOT BEEN:
(I) ANY MATERIAL ADVERSE CHANGE IN THE FINANCIAL CONDITION, ASSETS,
LIABILITIES (CONTINGENT OR OTHERWISE), INCOME OR BUSINESS OF CACHE; (II)
ANY DAMAGE, DESTRUCTION OR LOSS (WHETHER OR NOT COVERED BY INSURANCE)
MATERIALLY AND ADVERSELY AFFECTING THE PROPERTIES OR BUSINESS OF CACHE;
(III) ANY DECLARATION OR PAYMENT OF ANY DIVIDEND OR DISTRIBUTION IN RESPECT
OF THE CAPITAL STOCK OR ANY DIRECT OR INDIRECT REDEMPTION, PURCHASE OR
OTHER ACQUISITION OF ANY OF THE CAPITAL STOCK OF CACHE; (IV) ANY INCREASE
IN THE COMPENSATION, BONUS, SALES COMMISSIONS OR FEE ARRANGEMENT PAYABLE OR
TO BECOME PAYABLE BY CACHE TO ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES,
CONSULTANTS OR AGENTS OTHER THAN RAISES OR INCREASES IN COMPENSATION
CONSISTENT WITH PRIOR POLICY THAT ARE NOT IN EXCESS OF FIVE PERCENT OF THE
INDIVIDUAL'S ANNUAL COMPENSATION OR HOURLY RATE; (V) THE CREATION OF ANY
MATERIAL ENCUMBRANCE ON ANY OF THE ASSETS OF CACHE, OR THE AMENDMENT,
MODIFICATION OR EXTENSION OF ANY EXISTING MATERIAL ENCUMBRANCE ON ANY SUCH
ASSET OTHER THAN ANY SUCH CREATION, AMENDMENT, MODIFICATION OR EXTENSION
EFFECTED (A) IN THE ORDINARY COURSE OF BUSINESS, (B) AS REQUIRED IN
CONNECTION WITH THE CACHE MERGER, (C) IN CONNECTION WITH THE TRANSFER OF
THOSE CERTAIN ASSETS SET FORTH ON SECTION 2.10 OF THE DISCLOSURE SCHEDULE;
OR (D) FOR CURRENT TAXES OR ASSESSMENTS WHICH ARE NOT YET DUE, OR BEING
CONTEMPLATED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS; (VI) ANY SALE,
ASSIGNMENT, TRANSFER, CONVEYANCE, LEASE, HYPOTHECATION, ABANDONMENT OR
OTHER DISPOSITION OF OR AGREEMENT TO SELL, ASSIGN, TRANSFER, CONVEY, LEASE,
HYPOTHECATE, ABANDON OR OTHERWISE DISPOSE OF, ANY OF THE MATERIAL ASSETS OF
CACHE, OTHER THAT (A) ASSETS SOLD IN THE ORDINARY COURSE OF BUSINESS; (B)
THE ASSETS SET FORTH ON SECTION 2.10 OF THE DISCLOSURE SCHEDULE; OR (C) ANY
ASSETS WHICH ARE SCRAPPED AS OBSOLETE IN CONFORMANCE WITH CUSTOMARY
PROCEDURE.
2.11 Title to Assets; Encumbrances.
CACHE OWNS ITS MATERIAL ASSETS, WHETHER REAL, PERSONAL OR INTANGIBLE, FREE
AND CLEAR OF ALL ENCUMBRANCES, EXCEPT FOR (I) LIENS FOR CURRENT TAXES AND
ASSESSMENTS NOT YET DUE, OR BEING CONTESTED IN GOOD FAITH BY APPROPRIATE
PROCEEDINGS, (II) MECHANIC'S LIENS ARISING UNDER THE OPERATION OF LAW OR
FOR ACTIONS CONTESTED IN GOOD FAITH OR FOR WHICH PAYMENT ARRANGEMENTS HAVE
BEEN MADE, (III) LIENS GRANTED OR INCURRED BY CACHE IN THE ORDINARY COURSE
OF ITS BUSINESS OR IN CONNECTION WITH THE FINANCING OF OFFICE SPACE,
FURNITURE AND EQUIPMENT IN THE ORDINARY COURSE OF ITS BUSINESS, (IV)
EASEMENTS, COVENANTS, RESTRICTIONS AND OTHER EXCEPTION TO TITLE OF RECORD
(WHICH DO NOT MATERIALLY AND ADVERSELY AFFECT THE OPERATION OF CACHE), (V)
ENCUMBRANCES OTHERWISE DESCRIBED IN SECTION 2.11.1 OF THE DISCLOSURE
SCHEDULE, OR (VI) ENCUMBRANCES REFLECTED ON THE BALANCE SHEET AT SEPTEMBER
30, 2000 OF CACHE;
THERE ARE NO PARTIES IN POSSESSION OF ANY OF THE MATERIAL ASSETS OF CACHE
OTHER THAN CACHE, OTHER THAN PERSONAL PROPERTY HELD BY THIRD PARTIES IN THE
REASONABLE AND ORDINARY COURSE OF BUSINESS. CACHE ENJOYS FULL, FREE AND
EXCLUSIVE USE AND QUIET ENJOYMENT OF ITS MATERIAL ASSETS AND ITS RIGHTS
PERTAINING THERETO. CACHE ENJOYS PEACEFUL AND UNDISTURBED POSSESSION UNDER
ALL LEASES UNDER WHICH IT IS LESSEE.
2.12 Condition of Assets.
TO THE BEST OF CACHE'S KNOWLEDGE, EACH OF THE BUILDINGS, STRUCTURES,
EQUIPMENT OR OTHER ITEMS OF TANGIBLE PERSONAL PROPERTY OF CACHE WITH A COST
BASIS OF AT LEAST $20,000 IS IN WORKING ORDER AND REPAIR, ORDINARY WEAR AND
TEAR EXCEPTED.
2.13 Taxes and Returns.
2.13.1 CACHE has (i) filed all material tax returns and reports required to
be filed by it and (ii) paid all material taxes which it has incurred and
which have become due and payable, except such as are being or may be
contested in good faith by appropriate proceedings or relate to the fiscal
year ended September 30, 2000. No deficiencies for any taxes have been
proposed, asserted, or formally assessed against CACHE, and no requests for
waivers of the time to assess any such tax are pending. The CACHE
Financials reflect an adequate accrual, based on the facts and
circumstances existing as of the date hereof, for all material taxes
payable by CACHE (whether or not shown on any return) through the date
thereof. Section 2.13 of the Disclosure Schedule includes true, complete
and correct copies of all tax returns and reports filed by CACHE since
October 31, 2000.
2.13.2 For the purposes of this Agreement, the term "tax" (including, with
correlative meaning, the terms "taxes" and "taxable") shall include all
federal, state, local and foreign income, profits, franchise, gross
receipt, payroll, estimated sales, employment, use, property, withholding,
excise and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with respect to
such amounts.
2.14 Employment Practices.
CACHE HAS COMPLIED WITH THE OCCUPATIONAL SAFETY AND HEALTH ACT AND ALL
OTHER LAWS RELATING TO EQUAL EMPLOYMENT OF LABOR INCLUDING, WITHOUT
LIMITATION, LAWS RELATING TO EQUAL EMPLOYMENT OPPORTUNITY AND EMPLOYMENT
DISCRIMINATIONS, EMPLOYMENT OF ILLEGAL ALIENS, WAGES, HOURS AND COLLECTIVE
BARGAINING, THE VIOLATION OR FAILURE TO COMPLY WITH WHICH WOULD HAVE A
MATERIAL ADVERSE EFFECT ON THE BUSINESS OF CACHE. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, CACHE HAS COMPLIED WITH ALL LAWS RELATING TO THE
COLLECTION AND PAYMENT OF SOCIAL SECURITY AND WITHHOLDING TAXES, OR BOTH,
AND SIMILAR TAXES EXCEPT WHERE THE FAILURE TO COMPLY WITH SUCH LAWS WOULD
NOT HAVE A MATERIAL ADVERSE EFFECT ON THE BUSINESS OF CACHE. CACHE IS NOT
LIABLE FOR ANY ARREARAGE OF WAGES OR ANY TAXES OR PENALTIES FOR FAILURE TO
COMPLY WITH ANY OF THE FOREGOING, WHICH WOULD HAVE A MATERIAL ADVERSE
EFFECT ON THE BUSINESS OF CACHE.
2.15 COMPLIANCE WITH LAW.
To the best knowledge of CACHE, CACHE is in compliance with and is not in
violation of or in default with respect to, or in alleged violation of or
alleged default with respect to: (a) any applicable law, rule, regulation
or statute applicable to the operations of CACHE, or (b) any order, permit,
certificate, writ, judgment, injunction, decree, determination, award or
other decision of any court or any Government Entity to which CACHE is a
party or by which CACHE is bound, which violation or default or alleged
violation or default would materially and adversely affect the business of
CACHE.
2.16 ENVIRONMENTAL LAW.
To the best of CACHE's knowledge, there are no material claims and
complaints, made by or against CACHE during the past three years pursuant
to any Environmental Law. At present, to the best of CACHE's knowledge,
none of the operations of CACHE is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging
or addressing a material violation of or a material liability under any
Environmental Law.
2.17 Books and Records.
ALL THE STOCK RECORDS AND MINUTE BOOKS OF CACHE SHALL BE DELIVERED TO OR
MADE AVAILABLE UPON REQUEST FOR INSPECTION BY PROVIDENCE NOT LATER THAN TWO
(2) BUSINESS DAYS PRIOR TO THE SCHEDULED CLOSING DATE. TO THE BEST OF
CACHE'S KNOWLEDGE, SUCH STOCK RECORDS AND MINUTE BOOKS ARE TRUE AND CORRECT
IN ALL MATERIAL RESPECTS.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PROVIDENCE.
REPRESENTATIONS AND WARRANTIES SHALL BE MADE BY PROVIDENCE AND SHALL
SURVIVE THE EFFECTIVE TIME FOR A PERIOD OF ONE (1) YEAR. PROVIDENCE
REPRESENTS AND WARRANTS TO CACHE AS FOLLOWS:
3.1 Organization and Standing.
PROVIDENCE IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE STATE OF COLORADO AND IS DULY AUTHORIZED,
QUALIFIED AND IN GOOD STANDING UNDER ALL APPLICABLE LAWS, REGULATIONS,
ORDINANCES AND ORDERS OF PUBLIC AUTHORITIES AND HAS ALL REQUISITE CORPORATE
POWER AND AUTHORITY TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO CARRY
ON ITS BUSINESS AS IT IS NOW BEING CONDUCTED, EXCEPT WHERE THE FAILURE TO
BE SO AUTHORIZED, QUALIFIED OR LICENSED WOULD NOT HAVE A MATERIAL ADVERSE
EFFECT ON THE BUSINESS OF PROVIDENCE TAKEN AS A WHOLE. PROVIDENCE IS DULY
LICENSED OR QUALIFIED TO DO BUSINESS AS A FOREIGN CORPORATION IN EACH
JURISDICTION IN WHICH THE CHARACTER OF ITS PROPERTIES, OWNED OR LEASED, OR
THE NATURE OF THEIR ACTIVITIES, MAKES SUCH LICENSING OR QUALIFICATION
NECESSARY, EXCEPT FOR WHERE THE FAILURE TO BE SO LICENSED AND QUALIFIED
WOULD NOT HAVE A MATERIAL ADVERSE EFFECT ON THE BUSINESS OF PROVIDENCE.
TRUE AND CORRECT COPIES OF THE ARTICLES OF INCORPORATION OF PROVIDENCE ARE
ATTACHED HERETO AS EXHIBIT V.
3.2 AUTHORITY.
PROVIDENCE has the necessary corporate power and authority to enter into
this Agreement, as well as the Transaction Documents more fully defined in
Section 6.4, and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Transaction
Documents, and the completion of the transactions contemplated hereby and
thereby have been duly authorized by corporate action of the part of the
Board of Directors of PROVIDENCE , and subject to the convening of a
shareholder's meeting pursuant to Sections 7-111-101-109 of the Colorado
Business Corporation Act in order to approve this Agreement and the
Transaction Documents, no further corporate proceedings on the part of
PROVIDENCE will be necessary. When issued pursuant to this Agreement, the
Shares to be issued to the CACHE stockholders on the Effective Time will be
duly authorized, validly issued, fully paid and non-assessable, and the
Shares to be issued to the CACHE stockholders on the Effective Time shall
be legally equivalent in all respects to the PROVIDENCE common stock issued
and outstanding as of the date hereof. This Agreement has been executed
and delivered by PROVIDENCE and constitutes the legal, valid and binding
obligation of PROVIDENCE, enforceable in accordance with its terms. As of
the Effective Time, each of the Transaction Documents will constitute a
legal, valid and binding obligation of PROVIDENCE , each enforceable in
accordance with its terms.
3.3 No Conflict, Default, Breach or Violation.
THE EXECUTION AND DELIVERY OF THIS AGREEMENT DOES NOT, AND THE COMPLETION
OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY WILL NOT, CONFLICT WITH
OR RESULT IN A BREACH OF OR THE ACCELERATION OF ANY OBLIGATION UNDER, OR
CONSTITUTE A DEFAULT OR EVENT OF DEFAULT (OR EVENT WHICH WITH NOTICE OR
LAPSE OF TIME OR BOTH WOULD CONSTITUTE A DEFAULT) UNDER, ANY PROVISION OF
ANY CHARTER, BYLAW, INDENTURE, MORTGAGE, LIEN, LEASE, AGREEMENT, CONTRACT,
ORDER, JUDGMENT, OR, TO THE BEST KNOWLEDGE OF PROVIDENCE, ANY JUDICIAL OR
ADMINISTRATIVE DECREE, ORDINANCE OR REGULATION, PERMIT, LICENSE, FRANCHISE
OR ANY RESTRICTION TO WHICH ANY PROPERTY OF PROVIDENCE IS SUBJECT OR BY
WHICH PROVIDENCE OR ANY OF ITS SUBSIDIARIES IS BOUND, THE EFFECT OF WHICH
WOULD BE MATERIALLY ADVERSE TO PROVIDENCE. PROVIDENCE IS NOT ALLEGED TO BE
IN VIOLATION OR DEFAULT OR UNDER ANY APPLICABLE LAW, STATUTE, ORDER, RULE
OR REGULATION PROMULGATED OR JUDGMENT ENTERED BY ANY GOVERNMENTAL ENTITY,
RELATING TO OR AFFECTING THE OPERATION, CONDUCT OR OWNERSHIP OF THE
PROPERTY OR BUSINESS OF PROVIDENCE WHICH VIOLATION OR DEFAULT OR ALLEGED
VIOLATION OR DEFAULT WOULD HAVE A MATERIAL, ADVERSE EFFECT, ON PROVIDENCE.
3.4 Approvals.
EXCEPT FOR USUAL AND CUSTOMARY COMPLIANCE WITH THE SECURITIES ACT, THE
SECURITIES OR BLUE SKY LAWS OF VARIOUS STATES, NO CONSENT, APPROVAL, ORDER
OR AUTHORIZATION OF, OR REGISTRATION, DECLARATION OR FILING WITH, ANY
COURT, ADMINISTRATIVE AGENCY OR COMMISSION OR OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY, DOMESTIC OR FOREIGN (A "GOVERNMENTAL ENTITY"), OR THIRD
PARTY IS REQUIRED BY OR WITH RESPECT TO PROVIDENCE IN CONNECTION WITH THE
EXECUTION AND DELIVERY BY PROVIDENCE OF THIS AGREEMENT, OR THE COMPLETION
OF THE TRANSACTIONS CONTEMPLATED HEREBY, THE ABSENCE OF WHICH WOULD HAVE A
MATERIAL ADVERSE EFFECT ON PROVIDENCE.
3.5 SEC Documents; Filings; Financial Statements.
3.5.1 PROVIDENCE has delivered to CACHE accurate and complete copies
(excluding copies of exhibits) of each report, registration statement (on a
form other than Form S-8) and definitive information statement filed by
PROVIDENCE with the SEC between November 1, 1999 and the date of this
Agreement (the "PROVIDENCE SEC Documents"). As of the time it was filed
with the SEC (or, if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing): (i) each of the
PROVIDENCE SEC Documents complied in all material respects with the
applicable requirements of the Securities Act or the Exchange Act (as the
case may be); and (ii) none of the PROVIDENCE SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
3.5.2 The financial statements contained in the PROVIDENCE SEC Documents:
(i) complied as to form in all material respects with the published rules
and regulations of the SEC applicable thereto; (ii) were prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered, except as may be indicated in the notes to such financial
statements and (in the case of unaudited statements) as permitted by Form
10-QSB of the SEC, and except that unaudited financial statements may not
contain footnotes and are subject to year-end audit adjustments; and (iii)
fairly present the financial position of PROVIDENCE and its subsidiaries as
of the respective dates thereof and the results of operations of PROVIDENCE
and its subsidiaries for the periods covered thereby.
3.6 Information Supplied.
TO THE BEST KNOWLEDGE OF PROVIDENCE , NO WRITTEN STATEMENT, CERTIFICATE,
SCHEDULE, LIST OR OTHER WRITTEN INFORMATION FURNISHED BY OR ON BEHALF OF
PROVIDENCE TO CACHE ON OR PRIOR TO THE DATE HEREOF IN CONNECTION HEREWITH
CONTAINS (AFTER GIVING EFFECT TO ANY CORRECTION THEREOF FURNISHED TO CACHE
IN WRITING PRIOR TO THE DATE HEREOF) ANY UNTRUE STATEMENT OF A MATERIAL
FACT OR OMITS OR WILL OMIT TO STATE A MATERIAL FACT REQUIRED TO BE STATED
HEREIN OR THEREIN OR NECESSARY TO MAKE THE STATEMENTS HEREIN OR THEREIN, IN
LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.
3.7 Capitalization of PROVIDENCE.
AS OF THE DATE HEREOF, THE AUTHORIZED CAPITAL STOCK OF PROVIDENCE CONSISTS
OF FIFTY MILLION (50,000,000) SHARES OF COMMON STOCK, $.001 PAR VALUE, OF
WHICH ONE MILLION FIVE HUNDRED THOUSAND (1,500,000) SHARES OF COMMON STOCK
ARE ISSUED AND OUTSTANDING, AND FIFTY MILLION (50,000,000) SHARES OF
PREFERRED STOCK, $.001 PAR VALUE, OF WHICH NONE ARE ISSUED AND OUTSTANDING.
ALL OF THE ISSUED AND OUTSTANDING SHARES OF CAPITAL STOCK OF PROVIDENCE
HAVE BEEN DULY AND VALIDLY AUTHORIZED AND VALIDLY ISSUED AND ARE FULLY PAID
AND NON-ASSESSABLE. AS OF THE DATE HEREOF, EXCEPT AS DISCLOSED HEREIN,
THERE ARE NO AUTHORIZED OR OUTSTANDING SUBSCRIPTIONS, OPTIONS, CONVERSION
RIGHTS, WARRANTS OR OTHER AGREEMENTS, SECURITIES OR COMMITMENTS OF ANY
NATURE WHATSOEVER (WHETHER ORAL OR WRITTEN AND WHETHER FIRM OR CONDITIONAL)
OBLIGATING PROVIDENCE OR ANY OF ITS SUBSIDIARIES TO ISSUE, DELIVER OR SELL,
OR CAUSE TO BE ISSUED, DELIVERED OR SOLD, TO ANY PERSON ANY SHARES OF
PROVIDENCE COMMON STOCK OR ANY OTHER SHARES OF THE CAPITAL STOCK OF
PROVIDENCE OR ANY SHARES OF THE CAPITAL STOCK OF ANY OF ITS SUBSIDIARIES,
OR ANY SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR ANY SUCH SHARES, OR
OBLIGATING ANY SUCH PERSON TO GRANT, EXTEND OR ENTER INTO ANY SUCH
AGREEMENT OR COMMITMENT. THERE ARE NO AGREEMENTS OBLIGATING PROVIDENCE TO
REDEEM, REPURCHASE OR OTHERWISE ACQUIRE THE CAPITAL STOCK OF PROVIDENCE, OR
ANY OTHER SECURITIES ISSUED BY IT, OR TO REGISTER THE SALE OF THE CAPITAL
STOCK OF PROVIDENCE UNDER APPLICABLE SECURITIES LAWS. THERE ARE NO
AGREEMENTS OR ARRANGEMENTS PROHIBITING OR OTHERWISE RESTRICTING THE PAYMENT
OF DIVIDENDS OR DISTRIBUTIONS TO THE PROVIDENCE STOCKHOLDERS BY PROVIDENCE.
