EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
by and
among
BIB Holdings, Ltd.
a Nevada corporation,
BIBO Acquisition, Inc.,
a Delaware corporation
and
Incode Corporation,
a Delaware corporation
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LIST OF SCHEDULES AND EXHIBITS
TO
AGREEMENT AND PLAN OF MERGER
SCHEDULES
Company Disclosure Schedule
Schedule 4.2(d) PRCO Financial Statements
Schedule 4.2(i) PRCO Legal Proceedings
Schedule 4.2(g) PRCO Liabilities
Schedule 4.2(m) PRCO Absence of Certain Changes or Events
Schedule 4.2(n) PRCO Compliance with Law
EXHIBITS
Exhibit 2.2(a) Escrow Agreement
Exhibit 6.1(a) Company Certified Resolutions
Exhibit 6.1(b) Opinion of Counsel to the Company
Exhibit 6.1(c) Opinion of Special Securities Counsel to Company re Rule 504
Exhibit 6.1(d) Company's Instruction Letter to Transfer Agent
Exhibit 6.1(e) Acquisition Certified Resolutions
Exhibit 6.1(f) Company Officer's Certificate
Exhibit 6.1(h) Acquisition Officer's Certificate
Exhibit 6.1(j) Registration Rights Agreement
Exhibit 6.2(a) PRCO Certified Resolutions
Exhibit 6.2(b) Opinion of PRCO counsel
Exhibit 6.2(c) Opinion of Special Securities Counsel to PRCO re Rule 504
Exhibit 6.2(e) PRCO Officer's Certificate
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of November
23, 2004, by and among BIB Holdings, Ltd., a Nevada corporation (the "Company"),
BIBO Acquisition, Inc., a Delaware corporation ("Acquisition") and Incode
Corporation, a Delaware corporation ("PRCO").
RECITALS
WHEREAS, the Company and PRCO desire to merge Acquisition with and into
PRCO whereby PRCO shall be the surviving entity pursuant to the terms and
conditions set forth herein and whereby the transaction is intended to qualify
as a tax free reorganization pursuant to Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "IRC"), to the extent permitted by applicable law;
WHEREAS, in furtherance of such combination, the Boards of Directors of
the Company, Acquisition and PRCO have each approved the merger of Acquisition
with and into PRCO (the "Merger"), upon the terms and subject to the conditions
set forth herein, in accordance with the applicable provisions of the Delaware
General Corporation Law (the "DGCL").
WHEREAS, the stockholder of PRCO desires to exchange all of its shares
of the capital stock of PRCO (the "PRCO Capital Stock") for shares of the
capital stock of the Company (the "Company Capital Stock") as a tax free
reorganization pursuant to Section 368(a) of the IRC, to the extent permitted by
applicable law;
WHERAS, just prior to the Merger, PRCO's 5% Convertible Debentures Due
November 22, 2006 in the aggregate principal amount of One Million Dollars
($1,000,000) (the "PRCO Debentures") are convertible into shares of PRCO common
stock, par value $.01 (the "PRCO Common Stock"), pursuant to the terms of the
PRCO Debentures and the Purchase Agreement (as defined below) and upon the
consummation of the Merger will be convertible into an equivalent number of
shares of the Company's common stock, par value $0.001 per share (the "Company
Common Stock") (the "Company Underlying Shares");
WHEREAS, upon the effectiveness of the Merger and pursuant to the terms
of this Agreement and the Purchase Agreement, the obligation to issue Company
Underlying Shares will be substituted for the obligation to issue the Shares,
the Company will assume the obligations, jointly and severally, with PRCO under
the PRCO Debentures and the Company will assume the obligations of PRCO under
that certain Convertible Debenture Purchase Agreement dated even date herewith
between PRCO and Highgate House, LLC ("Highgate") (the "Purchase Agreement") and
PRCO will be released from certain of such obligations; and
WHEREAS, all defined terms used herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as hereinafter defined) and
subject to and upon the terms and conditions of this Agreement and the DGCL,
Acquisition shall be merged with and into PRCO pursuant to the Merger. Following
the Merger, PRCO shall continue as the surviving corporation (the "Surviving
Corporation") and the separate corporate existence of Acquisition shall cease.
As part of the Merger and as more fully described in Section 2.1, (i) the One
Thousand (1,000) issued and outstanding shares of the PRCO Common Stock shall be
exchanged for Company Common Stock at the Exchange Ratio (as defined below) and
(ii) each share of Acquisition's issued and outstanding shares of common stock,
par value [$.001] per share (the "Acquisition Common Stock"), shall be converted
into one validly issued, fully paid and non-assessable share of common stock,
par value $.01, of the Surviving Corporation (the "Surviving Corporation Common
Stock").
1.2 Effective Time. The Merger shall be consummated as promptly as
practicable after satisfaction of all conditions to the Merger set forth herein,
by filing with the Secretary of State of the State of Delaware a certificate of
merger or similar document (the "Certificate of Merger"), and all other
appropriate documents, executed in accordance with the relevant provisions of
the DGCL. The Merger shall become effective upon the filing of the Certificate
of Merger with the Secretary of the State of the State of Delaware. The time of
such filing shall be referred to herein as the "Effective Time."
1.3 Effects of the Merger. At the Effective Time, all the rights,
privileges, immunities, powers and franchises of Acquisition and PRCO and all
property, real, personal and mixed, and every other interest of, or belonging to
or due to each of Acquisition and PRCO shall vest in the Surviving Corporation,
and all debts, liabilities, obligations and duties of Acquisition and PRCO,
including, without limitation, the performance of all obligations and duties of
PRCO pursuant to the Purchase Agreement, the PRCO Debentures and the exhibits,
schedules and all documents executed in connection therewith or any other
Transaction Document (as defined in the Purchase Agreement), shall become the
debts, liabilities, obligations and duties of the Surviving Corporation (except
as assumed by the Company) without further act or deed, all in the manner and to
the full extent provided by the DGCL. Whenever a conveyance, assignment,
transfer, deed or other instrument or act is necessary to vest any property or
right in the Surviving Corporation, the directors and officers of the respective
constituent corporations shall execute, acknowledge and deliver such instruments
and perform such acts, for which purpose the separate existence of the
constituent corporations and the authority of their respective directors and
officers shall continue, notwithstanding the Merger.
1.4 Certificate of Incorporation. The Certificate of Incorporation of
PRCO, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation and thereafter may be
amended or repealed in accordance with its terms and applicable law.
1.5 By-Laws. At the Effective Time and without any further action on
the part of Acquisition and PRCO, the By-laws of PRCO shall be the By-laws of
the Surviving Corporation and thereafter may be amended or repealed in
accordance with their terms or the Certificate of Incorporation of the Surviving
Corporation and as provided by law.
1.6 Directors. The directors of Acquisition at the Effective Time shall
be the directors of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.
1.7 Officers. The officers of Acquisition at the Effective Time shall
be the officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly appointed
and qualified, as the case may be.
1.8 Tax-Free Reorganization. The parties intend that the Merger shall
be treated as a tax-free reorganization pursuant to Section 368(a) of the IRC,
to the extent permitted by applicable law.
ARTICLE II
CONVERSION OF PRCO SHARES AND ASSUMPTION OF PRCO DEBENTURES
2.1 Conversion and Cancellation of PRCO Capital Stock. As of the
Effective Time, by virtue of the Merger and without any action on the part of
the Company, Acquisition or PRCO or the holders of any shares of the capital
stock of Acquisition or PRCO:
(a) Subject to the provisions of Sections 2.4 and 2.5, each
share of PRCO Capital Stock (the "PRCO Common Stock Shares") issued and
outstanding immediately prior to the Effective Time (other than shares canceled
in accordance with Section 2.1(b) shall be converted into 0.01 (the "Exchange
Ratio") of a validly issued, fully paid and nonassessable share of Company
Common Stock (the "Company Common Stock Shares"). As of the Effective Time, each
PRCO Common Stock Share shall no longer be outstanding and shall automatically
be canceled and cease to exist, and each holder of a certificate representing
any PRCO Common Stock Share shall cease to have any rights with respect thereto
other than the right to receive Company Common Stock Shares to be issued in
consideration therefor upon the surrender of such certificate, properly endorsed
to the Company.
(b) Each share of PRCO Capital Stock held in the treasury of
the PRCO and each share of PRCO Capital Stock owned by Acquisition or Company
shall be canceled without any conversion thereof and no payment, distribution or
other consideration shall be made with respect thereto.
(c) Each issued and outstanding share of Acquisition Common
Stock shall be converted into one validly issued, fully paid and nonassessable
share of Surviving Corporation Common Stock.
2.2 [Intentionally left blank].
2.3 [Intentionally left blank].