3.8 Title to Assets; Encumbrances.
3.8.1 PROVIDENCE owns its assets, whether real, personal or intangible,
free and clear of all Encumbrances, except (i) liens for current taxes and
assessments not yet due or being contested in good faith by appropriate
proceedings, (ii) mechanic's liens arising under the operation of law or
for actions contested in good faith or for which payment arrangements have
been made, (iii) liens granted or incurred by PROVIDENCE in the ordinary
course of its business or in connection with the financing of office space,
furniture and equipment in the ordinary course of its business, (iv)
easements, covenants, restrictions and other exceptions to title of record
which do not materially and adversely affect the operations of PROVIDENCE,
(v) such Encumbrances as do not secure indebtedness in excess of $10,000,
or (vi) Encumbrances reflected in the SEC Documents;
3.8.2 Except as set forth in the Form 10-KSB for the period ended December
31, 2000 ("Form 10-K"), there are no parties in possession of any of the
assets of PROVIDENCE other than PROVIDENCE, other than personal property
held by third parties in the reasonable and ordinary course of business.
Except as set forth in the Form 10-K, PROVIDENCE enjoys full, free and
exclusive use and quiet enjoyment of its assets and all rights pertaining
thereto, and PROVIDENCE enjoys peaceful and undisturbed possession under
all leases under which it is lessee.
3.9 Subsidiaries.
PROVIDENCE HAS NO SUBSIDIARIES.
3.10 Litigation.
THERE IS NO SUIT, ACTION, PROCEEDING OR INVESTIGATION PENDING OR, TO THE
BEST KNOWLEDGE OF PROVIDENCE, THREATENED AGAINST OR AFFECTING PROVIDENCE
(OR ANY OF ITS OFFICERS OR DIRECTORS IN CONNECTION WITH THE BUSINESS OF
PROVIDENCE), NOR IS THERE ANY OUTSTANDING JUDGMENT, ORDER, WRIT, INJUNCTION
OR DECREE AGAINST PROVIDENCE, WHICH SUIT, ACTION, PROCEEDING OR
INVESTIGATION HAD OR COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT ON PROVIDENCE. TO THE BEST KNOWLEDGE OF PROVIDENCE: (I)
THERE ARE NO FACTS UPON WHICH ANY ACTION, SUIT OR PROCEEDING COULD BE
BROUGHT AGAINST PROVIDENCE THAT WOULD HAVE A MATERIAL ADVERSE EFFECT ON
PROVIDENCE; AND (II) PROVIDENCE IS NOT SUBJECT TO ANY COURT ORDER, WRIT,
INJUNCTION, DECREE, SETTLEMENT AGREEMENT OR JUDGMENT THAT CONTAINS OR
ORDERS ANY ONGOING OBLIGATIONS, WHETHER PROHIBITORY OR MANDATORY IN NATURE,
ON THE PART OF PROVIDENCE.
3.11 Environmental Law.
There are no claims, complaints or reports made by or against PROVIDENCE
during the past three years pursuant to Environmental Law. At present, to
the best of PROVIDENCE's knowledge, none of the operations of PROVIDENCE is
subject to any judicial or administrative proceeding, order, judgment,
decree or settlement alleging or addressing a material violation of or a
material liability under any Environmental Law.
3.12 Absence of Undisclosed Liabilities.
PROVIDENCE HAS NO LIABILITIES OR OBLIGATIONS, EITHER ACCRUED, ABSOLUTE,
CONTINGENT, OR OTHERWISE, REQUIRED TO BE BUT NOT REFLECTED OR RESERVED
AGAINST IN THE PROVIDENCE FINANCIALS IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, EXCEPT THOSE INCURRED IN THE ORDINARY COURSE OF
BUSINESS, AND PROVIDENCE KNOWS OF NO POTENTIAL LIABILITY THAT WOULD RESULT
IN A MATERIAL ADVERSE EFFECT ON THE VALUE OR BUSINESS OF PROVIDENCE.
3.13 Financial Statements.
PROVIDENCE HAS FURNISHED TO CACHE TRUE, COMPLETE AND CORRECT COPIES OF THE
AUDITED FINANCIAL STATEMENTS OF PROVIDENCE, AT AND FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2000 (THESE FINANCIAL STATEMENTS BEING COLLECTIVELY
REFERRED TO HEREIN AS THE "PROVIDENCE FINANCIALS"). THE PROVIDENCE
FINANCIALS WILL BE IN ACCORDANCE WITH THE BOOKS AND RECORDS OF PROVIDENCE,
COMPLY AS TO FORM IN ALL MATERIAL RESPECTS WITH APPLICABLE ACCOUNTING
REQUIREMENTS, HAVE BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES APPLIED ON A CONSISTENT BASIS DURING THE PERIODS
INVOLVED (EXCEPT AS MAY BE INDICATED IN THE NOTES THERETO) AND FAIRLY
PRESENT THE FINANCIAL POSITION OF PROVIDENCE AS AT THE DATE THEREOF. SINCE
DECEMBER 31, 2000, THERE HAS NOT BEEN, OCCURRED OR ARISEN (A) ANY MATERIAL
ADVERSE CHANGE IN THE BUSINESS OR THE FINANCIAL CONDITION OF PROVIDENCE
FROM THAT SHOWN ON THE AFOREMENTIONED BALANCE SHEET AS OF DECEMBER 31,
2000, OR (B) ANY EVENT, CONDITION OR STATE OF FACTS OF ANY CHARACTER WHICH,
TO THE BEST OF THE KNOWLEDGE OF PROVIDENCE, MATERIALLY AND ADVERSELY
AFFECTS, OR THREATENS TO MATERIALLY AND ADVERSELY AFFECT, THE BUSINESS OR
RESULTS OF OPERATIONS OR FINANCIAL CONDITION OF PROVIDENCE.
3.14 Contracts.
THERE ARE NO CONTRACTS, AGREEMENTS, BENEFIT PLANS, INSURANCE POLICIES,
COLLECTIVE BARGAINING AGREEMENTS AND COMMITMENTS OF PROVIDENCE, WHETHER OR
NOT MADE IN THE ORDINARY COURSE OF BUSINESS, INCLUDING LEASES UNDER WHICH
PROVIDENCE IS LESSOR OR LESSEE, WHICH ARE TO BE PERFORMED IN WHOLE OR IN
PART AFTER THE EFFECTIVE TIME, OTHER THAN AN AGREEMENT WITH XXXXXX AND
XXXXXXX, P.C. REFERRED TO IN SECTION 6.8 OF THIS AGREEMENT.
3.15 Taxes and Returns.
3.15.1 PROVIDENCE has (i) filed all tax returns and reports required to be
filed by it and (ii) paid all taxes, assessments and governmental charges
and penalties which it has incurred and which have become due and payable,
except such as are being or may be contested in good faith by appropriate
proceedings or relate to the fiscal year ended December 31, 2000.
PROVIDENCE is not delinquent in the payment of any material tax, assessment
or governmental charge, and no deficiencies for any taxes have been
proposed, asserted, or formally assessed against PROVIDENCE, and no
requests for waivers of the time to assess any such tax are pending, the
PROVIDENCE Financials reflect an adequate accrual, based on the facts and
circumstances existing as of the date hereof, for all material taxes
payable by PROVIDENCE (whether or not shown in any return) through the date
thereof. All tax returns and taxes for periods after December 31, 2000
have or will be filed and paid by PROVIDENCE on a timely basis, unless said
taxes are being contested in good faith by appropriate proceedings.
3.15.2 For the purposes of this Agreement, the term "tax" (including, with
correlative meaning, the terms "taxes" and "taxable") shall include all
federal, state, local and foreign income, profits, franchise, gross
receipt, payroll, estimated sales, employment, use, property, withholding,
excise and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with respect to
such amounts.
3.16 Compliance with Law.
TO THE BEST KNOWLEDGE OF PROVIDENCE, PROVIDENCE IS IN COMPLIANCE WITH AND
IS NOT IN VIOLATION OF OR IN DEFAULT WITH RESPECT TO, OR IN ALLEGED
VIOLATION OF OR ALLEGED DEFAULT WITH RESPECT TO: (A) ANY APPLICABLE LAW,
RULE, REGULATION OR STATUTE APPLICABLE TO THE OPERATIONS OF PROVIDENCE, OR
(B) ANY ORDER, PERMIT, CERTIFICATE, WRIT, JUDGMENT, INJUNCTION, DECREE,
DETERMINATION, AWARD OR OTHER DECISION OF ANY COURT OR ANY GOVERNMENT
ENTITY TO WHICH PROVIDENCE IS A PARTY OR BY WHICH PROVIDENCE IS BOUND,
WHICH VIOLATION OR DEFAULT OR ALLEGED VIOLATION OR DEFAULT WOULD MATERIALLY
AND ADVERSELY AFFECT THE BUSINESS, OPERATIONS, AFFAIRS, PROSPECTS,
PROPERTIES, ASSETS, PROFITS OR CONDITION OF PROVIDENCE . TO THE BEST
KNOWLEDGE OF PROVIDENCE, PROVIDENCE IS NOT DELINQUENT WITH RESPECT TO (A)
ANY REPORT REQUIRED TO BE FILED WITH ANY GOVERNMENTAL ENTITY OR (B) THE
PREPARATION AND DELIVERY OF ANY REPORTS REQUIRED BY PRIVATE AGREEMENTS TO
WHICH PROVIDENCE IS A PARTY, WHICH DELINQUENCY MIGHT MATERIALLY AND
ADVERSELY AFFECT THE BUSINESS, OPERATIONS, AFFAIRS, PROSPECTS, PROPERTIES,
ASSETS, PROFITS, CONDITIONS OF PROVIDENCE.
3.17 Intellectual Property.
PROVIDENCE HAS NO LETTERS OF PATENT, PATENT APPLICATIONS, INVENTIONS UPON
WHICH PATENT APPLICATIONS HAVE NOT YET BEEN FILED, TRADE NAMES, TRADEMARKS,
TRADEMARK REGISTRATIONS AND APPLICATIONS, COPYRIGHTS, COPYRIGHT
REGISTRATIONS AND APPLICATIONS, BOTH DOMESTIC AND FOREIGN, PRESENTLY OWNED,
POSSESSED, USED OR HELD BY PROVIDENCE.
3.18 Brokers' or Finders' Fees.
NO AGENT, BROKER, PERSON OR FIRM ACTING ON BEHALF OF PROVIDENCE OR UNDER
ITS AUTHORITY IS OR WILL BE ENTITLED TO ANY COMMISSION, BROKER, FINDER, OR
FINANCIAL ADVISORY FEES FROM ANY OF THE PARTIES HERETO IN CONNECTION WITH
ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN.
ARTICLE IX
OBLIGATIONS PENDING EFFECTIVE TIME
4.1 Agreements of CACHE.
CACHE AGREES THAT FROM THE DATE HEREOF TO AND THROUGH THE EFFECTIVE TIME,
CACHE WILL:
4.1.1 CORPORATE APPROVALS.
Use its best efforts for the purpose of authorizing and obtaining the
consent of the CACHE shareholders to this Agreement and the merger
contemplated hereby.
4.1.2 MAINTENANCE OF PRESENT BUSINESS.
Except as contemplated by this Agreement, CACHE shall operate its business
only in the usual, regular, and ordinary manner so as to maintain the
goodwill it now enjoys and, to the extent consistent with such operation,
use all reasonable efforts to preserve intact its present business
organization, keep available the services of its present officers and
employees, and preserve its relationship with all material customers,
suppliers, jobbers, distributors, and others having business dealings with
it. If CACHE proposes to secure a waiver of this covenant from PROVIDENCE
with respect to a particular transaction, CACHE shall be deemed in
compliance with this covenant if the President of PROVIDENCE or his
successor does not deliver to CACHE his objection in writing to any action
described in such waiver request within 72 hours of receiving notice of
such waiver request from CACHE.
4.1.3 MAINTENANCE OF PROPERTIES.
At its expense, maintain all of its property and assets in customary (for
CACHE) repair, order, and condition, reasonable wear and use and damage by
fire or unavoidable casualty excepted.
4.1.4 MAINTENANCE OF BOOKS AND RECORDS.
Maintain its books of account and records in the usual, regular, and
ordinary manner, in accordance with generally accepted accounting
principles applied on a consistent basis.
4.1.5 COMPLIANCE WITH LAW.
Continue to conduct its activities in a manner consistent with its current
understanding of the laws applicable to it, unless and until it receives
written notice from a Governmental Entity that it is not in compliance with
a particular law or laws, at which time CACHE will modify its conduct to
comply with such law or laws.
4.1.6 INSPECTION.
Allow PROVIDENCE, its directors, officers and authorized representatives,
during normal business hours, to inspect its records and to consult with
its officers, employees, attorneys, and agents for the purpose of
determining the accuracy of the representations and warranties made, and
the compliance with covenants contained, in this Agreement. PROVIDENCE
agrees that it and its officers and representatives shall hold all data and
information obtained with respect to CACHE in strict confidence, and
further agrees that it will not use such data or information or disclose
the same to others, except to the extent such data or information either
is, or becomes, published or a matter of public knowledge.
PROVIDENCE and CACHE agree that they will not issue any press release or
other disclosure of this Agreement without the prior approval of the other,
which shall not be unreasonably withheld, unless, in the good faith opinion
of counsel, such disclosure is required by law and time does not permit the
obtaining of such consent, or such consent is withheld.
In the event of a breach or threatened breach by PROVIDENCE or its officers
or representatives of the provision of this Section, CACHE shall be
entitled, in addition to any other available remedy, to an injunction
restraining any disclosure by PROVIDENCE, or its officers or
representatives of any of such confidential information.
4.1.7 PROHIBITION OF CERTAIN CONTRACTS.
Except as contemplated herein with respect to the Debentures and with
respect to obtaining up to $350,000 of additional borrowing from eCom
Corporation ("eCom"), not enter into any contracts outside of the ordinary
course of business without the prior written consent of PROVIDENCE, which
consent will not be unreasonably withheld. If CACHE proposes to secure a
waiver of this covenant from PROVIDENCE with respect to a particular
transaction, CACHE shall be deemed in compliance with this covenant if the
President of PROVIDENCE or his successor does not deliver to CACHE his
objection in writing to any action described in such waiver request within
72 hours of receiving notice of such waiver request from CACHE.
4.1.8 PROHIBITION OF LOANS.
Except as contemplated herein with respect to the Debentures and with
respect to obtaining up to $350,000 of additional borrowing from eCom, not
incur any borrowings, except in the usual and ordinary course of business,
without the prior written consent of PROVIDENCE, which consent will not be
unreasonably withheld.
4.1.9 PROHIBITION OF CERTAIN COMMITMENTS.
Except as contemplated herein with respect to the Debentures, not enter
into a commitment for expenditures or incur any liability exceeding
$25,000, in the aggregate, except (i) as may be necessary or desirable for
the maintenance of existing facilities, machinery and equipment in the
ordinary course of business or in connection with measures taken to effect
the Merger, as described herein, (ii) as in otherwise consented to in
writing by PROVIDENCE, or (iii) as may otherwise be in the ordinary course
of business.
4.1.10 DISPOSAL OF ASSETS.
Not sell, dispose of, or encumber, any property or assets, except (i) in
the usual and ordinary course of business; or (ii) as is otherwise
consented to in writing by PROVIDENCE or authorized hereunder.
4.1.11 MAINTENANCE OF INSURANCE.
Keep in full force and effect present insurance policies or other
comparable coverage on all its properties.
4.1.12 NO AMENDMENT TO ARTICLES OF INCORPORATION.
Not amend its Articles of incorporation or merge or consolidate with or
into any other corporation or change in any manner the rights of its
capital stock or the character of its business.
4.1.13 NO ISSUANCE, SALE, OR PURCHASE OF SECURITIES.
Except as contemplated by this Agreement or subject to an agreement
described herein or in the Disclosure Schedule, not issue or sell, or issue
options or rights to subscribe to, or enter into any contract or commitment
to issue or sell (upon conversion or otherwise), any shares of its capital
stock, or subdivide or in any way reclassify any shares of its capital
stock, or acquire, or agree to acquire, any shares of its capital stock.
4.1.14 PROHIBITION OF DIVIDENDS.
Not declare or pay any dividend on shares of its capital stock or make any
other distribution of assets to the holders thereof.
4.1.15 NOTICE OF MATERIAL DEVELOPMENTS.
Promptly notify PROVIDENCE in writing of any material adverse change in, or
any changes which in the aggregate would likely result in a material
adverse change in, the business, properties, condition (financial or
otherwise) or results of operations of CACHE, whether or not occurring in
the usual and ordinary course of its business, but only to the extent CACHE
has actual knowledge of any such changes.
4.2 Agreements of PROVIDENCE.
PROVIDENCE AGREES THAT FROM THE DATE HEREOF TO THE EFFECTIVE TIME, IT WILL:
4.2.1 CORPORATE APPROVALS.
Call and hold a meeting of its shareholders to approve the Merger
contemplated herein.
4.2.2 MAINTENANCE OF PRESENT BUSINESS.
Except as contemplated by this Agreement, operate no business.
4.2.3 MAINTENANCE OF BOOKS AND RECORDS.
Maintain the books of account and records of PROVIDENCE and each of its
subsidiaries in the usual, regular, and ordinary manner, in accordance with
generally accepted accounting principles applied on a consistent basis.
4.2.4 COMPLIANCE WITH LAW.
Continue to conduct its activities in a manner consistent with PROVIDENCE's
current understanding of the laws applicable to its, unless and until
PROVIDENCE receives written notice from a Government Entity that it is not
in compliance with a particular law or laws, at which time PROVIDENCE will
again comply with such law or laws.
4.2.5 INSPECTION.
Allow CACHE and its directors, officers and authorized representatives,
during normal business hours, to inspect its records and to consult with
its officers, employees, attorneys, and agents for the purpose of
determining the accuracy of the representations and warranties made, and
the compliance with covenants contained, in this Agreement. CACHE agrees
that it and its officers and representatives shall hold all data and
information obtained with respect to the other parties hereto in strict
confidence, and each further agrees that it will not use such data or
information or disclose the same to others, except to the extent such data
or information either is, or becomes, published or a matter of public
knowledge. In the event of a breach or threatened breach by CACHE or its
officers or representatives of the provisions of this Section, PROVIDENCE
shall be entitled, in addition to any other available remedy, to an
injunction restraining any disclosure by CACHE or its officers or
representatives of any of such confidential information.
4.2.6 PROHIBITION OF CONTRACTS.
Except as contemplated by this Agreement, PROVIDENCE shall not enter into
any contract.
4.2.7 PROHIBITION OF INDEBTEDNESS.
PROVIDENCE shall not incur any indebtedness of any kind or nature.
4.2.8 DISPOSAL OF ASSETS.
PROVIDENCE shall not dispose of any assets.
4.2.9 MAINTENANCE OF INSURANCE.
Keep in full force and effect present insurance policies or other
comparable coverage on all of the assets of PROVIDENCE and all of its
subsidiaries.