2.4 Adjustment of the Exchange Ratio. In the event that, prior to the
Effective Time, any stock split, combination, reclassification or stock dividend
with respect to the Company Common Stock or PRCO Common Stock, any change or
conversion of Company Common Stock or PRCO Common Stock or into other securities
or any other dividend or distribution with respect to the Company Common Stock
or PRCO Common Stock (other than regular quarterly dividends) should occur or,
if a record date with respect to any of the foregoing should occur, appropriate
and proportionate adjustments shall be made to the Exchange Ratio, and
thereafter all references to an Exchange Ratio shall be deemed to be to such
Exchange Ratio as so adjusted.
2.5 No Fractional Shares. No certificates or scrip representing
fractional shares of Company Common Stock shall be issued upon the surrender for
exchange of certificates and such fractional share shall not entitle the record
or beneficial owner thereof to vote or to any other rights as a stockholder of
the Company. The number of shares of Company Common Stock to be issued shall be
rounded up to the nearest whole share.
2.6 Further Assurances. If at any time after the Effective Time the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation, its right, title or interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either PRCO
or Acquisition or (b) otherwise to carry out the purposes of this Agreement, the
Surviving Corporation and its proper officers and directors or their designees
shall be authorized (to the fullest extent allowed under applicable law) to
execute and deliver, in the name and on behalf of either PRCO or Acquisition ,
all such deeds, bills of sale, assignments and assurances and do, in the name
and on behalf of PRCO or Acquisition, all such other acts and things necessary,
desirable or proper to vest, perfect or confirm its right, title or interest in,
to or under any of the rights, privileges, powers, franchises, properties or
assets of PRCO or Acquisition, as applicable, and otherwise to carry out the
purposes of this Agreement.
2.7 PRCO Debentures. (a) As of the Effective Time, the Company assumes,
jointly and severally with PRCO, all of the obligations and responsibilities
under the PRCO Debentures to the holder or holders of the PRCO Debentures.
(b) At the Effective Time, (i) all references in the PRCO
Debentures to "Company Common Stock" (as defined in the PRCO Debentures) shall
be references to Company Common Stock (as defined herein) and (ii) all
references to the "Company" (as defined in the PRCO Debentures) in the PRCO
Debentures shall be read as references to the "Company" (as defined herein) as
if the PRCO Debentures were issued on the date the PRCO Debentures were issued,
by the Company (as defined herein), specifically including all calculations in
the PRCO Debentures such as the determination of the conversion price, the
Conversion Price, the Fixed Conversion Price and the Floating Conversion Price.
The Exchange Ratio (as defined herein) shall have no effect on the PRCO
Debentures or the assumption thereof by the Company (as defined herein).
(c) At the Effective Time, PRCO shall assign and the Company
shall assume all of PRCO's obligations and covenants under the Purchase
Agreement as if the Company executed the Purchase Agreement instead of PRCO on
the date thereof. At the Effective Time, all references to the "Company" (as
defined in the Purchase Agreement) in the Purchase Agreement shall mean the
Company (as defined herein) and all references to dates or tolling of periods
shall be read as if the Company (as defined herein) executed the Purchase
Agreement instead of the "Company" (as defined in the Purchase Agreement). At
the Effective Time, all of the remedies available to the current and future
holders of the PRCO Debentures under the Purchase Agreement against the
"Company" (as defined in the Purchase Agreement) shall be available against the
Company (as defined herein).
(d) The provisions described in this Section 2.7 shall not be
amended and shall be in effect until the earlier of (i) the date all of the PRCO
Convertible Debentures have been converted into Company Common Stock Shares or
redeemed and (ii) six (6) years from the date the PRCO Debentures were issued.
(e) The current and future holders of the PRCO Debentures
shall be third party beneficiaries of this Agreement. There shall be no other
third party beneficiaries to this Agreement or any part hereof.
ARTICLE III
CLOSING
Subject to satisfaction of the conditions to closing set forth in this
Agreement and unless this Agreement is otherwise terminated in accordance with
the provisions contained herein, the closing of the Merger and the Contemplated
Transactions (the "Post-Closing") shall take place at the offices of Gottbetter
& Partners, LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx as promptly as
practicable after satisfaction of the conditions set forth in this Agreement,
which in no event shall be more than ten days after the Closing Date under the
Purchase Agreement (except if such 10th day is not a Business Day, then the next
Business Day) (the "Post-Closing Date").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Company and Acquisition.
Except as disclosed in the Reports (as defined below) or in a document of even
date herewith referring to the representations and warranties in this Agreement
and delivered by Company to PRCO prior to the execution and delivery of this
Agreement (the "Company Disclosure Schedule"), Acquisition and the Company
hereby make the following representations and warranties to PRCO, all of which
shall survive the Post-Closing, subject to the limitations set forth in Section
8.1 hereof:
(a) Organization and Good Standing. Acquisition is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with full corporate power and authority to conduct its
business as it is now being conducted, to own or use the properties and assets
that it owns or uses, and to perform all its obligations under this Agreement.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full corporate power and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it owns or uses, and to perform all its
obligations under this Agreement and, upon the Post-Closing the PRCO Debentures.
Company has no subsidiaries other than Acquisition and other than as set forth
on the Company Disclosure Schedule (individually, a "Subsidiary" and
collectively, the "Subsidiaries"). Acquisition has no subsidiaries. Each of the
Company and Acquisition is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which either the ownership or
use of the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification, except for such failures to be so
qualified or in good standing would not have a Material Adverse Effect.
(b) Authority; No Conflict.
i. This Agreement and any agreement executed in
connection herewith by Company or Acquisition constitute the legal, valid and
binding obligations of the Company and Acquisition, as the case may be,
enforceable against the Company and Acquisition, as the case may be, in
accordance with their respective terms, except as such enforceability is limited
by bankruptcy, insolvency and other laws affecting the rights of creditors and
by general equitable principles. The Company has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this Agreement and
any agreement executed by it in connection herewith and to perform its
obligations hereunder and thereunder.
ii. Neither the execution and delivery of this
Agreement by each of the Company and Acquisition, nor the consummation or
performance by each of any of its respective obligations contained in this
Agreement or in connection with the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of time):
a. contravene, conflict with or result in a
violation of (x) any provision of the Organizational Documents of the Company or
Acquisition, as the case may be, or (y) any resolution adopted by the board of
directors or the stockholders of the Company or Acquisition, as the case may be;
b. contravene, conflict with or result in a
material violation of, or give any governmental body or other Person the right
to challenge any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which the Company
or Acquisition or any of the assets owned or used by the Company or Acquisition
may be subject;
c. contravene, conflict with or result in a
violation or breach of any provision of, or give any Person the right to declare
a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate or modify, this Agreement, the PRCO
Debentures (once assumed by Company) or any Applicable Contract;
d. result in the imposition or creation of
any material encumbrance upon or with respect to any of the material assets
owned or used by the Company or Acquisition;
e. cause the Company or Acquisition to
become subject to, or to become liable for the payment of, any tax; or
f. cause any of the assets owned by the
Company or Acquisition to be reassessed or revalued by any taxing authority or
other governmental body, except in connection with the transfer of real estate
pursuant to this Agreement or the Contemplated Transactions, if any.
(c) Capitalization. The capitalization of the Company
as of September 30, 2004 is as set forth in the Form 10-QSB for the period ended
September 30, 2004, increased as set forth in the next sentence. The Company has
not issued any capital stock since that date other than pursuant to (i) employee
benefit plans disclosed in the Reports (as defined in Section 4.1(d)) or (ii)
outstanding warrants, options or other securities disclosed in the Reports,
except as set forth on Company Disclosure Schedule. All of the issued and
outstanding shares of the Company Capital Stock have been duly authorized and
validly issued and are fully paid and non-assessable. Except for this Agreement
and as disclosed in the Reports, there are no outstanding options, warrants,
script, rights to subscribe to, registration rights, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of the Company Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of the Company
Common Stock, or securities or rights convertible or exchangeable into shares of
the Company Common Stock. None of the outstanding Company Capital Stock was
issued in violation of the Securities Act or any other legal requirement.
(d) Financial Statements. The Company has delivered
or made available to PRCO copies of its Form 10-KSB Annual Report for the fiscal
year ended December 31, 2003 and copies of its quarterly reports on Form 10-QSB
for the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004,
each as filed with the SEC and including, in each case, any amendments thereto
(collectively, the "Reports"). The financial statements contained are in all
material respects in accordance with the books and records of the Company and
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods indicated, all as more particularly set forth in the
notes to such statements. The consolidated balance sheets contained in such
Reports (the "Company Balance Sheets") present fairly in all material respects
as of their dates the consolidated financial condition of the Company and its
subsidiaries. Except as and to the extent reflected or reserved against in the
Company Balance Sheets (including the notes thereto), the Company did not have,
as of the date of any such Company Balance Sheet, any material liabilities or
obligations (absolute or contingent) of a nature customarily reflected in a
balance sheet or the notes thereto. The consolidated statements of operations,
consolidated statements of stockholders' equity and changes in consolidated
statements of cash flows present fairly in all material respects the results of
operations and changes in financial position of the Company and its subsidiaries
for the periods indicated.
(e) SEC Filings. The Company has filed all reports
required to be filed with the SEC under the rules and regulations of the SEC and
all such reports have complied in all material respects, as of their respective
filing dates and effective dates, as the case may be, with all the applicable
requirements of the Securities Exchange Act of 1934, as amended. As of the
respective filing and effective dates, none of such reports (including without
limitation, the Reports) 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 light of the circumstances under which
they were made, not misleading.
(f) Absence of Material Adverse Change. Since the
date of the latest Company Balance Sheets, there have been no events, changes or
occurrences which have had or are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect.
(g) Issuance of Company Securities. The Company
Common Stock Shares, and when issued in accordance with this Agreement, shall be
duly authorized, validly issued, fully-paid and nonassessable. Except as set
forth in the Reports, there is no equity line of credit or convertible security
or instrument outstanding of the Company.
(h) Undisclosed Liabilities. Except as disclosed in
any Schedule to this Agreement, none of the Company, Acquisition or the
Subsidiaries has any material obligations and liabilities (contingent or
otherwise) except those liabilities (i) that are reflected in the Company
Balance Sheets or in the notes thereto, or disclosed in the notes therein in
accordance with GAAP or, in accordance with GAAP, are not required to be so
reflected or disclosed, or (ii) that were incurred after the date of the Company
Balance Sheets in the Ordinary Course of Business, none of which results from,
arises out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, or violation of law or could
reasonably be expected to have a Material Adverse Effect.
(i) Taxes.
i. The Company has filed or caused to be
filed on a timely basis all tax returns that are or were required to be filed by
it pursuant to applicable Legal Requirements. The Company has paid, or made
provision for the payment of, all taxes that have or may have become due
pursuant to those tax returns or otherwise, or pursuant to any assessment
received by the Company, except such taxes, if any, as are listed in the Company
Disclosure Schedule and are being contested in good faith as to which adequate
reserves have been provided in the Company Balance Sheets.
ii. All tax returns filed by the Company are
true, correct and complete in all material respects.
(j) Employee Benefits. Except as disclosed in the
Reports, the Company does not sponsor or otherwise maintain a "pension plan"
within the meaning of Section 3(2) of ERISA or any other retirement plan other
than the Company Profit Sharing and 401(k) Plan and Trust that is intended to
qualify under Section 401 of the Code, nor do any unfunded liabilities exist
with respect to any employee benefit plan, past or present. No employee benefit
plan, any trust created thereunder or any trustee or administrator thereof has
engaged in a "prohibited transaction," as defined in Section 4975 of the Code,
which may have a Material Adverse Effect.
(k) Governmental Authorizations. The Company,
Acquisition and the Subsidiaries have all permits that are legally required to
enable them to conduct their business in all material respects as now conducted.
(l) Legal Proceedings; Orders.
i. Except as set forth in the Reports, there
is no material pending Proceeding:
a. that has been commenced by or
against the Company, Acquisition or the Subsidiaries, or any of the assets owned
or used by, the Company, Acquisition or the Subsidiaries; or
b. that challenges, or that may
have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any Contemplated Transaction.
ii. Except as set forth in the Reports:
a. there is no material Order to which the
Company or the Subsidiaries, or any of the assets owned or used by the Company,
Acquisition or the Subsidiaries, is subject; and
b. no officer, director, agent, or employee
of the Company or Acquisition is subject to any material Order that prohibits
such offer, director, agent or employee from engaging in or continuing any
conduct, activity or practice relating to the business of the Company or
Acquisition, as the case may be.
(m) Absence of Certain Changes and Events. Except as
set forth in the Reports, since the date of the most recent Company Balance
Sheets, except as heretofore set forth, the Company and the Subsidiaries and
Acquisition, since the date of its inception, have conducted their business only
in the Ordinary Course of Business, and other than as contemplated by this
Agreement or the Contemplated Transactions there has not been any:
i. change in the authorized or issued
capital of the Company, including the Company Common Stock or the authorized or
issued capital stock of Acquisition and the Subsidiaries; grant of any stock
option or right to purchase shares of capital stock of the Company; issuance of
any equity lines of credit, security convertible into such capital stock; grant
of any registration rights; purchase, redemption, retirement, or other
acquisition or payment of any dividend or other distribution or payment in
respect of shares of capital stock;
ii. amendment to the Organizational
Documents of the Company, Acquisition or the Subsidiaries;
iii. damage to or destruction or loss of any
material asset or property of the Company, Acquisition or the Subsidiaries,
whether or not covered by insurance, causing a Material Adverse Effect;
iv. receipt of notice that any of their
substantial customers have terminated or intends to terminate their
relationship, which termination would have a Material Adverse Effect;
v. entry into any transaction other than in
the Ordinary Course of Business;
vi. entry into, termination of, or receipt
of written notice of termination of any material (i) license, distributorship,
dealer, sales representative, joint venture, credit, or similar agreement, or
(ii) contract or transaction;
vii. sale (other than sales of inventory in
the Ordinary Course of Business), lease, or other disposition of any asset or
property of the Company, Acquisition or the Subsidiaries or mortgage, pledge, or
imposition of any lien or other encumbrance on any material asset or property of
the Company, Acquisition or the Subsidiaries;
viii. cancellation or waiver of any claims
or rights with a value to the Company in excess of $10,000;
ix. material change in the accounting
methods used by the Company, Acquisition or the Subsidiaries; or
x. agreement, whether oral or written, by
the Company, Acquisition or the Subsidiaries to do any of the foregoing.
(n) No Default or Violation. The Company, Acquisition and the
Subsidiaries (i) are in material compliance with all applicable material terms
and requirements of each material contract under which they have or had any
obligation or liability or by which they or any of the assets owned or used by
them is or was bound and (ii) is not in material violation of any Legal
Requirement.
(o) Certain Payments. Since the most recent date of the
Company Balance Sheets, neither the Company, Acquisition or the Subsidiaries,
nor any director, officer, agent or employee of the Company or the Subsidiaries
has directly or indirectly (a) made any contribution, gift, bribe, rebate,
payoff, influence payment, kickback or other payment to any Person, private or
public, regardless of form, whether in money, property or services (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, (iii) to obtain special concessions or for special
concessions already obtained, for or in respect of the Company, Acquisition or
the Subsidiaries or (iv) in violation of any Legal Requirement, or (b)
established or maintained any fund or asset that has not been recorded in the
books and records of the Company, Acquisition or the Subsidiaries.
(p) Brokers or Finders. The Company and Acquisition have not
incurred any obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement.
4.2 Representations and Warranties of PRCO. PRCO hereby makes the
following representations and warranties to the Company, all of which shall
survive the Post-Closing, subject to the limitations set forth in Section 8.2
hereof:
(a) Organization, Good Standing and Purpose. PRCO is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware with full power and authority to conduct its businesses
as it is now being conducted, to own or use the properties and assets that it
owns or uses, and to perform all of its obligations under this Agreement. PRCO
has no subsidiaries. PRCO is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except for such
failures to be so qualified or in good standing would not have a Material
Adverse Effect. PRCO was formed to assist small communications companies with
their growth strategies.
(b) Authority; No Conflict.
i. This Agreement and any agreement executed in
connection herewith have been duly authorized by all required action of PRCO and
constitute the legal, valid and binding obligations of PRCO, enforceable against
PRCO in accordance with their respective terms. PRCO has the absolute and
unrestricted right, power and authority to execute and deliver this Agreement
and any agreements executed in connection herewith and to perform its
obligations hereunder and thereunder.
ii. Neither the execution and delivery of this
Agreement by PRCO, nor the consummation or performance by it of any of its
obligations contained in this Agreement or in connection with the Contemplated
Transactions by the Company will, directly or indirectly (with or without notice
or lapse of time):
a. contravene, conflict with or result in a
violation of (x) any provision of the Organizational Documents of PRCO or (y)
any resolution adopted by the board of directors or the stockholders of PRCO;
b. contravene, conflict with or result in a
violation of, or give any governmental body or other Person the right to
challenge any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which PRCO or any
of the assets owned or used by PRCO may be subject;
c. contravene, conflict with or result in a
violation or breach of any provision of, or give any Person the right to declare
a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate or modify, this Agreement, the Purchase
Agreement, the PRCO Debentures or any Applicable Contract;
d. result in the imposition or creation of
any material encumbrance upon or with respect to any of the material assets
owned or used by PRCO;
e. cause PRCO to become subject to, or to
become liable for the payment of, any tax; or
f. cause any of the assets owned by PRCO to
be reassessed or revalued by any taxing authority or other governmental body,
except in connection with the transfer of real estate pursuant to this Agreement
or the Contemplated Transactions.
iii. PRCO is not required to obtain any consent from
any Person in connection with the execution and delivery of this Agreement or
the consummation or performance of any of the Contemplated Transactions, other
than the requisite approval of its stockholder, Incandent Capital, LLC ( the
"PRCO Stockholder"), which approval has been obtained.