4.2.10 NO AMENDMENTS TO ARTICLES OF INCORPORATION.
Not amend its Articles of Incorporation, or merge into any other
corporation.
4.2.11 NOTICE OF MATERIAL DEVELOPMENTS.
Promptly notify CACHE in writing of any Material Adverse Change in, or any
changes which in the aggregate would likely result in a Material Adverse
Change in, the business, properties, condition (financial or otherwise),
results of operations or prospects of PROVIDENCE or any of its
subsidiaries, whether or not occurring in the usual and ordinary course of
business, but only to the extent PROVIDENCE or any of such subsidiaries has
actual knowledge of any such changes.
4.2.12 PERFORMANCE OF CONTRACTS.
Perform or cause to be performed all material obligations of PROVIDENCE
under agreements relating to or affecting its assets, properties or rights.
ARTICLE V
ADDITIONAL COVENANTS OF THE PARTIES
5.1 Filings and Consents.
AS PROMPTLY AS PRACTICABLE AFTER THE EXECUTION OF THIS AGREEMENT, EACH
PARTY TO THIS AGREEMENT (A) SHALL MAKE ALL FILINGS (IF ANY) AND GIVE ALL
NOTICES (IF ANY) REQUIRED TO BE MADE AND GIVEN BY SUCH PARTY IN CONNECTION
WITH THE MERGER AND (B) SHALL USE ALL COMMERCIALLY REASONABLE EFFORTS TO
OBTAIN ALL CONSENTS (IF ANY) REQUIRED TO BE OBTAINED (PURSUANT TO ANY
APPLICABLE LEGAL REQUIREMENT OR CONTRACT, OR OTHERWISE) BY SUCH PARTY IN
CONNECTION WITH THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, OTHER THAN THOSE CONSENTS IDENTIFIED ON SECTION 2.4 OF THE
DISCLOSURE SCHEDULE. PROVIDENCE SHALL (UPON REQUEST) PROMPTLY DELIVER TO
CACHE A COPY OF EACH SUCH FILING MADE, EACH SUCH NOTICE GIVEN AND EACH SUCH
CONSENT OBTAINED BY CACHE DURING THE PERIOD PRIOR TO CLOSING.
5.2 Public Announcements.
After the date hereof, each party shall not (and each party shall not
permit any of its Representatives to) issue any press release or make any
public statement regarding this Agreement or the Merger, or regarding any
of the other transactions contemplated by this Agreement, without the other
party's prior written consent.
5.3 Best Efforts.
DURING THE PERIOD PRIOR TO CLOSING, PROVIDENCE, AND CACHE SHALL USE THEIR
BEST EFFORTS TO CAUSE THE CONDITIONS SET FORTH IN ARTICLE 6 TO BE SATISFIED
ON A TIMELY BASIS.
5.4 Investment Representation Letter.
AT THE CLOSING, EACH OF THE CACHE SHAREHOLDERS SHALL EXECUTE AND DELIVER TO
CACHE AN INVESTMENT REPRESENTATION LETTER IN THE FORM ATTACHED HERETO AT
EXHIBIT VI (AN "INVESTMENT REPRESENTATION LETTER").
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF PROVIDENCE AND CACHE
THE OBLIGATIONS OF PROVIDENCE, AND CACHE TO EFFECT THE MERGER AND OTHERWISE
CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE SUBJECT TO
THE SATISFACTION, AT OR PRIOR TO THE CLOSING, OF EACH OF THE FOLLOWING
CONDITIONS, UNLESS ANY SUCH CONDITION IS WAIVED IN WRITING BY THE PARTY NOT
REQUIRED TO PERFORM SUCH CONDITION OTHER THAN THE CONDITIONS SET FORTH IN
SECTION 6.4(II) WHICH CAN ONLY BE WAIVED BY CACHE AND CANNOT BE WAIVED BY
PROVIDENCE:
6.1 Accuracy of Representations.
EACH OF THE REPRESENTATIONS AND WARRANTIES MADE BY PROVIDENCE AND CACHE IN
THIS AGREEMENT AND IN EACH OF THE TRANSACTION DOCUMENTS AND INSTRUMENTS
DELIVERED TO PROVIDENCE AND CACHE IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT SHALL HAVE BEEN ACCURATE IN ALL MATERIAL
RESPECTS AS OF THE DATE OF THIS AGREEMENT (WITHOUT GIVING EFFECT TO ANY
MATERIAL ADVERSE EFFECT OR OTHER MATERIALITY QUALIFICATIONS, OR ANY SIMILAR
QUALIFICATIONS, CONTAINED OR INCORPORATED DIRECTLY OR INDIRECTLY IN SUCH
REPRESENTATIONS AND WARRANTIES), AND SHALL BE ACCURATE IN ALL MATERIAL
RESPECTS AS OF THE CLOSING DATE AS IF MADE AT THE CLOSING DATE (WITHOUT
GIVING EFFECT TO ANY UPDATE TO THE DISCLOSURE SCHEDULE, AND WITHOUT GIVING
EFFECT TO ANY MATERIAL ADVERSE EFFECT OR OTHER MATERIALITY QUALIFICATIONS,
OR ANY SIMILAR QUALIFICATIONS, CONTAINED OR INCORPORATED DIRECTLY OR
INDIRECTLY IN SUCH REPRESENTATIONS AND WARRANTIES).
6.2 Performance of Covenants.
ALL OF THE COVENANTS AND OBLIGATIONS THAT PROVIDENCE AND CACHE ARE REQUIRED
TO COMPLY WITH OR TO PERFORM AT OR PRIOR TO THE CLOSING SHALL HAVE BEEN
COMPLIED WITH AND PERFORMED IN ALL RESPECTS.
6.3 Consents.
ALL CONSENTS REQUIRED TO BE OBTAINED IN CONNECTION WITH THE MERGER AND THE
OTHER TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL HAVE BEEN OBTAINED
AND SHALL BE IN FULL FORCE AND EFFECT.
6.4 Agreements and Documents.
PROVIDENCE AND CACHE SHALL HAVE RECEIVED THE FOLLOWING AGREEMENTS AND
DOCUMENTS (HEREIN REFERRED TO AS "TRANSACTION DOCUMENTS"), EACH OF WHICH
WILL BE IN FULL FORCE AND EFFECT AS OF THE EFFECTIVE TIME:
(i) ARTICLES OF MERGER:
(ii) DOCUMENTS INDICATING THAT PROVIDENCE HAS RECEIVED, OR HAS
RECEIVED A BINDING COMMITMENT FOR, THE EQUITY FINANCING;
(iii) INVESTMENT REPRESENTATION LETTERS EXECUTED BY EACH OF THE CACHE
SHAREHOLDERS;
(iv) LEGAL OPINIONS OF XXXXXX & XXXXXXX, P.C., DATED AS OF THE CLOSING
DATE, OUTSTANDING IN THE FORMS ATTACHED HERETO AT EXHIBIT VII;
(v) A certificate executed by both parties and containing the
representation and warranty of each party that each of the
representations and warranties set forth in Section 2 and 3 are
accurate in all respects as of the Closing Date as if made on the
Closing Date and that the conditions (unless waived) set forth in
Section 6 have been duly satisfied (the "Closing Certificate");
(vi) Written resignations of all officers and directors of PROVIDENCE,
effective as of the Effective Time;
(vii) Agreement with Xxxxxxx Xxxx and Company, LLC to provide
investment banking services for one year after the Effective
Time; and
(viii)An Information Statement prepared in accordance with Regulation
14C shall have been filed with the SEC and sent to the PROVIDENCE
stockholders at least 20 days prior to the meeting of the
PROVIDENCE stockholders called to approve this Agreement and the
Merger.
6.5 No Restraints.
NO TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION OR
OTHER ORDER PREVENTING THE CONSUMMATION OF THE MERGER SHALL HAVE BEEN
ISSUED BY ANY COURT OF COMPETENT JURISDICTION AND REMAIN IN EFFECT, AND
THERE SHALL NOT BE ANY LEGAL REQUIREMENT ENACTED OR DEEMED APPLICABLE TO
THE MERGER THAT MAKES CONSUMMATION OF THE MERGER ILLEGAL.
6.6 No Legal Proceedings.
NO PERSON SHALL HAVE COMMENCED OR THREATENED TO COMMENCE ANY LEGAL
PROCEEDING CHALLENGING OR SEEKING THE RECOVERY OF A MATERIAL AMOUNT OF
DAMAGES IN CONNECTION WITH THE MERGER OR SEEKING TO PROHIBIT OR LIMIT THE
EXERCISE BY PROVIDENCE OF ANY MATERIAL RIGHT PERTAINING TO ITS OWNERSHIP OF
THE ASSETS OF CACHE.
6.7 Employees.
NO MORE THAN ONE OF THE INDIVIDUALS IDENTIFIED ON EXHIBIT VIII SHALL HAVE
CEASED TO BE EMPLOYED BY, OR EXPRESSED AN INTENTION TO TERMINATE THEIR
EMPLOYMENT WITH, CACHE.
6.8 Legal Services.
Xxxx X. Xxxxxxxx, Of Counsel to Xxxxxx & Xxxxxxx, P.C., shall provide legal
services, without additional consideration, with respect to the SEC filings
listed below, and any amendments thereto, by the Surviving Corporation
after the Effective Time:
(i) Form 8-K regarding the Merger;
(ii) Initial Form 13-Ds for all persons reporting under Section
13 of the Exchange Act;
(iii)Initial Form 3's for all persons reporting under Section 16
of the Exchange Act;
(iv) Form 10-QSQ and 10-KSB for first reporting year following
the Effective Time; and
(v) Form SB-2, or similar registration statement, filed for
establishing trading in the common stock of the Surviving
Corporation.
6.9 Balance Sheet.
The balance sheet of PROVIDENCE shall show no liabilities.
6.10 Investment Banking Services Agreement Shares.
SIXTY ONE THOUSAND ONE HUNDRED NINETY TWO (61,192) PROVIDENCE SHARES SHALL
BE ISSUED TO XXXXXX INSTITUTIONAL FINANCE IN ACCORDANCE WITH THE INVESTMENT
BANKING SERVICES AGREEMENT IN EXHIBIT XI.
ARTICLE VII
TERMINATION
7.1 Termination Events.
THIS AGREEMENT MAY BE TERMINATED PRIOR TO THE CLOSING:
(A) by PROVIDENCE if PROVIDENCE reasonably determines that the timely
satisfaction of any condition set forth in Section 6 has become impossible
(other than as a result of any failure on the part of PROVIDENCE to comply
with or perform any covenant or obligation of PROVIDENCE set forth in this
Agreement);
(B) by CACHE if CACHE reasonably determines that the timely satisfaction
of any condition set forth in Section 6 has become impossible (other than
as a result of any failure on the part of CACHE to comply with or perform
any covenant or obligation set forth in this Agreement or in any other
agreement or instrument delivered to PROVIDENCE);
(C) by PROVIDENCE at or after the Scheduled Closing Time if any condition
set forth in Section 6 has not been satisfied or waived by the Scheduled
Closing Time;
(D) by CACHE at or after the Scheduled Closing Time if any condition set
forth in Section 6 has not been satisfied or waived by the Scheduled
Closing Time;
(E) by PROVIDENCE if the Closing has not taken place on or before July 31,
2001 (other than as a result of any failure on the part of PROVIDENCE to
comply with or perform any covenant or obligation of PROVIDENCE set forth
in this Agreement);
(F) by CACHE if the Closing has not taken place on or before July 31, 2001
(other than as a result of the failure on the part of CACHE to comply with
or perform any covenant or obligation set forth in this Agreement or in any
other agreement or instrument delivered to PROVIDENCE); or
(G) by the mutual consent of PROVIDENCE and CACHE.
7.2 Termination Procedures.
IF PROVIDENCE WISHES TO TERMINATE THIS AGREEMENT PURSUANT TO SECTION
7:1(A), SECTION 7:1(C) OR SECTION 7:1(E), PROVIDENCE SHALL DELIVER TO CACHE
A WRITTEN NOTICE STATING THAT PROVIDENCE IS TERMINATING THIS AGREEMENT AND
SETTING FORTH A BRIEF DESCRIPTION OF THE BASIS ON WHICH PROVIDENCE IS
TERMINATING THIS AGREEMENT. IF CACHE WISHES TO TERMINATE THIS AGREEMENT
PURSUANT TO SECTION 7:1(B), SECTION 7:1(D) OR SECTION 7:1(F), CACHE SHALL
DELIVER TO PROVIDENCE A WRITTEN NOTICE STATING THAT CACHE IS TERMINATING
THIS AGREEMENT AND SETTING FORTH A BRIEF DESCRIPTION OF THE BASIS ON WHICH
CACHE IS TERMINATING THIS AGREEMENT.
7.3 Effect of Termination.
IF THIS AGREEMENT IS TERMINATED PURSUANT TO SECTION 7:1, ALL FURTHER
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL TERMINATE; PROVIDED,
HOWEVER, that: (a) neither CACHE nor PROVIDENCE shall be relieved of any
obligation or liability arising from any prior breach by such party of any
provision of this Agreement; (b) the parties shall, in all events, remain
bound by and continue to be subject to the provisions set forth in Section
9.2; and (c) PROVIDENCE and CACHE shall, in all events, remain bound by and
continue to be subject to Section 5:2.
ARTICLE VIII
INDEMNIFICATION
8.1 Survival of Representations, Etc.
(A) The representations and warranties made by PROVIDENCE, and CACHE
(including the representations and warranties set forth in Sections 2 and
3, shall survive the Effective Time for a period of one (1) year, PROVIDED,
HOWEVER, that if, at any time prior to the first anniversary of the Closing
Date, any Indemnitee (acting in good faith) delivers to either party a
written notice alleging the existence of an inaccuracy in or a breach of
any of the representations and warranties made by either party (and setting
forth in reasonable detail the basis for such Indemnitee's belief that such
an inaccuracy or breach may exist) and asserting a claim for recovery under
Section 8.2 based on such alleged inaccuracy or breach, then the claim
asserted in such notice shall survive the first anniversary of the Closing
until such time as such claim is fully and finally resolved.
Notwithstanding the foregoing, the representations and warranties set forth
in Section 2.14 shall survive until the expiration of the applicable
statutes of limitations, including extensions thereof.
(B) The representations, warranties, covenants and obligations of
PROVIDENCE, and CACHE, and the rights and remedies that may be exercised by
either party, shall not be limited or otherwise affected by or as a result
of any information furnished to, or any investigation made by or knowledge
of either party or any of their Representatives.
(C) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty
made by PROVIDENCE or CACHE in this Agreement.
8.2 Cross Indemnification.
FROM AND AFTER THE EFFECTIVE TIME (BUT SUBJECT TO SECTION 8.1(A)),
PROVIDENCE AND CACHE SHALL HOLD HARMLESS AND INDEMNIFY EACH OTHER FROM AND
AGAINST, AND SHALL COMPENSATE AND REIMBURSE THE OTHER PARTY FOR, ANY
DAMAGES WHICH ARE DIRECTLY OR INDIRECTLY SUFFERED OR INCURRED BY EITHER
PARTY OR TO WHICH EITHER PARTY MAY OTHERWISE BECOME SUBJECT (REGARDLESS OF
WHETHER OR NOT SUCH DAMAGES RELATE TO ANY THIRD-PARTY CLAIM) AND WHICH
ARISE FROM OR AS A RESULT OF, OR ARE DIRECTLY OR INDIRECTLY CONNECTED WITH:
(I) ANY INACCURACY IN OR BREACH OF ANY REPRESENTATION OR WARRANTY SET FORTH
IN SECTIONS 2 OR 3 (WITHOUT GIVING EFFECT TO ANY MATERIAL ADVERSE EFFECT OR
OTHER MATERIALITY QUALIFICATION OR ANY SIMILAR QUALIFICATION CONTAINED OR
INCORPORATED DIRECTLY OR INDIRECTLY IN SUCH REPRESENTATION OR WARRANTY, BUT
GIVING EFFECT TO ANY UPDATE TO THE DISCLOSURE SCHEDULE DELIVERED BY
PROVIDENCE AND CACHE PRIOR TO THE CLOSING); (II) ANY BREACH OF ANY COVENANT
OR OBLIGATION OF PROVIDENCE, OR CACHE (INCLUDING THE COVENANTS SET FORTH IN
SECTIONS 4 AND 5); OR (III) ANY LEGAL PROCEEDING RELATING TO ANY INACCURACY
OR BREACH OF THE TYPE REFERRED TO IN CLAUSE "(I)" OR "(II)" ABOVE
(INCLUDING ANY LEGAL PROCEEDING COMMENCED BY ANY INDEMNITEE FOR THE PURPOSE
OF ENFORCING ANY OF ITS RIGHTS UNDER THIS SECTION 8).
8.3 Threshold; Ceiling.
PROVIDENCE or CACHE shall not be required to make any indemnification
payment pursuant to Section 8.2(a) for any inaccuracy in or breach of any
of their representations and warranties set forth in Sections 2 and 3 until
such time as the total amount of all Damages (including the Damages arising
from such inaccuracy or breach and all other Damages arising from any other
inaccuracies in or breaches of any representations or warranties) that have
been directly or indirectly suffered or incurred by the other party,
exceeds $10,000 in the aggregate. (If the total amount of such Damages
exceeds $10,000, then the Indemnitee shall be entitled to be indemnified
against and compensated and reimbursed for all of such Damages, including
claims for Damages included in the initial $10,000.
8.4 No Contribution.
PROVIDENCE AND CACHE WAIVE, ACKNOWLEDGE AND AGREE THAT THEY SHALL NOT HAVE
AND SHALL NOT EXERCISE OR ASSERT (OR ATTEMPT TO EXERCISE OR ASSERT), ANY
RIGHT OF CONTRIBUTION, RIGHT OF INDEMNITY OR OTHER RIGHT OR REMEDY AGAINST
EACH OTHER IN CONNECTION WITH ANY THIRD PARTY INDEMNIFICATION OBLIGATION OR
ANY OTHER LIABILITY TO WHICH EITHER PARTY MAY BECOME SUBJECT UNDER OR IN
CONNECTION WITH THIS AGREEMENT.
8.5 Interest.
ANY PARTY WHO IS REQUIRED TO HOLD HARMLESS, INDEMNIFY, COMPENSATE OR
REIMBURSE ANY INDEMNITEE PURSUANT TO THIS SECTION 8 WITH RESPECT TO ANY
DAMAGES SHALL ALSO BE LIABLE TO SUCH INDEMNITEE FOR INTEREST ON THE AMOUNT
OF SUCH DAMAGES (FOR THE PERIOD COMMENCING AS OF THE DATE ON WHICH
INDEMNIFYING PARTY FIRST RECEIVED NOTICE OF A CLAIM FOR RECOVERY BY SUCH
INDEMNITEE AND ENDING ON THE DATE ON WHICH THE LIABILITY OF SUCH
INDEMNIFYING PARTY TO SUCH INDEMNITEE IS FULLY SATISFIED BY SUCH
INDEMNIFYING PARTY) AT A FLOATING RATE EQUAL TO THE RATE OF INTEREST
PUBLICLY ANNOUNCED BY BANK OF AMERICA, N.T. & S.A. FROM TIME TO TIME AS ITS
PRIME, BASE OR REFERENCE RATE.
8.6 Defense of Third Party Claims.
IN THE EVENT OF THE ASSERTION OR COMMENCEMENT BY ANY PERSON OF ANY CLAIM OR
LEGAL PROCEEDING (WHETHER AGAINST PROVIDENCE, OR CACHE) WITH RESPECT TO
WHICH EITHER PARTY MAY BECOME OBLIGATED TO HOLD HARMLESS, INDEMNIFY,
COMPENSATE OR REIMBURSE ANY THIRD PARTY INDEMNITEE PURSUANT TO THIS SECTION
8, SUCH PARTY SHALL HAVE THE RIGHT, AT ITS ELECTION, TO PROCEED WITH THE
DEFENSE OF SUCH CLAIM OR LEGAL PROCEEDING ON ITS OWN.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Further Assurances.