(c) Capitalization. The entire authorized PRCO Capital Stock
consists of 100,000,000 shares PRCO Common Stock, of which 1,000 shares are
issued and outstanding and held by the PRCO Stockholder of which 50,000,000 are
held in escrow pursuant to the PRCO Escrow Agreement (as defined below). With
the exception of the PRCO Common Stock Shares and the PRCO Debentures, there are
no other outstanding equity or debt securities of the Company. No legend or
other reference to any purported encumbrance appears upon any certificate
representing the PRCO Common Stock Shares, other than applicable Securities Act
legends. The PRCO Common Stock Shares have been duly authorized and validly
issued and are fully paid and non-assessable. Except for the PRCO Debentures and
the agreements relating thereto set forth in the Purchase Agreement, there are
no outstanding options, voting agreements or arrangements, warrants, script,
rights to subscribe to, registration rights, calls or commitments of any
character whatsoever relating to, or, securities, rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of PRCO Capital Stock or other securities,
or contracts, commitments, understandings, or arrangements by which PRCO is or
may become bound to issue additional shares of PRCO Capital Stock or other
securities, or securities or rights convertible or exchangeable into shares of
PRCO Capital Stock or other securities. Except as set forth in this Section
4.2(c), PRCO has no outstanding equity, debt, debt or equity equivalent
security, or debt or equity lines of credit. None of the outstanding PRCO Common
Stock Shares were issued in violation of the Securities Act or any other legal
requirement. PRCO does not own, and has no contract to acquire, any equity
securities or other securities of any Person or any direct or indirect equity or
ownership interest in any other business. The PRCO Underlying Shares have been
duly authorized, validly issued, fully paid and are nonassessable pursuant to
the escrow agreement between PRCO, Highgate and the Escrow Agent (the "PRCO
Escrow Agreement").
(d) Financial Statements. PRCO has delivered to the Company a
balance sheet of PRCO as at October 31, 2004 (the "PRCO Balance Sheet"), and a
statement of operations for the period from inception to October 31, 2004. Such
financial statements were prepared in accordance with GAAP, are set forth in
Schedule 4.2(d) hereto and fairly present the financial condition and the
results of operations of PRCO as at October 31, 2004 of and for the period then
ended.
(e) Absence of Material Adverse Change. Since the date of the
most recent PRCO Balance Sheet provided under Section 4.2(d) hereof, there have
been no events, changes or occurrences which have had or are reasonably likely
to have, individually or in the aggregate, a material adverse effect on PRCO.
(f) Books and Records. The books of account, minute books,
stock record books, and other records of PRCO, all of which have been made
available to the Company and original copies of which will be delivered to the
Company at the Post-Closing, are complete and correct and have been maintained
in accordance with sound business practices, including the maintenance of an
adequate system of internal controls. The minute books of PRCO contain accurate
and complete records of all meetings held of, and corporate action taken by, the
stockholders, the Board of Directors, and any committees of the Board of
Directors of PRCO.
(g) No Undisclosed Liabilities. There are no material
liabilities of PRCO, whether absolute, accrued, contingent, or otherwise, other
than the PRCO Debentures and as set forth in Schedule 4.2(g).
(h) Title to Properties; Encumbrances. PRCO has good and
marketable title to all the properties, interest in such properties and assets,
real and personal, reflected in the PRCO Balance Sheet or acquired after the
date of such balance sheet, free and clear of all mortgages, liens, pledges,
charges or encumbrances except (i) mortgages and other encumbrances referred to
in the notes to the PRCO Balance Sheet. PRCO neither owns nor leases any real
property.
(i) Legal Proceedings; Orders.
i. Except as set forth in Schedule 4.2(i) hereto,
there is no pending Proceeding:
a. that has been commenced or threatened by
or against PRCO or any of its officers, directors, agents or employees as such
or that otherwise relates to or may affect the business of, or any of the assets
owned or used by, PRCO; or
b. that challenges, or that may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any Contemplated Transaction.
ii. Except as set forth in Schedule 4.2(i) hereto:
a. there is no Order to which PRCO, or any
of the assets owned or used by PRCO, is subject; and
b. no officer, director, agent, or employee
of PRCO is subject to any Order that prohibits such offer, director, agent or
employee from engaging in or continuing any conduct, activity or practice
relating to the business of PRCO.
(j) Brokers or Finders. PRCO has incurred no liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement.
(k) No Default or Violation. Schedule 4.2(k) hereto lists each
contract, agreement and commitment to which PRCO is a party or otherwise bound
(each, an "PRCO Contract") or has any obligation or liability pursuant thereto.
PRCO (i) is in compliance with all terms and requirements of each PRCO Contract
and (ii) is not in violation of any Legal Requirement.
(l) Taxes.
i. PRCO has filed or caused to be filed on a timely
basis all tax returns that are or were required to be filed by it pursuant to
applicable Legal Requirements. PRCO has paid, or made provision for the payment
of, all taxes that have or may have become due pursuant to those tax returns or
otherwise, or pursuant to any assessment received by PRCO, except such taxes, if
any, as are listed in Schedule 4.2(l) hereto and are being contested in good
faith as to which adequate reserves have been provided in the PRCO Balance
Sheets.
ii. All tax returns filed by PRCO are true, correct
and complete in all material respects and no taxes are currently owed or tax
returns due by or on behalf of PRCO.
(m) Absence of Certain Changes and Events. Except as set forth
in Schedule 4.2(m) hereto, since the date of the PRCO Balance Sheet, PRCO has
conducted its business only in the Ordinary Course of Business, there has not
been any material adverse effect on PRCO's business or operations, and there has
not been any:
i. change in the authorized or issued capital stock
of PRCO; grant of any stock option or right to purchase shares of capital stock
of PRCO; issuance of any security convertible into such capital stock; grant of
any registration rights; purchase, redemption, retirement, or other acquisition
or payment of any dividend or other distribution or payment in respect of shares
of capital stock;
ii. amendment to the Organizational Documents of
PRCO;
iii. damage to or destruction or loss of any asset or
property of PRCO, whether or not covered by insurance or any other event or
circumstance, materially and adversely affecting the properties, assets,
business, financial condition, or prospects of PRCO;
iv. receipt of notice that any of its substantial
customers have terminated or intends to terminate their relationship, which
termination would have a material adverse effect on its financial condition,
results or operations, business assets or properties of PRCO;
v. entry into any transaction other than in the
Ordinary Course of Business;
vi. entry into, termination of, or receipt of written
notice of termination of any (i) license, distributorship, dealer, sales
representative, joint venture, credit, or similar agreement, or (ii) contract or
transaction;
vii. sale, lease, or other disposition of any asset
or property of PRCO or mortgage, pledge, or imposition of any lien or other
encumbrance on any asset or property of PRCO;
viii. cancellation or waiver of any claims or rights
with a value to PRCO in excess of $10,000;
ix. material change in the accounting methods used by
PRCO;
x. accrual or payment of any salaries or other
compensation, increase in salaries, compensation or bonuses or retention or
hiring of, any consultant or employee;
xi. debt or other liability incurred, other than the
PRCO Debentures; or
xii. agreement, whether oral or written, by PRCO to
do any of the foregoing, other than the Purchase Agreement.
(n) Compliance with Law. Except as set forth in Schedule
4.2(n) hereto:
i. PRCO has complied in all material respects with,
and is not in violation of, in any material respect, any Law to which it or its
business is subject; and
ii. PRCO has obtained all licenses, permits,
certificates or other governmental authorizations (collectively
"Authorizations") necessary for the ownership or use of its assets and
properties or the conduct of its business; and
(iii) PRCO has not received written notice of
violation of, or knows of any material violation of, any Laws to which it or its
business is subject or any Authorization necessary for the ownership or use of
its assets and properties or the conduct of its business.
(o) Environmental Laws. PRCO has not received any notice or
claim (and is not aware of any facts that would form a reasonable basis for any
claim), or entered into any negotiations or agreements with any other Person,
and, to the best knowledge of PRCO, PRCO is not the subject of any investigation
by any governmental or regulatory authority, domestic or foreign, relating to
any material or potentially material liability or remedial action under any
Environmental Laws. There are no pending or, to the knowledge of PRCO,
threatened, actions, suits or proceedings against PRCO or any of its properties,
assets or operations asserting any such material liability or seeking any
material remedial action in connection with any Environmental Laws.
(p) Intellectual Property. (i) PRCO owns, or is validly
licensed or otherwise has the right to use, all patents, and patent rights
("Patents") and all trademarks, trade secrets, trademark rights, trade names,
trade name rights, service marks, service xxxx rights, copyrights and other
proprietary intellectual property rights and computer programs (the
"Intellectual Property Rights"), in each case, which are material to the conduct
of the business of PRCO.