EACH PARTY HERETO SHALL EXECUTE AND CAUSE TO BE DELIVERED TO EACH OTHER
PARTY HERETO SUCH INSTRUMENTS AND OTHER DOCUMENTS, AND SHALL TAKE SUCH
OTHER ACTIONS, AS SUCH OTHER PARTY MAY REASONABLY REQUEST (PRIOR TO, AT OR
AFTER THE CLOSING) FOR THE PURPOSE OF CARRYING OUT OR EVIDENCING ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
9.2 Fees and Expenses.
IF THE CACHE MERGER IS NOT CONSUMMATED FOR ANY REASON WHATSOEVER, EACH
PARTY TO THIS AGREEMENT SHALL BEAR AND PAY ALL FEES, COSTS AND EXPENSES
(INCLUDING LEGAL FEES AND ACCOUNTING FEES) ("FEES AND EXPENSES") THAT HAVE
BEEN INCURRED OR THAT ARE INCURRED BY SUCH PARTY IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. IF THE CACHE MERGER IS
CONSUMMATED, THE SURVIVING CORPORATION SHALL PAY ALL FEES AND EXPENSES OF
PROVIDENCE AND CACHE.
9.3 Attorneys' Fees.
IF ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE ENFORCEMENT
OF ANY PROVISION OF THIS AGREEMENT IS BROUGHT AGAINST ANY PARTY HERETO, THE
PREVAILING PARTY SHALL BE ENTITLED TO RECOVER REASONABLE ATTORNEYS' FEES,
COSTS AND DISBURSEMENTS (IN ADDITION TO ANY OTHER RELIEF TO WHICH THE
PREVAILING PARTY MAY BE ENTITLED).
9.4 Notices.
ALL NOTICES AND OTHER COMMUNICATIONS REQUIRED OR PERMITTED UNDER THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE IN WRITING AND
SHALL BE DEEMED TO HAVE BEEN DULY GIVEN, MADE AND RECEIVED ON THE DATE WHEN
DELIVERED BY HAND DELIVERY WITH RECEIPT ACKNOWLEDGED, OR UPON THE NEXT
BUSINESS DAY FOLLOWING RECEIPT OF FACSIMILE TRANSMISSION, OR UPON THE FIFTH
DAY AFTER DEPOSIT IN THE UNITED STATES MAIL, REGISTERED OR CERTIFIED WITH
POSTAGE PREPAID, RETURN RECEIPT REQUESTED, ADDRESSED AS SET FORTH BELOW:
(A) If to PROVIDENCE:
0000 Xxxxx Xxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy (not constituting notice) to:
Xxxxxx & Xxxxxxx, P.C.
00 Xxxx Xxxxxx, Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
Xxxxx X. Xxxxxxx, III
Xxxxxxx Xxxx & Company, LLC
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
(000) 000-0000
(B) If to CACHE:
Xxxxxxx X. Xxxxx, President
Cache Stream Corporation
0000 Xxxxxxx Xxxx XX
Xxxxx 000
Xxxxxxxx, XX 00000
with a copy to:
Xxxxxx Institutional Finance
000 Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000
WITH A COPY (NOT CONSTITUTING NOTICE) TO:
XXXXXX & WHITNEY, LLP
REPUBLIC PLAZA BUILDING
SUITE 4700
000 XXXXXXXXXXX XXXXXX
XXXXXX, XX 00000-0000
ATTENTION: XXXXXX X. XXXXX, ESQ.
TELEPHONE: (000) 000-0000
FACSIMILE: (000) 000-0000
9.5 Confidentiality.
WITHOUT LIMITING THE GENERALITY OF ANYTHING CONTAINED IN SECTION 5.2, ON
AND AT ALL TIMES AFTER THE CLOSING DATE, EACH PARTY SHALL KEEP
CONFIDENTIAL, AND SHALL NOT USE OR DISCLOSE TO ANY OTHER PERSON, ANY NON-
PUBLIC DOCUMENT OR OTHER NON-PUBLIC INFORMATION IN SUCH PARTY'S POSSESSION
THAT RELATES TO THE BUSINESS OF CACHE OR PROVIDENCE.
9.6 Time of the Essence.
TIME IS OF THE ESSENCE OF THIS AGREEMENT.
9.7 Headings.
THE BOLDED HEADINGS CONTAINED IN THIS AGREEMENT ARE FOR CONVENIENCE OF
REFERENCE ONLY, SHALL NOT BE DEEMED TO BE A PART OF THIS AGREEMENT AND
SHALL NOT BE REFERRED TO IN CONNECTION WITH THE CONSTRUCTION OR
INTERPRETATION OF THIS AGREEMENT.
9.8 Counterparts.
THIS AGREEMENT MAY BE EXECUTED IN SEVERAL COUNTERPARTS, EACH OF WHICH SHALL
CONSTITUTE AN ORIGINAL AND ALL OF WHICH, WHEN TAKEN TOGETHER, SHALL
CONSTITUTE ONE AGREEMENT.
9.9 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED IN ALL
RESPECTS BY, THE INTERNAL LAWS OF THE STATE OF COLORADO AND (WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS).
9.10 Successors and Assigns.
THE RIGHTS AND OBLIGATIONS OF PROVIDENCE OR CACHE MAY NOT BE ASSIGNED
WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES. SUBJECT TO THE
FOREGOING, THE PROVISIONS OF THIS AGREEMENT SHALL BE BINDING UPON AND INURE
TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE HEIRS, PERSONAL
REPRESENTATIVES, SUCCESSORS AND ASSIGNS.
9.11 Remedies Cumulative; Specific Performance.
THE RIGHTS AND REMEDIES OF THE PARTIES HERETO SHALL BE CUMULATIVE (AND NOT
ALTERNATIVE). THE PARTIES TO THIS AGREEMENT AGREE THAT, IN THE EVENT OF
ANY BREACH OR THREATENED BREACH BY ANY PARTY TO THIS AGREEMENT OF ANY
COVENANT, OBLIGATION OR OTHER PROVISION SET FORTH IN THIS AGREEMENT FOR THE
BENEFIT OF ANY OTHER PARTY TO THIS AGREEMENT, SUCH OTHER PARTY SHALL BE
ENTITLED (IN ADDITION TO ANY OTHER REMEDY THAT MAY BE AVAILABLE TO IT) TO
(A) A DECREE OR ORDER OF SPECIFIC PERFORMANCE OR MANDAMUS TO ENFORCE THE
OBSERVANCE AND PERFORMANCE OF SUCH COVENANT, OBLIGATION OR OTHER PROVISION,
AND (B) AN INJUNCTION RESTRAINING SUCH BREACH OR THREATENED BREACH.
9.12 Waiver.
(A) No failure on the part of any Person to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or
remedy; and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other or further exercise thereof or
of any other power, right, privilege or remedy.
(B) No Person shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have
any effect except in the specific instance in which it is given.
9.13 Amendments.
THIS AGREEMENT MAY NOT BE AMENDED, MODIFIED, ALTERED OR SUPPLEMENTED OTHER
THAN BY MEANS OF A WRITTEN INSTRUMENT DULY EXECUTED AND DELIVERED ON BEHALF
OF ALL OF THE PARTIES HERETO.
9.14 Severability.
IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT, OR THE APPLICATION OF
ANY SUCH PROVISION TO ANY PERSON OR SET OF CIRCUMSTANCES, SHALL BE
DETERMINED TO BE INVALID, UNLAWFUL, VOID OR UNENFORCEABLE TO ANY EXTENT,
THE REMAINDER OF THIS AGREEMENT, AND THE APPLICATION OF SUCH PROVISION TO
PERSONS OR CIRCUMSTANCES OTHER THAN THOSE AS TO WHICH IT IS DETERMINED TO
BE INVALID, UNLAWFUL, VOID OR UNENFORCEABLE, SHALL NOT BE IMPAIRED OR
OTHERWISE AFFECTED AND SHALL CONTINUE TO BE VALID AND ENFORCEABLE TO THE
FULLEST EXTENT PERMITTED BY LAW.
9.15 Entire Agreement.
THIS AGREEMENT AND THE OTHER AGREEMENTS REFERRED TO HEREIN SET FORTH THE
ENTIRE UNDERSTANDING OF THE PARTIES HERETO RELATING TO THE SUBJECT MATTER
HEREOF AND THEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS
AMONG OR BETWEEN ANY OF THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF
AND THEREOF.
9.16 Construction.
(A) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender
shall include the masculine and neuter genders; and the neuter gender shall
include the masculine and feminine genders.
(B) The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.
(C) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."
(D) Except as otherwise indicated, all references in this Agreement to
"Sections" and "Exhibit" are intended to refer to Sections of this
Agreement and Exhibits to this Agreement.
IN WITNESS WHEREOF, PROVIDENCE and CACHE have signed this Agreement as of
the date first written above.
PROVIDENCE CAPITAL IX, INC.
A Colorado Corporation
By: _____________________________________
Xxxxxxx Xxxxxx, Jr., President
CACHESTREAM CORPORATION
a Colorado Corporation
By: _____________________________________
Xxxxxxx X. Xxxxx, President
Xxxx X. Xxxxxxxx, Of Counsel to
Xxxxxx & Xxxxxxx, P.C., enters into this
Agreement for purposes of evidencing his
consent to and agreement with Section 6.8.
Date: June 27, 2001
By:
Xxxx X. Xxxxxxxx, Of Counsel
EXHIBIT I
CERTAIN DEFINITIONS
The following are definitions of terms not otherwise defined in the
Agreement. For purposes of the Agreement (including this EXHIBIT I):
"ACQUISITION TRANSACTION" means any transaction involving:
(A) the sale, license, disposition or acquisition of all or a
material portion of PROVIDENCE or CACHE's business or assets;
(B) the issuance, disposition or acquisition of (i) any capital
stock or other equity security of PROVIDENCE or CACHE, (ii) any
option, call, warrant or right (whether or not immediately
exercisable) to acquire any capital stock or other equity
security of PROVIDENCE or CACHE, or (iii) any security,
instrument or obligation that is or may become convertible into
or exchangeable for any capital stock or other equity security of
PROVIDENCE or CACHE; or
(C) any merger, consolidation, business combination,
reorganization or similar transaction involving PROVIDENCE or
CACHE.
"AFFILIATE" means, with respect to any specified Person, any other Person
in which the specified Person has a direct or indirect interest (except
through ownership of less than 5% of the outstanding shares of any entity
whose securities are listed on a national securities exchange or traded in
the national over-the-counter market).
"BUSINESS DAY" means a day, other than a Saturday or a Sunday, or a federal
holiday upon which offices of the federal government are not open for
business.
"CACHE CONTRACT" means any Contract: (a) to which CACHE is a party; (b) by
which CACHE or any of its assets is or may become bound or under which
CACHE has, or may become subject to, any obligation; or (c) under which
CACHE has or may acquire any right or interest.
"CONSENT" means any approval, consent, ratification, permission, waiver or
authorization (including any Governmental Authorization).
"CONTRACT" means any written, oral or other agreement, contract,
subcontract, lease, understanding, instrument, note, warranty, insurance
policy, benefit plan or legally binding commitment or undertaking of any
nature.
"DAMAGES" shall include any loss, damage, injury, decline in value, lost
opportunity, liability, claim, demand, settlement, judgment, award, fine,
penalty, Tax, fee (including reasonable attorneys' fees), charge, cost
(including costs of investigation) or expense of any nature.
"EFFECTIVE TIME" shall have the meaning specified in Section 1.3 of the
Agreement.
"ENCUMBRANCE" means any lien, pledge, hypothecation, charge, mortgage,
security interest, encumbrance, claim, infringement, interference, option,
right of first refusal, preemptive right, community property interest or
restriction of any nature (including any restriction on the voting of any
security, any restriction on the transfer of any security or other asset,
any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
"ENTITY" means any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, CACHE (including any limited liability CACHE
or joint stock CACHE), firm or other enterprise, association, organization
or entity.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign Legal
Requirement relating to pollution or protection of human health or the
environment (including ambient air, surface water, ground water, land
surface or subsurface strata), including any law or regulation relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FEES AND EXPENSES" shall have the meaning specified in Section 9.2 of the
Agreement.
"GAAP" means generally accepted accounting principles.
"GOVERNMENTAL AUTHORIZATION" means any: (a) permit, license, certificate,
franchise, permission, clearance, registration, qualification or
authorization issued, granted, given or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement; or (b) right under any Contract with any Governmental Body.
"INDEMNITEES" means the following Persons: (a) PROVIDENCE or CACHE; (b)
PROVIDENCE or CACHE's current and future affiliates; (c) the respective
Representatives of the Persons referred to in clauses "(a)" and "(b)"
above; and (d) the respective successors and assigns of the Persons
referred to in clauses "(a)", "(b)" and "(c)" above; PROVIDED, HOWEVER,
that the Stockholders shall not be deemed to be "Indemnitees."
"LEGAL PROCEEDING" means any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding), hearing, inquiry, audit, examination or
investigation commenced, brought, conducted or heard by or before, or
otherwise involving, any court or other Governmental Body or any arbitrator
or arbitration panel.
"LEGAL REQUIREMENT" means any federal, state, local, municipal, foreign or
other law, statute, constitution, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, ruling or requirement
issued, enacted, adopted, promulgated, implemented or otherwise put into
effect by or under the authority of any Governmental Body.
"MATERIAL ADVERSE EFFECT" means a violation or other matter will be deemed
to have a "Material Adverse Effect" on CACHE if such violation or other
matter (considered together with all other matters that would constitute
exceptions to the representations and warranties set forth in the Agreement
but for the presence of "Material Adverse Effect" or other materiality
qualifications, or any similar qualifications, in such representations and
warranties) would have a material adverse effect on CACHE's business,
condition, assets, liabilities, operations, financial performance or
prospects.
"MATERIALS OF ENVIRONMENTAL CONCERN" means chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products
and any other substance that is now or hereafter regulated by any
Environmental Law or that is otherwise a danger to health, reproduction or
the environment.
"PERSON" means any individual, Entity or Governmental Body.
"RELATED PARTY" means: (i) the Stockholders; (ii) each individual who is,
or who has at any time since December 22, 1999 been, an officer of CACHE;
(iii) each member of the immediate family of each of the individuals
referred to in clauses "(i)" and "(ii)" above; and (iv) any trust or other
entity (other than CACHE) in which any one of the individuals referred to
in clauses "(i)", "(ii)" and "(iii)" above holds (or in which more than one
of such individuals collectively hold), beneficially or otherwise, a
material voting, proprietary or equity interest).
"REPRESENTATIVES" means officers, directors, employees, agents, attorneys,
accountants, advisors and representatives.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" shall have the meaning specified in the preamble to the Agreement.
"TAX RETURN" means any return (including any information return), report,
statement, declaration, estimate, schedule, notice, notification, form,
election, certificate or other document or information filed with or
submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection or payment of any Tax or in connection with the administration,
implementation or enforcement of or compliance with any Legal Requirement
relating to any Tax.
EXHIBIT II
ARTICLES OF MERGER
(To be completed prior to the Closing Date)
PROVIDENCE CAPITAL IX, INC.
AND
CACHESTREAM CORPORATION
ARTICLES OF MERGER
Pursuant to the provisions of the Colorado Business Corporation Act (CRS 7-
111-107, et seq., as amended) the undersigned corporations adopt the
following Articles of Merger:
FIRST: Attached hereto as Exhibit A is the Plan and Agreement of Merger,
(without the Exhibits) of PROVIDENCE CAPITAL IX, INC., a Colorado
corporation and CACHESTREAM CORPORATION, a Colorado corporation.
SECOND: The Plan and Agreement of Merger was duly adopted and recommended
to the shareholders by the Board of Directors of PROVIDENCE
CAPTIAL IX, INC. on ____________________, 2001, and by the Board
of Directors of CACHESTREAM CORPORTION on June 15,2001, and
approved by the shareholders of PROVIDENCE CAPITAL IX, INC. on
____________________, 2001, and by the shareholders of
CACHESTREAM CORPORATION, on June18, 2001, in the manner
prescribed by Section 7-111-105(1)(c) of the Colorado Business
Corporation Act. Accordingly, the number of shares voted for the
Plan and Agreement of Merger by each voting group was, with
respect to each corporation, sufficient for approval by that
voting group.
THIRD: On the date these Articles of Merger are filed with the Colorado
Secretary of State, they shall be effective and CACHESTREAM
CORPORATION shall merge into PROVIDENCE CAPITAL IX, INC. and the
first sentence of Article I of the Articles of Incorporation of
PROVIDENCE CAPITAL IX, INC. shall be amended to read as follows:
"The name of the corporation shall be CACHESTREAM CORPORATION."
IN WITNESS WHEREOF, the following persons have duly executed and verify
these Articles of Merger this ______________ day of ___________________,
2001.
PROVIDENCE CAPITAL IX, INC.,
a Colorado corporation
By:______________________
XXXXXXX XXXXXX, JR.
Chairman and President
CACHESTREAM CORPORATION,
a Colorado corporation
By:______________________
XXXXXXX X. XXXXX,
Its President
EXHIBIT III
BYLAWS
OF
PROVIDENCE CAPITAL IX, INC.
ARTICLE I
OFFICES
SECTION 1.1 PRINCIPAL OFFICE. The principal office of the corporation
in the State of Colorado shall be located in the City of Colorado Springs,
County of El Paso. The corporation may have such other offices, either
within or outside of the State of Colorado, as the Board of Directors may
designate, or as the business of the corporation may require from time to
time.
SECTION 1.2 REGISTERED OFFICE. The registered office of the
corporation, required by the Colorado Business Corporation Act to be
maintained in the State of Colorado, may be, but need not be, identical
with the principal office in the State of Colorado, and the address of the
registered office may be changed from time to time by the Board of
Directors.
ARTICLE II
SHAREHOLDERS
SECTION 2.1 ANNUAL MEETING. The annual meeting of the shareholders
shall be held on the last Tuesday of March in each year, commencing with
the year 2000, at the hour of 10:00 A.M., or at such other time on such
other day as shall be fixed by the Board of Directors, for the purpose of
electing directors and for the transaction of such other business as may
come before the meeting. If the day fixed for the annual meeting shall be a
legal holiday in the State of Maine, such meeting shall be held on the next
succeeding business day. If the election of directors shall not be held on
the day designated herein for any annual meeting of the shareholders, or at
any adjournment thereof, the Board of Directors shall cause the election to
be held at a special meeting of the shareholders as soon thereafter as may
be convenient.
A shareholder may apply to the district court in the county in
Colorado where the corporation's principal office is located or, if the
corporation has no principal office in Colorado, to the district court of
the county in which the corporation's registered office is located to seek
an order that a shareholder meeting be held (i) if an annual meeting was
not held within six months after the close of the corporation's most
recently ended fiscal year or fifteen months after its last annual meeting,
whichever is earlier, or (ii) if the shareholder participated in a proper
call or of proper demand for a special meeting and notice of the special
meeting was not given within thirty days after the date of the call or the
date the last of the demands necessary to require calling of the meeting
was received by the corporation pursuant to C.R.S. ' 7-107-102(1)(b), or
the special meeting was not held in accordance with the notice.
SECTION 2.2 SPECIAL MEETINGS. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called
by the President or by the Board of Directors, and shall be called by the
President upon the receipt of one or more written demands for a special
meeting, stating the purpose or purposes for which it is to be held, signed
and dated by the holders of shares representing at least ten percent of all
the votes entitled to be cast on any issue proposed to be considered at
the meeting.
SECTION 2.3 PLACE OF MEETINGS. The Board of Directors may designate
any place, either within or outside of the State of Colorado, as the place
of meeting for any annual meeting or for any special meeting called by the
Board of Directors. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal office of the
corporation in the State of Colorado.
SECTION 2.4 NOTICE OF MEETING. Written notice stating the place, day
and hour of the meeting of shareholders and, in case of a special meeting,
the purpose or purposes for which the meeting is called, shall, unless
otherwise prescribed by statute, be delivered not less than ten nor more
than sixty days before the date of the meeting, either personally or by
mail, by or at the direction of the President, or the Secretary, or the
officer or other persons calling the meeting, to each shareholder of record
entitled to vote at such meeting; provided, however, that if the number of
authorized shares is to be increased, at least thirty days' notice shall be
given.
Notice of a special meeting shall include a description of the purpose
or purposes of the meeting. Notice of an annual meeting need not include a
description of the purpose or purposes of the meeting except the purpose or
purposes shall be stated with respect to (i) an amendment to the articles
of incorporation of the corporation, (ii) a merger or share exchange in
which the corporation is a party and, with respect to a share exchange, in
which the corporation's shares will be acquired, (iii) a sale, lease,
exchange or other disposition, other than in the usual and regular course
of business, of all or substantially all of the property of the corporation
or of another entity which this corporation controls, in each case with or
without the goodwill, (iv) a dissolution of the corporation, or (v) any
other purpose for which a statement of purpose is required by the Colorado
Business Corporation Act.
Notice shall be given personally or by mail, private carrier,
telegraph, teletype, electronically transmitted facsimile or other form of
wire or wireless communication by or at the direction of the president, the
secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed and if in
a comprehensible form, such notice shall be deemed to be given and
effective when deposited in the United States mail, addressed to the
shareholder at his address as it appears in the corporation's current
record of shareholders, with postage prepaid. If notice is given other than
by mail, and provided that such notice is in a comprehensible form, the
notice is given and effective on the date received by the shareholder.
If requested by the person or persons lawfully calling such meeting,
the notice shall be given at corporate expense.
When a meeting is adjourned to another date, time or place, notice need not
be given of the new date, time or place if the new date, time or place of
such meeting is announced before adjournment at the meeting at which the
adjournment is taken. At the adjourned meeting the corporation may transact
any business which may have been transacted at the original meeting. If the
adjournment is for more than 120 days, or if a new record date is fixed for
the adjourned meeting, a new notice of the adjourned meeting shall be given
to each shareholder of record entitled to vote at the meeting as of the new
record date.
A shareholder may waive notice of a meeting before or after the time
and date of the meeting by a writing signed by such shareholder. Such
waiver shall be delivered to the corporation for filing with the corporate
records. Further, by attending a meeting either in person or by proxy, a
shareholder waives objection to lack of notice or defective notice of the
meeting unless the shareholder objects at the beginning of the meeting to
the holding of the meeting or the transaction of business at the meeting
because of lack of notice or defective notice. By attending the meeting,
the shareholder also waives any objection to consideration in the meeting
of a particular matter not within the purpose or purposes described in the
meeting notice unless the shareholder objects to considering the matter
when it is presented.
No notice need be sent to any shareholder if three successive notices
mailed to the last known address of such shareholder have been returned as
undeliverable until such time as another address for such shareholder is
made known to the corporation by such shareholder. In order to be entitled
to receive notice of any meeting, a shareholder shall advise the
corporation in writing of any change in such shareholder's mailing address
as shown on the corporation's books and records.
SECTION 2.5 MEETING OF ALL SHAREHOLDERS. If all of the shareholders
shall meet at any time and place, either within or outside of the State of
Colorado, and consent to the holding of a meeting at such time and place,
such meeting shall be valid without call or notice, and at such meeting any
corporate action may be taken.
SECTION 2.6 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any distribution, or in order to make a
determination of shareholders for any other purpose, the Board of Directors
of the corporation may provide that the share transfer books shall be
closed for a stated period but not to exceed, in any case, seventy days. If
the share transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders,
such books shall be closed for at least ten days immediately preceding such
meeting. In lieu of closing the share transfer books, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than
seventy days and, in case of a meeting of shareholders, not less than ten
days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the share transfer books
are not closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders,
or shareholders entitled to receive payment of a distribution, the date on
which notice of the meeting is mailed or the date on which the resolution
of the Board of Directors declaring such distribution is adopted, as the
case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof unless the meeting is
adjourned to a date more than one hundred twenty days after the date fixed
for the original meeting, in which case the Board of Directors shall make a
new determination as provided in this section.
SECTION 2.7 VOTING RECORD. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten
days before such meeting of shareholders, a complete record of the
shareholders entitled to vote at each meeting of shareholders or any
adjournment thereof, arranged by voting groups and within each voting group
by class or series of shares, in alphabetical order within each class or
series, with the address of and the number of shares held by each
shareholder in each class or series. For a period beginning the earlier of
ten days before the meeting for which the record was prepared or two
business days after notice of the meeting is given and continuing through
the meeting, the record shall be kept on file at the principal office of
the corporation or at a place identified in the notice of the meeting in
the city where the meeting will be held, whether within or outside of the
State of Colorado, and shall be subject to inspection by any shareholder
upon written demand at any time during usual business hours. Such record
shall be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder during the whole time
of the meeting for the purposes thereof.
The original stock transfer books shall be the PRIMA FACIE evidence as
to who are the shareholders entitled to examine the record or transfer
books or to vote at any meeting of shareholders.
SECTION 2.8 QUORUM. A majority of the votes entitled to be cast on the
matter by a voting group, represented in person or by proxy, constitutes a
quorum of that voting group for action on that matter. If no specific
voting group is designated in the Articles of Incorporation or under the
Colorado Business Corporation Act for a particular matter, all outstanding
shares of the corporation entitled to vote, represented in person or by
proxy, shall constitute a voting group. In the absence of a quorum at any
such meeting, a majority of the shares so represented may adjourn the
meeting from time to time for a period not to exceed one hundred twenty
days without further notice. However, if the adjournment is for more than
one hundred twenty days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at the meeting.
At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The shareholders present
at a duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal during such meeting of that
number of shareholders whose absence would cause there to be less than a
quorum.
SECTION 2.9 MANNER OF ACTING. If a quorum is present, an action is approved
if the votes cast favoring the action exceed the votes cast within the
voting group opposing the action and such action shall be the act of the
shareholders, unless the vote of a greater proportion or number or voting
by groups is otherwise required by the Colorado Business Corporation Act,
the Articles of Incorporation or these Bylaws.
SECTION 2.10 PROXIES. At all meetings of shareholders a shareholder
may vote by proxy by signing an appointment form or similar writing, either
personally or by his or her duly authorized attorney-in-fact. A shareholder
may also appoint a proxy by transmitting or authorizing the transmission of
a telegram, teletype, or other electronic transmission providing a written
statement of the appointment to the proxy, a proxy solicitor, proxy support
service organization, or other person duly authorized by the proxy to
receive appointments as agent for the proxy, or to the corporation. The
transmitted appointment shall set forth or be transmitted with written
evidence from which it can be determined that the shareholder transmitted
or authorized the transmission of the appointment. The proxy appointment
form or similar writing shall be filed with the secretary of the
corporation before or at the time of the meeting. The appointment of a
proxy is effective when received by the corporation and is valid for eleven
months unless a different period is expressly provided in the appointment
form or similar writing.
Any complete copy, including an electronically transmitted facsimile,
of an appointment of a proxy may be substituted for or used in lieu of the
original appointment for any purpose for which the original appointment
could be used.
Revocation of a proxy does not affect the right of the corporation to
accept the proxy's authority unless (i) the corporation had notice that the
appointment was coupled with an interest and notice that such interest is
extinguished is received by the secretary or other officer or agent
authorized to tabulate votes before the proxy exercises his or her
authority under the appointment, or (ii) other notice of the revocation of
the appointment is received by the secretary or other officer or agent
authorized to tabulate votes before the proxy exercises his or her
authority under the appointment. Other notice of revocation may, in the
discretion of the corporation, be deemed to include the appearance at a
shareholders' meeting of the shareholder who granted the proxy and his or
her voting in person on any matter subject to a vote at such meeting.
The death or incapacity of the shareholder appointing a proxy does not
affect the right of the corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the secretary or other
officer or agent authorized to tabulate votes before the proxy exercises
his or her authority under the appointment.
The corporation shall not be required to recognize an appointment made
irrevocable if it has received a writing revoking the appointment signed by
the shareholder (including a shareholder who is a successor to the
shareholder who granted the proxy) either personally or by his or her
attorney-in-fact, notwithstanding that the revocation may be a breach of an
obligation of the shareholder to another person not to revoke the
appointment.
SECTION 2.11 VOTING OF SHARES. Unless otherwise provided by these Bylaws or
the Articles of Incorporation, each outstanding share entitled to vote
shall be entitled to one vote upon each matter submitted to a vote at a
meeting of shareholders, and each fractional share shall be entitled to a
corresponding fractional vote on each such matter. Only shares are entitled
to vote.
SECTION 2.12 VOTING OF SHARES BY CERTAIN SHAREHOLDERS. If the name on
a vote, consent, waiver, proxy appointment, or proxy appointment revocation
corresponds to the name of a shareholder, the corporation, if acting in
good faith, is entitled to accept the vote, consent, waiver, proxy
appointment or proxy appointment revocation and give it effect as the act
of the shareholder.
If the name signed on a vote, consent, waiver, proxy appointment or
proxy appointment revocation does not correspond to the name of a
shareholder, the corporation, if acting in good faith, is nevertheless
entitled to accept the vote, consent, waiver, proxy appointment or proxy
appointment revocation and to give it effect as the act of the shareholder
if:
(i) the shareholder is an entity and the name signed purports to be
that of an officer or agent of the entity;
(ii) the name signed purports to be that of an administrator,
executor, guardian or conservator representing the shareholder and, if the
corporation requests, evidence of fiduciary status acceptable to the
corporation has been presented with respect to the vote, consent, waiver,
proxy appointment or proxy appointment revocation;
(iii) the name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the corporation requests, evidence of
this status acceptable to the corporation has been presented with respect
to the vote, consent, waiver, proxy appointment or proxy appointment
revocation;
(iv) the name signed purports to be that of a pledgee, beneficial
owner or attorney-in-fact of the shareholder and, if the corporation
requests, evidence acceptable to the corporation of the signatory's
authority to sign for the shareholder has been presented with respect to
the vote, consent, waiver, proxy appointment or proxy appointment
revocation;
(v) two or more persons are the shareholder as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of
the co-tenants or fiduciaries, and the person signing appears to be acting
on behalf of all the co-tenants or fiduciaries; or
(vi) the acceptance of the vote, consent, waiver, proxy appointment or
proxy appointment revocation is otherwise proper under rules established by
the corporation that are not inconsistent with this Section 2.12.
The corporation is entitled to reject a vote, consent, waiver, proxy
appointment or proxy appointment revocation if the secretary or other
officer or agent authorized to tabulate votes, acting in good faith, has
reasonable basis for doubt about the validity of the signature on it or
about the signatory's authority to sign for the shareholder.
Neither the corporation nor any of its directors, officers employees, or
agents who accepts or rejects a vote, consent, waiver, proxy appointment or
proxy appointment revocation in good faith and in accordance with the
standards of this Section is liable in damages for the consequences of the
acceptance or rejection.
Redeemable shares are not entitled to be voted after notice of
redemption is mailed to the holders and a sum sufficient to redeem the
shares has been deposited with a bank, trust company or other financial
institution under an irrevocable obligation to pay the holders of the
redemption price on surrender of the shares.
SECTION 2.13 ACTION BY SHAREHOLDERS WITHOUT A MEETING. Unless the
Articles of Incorporation or these Bylaws provide otherwise, action
required or permitted to be taken at a meeting of shareholders may be taken
without a meeting if the action is evidenced by one or more written
consents describing the action taken, signed by each shareholder entitled
to vote and delivered to the Secretary of the corporation for inclusion in
the minutes or for filing with the corporate records. Action taken under
this section is effective when all shareholders entitled to vote have
signed the consent, unless the consent specifies a different effective
date.
Any such writing may be received by the corporation by electronically
transmitted facsimile or other form of wire or wireless communication
providing the corporation with a complete copy thereof, including a copy of
the signature thereto. The shareholder so transmitting such a writing shall
furnish an original of such writing to the corporation, but the failure of
the corporation to receive or record such original writing shall not affect
the action so taken.
The record date for determining shareholders entitled to take action
without a meeting shall be the date the written consent is first received
by the corporation.
SECTION 2.14 VOTING BY BALLOT. Voting on any question or in any
election may be by voice vote unless the presiding officer shall order or
any shareholder shall demand that voting be by ballot.
SECTION 2.15 NO CUMULATIVE VOTING. No shareholder shall be permitted
to cumulate his or her votes.
SECTION 2.16 WAIVER OF NOTICE. When any notice is required to be given
to any shareholder, a waiver thereof in writing signed by the person
entitled to such notice, whether before, at, or after the time stated
therein, shall be equivalent to the giving of such notice.
The attendance of a shareholder at any meeting shall constitute a
waiver of notice, waiver of objection to defective notice of such meeting,
or a waiver of objection to the consideration of a particular matter at the
shareholder meeting unless the shareholder, at the beginning of the
meeting, objects to the holding of the meeting, the transaction of business
at the meeting, or the consideration of a particular matter at the time it
is presented at the meeting.
SECTION 2.17 PARTICIPATION BY ELECTRONIC MEANS. Any shareholder may
participate in any meeting of the shareholders by means of telephone
conference or similar communications equipment by which all persons
participating in the meeting can hear each other at the same time. Such
participation shall constitute presence in person at the meeting.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1 GENERAL POWERS. The business and affairs of the
corporation shall be managed by its Board of Directors.
SECTION 3.2 PERFORMANCE OF DUTIES. A director of the corporation shall
perform his or her duties as a director, including his or her duties as a
member of any committee of the board upon which he or she may serve, in
good faith, in a manner he or she reasonably believes to be in the best
interests of the corporation, and with such care as an ordinarily prudent
person in a like position would use under similar circumstances. In
performing his duties, a director shall be entitled to rely on information,
opinions, reports, or statements, including financial statements and other
financial data, in each case prepared or presented by persons and groups
listed in paragraphs (a), (b), and (c) of this Section 3.2; but he or she
shall not be considered to be acting in good faith if he or she has
knowledge concerning the matter in question that would cause such reliance
to be unwarranted. A person who so performs his or her other duties shall
not have any liability by reason of being or having been a director of the
corporation. Those persons and groups on whose information, opinions,
reports, and statements a director is entitled to rely are:
(a) One or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants, or other persons as to matters
which the director reasonably believes to be within such persons'
professional or expert competence; or
(c) A committee of the board upon which he or she does not serve, duly
designated in accordance with the provision of the Articles of
Incorporation or the Bylaws, as to matters within its designated authority,
which committee the director reasonably believes to merit confidence.
SECTION 3.3 NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be fixed from time to time by resolution
of the Board of Directors, but in no instance shall there be less than one
director. Each director shall hold office as prescribed by written
agreement, or until the next annual meeting of shareholders, or until his
or her successor shall have been elected and qualified. Directors need not
be residents of the State of Colorado or shareholders of the corporation.
There shall be a Chairman of the Board, who has been elected from
among the directors. He or she shall preside at all meetings of the
stockholders and of the Board of Directors. He or she shall have such other
powers and duties as may be prescribed by the Board of Directors.
There shall be at least two (2) independent directors as defined by the
Colorado Business Corporation Act of 1994, as amended.
SECTION 3.4 REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this Bylaw immediately
after, and at the same place as, the annual meeting of shareholders. The
Board of Directors may provide, by resolution, the time and place, either
within or without the State of Colorado, for the holding of additional
regular meetings without other notice than such resolution.
SECTION 3.5 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by or at the request of the President or any two
directors. The person or persons authorized to call special meetings of the
Board of Directors may fix any place, either within or without the State of
Colorado, as the place for holding any special meeting of the Board of
Directors called by them.
SECTION 3.6 NOTICE. Written notice of any special meeting of directors
shall be given as follows:
By mail to each director at his or her business address at least two
days prior to the meeting; or
By personal delivery, facsimile or telegram at least twenty-four hours
prior to the meeting to the business address of each director, or in the
event such notice is given on a Saturday, Sunday or holiday, to the
residence address of each director. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail, so addressed,
with postage thereon prepaid. If notice is given by facsimile, such notice
shall be deemed to be delivered when a confirmation of the transmission of
the facsimile has been received by the sender. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company.
Any director may waive notice of any meeting.
The attendance of a director at any meeting shall constitute a waiver
of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in
the notice or waiver of notice of such meeting.
When any notice is required to be given to a director, a waiver
thereof in writing signed by such director, whether before, at or after the
time stated therein, shall constitute the giving of such notice.
SECTION 3.7 QUORUM. A majority of the number of directors fixed by or
pursuant to Section 3.2 of this Article III, or if no such number is fixed,
a majority of the number of directors in office immediately before the
meeting begins, shall constitute a quorum for the transaction of business
at any meeting of the Board of Directors, but if less than such majority is
present at a meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice.
SECTION 3.8 MANNER OF ACTING. Except as otherwise required by law or
by the Articles of Incorporation, the affirmative vote of the majority of
the directors present at a meeting at which a quorum is present shall be
the act of the Board of Directors.
SECTION 3.9 INFORMAL ACTION BY DIRECTORS OR COMMITTEE MEMBERS. Unless
the Articles of Incorporation or these By-laws provide otherwise, any
action required or permitted to be taken at a meeting of the board of
directors or any committee designated by said board may be taken without a
meeting if the action is evidenced by one or more written consents
describing the action taken, signed by each director or committee member,
and delivered to the Secretary for inclusion in the minutes or for filing
with the corporate records. Action taken under this section is effective
when all directors or committee members have signed the consent, unless the
consent specifies a different effective date. Such consent has the same
force and effect as a unanimous vote of the directors or committee members
and may be stated as such in any document.
SECTION 3.10 PARTICIPATION BY ELECTRONIC MEANS. Any members of the
Board of Directors or any committee designated by such Board may
participate in a meeting of the Board of Directors or committee by means of
telephone conference or similar communications equipment by which all
persons participating in the meeting can hear each other at the same time.
Such participation shall constitute presence in person at the meeting.
SECTION 3.11 VACANCIES. Any vacancy on the Board of Directors may be
filled by the affirmative vote of a majority of the shareholders or the
Board of Directors. If the directors remaining in office constitute fewer
than a quorum of the board, the directors may fill the vacancy by the
affirmative vote of a majority of all the directors remaining in office.
If elected by the directors, the director shall hold office until the
next annual shareholders' meeting at which directors are elected. If
elected by the shareholders, the director shall hold office for the
unexpired term of his or her predecessor in office; except that, if the
director's predecessor was elected by the directors to fill a vacancy, the
director elected by the shareholders shall hold the office for the
unexpired term of the last predecessor elected by the shareholders.
If the vacant office was held by a director elected by a voting group
of shareholders, only the holders of shares of that voting group are
entitled to vote to fill the vacancy if it is filled by the shareholders,
and, if one or more of the remaining directors were elected by the same
voting group, only such directors are entitled to vote to fill the vacancy
if it is filled by the directors.
SECTION 3.12 RESIGNATION. Any director of the corporation may resign
at any time by giving written notice to the Secretary of the corporation.
The resignation of any director shall take effect upon receipt of notice
thereof or at such later time as shall be specified in such notice; and,
unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective. When one or more directors
shall resign from the board, effective at a future date, a majority of the
directors then in office, including those who have so resigned, shall have
power to fill such vacancy or vacancies, the vote thereon to take effect
when such resignation or resignations shall become effective.