(ii) To the best knowledge of PRCO, PRCO has not
interfered with, infringed upon (without license to infringe), misappropriated
or otherwise come into conflict with any Patent of any other Person. PRCO has
not interfered with, infringed upon, misappropriated or otherwise come into
conflict with any Intellectual Property Rights of any other Person. PRCO has not
received any written charge, complaint, claim, demand or notice alleging any
such interference, infringement, is appropriation or violation (including any
claim that PRCO must license or refrain from using any Patents or Intellectual
Property Rights of any other Person) which has not been settled or otherwise
fully resolved. To the best knowledge of PRCO, no other Person has interfered
with, infringed upon (without license to infringe), misappropriated or otherwise
come into conflict with any Patents or Intellectual Property Rights of PRCO.
(q) Employees. (a) PRCO has no employees other than Xxx
Xxxxxxx, who is the President and Chief Financial Officer of PRCO; (b) Xxx
Xxxxxxx has been fully paid for all services rendered by him to PRCO in his
capacity as President of PRCO and is owed no further salary or compensation in
connection therewith; (c) PRCO has complied in all respects with all applicable
Laws respecting employment and employment practices, terms and conditions of
employment, wages and hours, and PRCO is not liable for any arrears of wages or
any taxes or penalties for failure to comply with any such Laws; (d) PRCO
believes that PRCO's relations with its employees is satisfactory; (e) there are
no controversies pending or, to the best knowledge of PRCO, threatened between
PRCO and any of its employees or former employees; (f) PRCO is not a party to
any collective bargaining agreement or other labor union contract applicable to
persons employed by PRCO, nor, to the best knowledge of PRCO, are there any
activities or proceedings of any labor union to organize any such employees; (g)
there are no unfair labor practice complaints pending against PRCO before the
National Labor Relations Board or any current union representation questions
involving employees of PRCO; (h) there is no strike, slowdown, work stoppage or
lockout existing, or, to the best knowledge of PRCO, threatened, by or with
respect to any employees of PRCO; (i) no charges are pending before the Equal
Employment Opportunity Commission or any state, local or foreign agency
responsible for the prevention of unlawful employment practices with respect to
PRCO; (j) there are no claims pending against PRCO before any workers'
compensation board; (k) PRCO has not received notice that any Federal, state,
local or foreign agency responsible for the enforcement of labor or employment
laws intends to conduct an investigation of or relating to PRCO and, to the best
knowledge of PRCO, no such investigation is in progress; and (l) PRCO has no
consultants or independent contractors.
(r) Employee Benefit Plans. There are no "employee pension
benefit plans" (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) or "employee welfare benefit plans"
(as defined in Section 3(1) of ERISA) maintained, or contributed to, by PRCO for
the benefit of any current or any former employees, officers or directors of
PRCO.
(s) Rule 504 Securities. The PRCO Debentures (which include
the Escrow Shares for the PRCO Underlying Shares) were sold in accordance with
Rule 504 of Regulation D of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 80A.15.2(g) of the Minnesota Statutes, 1986 (the
"Minnesota Act") and Administrative Rule 2875.0170, to an accredited investor
residing in the State of Minnesota. Accordingly, at the Effective Time and
pursuant to Rule 504, the Minnesota Act, and Section 3(a)(9) of the Securities
Act, the PRCO Debentures (which include the Company Escrow Shares (as defined in
the Share Deposit Agreement) for the Company Underlying Shares) shall continue
to be without restriction and shall be freely tradable in accordance with Rule
504.
ARTICLE V
COVENANTS
5.1 Covenants of the Company and Acquisition.
(a) Conduct of Business. Between the date hereof and up to and
including the Post-Closing Date, each of the Company and Acquisition shall:
i. conduct its business only in the Ordinary Course
of Business;
ii. use its commercially reasonable efforts to
preserve intact the current business organization of the Company and
Acquisition, as the case may be, keep available the services of the current
officers, employees and agents of the Company and Acquisition, as the case may
be, and maintain the relations and good will with suppliers, customers,
landlords, creditors, employees, agents and others having business relationships
with the Company and Acquisition, as the case may be;
iii. not pay, incur or declare any dividends or
distributions with respect to its stockholders or amend its Certificate of
Incorporation or By-Laws, without the prior written consent of the PRCO
Debenture Holder;
iv. not authorize, issue, sell, purchase or redeem
any shares of its capital stock or any options or other rights to acquire
ownerships interests without the prior written consent of the PRCO Debenture
Holder except as may be required by pre-existing commitments disclosed herein or
in the Reports;
v. not incur any indebtedness for money borrowed or
issue any debt securities, or incur or suffer to be incurred any liability or
obligation of any nature whatsoever, except those incurred in the Ordinary
Course of Business, or cause or permit any material lien, encumbrance or
security interest to be created or arise on or in respect of any material
portion of its properties or assets;
vi. not make any investment of a capital nature
either by purchased stock or securities, contribution to capital, property
transfer or otherwise, or by the purchase of any property or assets of any other
Person;
vii. not do any other act which would cause any
representation or warranty of the Company in this Agreement to be or become
untrue in any material respect or that is not in the Ordinary Course of
Business;
viii. report periodically to the PRCO Debenture
Holder concerning the status of the business and operations of the Company upon
the reasonable request of the PRCO Debenture Holder; and
ix. confer with the PRCO Debenture Holder concerning
operational matters of a material nature upon the reasonable request of the PRCO
Debenture Holder.
(b) Proposals; Other Offers. Commencing on the date of
execution of this Agreement up to and including the Post-Closing Date, each of
the Company and Acquisition shall not, directly or indirectly (whether through
an employee, a representative, an agent or otherwise), solicit or encourage any
inquiries or proposals, engage in negotiations for or consent to or enter into
any agreement providing for the acquisition of its business. Each of the Company
and Acquisition shall not, directly or indirectly (whether through an employee,
a representative, an agent or otherwise) disclose any nonpublic information
relating to the Company and Acquisition or afford access to any of the books,
records or other properties of the Company and Acquisition to any person or
entity that is considering, has considered or is making any such acquisition
inquiry or proposal relating to the Company's and Acquisition's business.
(c) Further Assurances. Prior to the Post-Closing Date, with
the cooperation of PRCO where appropriate, each of the Company and Acquisition
shall use commercially reasonable efforts to:
i. promptly comply with all filing requirements which
federal, state or local law may impose on the Company or Acquisition, as the
case may be, with respect to the Contemplated Transactions by this Agreement;
and
ii. take all actions necessary to be taken, make any
filing and obtain any consent, authorization or approval of or exemption by any
governmental authority, regulatory agency or any other third party (including
without limitation, any landlord or lessor of the Company and any party to whom
notification is required to be delivered or from whom any form of consent is
required) which is required to be filed or obtained by the Company or
Acquisition in connection with the Contemplated Transactions by this Agreement.
(d) Access to Additional Agreements and Information. Prior to
the Post-Closing Date, the Company and Acquisition shall make available to the
PRCO Debenture Holder (as well as its counsel, accountants and other
representatives) any and all agreements, contracts, documents, other instruments
and personnel material to the Company's business, including without limitation,
those contracts to which the Company or Acquisition is a party and those by
which each of its business or any of the Company's or Acquisition's assets are
bound.
5.2 Covenants of PRCO.
(a) Conduct of Business. Between the date hereof and up to and
including the Post-Closing Date, PRCO shall:
i. conduct its business only in the Ordinary Course
of Business;
ii. use its commercially reasonable efforts to
preserve intact the current business organization of PRCO, keep available the
services of the current officers, employees and agents of PRCO, and maintain the
relations and good will with suppliers, customers, landlords, creditors,
employees, agents and others having business relationships with PRCO;
iii. not pay, incur or declare any dividends or
distributions with respect to its stockholders or amend its Certificate of
Incorporation or By-Laws, without the prior written consent of the Company and
PRCO Debenture Holder;
iv. not authorize, issue, sell, purchase or redeem
any shares of its capital stock or any options or other rights to acquire
ownerships interests without the prior written consent of the Company and PRCO
Debenture Holder;
v. not incur any indebtedness for money borrowed or
issue and debt securities, or incur or suffer to be incurred any liability or
obligation of any nature whatsoever, or cause or permit any material lien,
encumbrance or security interest to be created or arise on or in respect of any
material portion of its properties or assets;
vi. not make any investment of a capital nature
either by purchased stock or securities, contribution to capital, property
transfer or otherwise, or by the purchase of any property or assets of any other
Person;
vii. not do any other act which would cause
representation or warranty of PRCO in this Agreement to be or become untrue in
any material respect or that is not in the Ordinary Course of Business
consistent with past practice;
viii. report periodically to the Company and the PRCO
Debenture Holder concerning the status of the business and operations of PRCO;
and
ix. confer with the Company and the PRCO Debenture
Holder concerning operational matters of a material nature.
(b) Proposals; Other Offers. Commencing on the date of
execution of this Agreement through the Post-Closing Date, PRCO shall not,
directly or indirectly (whether through an employee, a representative, an agent
or otherwise), solicit or encourage any inquiries or proposals, engage in
negotiations for or consent to or enter into any agreement providing for the
acquisition of its business. PRCO shall not, directly or indirectly (whether
through an employee, a representative, an agent or otherwise) disclose any
nonpublic information relating to PRCO or afford access to any of the books,
records or other properties of PRCO to any person or entity that is considering,
has considered or is making any such acquisition inquiry or proposal relating to
the PRCO's business.
(c) Further Assurances. Prior to the Post-Closing Date, with
the cooperation of the Company where appropriate, PRCO shall:
i. promptly comply with all filing requirements which
federal, state or local law may impose on PRCO with respect to the Contemplated
Transactions by this Agreement and cooperate with the Company regarding the
same; and
ii. take all actions necessary to be taken, make any
filing and obtain any consent, authorization or approval of or exemption by any
governmental authority, regulatory agency or any other third party (including
without limitation, any landlord or lessor of PRCO and any party to whom
notification is required to be delivered or from whom any form of consent is
required) which is required to be filed or obtained by PRCO in connection with
the Contemplated Transactions by this Agreement.
(d) Actions by PRCO. PRCO shall take no action or enter into
any agreements or arrangements except as may be required by this Agreement.
(e) No Change in Capital Stock. Prior to the Effective Time,
no change will be made in the authorized, issued or outstanding capital stock of
PRCO, and no subscriptions, options, rights, warrants, calls, commitments or
agreements relating to the authorized, issued or outstanding capital stock of
PRCO will be entered into, issued, granted or created.
(f) Access to Additional Agreements and Information. Prior to
the Post-Closing Date, PRCO shall make available to the Company and PRCO
Debenture Holder (as well as its counsel, accountants and other representatives)
any and all agreements, contracts, documents, other instruments and personnel
material of PRCO's business, including without limitation, those contracts to
which PRCO is a party and those by which its business or any of PRCO's assets
are bound.
(g) Further Assurances. Prior to the Post-Closing Date, with
the cooperation of the Company where appropriate, PRCO shall use commercially
reasonable efforts to:
i. promptly comply with all filing requirements which
federal, state or local law may impose on PRCO with respect to the Contemplated
Transactions by this Agreement; and
ii. take all actions necessary to be taken, make any
filing and obtain any consent, authorization or approval of or exemption by any
governmental authority, regulatory agency or any other third party (including
without limitation, any landlord or lessor of PRCO and any party to whom
notification is required to be delivered or from whom any form of consent is
required) which is required to be filed or obtained by PRCO in connection with
the Contemplated Transactions by this Agreement.
5.3 Governmental Filings and Consents. The Company, Acquisition and
PRCO shall cooperate with one another in filing any necessary applications,
reports or other documents with any federal or state agencies, authorities or
bodies having jurisdiction with respect to the business of the Company,
Acquisition or PRCO and in seeking any necessary approval, consultation or
prompt favorable action of, with or by any of such agencies, authorities or
bodies.
5.4 Publicity. Any public announcement or press release relating to
this Agreement or the Contemplated Transactions must be approved by the PRCO
Debenture Holder and the Company in writing before being made or released. The
Company shall have the right to issue a press release or make other disclosure
without the PRCO Debenture Holder's written approval if in the opinion of the
Company's counsel such a release is necessary to comply with SEC Rules and
Regulations or other Law; provided that, the PRCO Debenture Holder receives a
copy of such prepared press release or other disclosures for purposes of review
at least 24 hours before it is issued. This 24 hour period may be shortened if
in the opinion of the Company's counsel it is required by Law; provided that,
the PRCO Debenture Holder and the Company receives a copy of such release as
long as reasonably practical before it is issued.
5.5 Tax Returns. The current officers of the Company shall have the
right to prepare any tax returns of the Company with respect to any period that
ends on or before the Post-Closing Date. Such tax returns shall be timely filed
by the Company. PRCO shall cooperate with said officers in the preparation of
such tax returns.
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligations of PRCO. The obligation of PRCO to
consummate the Contemplated Transactions is subject to the fulfillment of each
of the following conditions, any of which may be waived by PRCO in its sole
discretion:
(a) Copies of Resolutions. At the Post-Closing (i) the Company
shall have furnished PRCO with a certificate of its CEO or President, as the
case may be, in the form of EXHIBIT 6.1(A) annexed hereto, certifying that
attached thereto are copies of resolutions duly adopted by the board of
directors of the Company authorizing the execution, delivery and performance of
this Agreement and all other necessary or proper corporate action to enable the
Company to comply with the terms of this Agreement and (ii) Acquisition shall
have furnished PRCO with a certificate of its CEO or President, as the case may
be, in the form of EXHIBIT 6.1(E) annexed hereto, certifying that attached
thereto are copies of resolutions duly adopted by the board of directors of
Acquisition authorizing the execution, delivery and performance of this
Agreement and all other necessary or proper corporate action to enable
Acquisition to comply with the terms of this Agreement.
(b) Opinion of Company's Counsel. The Company shall have
furnished to PRCO, at the Post-Closing, an opinion of its legal counsel, dated
as of the Post-Closing Date, substantially in the form of EXHIBIT 6.1(B) annexed
hereto.
(c) Opinion of Company's Special Securities Counsel. The
Company shall have furnished to PRCO, at the Post-Closing, with an opinion of
the special securities counsel to the Company, dated as of the Post-Closing
Date, substantially in the form of EXHIBIT 6.1(C) annexed hereto.
(d) Instruction Letter to Transfer Agent. The Company shall
have furnished PRCO, at the Post-Closing, with a letter to its transfer agent,
to accept the legal opinion set forth in Section 6.1(c), dated as of the
Post-Closing Date, substantially in the form of EXHIBIT 6.1(D) annexed hereto.
(e) Accuracy of Representations and Warranties; Performance of
Covenants. Each of the representations and warranties of the Company and
Acquisition set forth in this Agreement was true, correct and complete in all
material respects when made (except for representations and warranties that
speak as of a specific date, which representations and warranties shall be true,
correct and complete in all material respects as of such date) and shall also be
true, correct and complete in all material respects at and as of the
Post-Closing Date (except for representations and warranties that speak as of a
specific date, which representations and warranties shall be true, correct and
complete in all material respects as of such date), with the same force and
effect as if made at and as of the Post-Closing Date. The Company shall have
performed and complied in all material respects with all agreements and
covenants required by this Agreement to be performed by the Company and
Acquisition at or prior to the Post-Closing Date.
(f) Delivery of Certificate. (A) The Company shall have
delivered to PRCO a certificate, in the form of EXHIBIT 6.1(F) annexed hereto,
dated the Post-Closing Date, and signed by the CEO or President of the Company
affirming that the representations and warranties as set forth in Section 4.1
were and are true, correct and complete as required by Section 6.1(e) and (B)
Acquisition shall have delivered to PRCO a certificate, in the form of EXHIBIT
6.1(H) annexed hereto, dated the Post-Closing Date, and signed by the CEO or
President of Acquisition affirming that the representations and warranties as
set forth in Section 4.1 were and are true, correct and complete as required by
Section 6.1(e).
(g) Consents and Waivers. At the Post-Closing, any and all
necessary consents, authorizations, orders or approvals shall have been
obtained, except as the same shall have been waived by the PRCO Debenture
Holder.
(h) Litigation. On the Post-Closing Date, there shall be no
effective injunction, writ or preliminary restraining order or any order of any
kind whatsoever with respect to the Company issued by a court or governmental
agency (or other governmental or regulatory authority) of competent jurisdiction
restraining or prohibiting the consummation of the Contemplated Transactions or
making consummation thereof unduly burdensome to PRCO. On the Post-Closing Date
and immediately prior to consummation of the Contemplated Transactions, no
proceeding or lawsuit shall have been commenced, be pending or have been
threatened by any governmental or regulatory agency or authority or any other
Person restraining or prohibiting the consummation of the Contemplated
Transactions.
(i) Delivery of Documents and Other Information. Prior to the
Post-Closing Date, the Company and Acquisition shall have made available or
delivered to PRCO all of the agreements, contracts, documents and other
instruments requested by PRCO.
(j) Delivery of Registration Rights Agreement. The Company
shall have delivered to Highgate a fully executed Registration Rights Agreement,
in the form of EXHIBIT 6.1(J) annexed hereto, dated the Post-Closing Date.