SECTION 3.13 REMOVAL. Subject to any limitations contained in the
Articles of Incorporation, any director or directors of the corporation
may be removed at any time, with or without cause, in the manner provided in
the Colorado Business Corporation Act.
SECTION 3.14 COMMITTEES. By resolution adopted by a majority of the
Board of Directors, the directors may designate two or more directors to
constitute a committee, any of which shall have such authority in the
management of the corporation as the Board of Directors shall designate and
as shall be prescribed by the Colorado Business Corporation Act and Article
XI of these Bylaws.
SECTION 3.15 COMPENSATION. By resolution of the Board of Directors and
irrespective of any personal interest of any of the members, or the Board
of Directors, each director may be paid his or her expenses, if any, of
attendance at each meeting of the Board of Directors, and may be paid a
stated salary as director or a fixed sum for attendance at each meeting of
the Board of Directors or both. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving
compensation therefor.
SECTION 3.16 PRESUMPTION OF ASSENT. A director of the corporation who
is present at a meeting of the Board of Directors or committee of the board
at which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless (i) the director objects at the
beginning of the meeting, or promptly upon his or her arrival, to the
holding of the meeting or the transaction of business at the meeting and
does not thereafter vote for or assent to any action taken at the meeting,
(ii) the director contemporaneously requests that his or her dissent or
abstention as to any specific action taken be entered in the minutes of the
meeting, or (iii) the director causes written notice of his or her dissent
or abstention as to any specific action to be received by the presiding
officer or the meeting before its adjournment or by the corporation
promptly after the adjournment of the meeting. A director may dissent to a
specific action at a meeting, while assenting to others. The right to
dissent to a specific action taken at a meeting of the Board of Directors
or a committee of the board shall not be available to a director who voted
in favor of such action.
ARTICLE IV
OFFICERS
SECTION 4.1 NUMBER. The officers of the corporation shall be a
President, a Secretary, and a Treasurer, each of whom must be a natural
person who is eighteen years or older and shall be elected by the Board of
Directors. Such other officers and assistant officers as may be deemed
necessary may be elected or appointed by the Board of Directors. Any two or
more offices may be held by the same person.
SECTION 4.2 ELECTION AND TERM OF OFFICE. The officers of the corporation to
be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after the
annual meeting of the shareholders. If the election of officers shall not
be held at such meeting, such election shall be held as soon thereafter as
practicable. Each officer shall hold office until his successor shall have
been duly elected and shall have qualified or until his or her death or
until he shall resign or shall have been removed in the manner hereinafter
provided.
SECTION 4.3 REMOVAL AND RESIGNATION. Any officer or agent may be
removed by the Board of Directors at any time, with or without cause, but
such removal shall be without prejudice to the contract rights, if any, of
the person so removed. Election or appointment of an officer or agent shall
not of itself create contract rights.
An officer or agent may resign at any time by giving written notice of
resignation to the Secretary of the corporation. The resignation is
effective when the notice is received by the corporation unless the notice
specifies a later effective date.
SECTION 4.4 VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
SECTION 4.5 PRESIDENT. The President shall be the chief executive
officer of the corporation and, subject to the control of the Board of
Directors, shall, in general, supervise and control all of the business and
affairs of the corporation. He or she shall, when present, and in the
absence of a Chair of the Board, preside at all meetings of the
shareholders and of the Board of Directors. He or she may sign, with the
Secretary or any other proper officer of the corporation thereunto
authorized by the Board of Directors, certificates for shares of the
corporation and deeds, mortgages, bonds, contracts, or other instruments
which the Board of Directors has authorized to be executed, except in cases
where the signing and execution thereof shall be expressly delegated by the
Board of Directors or by these Bylaws to some other officer or agent of the
corporation, or shall be required by law to be otherwise signed or
executed; and in general shall perform all duties incident to the office of
President and such other duties as may be prescribed by the Board of
Directors from time to time.
SECTION 4.6 VICE PRESIDENT. If elected or appointed by the Board of
Directors, the Vice President (or in the event there be more than one vice
president, the vice presidents in the order designated at the time of their
election, or in the absence of any designation, then in the order of their
election) shall, in the absence of the President or in the event of his or
her death, inability or refusal to act, perform all duties of the
President, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. Any Vice President may sign,
with the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary, certificates for shares of the corporation; and shall
perform such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.
SECTION 4.7 SECRETARY. The Secretary shall: (a) prepare and maintain as
permanent records the minutes of the proceedings of the shareholders and
the Board of Directors, a record of all actions taken by the shareholders
or Board of Directors without a meeting, a record of all actions taken by a
committee of the Board of Directors in place of the Board of Directors on
behalf of the corporation, and a record of all waivers of notice and
meetings of shareholders and of the Board of Directors or any committee
thereof (b) ensure that all notices are duly given in accordance with the
provisions of these Bylaws and as required by law, (c) serve as custodian
of the corporate records and of the seal of the corporation and affix the
seal to all documents when authorized by the Board of Directors, (d) keep
at the corporation's registered office or principal place of business a
record containing the names and addresses of all shareholders in a form
that permits preparation of a list of shareholders arranged by voting group
and by class or series of shares within each voting group, that is
alphabetical within each class or series and that shows the address of, and
the number of shares of each class or series held by, each shareholder,
unless such a record shall be kept at the office of the corporation's
transfer agent or registrar, (e) maintain at the corporation's principal
office the originals or copies of the corporation's Articles of
Incorporation, Bylaws, minutes of all shareholders' meetings and records of
all action taken by shareholders without a meeting for the past three
years, all written communications within the past three years to
shareholders as a group or to the holders of any class or series of shares
as a group, a list of the names and business addresses of the current
directors and officers, a copy of the corporation's most recent corporate
report filed with the Secretary of State, and financial statements showing
in reasonable detail the corporation's assets and liabilities and results
of operations for the last three years, (f) have general charge of the
stock transfer books of the corporation, unless the corporation has a
transfer agent, (g) authenticate records of the corporation, and (h) in
general, perform all duties incident to the office of secretary and such
other duties as from time to time may be assigned to him by the president
or by the board of the Board of Directors. Assistant Secretaries, if any,
shall have the same duties and powers, subject to supervision by the
Secretary. The directors and/or shareholders may however respectively
designate a person other than the Secretary or Assistant Secretary to keep
the minutes of their respective meetings.
Any books, records, or minutes of the corporation may be in written
form or in any form capable of being converted into written form within a
reasonable time.
SECTION 4.8 TREASURER. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
corporation; (b) receive and give receipts for moneys due and payable to
the corporation from any source whatsoever, and deposit all such moneys in
the name of the corporation in such banks, trust companies or other
depositories as shall be selected in accordance with the provisions of
Article V of these Bylaws; and (c) in general perform all of the duties
incident to the office of Treasurer and such other duties as from time to
time may be assigned to him or her by the President or by the Board of
Directors.
SECTION 4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
Assistant Secretaries, when authorized by the Board of Directors, may sign
with the Chair or Vice Chair of the Board of Directors or the President or
a Vice President certificates for shares of the corporation the issuance of
which shall have been authorized by a resolution of the Board of Directors.
The Assistant Secretaries and Assistant Treasurers, in general, shall
perform such duties as shall be assigned to them by the Secretary or the
Treasurer, respectively, or by the President or the Board of Directors.
SECTION 4.10 BONDS. If the Board of Directors by resolution shall so
require, any officer or agent of the corporation shall give bond to the
corporation in such amount and with such surety as the Board of Directors
may deem sufficient, conditioned upon the faithful performance of their
respective duties and offices.
SECTION 4.11 SALARIES. The salaries of the officers shall be fixed from
time to time by the Board of Directors and no officer shall be prevented
from receiving such salary by reason of the fact that he is also a director
of the corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 5.1 CONTRACTS. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the corporation,
and such authority may be general or confined to specific instances.
SECTION 5.2 LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such authority
may be general or confined to specific instances.
SECTION 5.3 CHECKS, DRAFTS, ETC. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued
in the name of the corporation shall be signed by such officer or officers,
agent or agents of the corporation and in such manner as shall from time to
time be determined by resolution of the Board of Directors.
SECTION 5.4 DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositories as the
Board of Directors may select.
ARTICLE VI
SHARES, CERTIFICATES FOR SHARES
AND TRANSFER OF SHARES
SECTION 6.1 REGULATION. The Board of Directors may make such rules and
regulations as it may deem appropriate concerning the issuance, transfer
and registration of certificates for shares of the corporation, including
the appointment of transfer agents and registrars.
SECTION 6.2 SHARES WITHOUT CERTIFICATES. Unless otherwise provided by
the Articles of Incorporation or these Bylaws, the board of directors may
authorize the issuance of any of its classes or series of shares without
certificates. Such authorization shall not affect shares already
represented by certificates until they are surrendered to the corporation.
Within a reasonable time following the issue or transfer of shares
without certificates, the corporation shall send the shareholder a complete
written statement of the information required on certificates by the
Colorado Business Corporation Act.
SECTION 6.3 CERTIFICATES FOR SHARES. If shares of the corporation are
represented by certificates, the certificates shall be respectively
numbered serially for each class of shares, or series thereof, as they are
issued, shall be impressed with the corporate seal or a facsimile thereof,
and shall be signed by the Chair or Vice Chair of the Board of Directors or
by the President or a Vice President and by the Treasurer or an Assistant
Treasurer or by the Secretary or an Assistant Secretary; provided that such
signatures may be facsimile if the certificate is countersigned by a
transfer agent, or registered by a registrar other than the corporation
itself or its employee. Each certificate shall state the name of the
corporation, the fact that the corporation is organized or incorporated
under the laws of the State of Colorado, the name of the person to whom
issued, the date of issue, the class (or series of any class), and the
number of shares represented thereby. A statement of the designations,
preferences, qualifications, limitations, restrictions and special or
relative rights of the shares of each class shall be set forth in full or
summarized on the face or back of the certificates which the corporation
shall issue, or in lieu thereof, the certificate may set forth that such a
statement or summary will be furnished to any shareholder upon request
without charge. Each certificate shall be otherwise in such form as may be
prescribed by the Board of Directors and as shall conform to the rules of
any stock exchange on which the shares may be listed.
The corporation shall not issue certificates representing fractional
shares and shall not be obligated to make any transfers creating a
fractional interest in a share of stock. The corporation may, but shall not
be obligated to, issue scrip in lieu of any fractional shares, such scrip
to have terms and conditions specified by the Board of Directors.
SECTION 6.4 CANCELLATION OF CERTIFICATES. All certificates surrendered
to the corporation for transfer shall be canceled and no new certificates
shall be issued in lieu thereof until the former certificate for a like
number of shares shall have been surrendered and canceled, except as herein
provided with respect to lost, stolen or destroyed certificates.
SECTION 6.5 LOST, STOLEN OR DESTROYED CERTIFICATES. Any shareholder
claiming that his certificate for shares is lost, stolen or destroyed may
make an affidavit or affirmation of that fact and lodge the same with the
Secretary of the corporation, accompanied by a signed application for a new
certificate. Thereupon, and upon the giving of a satisfactory bond of
indemnity to the corporation not exceeding an amount double the value of
the shares as represented by such certificate (the necessity for such bond
and the amount required to be determined by the President and Treasurer of
the corporation), a new certificate may be issued of the same tenor and
representing the same number, class and series of shares as were
represented by the certificate alleged to be lost, stolen or destroyed.
SECTION 6.6 TRANSFER OF SHARES. Subject to the terms of any
shareholder agreement relating to the transfer of shares or other transfer
restrictions contained in the Articles of Incorporation or authorized
therein, shares of the corporation shall be transferable on the books of
the corporation by the holder thereof in person or by his duly authorized
attorney, upon the surrender and cancellation of a certificate or
certificates for a like number of shares. Upon presentation and surrender
of a certificate for shares properly endorsed and payment of all taxes
therefor, the transferee shall be entitled to a new certificate or
certificates in lieu thereof. As against the corporation, a transfer of
shares can be made only on the books of the corporation and in the manner
hereinabove provided, and the corporation shall be entitled to treat the
holder of record of any share as the owner thereof and shall not be bound
to recognize any equitable or other claim to or interest in such share on
the part of any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by the statutes of the State of
Colorado.
ARTICLE VII
FISCAL YEAR
THE FISCAL YEAR OF THE CORPORATION SHALL END ON THE 31{ST} DAY OF
DECEMBER IN EACH CALENDAR YEAR.
ARTICLE VIII
DISTRIBUTIONS
The Board of Directors may from time to time declare, and the
corporation may pay, distributions on its outstanding shares in the manner
and upon the terms and conditions provided by the Colorado Business
Corporation Act and its Articles of Incorporation.
ARTICLE IX
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the
corporation and the state of incorporation and the words "CORPORATE SEAL."
ARTICLE X
The Board of Directors shall have power, to the maximum extent
permitted by the Colorado Business Corporation Act, to make, amend and
repeal the Bylaws of the corporation at any regular or special meeting of
the board unless the shareholders, in making, amending or repealing a
particular Bylaw, expressly provide that the directors may not amend or
repeal such Bylaw. The shareholders also shall have the power to make,
amend or repeal the Bylaws of the corporation at any annual meeting or at
any special meeting called for that purpose.
AMENDMENTS
ARTICLE XI
EXECUTIVE COMMITTEE
SECTION 11.1 APPOINTMENT. The Board of Directors by resolution adopted
by a majority of the full Board, may designate two or more of its members
to constitute an Executive Committee. The designation of such Committee and
the delegation thereto of authority shall not operate to relieve the Board
of Directors, or any member thereof, of any responsibility imposed by law.
SECTION 11.2 AUTHORITY. The Executive Committee, when the Board of
Directors is not in session, shall have and may exercise all of the
authority of the Board of Directors except to the extent, if any, that such
authority shall be limited by the resolution appointing the Executive
Committee and except also that the Executive Committee shall not have the
authority of the Board of Directors in reference to authorizing
distributions, filling vacancies on the Board of Directors, authorizing
reacquisition of shares, authorizing and determining rights for shares,
amending the Articles of Incorporation, adopting a plan of merger or
consolidation, recommending to the shareholders the sale, lease or other
disposition of all or substantially all of the property and assets of the
corporation otherwise than in the usual and regular course of its business,
recommending to the shareholders a voluntary dissolution of the corporation
or a revocation thereof, or amending the Bylaws of the corporation.
SECTION 11.3 TENURE AND QUALIFICATIONS. Each member of the Executive
Committee shall hold office until the next regular annual meeting of the
Board of Directors following his or her designation and until his or her
successor is designated as a member of the Executive Committee and is
elected and qualified.
SECTION 11.4 MEETINGS. Regular meetings of the Executive Committee may
be held without notice at such time and places as the Executive Committee
may fix from time to time by resolution. Special meetings of the Executive
Committee may be called by any member thereof upon not less than one day's
notice stating the place, date and hour of the meeting, which notice may be
written or oral, and if mailed, shall be deemed to be delivered when
deposited in the United States mail addressed to the member of the
Executive Committee at his or her business address. Any member of the
Executive Committee may waive notice of any meeting and no notice of any
meeting need be given to any member thereof who attends in person. The
notice of a meeting of the Executive Committee need not state the business
proposed to be transacted at the meeting.
SECTION 11.5 QUORUM. A majority of the members of the Executive
Committee shall constitute a quorum for the transaction of business at any
meeting thereof, and action of the Executive Committee must be authorized
by the affirmative vote of a majority of the members present at a meeting
at which a quorum is present.
SECTION 11.6 INFORMAL ACTION BY EXECUTIVE COMMITTEE. Any action
required or permitted to be taken by the Executive Committee at a meeting
may be taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the members of the Executive
Committee entitled to vote with respect to the subject matter thereof.
SECTION 11.7 VACANCIES. Any vacancy in the Executive Committee may be
filled by a resolution adopted by a majority of the full Board of
Directors.
SECTION 11.8 RESIGNATIONS AND REMOVAL. Any member of the Executive
Committee may be removed at any time with or without cause by resolution
adopted by a majority of the full Board of Directors. Any member of the
Executive Committee may resign from the Executive Committee at any time by
giving written notice to the President or Secretary of the corporation, and
unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 11.9 PROCEDURE. The Executive Committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall
not be inconsistent with these Bylaws. It shall keep regular minutes of its
proceedings and report the same to the Board of Directors for its
information at the meeting thereof held next after the proceedings shall
have been taken.
ARTICLE XII
EMERGENCY BY-LAWS
The Emergency Bylaws provided in this Article XII shall be operative
during any emergency in the conduct of the business of the corporation
resulting from a catastrophic event that prevents the normal functioning of
the offices of the Corporation, notwithstanding any different provision in
the preceding articles of the Bylaws or in the Articles of Incorporation of
the corporation or in the Colorado Business Corporation Act. To the extent
not inconsistent with the provisions of this Article, the Bylaws provided
in the preceding articles shall remain in effect during such emergency and
upon its termination the Emergency Bylaws shall cease to be operative.
During any such emergency:
(a) A meeting of the Board of Directors may be called by any officer
or director of the corporation. Notice of the time and place of the meeting
shall be given by the person calling the meeting to such of the directors
as it may be feasible to reach by any available means of communication.
Such notice shall be given at such time in advance of the meeting as
circumstances permit in the judgment of the person calling the meeting.
(b) At any such meeting of the Board of Directors, a quorum shall
consist of the number of directors in attendance at such meeting.
(c) The Board of Directors, either before or during any such
emergency, may, effective in the emergency, change the principal office or
designate several alternative principal offices or regional offices, or
authorize the officers so to do.
(d) The Board of Directors, either before or during any such
emergency, may provide, and from time to time modify, lines of succession
in the event that during such an emergency any or all officers or agents of
the corporation shall for any reason be rendered incapable of discharging
their duties.
(e) No officer, director or employee acting in accordance with these
Emergency Bylaws shall be liable except for willful misconduct.
(f) These Emergency Bylaws shall be subject to repeal or change by
further action of the Board of Directors or by action of the shareholders,
but no such repeal or change shall modify the provisions of the next
preceding paragraph with regard to action taken prior to the time of such
repeal or change. Any amendment of these Emergency Bylaws may make any
further or different provision that may be practical and necessary for the
circumstances of the emergency.
EXHIBIT IV
DISCLOSURE SCHEDULE
2.1 Organization, Standing and Qualification.
0000 Xxxxxxx Xxxx - XXXXX 000
XXXXXXXX, XXXXXXX 000000
XXX
0000 XXXXX XXXXX - XXXXX 000
XXXXXX, XX X0X0X0
XXXXXX
00X XXXXX XX0/00
00000 XXXXXXXX XXXX, XXXXXXXX
XXXXXXXX
CACHESTREAM QUALIFIED TO DO BUSINESS AS A FOREIGN CORPORATION IN GEORGIA;
OTTAWA, CANADA; AND MALYASIA.