6.2 Conditions to Obligations of the Company and Acquisition. The
obligations of the Company and Acquisition to consummate the Contemplated
Transactions are subject to the fulfillment of each of the following conditions,
any of which may be waived by the Company and Acquisition, in their sole
discretion:
(a) Copies of Resolutions. At the Post-Closing, PRCO shall
have furnished the Company with a certificate of its President, in the form of
EXHIBIT 6.2(A) annexed hereto, certifying that attached thereto are copies of
resolutions duly adopted by the board of directors of PRCO authorizing the
execution, delivery and performance of the terms of this Agreement and all other
necessary or proper corporate action to enable PRCO to comply with the terms of
this Agreement.
(b) Opinion of PRCO's Counsel. PRCO shall have furnished to
the Company, at the Post-Closing, with an opinion of counsel to PRCO, dated as
of the Post-Closing Date, substantially in the form of EXHIBIT 6.2(B) annexed
hereto.
(c) Opinion of PRCO's Special Securities Counsel. PRCO shall
have furnished to the Company, at the Closing, with an opinion of the special
securities counsel to PRCO dated as of the Post-Closing Date, substantially in
the form of EXHIBIT 6.2(C) annexed hereto.
(d) Accuracy of Representations and Warranties; Performance of
Covenants. Each of the representations and warranties of PRCO was true, correct
and complete in all material respects when made (except for representations and
warranties that speak as of a specific date, which representations and
warranties shall be true, correct and complete in all material respects as of
such date) and shall also be true, correct and complete in all material respects
at and as of the Post-Closing Date (except for representations and warranties
that speak as of a specific date, which representations and warranties shall be
true, correct and complete in all material respects as of such date), with the
same force and effect as if made at and as of the Post-Closing Date. PRCO shall
have performed and complied in all material respects with all agreements and
covenants required by this Agreement to be performed by PRCO at or prior to the
Post-Closing Date.
(e) Delivery of Certificate. PRCO shall have delivered to the
Company a certificate, in the form of EXHIBIT 6.2(E) annexed hereto, dated the
Post-Closing Date and signed by the CEO or President of PRCO, affirming that the
representations and warranties of PRCO as set forth in Section 4.2 were and are
true, correct and complete and PRCO's agreements and covenants have been
performed as required by Section 6.2(d).
(f) Compliance with Rule 504. In connection with the issuance
of the Securities by PRCO under the Purchase Agreement, on or prior to the
Post-Closing Date PRCO shall be in full compliance with Rule 504 of Regulation D
of the Securities Act of 1933, as amended, and PRCO shall have delivered to the
Company at the Post-Closing a filed copy of the Form D required to be filed with
the SEC in connection therewith.
(g) Consents and Waivers. On or prior to the Post-Closing
Date, any and all necessary consents, authorizations, orders or approvals shall
have been obtained, except as the same shall have been waived by the Company.
(h) Litigation. On the Post-Closing Date, there shall be no
effective injunction, writ or preliminary restraining order or any order of any
kind whatsoever with respect to PRCO issued by a court or governmental agency
(or other governmental or regulatory authority) of competent jurisdiction
restraining or prohibiting the consummation of the Contemplated Transactions or
making the consummation thereof unduly burdensome to the Company or PRCO. On the
Post-Closing Date, no proceeding or lawsuit shall have been commenced,
threatened or be pending or by any governmental or regulatory agency or
authority or any other person with respect to the Contemplated Transactions.
(i) Delivery of Documents and Other Information. Prior to the
Post-Closing Date, PRCO shall have made available or delivered to the Company
all of the agreements, contracts, documents and other instruments required to be
delivered pursuant to the provisions of this Agreement.
ARTICLE VII
TERMINATION
7.1 Termination by Mutual Agreement. This Agreement may be terminated
at any time by mutual consent of the parties hereto, provided that such consent
to terminate is in writing and is signed by each of the parties hereto.
7.2 Termination for Failure to Close. This Agreement shall be
automatically terminated if the Closing shall not have occurred within ten (10)
days of the date hereof (except if such 10th day is not a Business Day, then the
next Business Day).
7.3 Termination by Operation of Law. This Agreement may be terminated
by any party hereto if there shall be any statute, rule or regulation that
renders consummation of the Contemplated Transactions illegal or otherwise
prohibited, or a court of competent jurisdiction or any government (or
governmental authority) shall have issued an order, decree or ruling, or has
taken any other action restraining, enjoining or otherwise prohibiting the
consummation of such transactions and such order, decree, ruling or other action
shall have become final and nonappealable.
7.4 Termination for Failure to Perform Covenants or Conditions. This
Agreement may be terminated prior to the Post-Closing Date:
(a) by PRCO if: (i) any of the representations and warranties
made in this Agreement by the Company or Acquisition shall not be materially
true and correct, when made or at any time prior to consummation of the
Contemplated Transactions as if made at and as of such time; (ii) any of the
conditions set forth in Section 6.1 hereof have not been fulfilled in all
material respects by the Post-Closing Date; (iii) the Company or Acquisition
shall have failed to observe or perform any of its material obligations under
this Agreement; or (iv) as otherwise set forth herein; or
(b) by the Company or Acquisition if: (i) any of the
representations and warranties of PRCO or the PRCO Stockholder shall not be
materially true and correct when made or at any time prior to consummation of
the Contemplated Transactions as if made at and as of such time; (ii) any of the
conditions set forth in Section 6.2 hereof have not been fulfilled in all
material respects by the Post-Closing Date; (iii) PRCO or the PRCO Stockholder
shall have failed to observe or perform any of their material respective
obligations under this Agreement; or (iv) as otherwise set forth herein.
7.5 Effect of Termination or Default; Remedies. In the event of
termination of this Agreement as set forth above, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto,
provided that such party is a Non-Defaulting Party (as defined below). The
foregoing shall not relieve any party from liability for damages actually
incurred as a result of such party's breach of any term or provision of this
Agreement.
7.6 Remedies; Specific Performance. In the event that any party shall
fail or refuse to consummate the Contemplated Transactions or if any default
under or beach of any representation, warranty, covenant or condition of this
Agreement on the part of any party (the "Defaulting Party") shall have occurred
that results in the failure to consummate the Contemplated Transactions, then in
addition to the other remedies provided herein, the non-defaulting party (the
"Non-Defaulting Party") shall be entitled to seek and obtain money damages from
the Defaulting Party, or may seek to obtain an order of specific performance
thereof against the Defaulting Party from a court of competent jurisdiction,
provided that the Non-Defaulting Party seeking such protection must file its
request with such court within forty-five (45) days after it becomes aware of
the Defaulting Party's failure, refusal, default or breach. In addition, the
Non-Defaulting Party shall be entitled to obtain from the Defaulting Party court
costs and reasonable attorneys' fees incurred in connection with or in pursuit
of enforcing the rights and remedies provided hereunder.
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
8.1 Survival of Representations and Warranties of the Company. All
representations and warranties of the Company shall survive the execution and
delivery of this Agreement and the Post-Closing hereunder and shall thereafter
survive until the earlier of (i) the fourth anniversary of the Post-Closing Date
and (ii) the date of the PRCO Debentures have been fully converted or otherwise
cease to be outstanding (the "Conversion Date") and shall then terminate except
to the extent that notice of the Company's or Acquisition liability in respect
of any inaccuracy in or breach of any representation or warranty shall have been
given on or prior to such second anniversary or Conversion Date.
8.2 Survival of Representations and Warranties of PRCO. All
representations and warranties of PRCO shall terminate upon the Closing except
to the extent that notice of PRCO's liability in respect of any inaccuracy in or
breach of any representation or warranty shall have been given on or prior to
Closing.
8.3 Obligation of the Company to Indemnify. The Company agrees to
indemnify, defend and hold harmless PRCO (and its directors, officers,
employees, affiliates, stockholders, debenture holders, agents, attorneys,
successors and assigns) from and against all losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties and reasonable
attorneys' and consultants' fees and disbursements) (collectively, "Losses")
based upon, arising out of or otherwise in respect of any (i) inaccuracy in any
representation or warranty of the Company contained in this Agreement or in the
Schedules and Exhibits hereto or (ii) breach by the Company of any covenant or
agreement contained in this Agreement.
8.4 Obligation of and PRCO to Indemnify. PRCO agrees to indemnify,
defend and hold harmless the Company (and its directors, officers, employees,
affiliates, stockholders, agents, attorneys, successors and assigns) from and
against any Losses based upon, arising out of or otherwise in respect of any (i)
inaccuracy in any representation or warranty of PRCO contained in this Agreement
or (ii) breach by PRCO of any covenant or agreement contained in this Agreement.