2.5 CAPITALIZATION
STOCKHOLDER NAME SHARES PRICE PERCENTAGE
ISSUED PER OWNED
SHARE
XXXXXXX X. XXXXX 75,000 0.01000 1.38%
Q6 TECHNOLOGIES, INC. 1,500,000 0.66667 41.74%
Q6 GROUP LLC 75,000 0.01000 1.27%
XXXXXX XXXXXXXX 75,000 0.01000 1.27%
THE XXXXXX XXXXXXXX FAMILY TRUST 35,000 0.66670 0.59%
XXXXXX XXXXXXXX 88,529 0.66670 1.65%
THE XXXXXX X XXXXXX FAMILY TRUST 70,000 0.66670 1.19%
XXXXXX X. XXXXXX 44,706 0.66670 0.80%
THE XXXXX-XXXXXX FAMILY TRUST 61,765 0.66670 1.05%
Q6 TECHNOLOGIES, INC. 900,000 1.11111
XXXXXXX XXXXXXXXXX 60,000 1.66667 1.02%
XXXX XXX WEE 306,960 0.01815 5.21%
Q6 TECHNOLOGIES, INC. 60,000 1.66667
ASIA TRANS PACIFIC INVESTMENT CORPORATION 2,093,040 0.01815 35.51%
XXXX XXXXXXXXX 60,000 1.66667 1.02%
DUNWOODY BROKERAGE SERVICES, INC. 159,570 1.66667 2.71%
CROWN LEGACY, LP 13,333 0.00000 0.23%
XXXXXXX XXXXXX 9,333 0.00000 0.16%
XXXXXXX XXXX INVESTMENTS, INC. 13,333 0.00000 0.23%
XXX XXXXX 16,000 0.00000 0.32%
XXXXXXX XXXX 33,300 0.00000 0.57%
XXX LEADER 14,667 0.00000 0.25%
XXXXXXXX XXXXX 2,717 0.00000 0.05%
XXXX XXX 1,183 0.00000 0.02%
XXXXXX XXXX 2,480 0.00000 0.04%
XXXXXXX XXXXXXX 1,297 0.00000 0.02%
XXXXX XXXXXX 4,674 0.00000 0.08%
XXXX XXX 1,824 0.00000 0.03%
XXXXX XXX 4,178 0.00000 0.07%
XXXX XXXXX 2,035 0.00000 0.03%
XXXXXXX X. XXXXX 6,301 0.00000
XXX XXXXX 2,891 0.00000
XXXXX XXXXXXX 1,364 0.00000 0.02%
XXXXXXX XXXX 5,962 0.00000 0.10%
XXXXXX XXXX 10,312 0.00000 0.17%
XXXXXX X XXXXXX 2,664 0.00000
XXXXXXXXX XXXXXXXXX 1,780 0.00000 0.03%
XXXX XXXXXXX 1,780 0.00000 0.03%
XXXXX XXXXXX 357 0.00000 0.01%
XXXXXX XXXXXXXX 8,599 0.00000
250 K BRIDGE FINANCING 66,667 0.00000 1.13%
TOTAL SHARES ISSUED 5,893,601
Warrants Issued
Warrant Holder Shares Price Per Share
Q6 Technologies, Inc - Mgmt Fee Deferral 37,500 $1.6667
Total Warrants Issued 37,500
ECOM Transaction
CacheStream plans to borrow up to an additional $350,000 from eCom
Corporation ("eCom"). The $350,000 will be convertible into Providence
common stock and warrants after the merger. In addition, a $450,000
promissory note from CacheStream will become convertible into Providence
common stock and warrants and eCom will have the right to purchase
$1,000,000 of Providence stock and warrants.
2.8 ADDITIONAL INFORMATION.
2.8.1 REAL PROPERTY.
NONE
2.8.2 MACHINERY AND EQUIPMENT.
(
EQUIPMENT LOCATED AT:
0000 XXXXXXX XXXX
XXXXX 000
XXXXXXXX, XXXXXXX 00000
DATE PURCHASED DESCRIPTION SERIAL NUMBER/SYSTEM TAG
COMPUTERS
2/5/00 Sony F430 PIII
3/14/00 Latitude CPxH5000GT FBE79
3/14/00 Latitude CPxH5000GT FBE7M
3/14/00 Latitude CPxH5000GT FBE7V
3/14/00 Latitude CPxH5000GT FBE7W
3/17/00 Sony F430 PIII 0003-865-482-324
3/14/00 Panaboard W/Stand
3/30/00 Latitude CPiV466GT FHJOX
4/6/00 Latitude CPxH500GT 1IML7
4/1/00 Dell Poweredge 2400 Base 91LV00B
5/30/00 Dell Poweredge 2400 Base 8QQO00B
6/9/00 Phaser740 Plus Color Printer 9HMEVD40138
7/1/00 Dimension L Series PIII BH6420B
7/11/00 Cisco 1605 Router
7/11/00 Dell Linux Server J23N20B
7/19/00 Systemax Venture T733-6 3575134
9/22/00 2-Systemax Venture T733 3607956/3836428
9/22/00 4-Systemax Venture T733 3638433/6883/3881/8436
9/25/00 Systemax 15" Monitor
9/26/00 4-Systemax 15" Monitors
9/27/00 Systemax 15" Monitor
0/00/00 Xxxx Xxxxxxxxx X000 00X0X00
1/31/00 Dell Xxxxxxxxx X000 XXXXX00
2/20/01 Systemax Venture 750d 3959417
2/20/01 Systemax Venture 750d 3958762
2/20/01 Systemax Venture 750d 3959424
2/20/01 Systemax Venture 750d 3959416
2/20/01 Systemax Excite T800 3907049
2/20/01 Systemax Excite T800 3907064
3/21/01 Sun Ultra Workstation PR87010771
2/5/00 Sony F430 PIII
3/14/00 Latitude CPxH5000GT FBE79
3/14/00 Latitude CPxH5000GT FBE7M
3/14/00 Latitude CPxH5000GT FBE7V
3/14/00 Latitude CPxH5000GT FBE7W
3/17/00 Sony F430 PIII 0003-865-482-324
3/14/00 Panaboard W/Stand
TELEPHONE SYSTEM
06/01/00 INTERTEL TELEPHONE SYSTEM
2.8.3 RECEIVABLES.
None
2.8.4 PAYABLES.
Xxxxx Rents, Inc. 331.48
American Express 6,272.00
AT&T Wireless Services 1,517.20
BellSouth 34.00
Xxxxxx Xxxxxxx 440.76
Xxxxxxx Xxxx 582.54
Xxxxxx & Whitney 52,652.90
Duplicating Products, Inc 44.76
Global Computer Supplies 1,888.07
Xxxxxxx Xxxxx 2,963.87
Xxxxxxxx Xxxxx 8,324.55
MCI Worldcom Communications 6,843.21
MCI Worldcom Conferencing 418.61
NxGEN Data Research, Inc 30,000.00
Paul, Hastings, Xxxxxxxx & 12,092.98
Principal Life 4,575.37
Q6 Technologies 22,500.00
Xxxxxx Xxxx 2,070.85
Streaming Magazine 400.00
Trademark Research Corp 1,500.00
Total 155,453.15
2.8.5 CONTRACTS.
CacheStream has entered into an eleven month sublease for its offices at:
0000 XXXXXXX XXXX
XXXXX 000
XXXXXXXX, XX 00000
MONTHLY RENT IS $7,783.50 AND EXPIRES ON JANUARY 31, 2001.
CACHE HAS ENTERED INTO THE EMPLOYMENT AGREEMENTS DETAILED IN SCHEDULE
2.8.7.
CACHE HAS ISSUED A WARRANT FOR 37,500 SHARES OF STOCK TO Q6 TECHNOLOGIES,
INC.
CACHE HAS ENTERED SOFTWARE LICENSE AGREEMENTS WITH THE FOLLOWING LICENSEES:
WORLDSPACE CORPORATION
ETNETWORKS, INC.
INTELSAT
VIACAST
2.8.6 LICENSES; PERMITS.
NONE
2.8.7 Employment Agreements
Employment Agreements
COMPENSATION
OFFICER/MANAGER NAME BASE INCENTIVE
Xxxxxxx X. Xxxxx $180,000 $ 90,000
XXXXXX XXXX $150,000 40,000
XXXXXXX XXXX $150,000 40,000
XXXXX XXXXXX $150,000 40,000
XXXXX XXX $110,000 40,000
XXX XXXXXX $100,000 50,000
Employee Covenants Agreements
EMPLOYEE NAME SALARY
Xxxxxxxx X. Xxxxx $ 55,000
XXXXXX X. XXX III $ 70,000
XXXXXX XXXX $ 90,000
XXXXX XXXXXXX $ 70,000
XXXXXXX XXXXXXX $ 50,000
XXXX XXXXX $ 75,000
XXX XXXXX $ 110,000
XXXX XXX $ 75,000
2.8.8 INSURANCE POLICIES.
CACHE HAS A GROUP HEALTH INSURANCE POLICY WITH PRINCIPAL LIFE INSURANCE,
AND A GROUP DENTAL INSURANCE POLICY WITH HUMANA, INC.
CACHE WILL OBTAIN THE FOLLOWING INSURANCE POLICIES WITHIN 30 (THIRTY) DAYS
OF CLOSING:
FIRE AND THEFT
ERRORS AND OMISSIONS
DIRECTORS AND OFFICERS
XXXXXXX'X COMPENSATION
2.8.9 TRANSACTIONS WITH MANAGEMENT.
CACHE has entered into the employment agreements detailed in Schedule
2.8.7. CACHE has issued a warrant for 37,500 shares of stock to Q6
Technologies, Inc. None of the officers, directors, stockholders, or
employees of CACHE owns, leases or licenses any interest in any asset used
by CACHE in its business, other than solely by and through ownership of the
capital stock of CACHE.
2.10 Absence of Certain Changes
All operations of CacheStream in Malaysia are in the process of being
discontinued. The eight Malaysian employees were TERMINATED AS OF APRIL
30, 2001. THE OFFICE WILL BE SHUT DOWN OVER THE REMAINDER OF THE YEAR AS
THE CORPORATE ENTITY IS DISSOLVED. CERTAIN EMPLOYEES MAY BE RETAINED ON A
CONTRACT BASIS FROM TIME TO TIME AS NEEDED.
CACHESTREAM HAS CONTINUED TO BORROW CAPITAL FOR OPERATIONS AND HAS
CONTINUED TO INCUR CONSOLIDATED LOSSES SINCE SEPTEMBER 30, 2000.
2.13 TAXES AND RETURNS.
CACHESTREAM HAS FILED AN EXTENSION FOR FISCAL 2000 CORPORATION INCOME
TAXES.
EXHIBIT VI
CACHE INVESTMENT REPRESENTATION LETTER
(To be distributed to CACHE Shareholders prior to the Closing Date)
________________________, 2001
Providence Capital IX, Inc.
Attn: Xxxx X. Xxxxxxx, Esq.
C/O Nadeau & Xxxxxxx, P.C.
0000 Xxxxx Xxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
RE: INVESTMENT REPRESENTATION LETTER - PLAN AND AGREEMENT OF MERGER
BETWEEN CACHESTREAM CORPORATION AND PROVIDENCE CAPITAL IX, INC.
Gentlemen:
In connection with the exchange of all of the outstanding capital stock of
CACHESTREAM CORPORATION, a Colorado corporation (the "Company"), of which I
am a stockholder, with PROVIDENCE CAPITAL IX, INC., a Colorado corporation
("Providence"), pursuant to a merger of the Company with and into
Providence, converting the Company's common stock into the right to receive
a certain number of shares of Providence's common stock, par value $.001
per share, as outlined in the Plan and Agreement of Merger (the "Plan of
Merger"), the undersigned hereby makes the following certifications and
representations with respect to the common stock that is being received by
the undersigned pursuant to the Plan of Merger (the "Shares").
The undersigned is EITHER an "accredited investor," as that term is defined
in Regulation D of the Securities Act of 1933, as amended (the "Securities
Act") or prior to the acquisition of the Shares, (i) has been given an
opportunity by Providence to ask questions and receive answers concerning
the terms and conditions of the Merger and to obtain any additional
information from Providence that is necessary to make an informed decision
regarding the Merger, and (ii) has been advised by Providence of the
limitations on resale.
Page 3
The Board of Directors
_____________________, 2001
_____________________
By answering the questions listed below, the undersigned further represents
that the undersigned has the educational background and the business and
financial knowledge and experience necessary to evaluate the prospective
investment in Providence:
1. PLEASE DESCRIBE YOUR EDUCATIONAL BACKGROUND, INDICATING DEGREES
OBTAINED.
* a) PLEASE STATE YOUR PRESENT OCCUPATION, EMPLOYER, PRIMARY
BUSINESS ADDRESS, AND BUSINESS PHONE NUMBER.
(b) PLEASE DESCRIBE YOUR OCCUPATIONAL HISTORY BRIEFLY. SPECIFIC
EMPLOYERS NEED NOT BE IDENTIFIED. WHAT IS SOUGHT IS A
DESCRIPTION OF YOUR EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS.
3. PLEASE INDICATE YOUR PRIOR EXPERIENCE IN INVESTING IN NEW,
SPECULATIVE, COMPANIES.
4. PLEASE INDICATE ANY OTHER RELEVANT INVESTMENT EXPERIENCE.
5. PLEASE DESCRIBE ANY PRE-EXISTING PERSONAL OR BUSINESS RELATIONSHIP
BETWEEN YOU AND
PROVIDENCE, OR ANY OF ITS OFFICERS OR DIRECTORS.
6. IF YOU HAVE A BACKGROUND OR EXPERIENCE IN THE BUSINESS CONDUCTED BY
PROVIDENCE, PLEASE DESCRIBE.
The undersigned represents and warrants that the undersigned is acquiring
the Shares solely for the undersigned's account for investment and not with
a view to or for sale or distribution of the Shares or any part thereof.
The undersigned also represents that the entire legal and beneficial
interest of the Shares the undersigned is acquiring is being acquired for,
and will be held for, the undersigned's account only.
The undersigned understands that the Shares have not been registered under
the Securities Act on the basis that no distribution or public offering of
the Shares is to be effected. The undersigned realizes that the basis for
the exemption may not be present if, notwithstanding the undersigned's
representations, the undersigned has in mind merely acquiring the Shares
for a fixed or determinable period in the future, or for a market rise, or
for sale if the market does not rise. The undersigned has no such
intention.
The undersigned recognizes that the Shares being acquired by the
undersigned must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration
is available. The undersigned is aware that the Shares may not be sold
pursuant to Rule 144 adopted under the Securities Act ("Rule 144") unless
certain conditions are met including, among other things, (1) the
availability of certain current public information about Providence, (2)
the passage of required holding periods under Rule 144 and (3) compliance
with limitations on the volume of Shares which may be sold during any
three-month period. The undersigned acknowledges that the certificates
representing the Shares will be legended to reflect these restrictions.
The undersigned further agrees not to make any disposition of all or any
part of the Shares being acquired in any event unless and until:
1. The Shares are transferred pursuant to Rule 144; or
2. PROVIDENCE SHALL HAVE RECEIVED A LETTER SECURED BY THE UNDERSIGNED
FROM THE SECURITIES AND EXCHANGE COMMISSION STATING THAT NO ACTION
WILL BE RECOMMENDED TO THE COMMISSION WITH RESPECT TO THE PROPOSED
DISPOSITION; OR
3. There is then in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with said registration statement; or
4. (I) THE UNDERSIGNED SHALL HAVE NOTIFIED PROVIDENCE OF THE PROPOSED
DISPOSITION AND SHALL HAVE FURNISHED PROVIDENCE WITH A DETAILED
STATEMENT OF THE CIRCUMSTANCES SURROUNDING THE PROPOSED DISPOSITION
AND (II) THE UNDERSIGNED SHALL HAVE FURNISHED PROVIDENCE WITH EVIDENCE
SATISFACTORY TO PROVIDENCE THAT SUCH DISPOSITION WILL NOT REQUIRE
REGISTRATION OF SUCH SHARES UNDER THE SECURITIES ACT.
SIGNATURE
_________________________________
PRINT NAME
__________________________________
Page 2
Xx. Xxxxxxx X. Xxxxx
________________, 2001
_____________________
EXHIBIT VII
LEGAL OPINIONS
_______________________, 2001
CONFIDENTIAL
Xx. Xxxxxxx X. Xxxxx
Cachestream Corporation
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
RE: PLAN AND AGREEMENT OF MERGER DATED ____________________, 2001
BETWEEN PROVIDENCE CAPITAL IX, INC. AND CACHESTREAM CORPORATION
Dear Xx. Xxxxx:
We render herewith our opinion as to certain matters pursuant to the Plan
and Agreement of Merger dated _______________________, 2001 (the "Plan"),
made by and among Providence Capital IX, Inc. (the "Surviving Corporation"
or "Providence") and CACHESTREAM CORPORATION, a Colorado corporation (the
"Disappearing Corporation"), involved in the Section 4(2), 4(6) or
Regulation D private placement of common shares of Providence (the
"Shares"), conducted in compliance with the Securities Act of 1933 (the
"Act").
In rendering our opinion, we have examined and relied upon the following:
(a) The Articles of Incorporation of the Surviving Corporation filed
with the State of Colorado.
(b) The materials contained in the Plan, Disclosure Schedules and
Certificates (the "Confidential Documents") concerning the transactions
contemplated thereby and the issuance by the Surviving Corporation of up to
thirteen million five hundred fifty-six thousand nine hundred eighty-two
(13,556,982) common shares (the " Shares") to the Shareholders of the
Disappearing Corporation on a pro rata basis;
(c) The Certificate of Good Standing dated ______________________,
2001, attached hereto as Exhibit "A" (the "Company's Certificate").
(d) Such other documents and instruments as we have deemed necessary
in order to enable us to render the opinions expressed herein.
Page 3
Xx. Xxxxxxx X. Xxxxx
________________, 2001
_____________________
For the purposes of rendering this opinion, we have assumed that no person
or entity has engaged in fraud or misrepresentation regarding the
inducement relating to, or the execution or delivery of, the documents
reviewed. Furthermore, we express no opinion as to the validity of any of
the assumptions, form, or content of any financial or statistical data
contained in the Confidential Documents. We do not assume any obligation
to advise officers, directors, their advisors or representatives of the
parties to the Plan, beyond the opinions specifically expressed herein.
The terms used in this opinion shall have the meaning ascribed to them in
the Plan and other documents relied upon in rendering our opinion.
SCOPE OF OPINION
This Opinion deals only with the specific legal issues explicitly addressed
herein. We have made no independent review with respect to factual matters
contained in the Documents and in any ancillary applicable documents and
have assumed that all factual matters are accurate and complete.
Notwithstanding anything to the contrary contained in this opinion, no
opinion is expressed with respect to any factual matters or any matters
involving the business judgment of the parties thereto.
GOVERNING LAW
The law covered by the opinions expressed herein is limited to the law of
the State of Colorado and the Federal law of the United States of America.
SCOPE OF REVIEW
For the purpose of rendering the opinions contained herein, we have
reviewed such documents and given consideration to such matters of law and
fact as we have deemed appropriate in our professional judgment, including,
but not limited to the Documents.
INFORMATION RELIED UPON
For the purpose of rendering the opinions contained herein, we have
reviewed such documents and given consideration to such matters of law and
fact as we have deemed appropriate in our professional judgment. We have
relied upon information (including statements having the effect of legal
conclusions) in certificates and other documents issued by government
officials, offices or agencies concerning the Company's property or status
(the "Public Authority Documents"'), which we reasonably believe to be an
appropriate source for the information provided, without (i) investigation
or (ii) analysis of any underlying data supporting information contained in
any certificate or other document.
Based upon the assumptions set forth below, our review of the above
documents and our reliance, as to factual matters, upon the representations
identified in paragraphs (a)-(d) above, and subject to the qualifications
listed herein, we are of the opinion that:
1. The Surviving Corporation is a duly organized and validly existing
corporation under the laws of the State of Colorado, and upon the
filing of required state documents with the appropriate
authorities, is fully authorized to transact the business in which
it is engaged in accordance with the Plan and as described in the
Confidential Documents.
2. The Shares, when issued, will be validly and legally issued under
the laws of the State of Colorado. The Shares, when issued, will
be fully paid and non-assessable.
3. The Shares, when issued, will conform in all material respects to
all statements concerning them contained in the Confidential
Documents.
4. In our opinion, the Shares have been validly authorized by the
Company.
5. The Plan has been duly authorized, executed and delivered and is a
valid and binding agreement of the Surviving Corporation, having
adequate authorization and having taken all action necessary to
authorize the indemnification provisions contained therein;
provided, however, that no opinion is rendered as to the validity
or enforceability of such indemnification provisions insofar as
they are or may be held to be violative of public policy (under
either state or federal law) against such types of provisions in
the context of the offer, offer for sale, or sale of securities.
6. In addition to the Shares, the existing shareholders of Providence,
listed on Exhibit "C", attached hereto, hold an aggregate of
750,000 shares (the "Providence Commons Stock"). The shares of
Providence Common Stock are among those registered on the S-8.
ASSUMPTIONS
For the purposes of this Opinion, we have assumed, without investigation,
that:
(a) The Company holds the requisite title and rights to its property.
(b) The Company and Shareholders have satisfied those legal
requirements that are applicable to it to the extent necessary to make the
transactions described above (hereinafter the "Transactions") enforceable
against them.
(c) Each document submitted to me for review is accurate and complete;
each such document that is an original is authentic; each such document
that is a copy conforms to an authentic original; and all signatures on
each such document are authentic.
(d) Each Public Authority Document is accurate, complete and
authentic, and all official public records (including their property
indexing and filing) are accurate and complete.
(e) There has not been any mutual mistake of fact or
misunderstanding, fraud, duress or undue influence.
(f) The conduct of the Company, the Shareholders and any assigns has
complied with any requirement of good faith, fair dealing and
conscionability.
(g) The parties to the Transactions have acted in good faith and
without notice of any defense against the enforcement of any rights created
by, or adverse claim to any property or interest transferred or created as
part of, the Transactions.
(h) There are no agreements or understandings among the parties,
written or oral, and there is no usage of trade or course of prior dealing
among the parties that would, in either case, define, supplement or qualify
the terms of the Documents.
(i) All statutes, judicial and administrative decisions, and rules and
regulations of governmental agencies, constituting the law of the State of
Colorado, are generally available (i.e., in terms of access and
distribution following publication or other release) to lawyers practicing
in Colorado, and are in a format that makes legal research reasonable
feasible.
(j) The constitutionality or validity of a relevant statute, rule,
regulation or agency action is not in issue unless a reported decision in
Colorado has specifically addressed but not resolved, or has established
its' unconstitutionality or invalidity.
(k) The parties to the Transactions will not in the future take any
discretionary action (including a decision not to act) permitted under the
Documents that would result in a violation of law or constitute a breach or
default under the Documents.
(l) All parties to the Transactions will act in accordance with, and
will refrain from taking any action that is forbidden by, the terms and
conditions of the Documents.
NO ACTUAL KNOWLEDGE INCONSISTENT WITH ASSUMPTIONS
We have no actual knowledge that the assumptions set forth above and which
we have relied upon in rendering the opinions herein are false nor do we
have actual knowledge of facts that, under the circumstances, would make
our reliance on the information and assumptions unreasonable.
BANKRUPTCY AND INSOLVENCY EXCEPTION
The opinions expressed above are subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other similar laws
affecting the rights and remedies of creditors generally. This exception
includes without limitation the Federal Bankruptcy Code; all other Federal
and Colorado bankruptcy, insolvency, reorganization, receivership,
moratorium, arrangement and assignment for the benefit of creditors laws
that affect the rights and remedies of creditors generally (and not just
creditors of specific types of debtors); Colorado and Federal fraudulent
transfer and conveyance laws; and judicially developed doctrines relevant
to any of the foregoing laws, such as substantive consolidation of
entities.
EQUITABLE PRINCIPLES LIMITATION
The opinions expressed above are subject to the effect of general
principles of equity, whether applied by a court of law or equity. This
limitation includes principles:
(a) governing the availability of specific performance, injunctive
relief or other equitable remedies, which generally place the award of such
remedies, subject to certain guidelines' in the discretion of the court to
which application for such relief is made;
(b) affording equitable defenses (for example, waiver, laches and
estoppel) against a party seeking enforcement;
(c) requiring good faith and fair dealing in the performance and
enforcement of a contract by the party seeking its enforcement;
(d) requiring reasonableness in the performance and enforcement of a
contract by the party seeking its enforcement;
(e) requiring consideration of the materiality of (i) the breach and
(ii) the consequences of the breach to you;
(f) requiring consideration of the impracticability or impossibility
of performance at the time of attempted enforcement; and
(g) affording defenses based upon the unconscionability of the
enforcing party's conduct after the parties have entered into the contract.
OTHER QUALIFICATIONS
The opinions expressed above are subject to the effect of the application
of generally applicable rules of law that:
(a) limit or affect the enforcement of provisions of a contract that
purport to require waiver of the obligations of good faith, fair dealing,
diligence and reasonableness;
(b) provide that forum selection clauses in contracts are not
necessarily binding on the courts;
(c) limit the availability of a remedy under certain circumstances
where another remedy has been elected;
(d) limit the enforceability of provisions releasing, exculpating or
exempting a party from, or requiring indemnification of a party for,
liability for its own action or inaction, to the extent the action or
inaction involves gross negligence, recklessness, willful misconduct or
unlawful conduct;
(e) may, where less than all of a contract may be unenforceable, limit
the enforceability of the balance of the contract to circumstances in which
the unenforceable portion is not an essential part of the agreed exchange;
(f) govern and afford judicial discretion regarding the determination
of damages and entitlement to attorneys' fees and other costs;
(g) may permit a party who has materially failed to render or offer
performance required by the contract to cure that failure, unless (i)
permitting a cure would unreasonably hinder the aggrieved party from making
substitute arrangements for performance, or (ii) it was important in the
circumstances to the aggrieved party that performance occur by the date
stated in the contract;
(h) limit the enforceability of any provisions of any Document that
waives procedural, judicial or substantive rights, such as rights to
notice, right to a jury trial, statutes of limitations and marshaling of
assets; or
LEGAL ISSUES NOT ADDRESSED
This Opinion does not address legal issues, if any, arising under any of
the following:
(a) pension and employee benefit laws and regulations;
(b) antitrust and unfair competition laws and regulations;
(c) laws and regulations concerning filing and notice requirements
other than requirements applicable to charter-related documents such as
articles of merger;
(d) compliance with fiduciary duty requirements;
(e) environmental laws and regulations;
(f) land use and subdivision laws and regulations;
(g) tax laws and regulations;
(h) Federal patent and copyright laws and regulations and Federal and
state trademark and other intellectual property laws and regulations;
(i) racketeering laws and regulations;
(j) health and safety laws and regulations;
(k) labor laws and regulations;
(l) laws, regulations and policies concerning (i) national and local
emergency, (ii) possible judicial deference to acts of sovereign states,
and (iii) criminal and civil forfeiture laws; or
(m) other statutes of general application to the extent they provide
for criminal prosecution.
"ACTUAL KNOWLEDGE" DEFINED
For the purposes of this Opinion, the phrases "our actual knowledge" or
"actually known to us" mean the conscious awareness of facts or other
information (i) by the lawyers in this firm who have given substantive
legal attention to the representation of the Company in connection with the
Transactions, and (ii) solely as to information relevant to a particular
opinion, issue or confirmation regarding a particular factual matter, by
any lawyer in our firm who is primarily responsible for providing the
response concerning that particular opinion, issue or confirmation.
NO OBLIGATION TO UPDATE
The opinions herein are expressed as of the date of this Opinion, and we
undertake no obligation to advise you of changes of law or fact that occur
after the date of this Opinion.
RELIANCE UPON OPINION
Our opinion is limited to the specific opinions expressed above. No other
opinions are intended to be inferred therefrom. This opinion is addressed
to and is for the benefit solely of ______________________________ and its
Board of Directors, and no other person or persons shall be furnished a
copy of this opinion or are entitled to rely on the contents herein without
our express written consent. In the event that any of the facts are
different from those which have been furnished to us and upon which we have
relied, the conclusions as set forth above cannot be relied upon.
Very truly yours,
Xxxxxx & Xxxxxxx, P.C.
MTT/jet
cc:
EXHIBIT VIII
SCHEDULE OF EMPLOYEES
XXXXXXX X. XXXXX
XXXXXX XXXXXX
XXXXXX X. XXXX, XX.
XXXXXXX XXXX
XXXXX XXXXXX
XXXX XXX
XXXXX XXX
XXX XXXXX
XXXXXXXXX XXXXX
XXXXXXXXX XXXXXXXXX
XXXX XXXXXXX
XXXX XXX
XXXXXXX XXXXXXX
XXXX XXXXX
XXXXXX XXXX
XXXXXXXX XXXXX
XXXXX XXXXXXX
XXXXX XXXXXX
EXHIBIT IX
CERTIFICATE OF BOARD OF DIRECTORS
OF
CAPITALIZATION OF CACHESTREAM CORPORATION
CERTIFICATE
THE BOARD OF DIRECTORS
OF
CACHESTREAM CORPORATION
The following individuals represent that the following Section 2.5 of the
Plan and Agreement of Merger dated ____________________________, 2001 (the
"Plan"), made by and among PROVIDENCE CAPITAL IX, INC., a Colorado
corporation ("PROVIDENCE"), and CACHESTREAM CORPORATION ("CACHE"), a
Colorado corporation is an accurate representation as of the date of
execution of the Plan:
2:1:6 Capitalization of CACHE and Subsidiaries.
(a) The authorized capital stock of CACHE consists of twenty million
(20,000,000) shares of CACHE common stock, $.01 par value per share, of
which ____________________________________________ (__________) shares are
issued and outstanding or are reserved for issuance prior to the Closing
Date. The CACHE shares are validly issued, fully paid and non-assessable
and not subject to preemptive rights. Section 2.5 of the Disclosure
Schedule sets forth a true, complete and correct list of (i) the holders of
record of the issued and outstanding shares of CACHE common stock, and (ii)
all claims, commitments or agreements to which CACHE is a party or by which
it is bound, obligating CACHE to issue, deliver or sell, or to cause to be
issued, delivered or sold, additional shares of common stock of CACHE or
obligating CACHE to grant, extend or enter into any such option, warrant,
call, right or agreement with respect to its capital stock. There are, and
as of the Effective Time there will be, no agreements obligating CACHE to
redeem, repurchase or otherwise acquire the common stock of CACHE, or any
other securities issued by it, or to register the sale of the common stock
of CACHE under applicable securities laws. There are, and as of the
Effective Time there will be, no agreements or arrangements prohibiting or
otherwise restricting the payment of dividends or distributions to the
CACHE Shareholders by CACHE.
THE BOARD OF DIRECTORS,
CACHESTREAM CORPORATION
______________________________________
Xxxx X. Xxxxxx
______________________________________
Xxxxxxx X. Xxxxx
______________________________________
Xxxxxxx X. Xxxxx
DATED: ______________________________, 2001
EXHIBIT X
CERTIFICATE OF BOARD OF DIRECTORS OF PROVIDENCE
CERTIFICATE OF BOARD OF DIRECTORS
OF CAPITALIZATION
OF PROVIDENCE CAPITAL IX, INC.
The undersigned, being all the Directors of Providence Capital IX,
Inc. (the "Corporation"), hereby state that, as of the date hereof; the
statements below represent the Capitalization of a the Corporation and
Subsidiaries (if any):
(a) THE AUTHORIZED CAPITAL STOCK OF THE CORPORATION CONSISTS OF FIFTY
MILLION (50,000,000) SHARES OF PREFERRED STOCK, $.001 PAR VALUE PER
SHARE (THE "PREFERRED SHARES"), OF WHICH NO SHARES ARE OUTSTANDING;
AND FIFTY MILLION (50,000,000) SHARES OF THE CORPORATION'S COMMON
STOCK, $0.001 PAR VALUE PER SHARE, OF WHICH ONE MILLION SEVEN HUNDRED
THOUSAND (1,700,000) SHARES (THE "PROVIDENCE SHARES") ARE ISSUED AND
OUTSTANDING. THE PROVIDENCE SHARES ARE VALIDLY ISSUED, FULLY PAID AND
NON-ASSESSABLE AND NOT SUBJECT TO PREEMPTIVE RIGHTS. THERE ARE NO
AGREEMENTS OBLIGATING THE CORPORATION TO REDEEM, REPURCHASE OR
OTHERWISE ACQUIRE THE CAPITAL STOCK OF THE CORPORATION, OR ANY OTHER
SECURITIES ISSUED BY IT, OR TO REGISTER THE SALE OF THE CAPITAL STOCK
OF THE CORPORATION UNDER APPLICABLE SECURITIES LAWS. THERE ARE NO
AGREEMENTS OR ARRANGEMENTS PROHIBITING OR OTHERWISE RESTRICTING THE
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS TO THE CORPORATION'S
SHAREHOLDERS BY THE CORPORATION.
IN WITNESS WHEREOF, THE UNDERSIGNED DIRECTORS HAVE HEREUNTO SET THEIR
HANDS IN SAID CAPACITY THIS DAY OF APRIL, 2001
Xxxxxxx Xxxxxx, Jr.
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxx
EXHIBIT XI
CACHESTREAM CORPORATION
Investment Banking Services Agreement ("Agreement")
COMPANY: CacheStream Corporation ("CacheStream")
INVESTMENT BANKER: Dunwoody Brokerage Services, Inc. d/b/a/ Xxxxxx
Institutional Finance ("Xxxxxx").
INVESTMENT BANKING Xxxxxx shall provide Investment Banking and Advisory
AND ADVISORY Services ("Services") to CacheStream. These Services
SERVICES: shall include, but not be limited to, structuring and
negotiating transactions involving entities seeking to
make an investment into CacheStream or into whom
CacheStream makes an investment or enters into a
strategic partnership, licensing agreement, stock swap
deal, merger, acquisition or any other transaction with
CacheStream (collectively referred to as "Covered
Transactions"). The proposed business combination
("Acquisition Transaction") with Providence Capital IX,
Inc. ("Providence") shall be included as a Covered
Transaction. The aforementioned entities shall be
referred to as "Strategic Partners." All Strategic
Partners introduced by Xxxxxx shall be initially
submitted in writing by Xxxxxx and confirmed in writing
via Schedule A attached hereto by CacheStream prior to
being pursued by Xxxxxx. CacheStream may also
introduce Strategic Partners to Xxxxxx and these
Strategic Partners shall also be confirmed in writing
via Schedule A attached hereto. As compensation for
Services, except for the Acquisition Transaction,
CacheStream shall pay Xxxxxx a Fee (as defined below)
of X% of the Transaction Value (as defined below) of
the transaction between CacheStream and the Strategic
Partners payable in accordance with the description
under the Fee section at the time of closing of each
transaction. To the extent that Xxxxxx is paid in
CacheStream Common Stock ("Stock"), then the Stock
will be valued at the Market Price (as defined below)
on the closing date of such transaction. As
compensation for Services rendered in conjunction with
the Merger, CacheStream shall pay Xxxxxx a fee as
defined below under Providence Fee.
PROVIDENCE FEE: Xxxxxx shall receive a fee ("Providence Fee") of 2% of
the fully-diluted shares of CacheStream prior to the
Acquisition Termination payable in Stock. The
Providence Fee shall be due and payable within 3
business days of execution of the Letter of Intent
between CacheStream and Providence. The Providence Fee
shall have anti-dilution provisions following any
reverse-stock-splits and shall have a term that expires
upon the completion of the Merger such that the fee
shall be 2% of the fully-diluted shares of CacheStream
immediately post-Merger. Anti-dilution rights are
activated upon certain events which include but are not
limited to stock splits, stock reclassifications, stock
dividends, corporate reorganizations, and mergers.
FEE: For purposes of this Fee Scale, each transaction shall
be considered separately.
For Strategic Partners introduced by CacheStream:
1% of Transaction Value in cash, and
1% of Transaction Value in Stock.
For Strategic Partners introduced by Xxxxxx:
1%of Transaction Value in cash,
1% of Transaction Value in Stock, and
Warrants to purchase a number of shares of Stock
registered for resale equal to 2% of the Transaction
Value divided by the Market Price on the closing
date of such transaction, exercisable at $1.42.
TRANSACTION VALUE "Transaction Value" shall mean the dollar amount or
AND TRANSACTIONS value of the subject transaction, provided that the
WITH NO DEFINED value of any transaction arranged by Xxxxxx, which does
TRANSACTION VALUE: not entail a defined dollar amount will be a defined
dollar or Stock value determined by CacheStream and
Xxxxxx in writing prior to closing (the "Defined
Value"). For any such transaction, Xxxxxx shall
receive from CacheStream X% of the Defined Value
payable in accordance with the description under Fee.
Market Price: PRIVATE COMPANY: Market Price shall equal the
Investors', Strategic Partners' or Third Party Funding
Sources' purchase price per share paid by such entity.
In the event debt or equity securities convertible into
Common Stock are issued ("Convertible Securities"),
Market Price shall equal the Convertible Securities
conversion price. In the event no Common Stock or
Convertible Securities are issued, Market Price shall
equal the last price paid by investors that exceeds $1
million in a private placement.
PUBLIC COMPANY: In the event that CacheStream is a
publicly traded company, Market Price shall equal the
lesser of (i) the lowest closing bid price of the
Common Stock for the 5 trading days immediately
preceding the date of execution by CacheStream of a
Letter of Intent to complete a Covered Transaction, or
(ii) the lowest closing bid price of the Common Stock
for the 5 trading days immediately preceding the
closing date of a Covered Transaction.
Disputes as to Should the parties hereto not agree on the Defined
Transaction Value, Value, Transaction Value, or Market Price as each is
Defined Value or defined above, CacheStream agrees to forego and not
Market Price: circumvent Xxxxxx with respect to any transaction with
any Strategic Partners, or any affiliate thereof, until
such time as the parties hereto can agree on the
Defined Value.
Non-Circumvention: Any potential Investor or Strategic Partner (a Xxxxxx
Client) to whom Xxxxxx introduces CacheStream shall be
considered, for purposes of this Agreement, the
property of Xxxxxx ("Xxxxxx Client"). In the event
that CacheStream enters into a Covered Transaction with
a Xxxxxx Client for a period of 60 months from the date
of written confirmation of introduction of said Xxxxxx
Client, CacheStream agrees to pay to Xxxxxx a fee as
stated above at the time of closing.
No Obligation: CacheStream may, in its sole and absolute discretion,
choose not to close any Covered Transaction with any
Xxxxxx Client. CacheStream shall have no obligation to
pay Xxxxxx any fees or issue any Stock or warrants to
Xxxxxx to the extent CacheStream rejects such Covered
Transaction.
Warrants Warrants referenced herein shall have piggyback
Referenced in this registration rights and shall have a 5-year term.
Agreement:
Termination: CacheStream and Xxxxxx have the right to submit written
notice of their respective intent to terminate the
Agreement. This Agreement, except as to the Non-
Circumvention Section, shall be deemed terminated
within 30 days of receipt of the written notice of
termination from either CacheStream or Xxxxxx.
Effective Date: This Agreement shall be considered effective as of
April ___, 2001, subject to the execution of this
Agreement by all signatories. This Agreement shall
supercede in its entirety, the Consulting Services
Agreement dated February 21, 2001, between Xxxxxx
Investments, LLC, and CacheStream.
DUNWOODY BROKERAGE SERVICES, INC. CACHESTREAM CORPORATION
By: By:
Xxxxxx Xxxxxxx, President Print Name:
Date:___________________________ Title: Date:
XXXXXX INSTITUTIONAL FINANCE
By:
Xxxx Xxxxxx, OSJ
Date:
CACHESTREAM
SCHEDULE A
Pursuant to the executed Investment Banking Services Agreement
("Agreement"), dated April , 2001,
CACHESTREAM hereby confirms that Xxxxxx has permission to introduce
CACHESTREAM to:
1 PROVIDENCE CAPITAL IX, INC.
2 XXXXXXX XXXX & COMPANY, LLC
The above named COMPANY(IES) shall be covered under the terms as agreed
upon in the executed Agreement. This signed Schedule A will act as written
confirmation for Xxxxxx to make THIS/THESE introduction(S).
CacheStream Corporation
By:
Print Name: ______________________________
Title: ___________________________________
Date: ____________________________________