8.5 Notice and Opportunity to Defend. (a) Promptly after receipt by any
Person entitled to indemnity under this Agreement (an "Indemnitee") of notice of
any demand, claim or circumstances which, with the lapse of time, would or might
give rise to a claim or the commencement (or threatened commencement) of any
action, proceeding or investigation (an "Asserted Liability") that may result in
a Loss, the Indemnitee shall give notice thereof (the "Claims Notice") to any
other party (or parties) who is or may be obligated to provide indemnification
pursuant to Section 8.3 or 8.4 (the "Indemnifying Party"). The Claims Notice
shall describe the Asserted Liability in reasonable detail and shall indicate
the amount (estimated, if necessary and to the extent feasible) of the Loss that
has been or may be suffered by the Indemnitee.
(b) The Indemnifying Party may elect to compromise or defend,
at its own expense and by its own counsel, any Asserted Liability. If the
Indemnifying Party elects to compromise or defend such Asserted Liability, it
shall within 30 days after the date the Claims Notice is given (or sooner, if
the nature of the Asserted Liability so requires) notify the Indemnitee of its
intent to do so, and the Indemnitee shall cooperate, at the expense of the
Indemnifying Party, in the compromise of, or defense against, such Asserted
Liability. If the Indemnifying Party elects not to compromise or defend the
Asserted Liability, fails to notify the Indemnitee of its election as herein
provided or contests its obligation to indemnify under this Agreement, the
Indemnitee may pay, compromise or defend such Asserted Liability and all
reasonable expenses incurred by the Indemnitee in defending or compromising such
Asserted Liability, all amounts required to be paid in connection with any such
Asserted Liability pursuant to the determination of any court, governmental or
regulatory body or arbitrator, and amounts required to be paid in connection
with any compromise or settlement consented to by the Indemnitee, shall be borne
by the Indemnifying Party. Except as otherwise provided in the immediately
preceding sentence, the Indemnitee may not settle or compromise any claim over
the objection of the Indemnifying Party. In any event, the Indemnitee and the
Indemnifying Party may participate, at their own expense, in (but the Indemnitee
may not control) the defense of such Asserted Liability. If the Indemnifying
Party chooses to defend any claim, the Indemnitee shall make available to the
Indemnifying Party any books, records or other documents within its control that
are necessary or appropriate for such defense.
ARTICLE IX
DEFINITIONS
The following terms, which are capitalized in this Agreement, shall
have the meanings set forth below for the purpose of this Agreement.
"Applicable Contract" means any Contract (a) to which the Company is a
party and under which the Company has or may acquire any material rights, (b)
under which the Company or PRCO, as the case may be, is a party and has or may
become subject to any material obligation or material liability or (c) by which
the Company or PRCO, as the case may be, or any of the material assets owned or
used by it is or may become bound.
"Contemplated Transactions" means all of the transactions contemplated
by this Agreement, including, without limitation:
(1) the Merger; and
(2) the performance by the parties of their respective
covenants and obligations under this Agreement.
"Environmental Laws" means all applicable federal, state, local or
foreign laws, rules and regulations, orders, decrees, judgments, permits,
filings and licenses relating (i) to protection and clean-up of the environment
and activities or conditions related thereto, including those relating to the
generation, handling, disposal, transportation or release of hazardous
substances and (ii) the health or safety of employees in the workplace
environment, all as amended from time to time, and shall also include any common
law theory based on nuisance, trespass, negligence or other tortious conduct.
"ERISA" means the Employee Retirement Income Security Act of 1974 or
any successor law, and regulations and rules issued pursuant to such law or any
successor law.
"GAAP" means generally accepted accounting principles in the United
States, applied on a consistent basis.
"Law" means all applicable laws, statutes, ordinances, rules,
regulations, orders, writs, injunctions, judgments or decrees entered, enacted,
promulgated, enforced or issued by any court or other governmental or regulatory
authority, domestic or foreign.
"Legal Requirement" means any federal, state, local, municipal,
foreign, international, multinational or other administrative law, ordinance,
principle of common law, regulation, statute, treaty, court or arbitrator.
"Material Adverse Effect" means a material adverse effect upon the
business or financial condition of the Company (when used in Section 4.1) or
PRCO (when used in Section 4.2), taken as a whole with any subsidiaries.
"Order" means any award, decision, injunction, judgment, order, ruling,
subpoena or verdict entered, issued, made or rendered by any court,
administrative agency or other governmental body or by any arbitrator.
"Ordinary Course of Business" means an action taken by a Person where:
(1) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day operations
of such Person;
(2) such action is not required to be authorized by the board
of directors of such Person (or by any Person or group of Persons exercising
similar authority); and
(3) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors (or by
any Person or group of Persons exercising similar authority), in the ordinary
course of the normal day-to-day operations of other Persons that are in the same
line of business as such Person.
"Organizational Documents" means the articles or certificate of
incorporation and the by-laws of a corporation and any amendment thereto.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or governmental body.
"Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or before,
or otherwise involving, any governmental body or arbitrator.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
ARTICLE X
MISCELLANEOUS
10.1 Fees and Expenses. Except as otherwise provided in this Agreement,
each party hereto will bear its own legal, accounting and other fees and
expenses incident to the Contemplated Transactions herein. Any fees and expenses
required to be paid by any party hereunder shall be limited to reasonable and
necessary fees and expenses
10.2 Modification, Amendments and Waiver. The parties hereto may amend,
modify or otherwise waive any provision of this Agreement by mutual consent,
provided that such consent and any amendment, modification or waiver is in
writing and is signed by each of the parties hereto.
10.3 Assignment. Neither the Company nor PRCO shall have the authority
to assign its respective rights or obligations under this Agreement without the
prior written consent of the PRCO Debenture Holder.
10.4 Successors. This Agreement shall be binding upon and, to the
extent permitted in this Agreement, shall inure to the benefit of the parties
and their respective successors and permitted assigns.
10.5 Entire Agreement. This Agreement and the exhibits, schedules and
other documents referred to herein contain the entire agreement among the
parties hereto with respect to the Contemplated Transactions and supersede all
prior agreements with respect thereto, whether written or oral.
10.6 Governing Law. This Agreement and the exhibits hereto shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to principles of conflicts or choice of laws thereof. Any
action to enforce the terms of this Agreement or any of its exhibits shall be
brought exclusively in the state and/or federal courts situated in the County
and State of New York. Service of process in any action by either party to
enforce the terms of this Agreement may be made by serving a copy of the summons
and complaint, in addition to any other relevant documents, by commercial
overnight courier to the other party at its principal address set forth in this
Agreement.
10.7 Notices. Any notice, request, demand, waiver, consent, approval,
or other communication which is required or permitted to be given to any party
hereunder shall be in writing and shall be deemed given only if delivered to the
party personally or sent to the party by facsimile upon electronic confirmation
of receipt (promptly followed by a hard-copy delivered in accordance with this
Section 10.7) or three days after being mailed by registered or certified mail
(return receipt requested), with postage and registration or certification fees
thereon prepaid, or if sent by nationally recognized overnight courier, one day
after being mailed, addressed to the party at its address set forth below:
If to PRCO prior to
Post-Closing: Incode Corporation
000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxx, CEO
Tel: (000) 000-0000
Fax: (000) 000-0000
If to PRCO after Incode Corporation
Post-Closing: 000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxx, CEO
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Acquisition: BIBO Acquisition, Inc.
0000 Xxx Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attn: CEO
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Company: BIB Holdings, Ltd.
0000 Xxx Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attn: CEO
Tel: (000) 000-0000
Fax: (000) 000-0000
or to such other persons or addresses as may be designated in writing by the
party to receive such notice. If mailed as aforesaid, the day of mailing or
transmission shall be the date any such notice shall be deemed to have been
delivered.
10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which shall
constitute but one agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
10.9 Rights Cumulative. All rights, powers and privileges conferred
hereunder upon the parties, unless otherwise provided, shall be cumulative and
shall not be restricted to those given by law. Failure to exercise any power
given any party hereunder or to insist upon strict compliance by any other party
shall not constitute a waiver of any party's right to demand exact compliance
with any of the terms or provisions hereof.
10.10 Severability of Provisions. The provisions of this Agreement
shall be considered severable in the event that any of such provisions are held
by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable. Such invalid, void or otherwise unenforceable provisions shall be
automatically replaced by other provisions which are valid and enforceable and
which are as similar as possible in term and intent to those provisions deemed
to be invalid, void or otherwise unenforceable and the remaining provisions
hereof shall remain enforceable to the fullest extent permitted by law.
10.11 Headings. The headings set forth in the articles and sections of
this Agreement and in the exhibits and the schedules to this Agreement are
inserted for convenience of reference only and shall not be deemed to constitute
a part hereof.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
have caused this Agreement to be executed and delivered on the date and year
first above written.
BIB HOLDINGS, LTD.
By: /S/ Xxxx Xxxxxx
-------------------------
Xxxx Xxxxxx, President
INCODE CORPORATION
By: /S/ Xxx Xxxxxxx
-------------------------
Xxx Xxxxxxx, President
BIBO ACQUISITION, INC.
By: /S/ Xxxx Xxxxxx
-------------------------
Xxxx Xxxxxx, President
