Communications World International, Inc.
Form 10-SB
Exhibit 2 (a)
PLAN AND AGREEMENT OF
MERGER
BY AND AMONG
INTERCONNECT ACQUISITION CORPORATION
COMMUNICATIONS WORLD INTERNATIONAL, INC.
IAC ACQUISITION CORPORATION
AND
THE STOCKHOLDERS
OF
INTERCONNECT ACQUISITION CORPORATION
Dated as of October 20, 1998
TABLE OF CONTENTS
-----------------
Page
----
1. DEFINITIONS............................................... 1
1.1 General Definitions....................................... 1
2. MERGER.................................................... 3
2.1 Terms of Merger........................................... 3
(a) Merger; Surviving Company................................. 3
(b) The Effective Date and Time............................... 4
(c) Registered Office and Agent............................... 4
(d) Certificate of Incorporation of Surviving Corporation..... 4
(e) Bylaws of the Surviving Corporation....................... 4
(f) Effect of Merger on Stock of Constituent Corporations..... 4
(g) Officers and Directors of Surviving Corporation........... 4
(h) Approval by Stockholders; Effective Date.................. 5
(i) Amendment................................................. 5
(j) Termination of Merger..................................... 5
(k) Tax Free Reorganization................................... 5
2.2 Further Assurances........................................ 5
3. REPRESENTATIONS AND WARRANTIES OF IAC..................... 5
3.1 Organization; Qualification............................... 6
3.2 Authority Relative to this Agreement...................... 6
3.3 Capitalization............................................ 6
3.4 Consents and Approvals.................................... 6
3.5 No Violations............................................. 7
3.6 No Brokers................................................ 7
3.7 No Liabilities............................................ 7
4. REPRESENTATIONS AND WARRANTIES OF CWII.................... 7
4.1 Organization; Qualification............................... 7
4.2 Authority Relative to this Agreement...................... 7
4.3 Consents and Approvals.................................... 8
4.4 No Brokers................................................ 8
4.5 CWII Stock; Authorized and Issued Shares.................. 8
4.6 No Violations............................................. 8
5. ADDITIONAL AGREEMENTS..................................... 8
5.1 Agreement to Consummate................................... 8
5.2 Agreement Regarding Brokers............................... 9
5.3 Filings................................................... 9
6. CONDITIONS PRECEDENT TO CLOSING........................... 9
6.1 General Conditions........................................ 9
(a) No Injunction............................................. 9
(b) Proceedings............................................... 9
(c) Legislation............................................... 9
(d) Litigation................................................ 10
6.2 Conditions to Closing in Favor of the Stockholders and IAC 10
(a) Representations and Warranties of CWII.................... 10
(b) CWII's Officers' Certificate.............................. 10
(c) Governmental Consents, Authorizations, Etc................ 10
i
(d) Closing Consideration..................................... 10
(e) Third Party Consents...................................... 10
(f) Approval.................................................. 10
(g) Certificate of Authorities................................ 11
(h) Certificate of Merger..................................... 11
(k) Other Matters............................................. 11
6.3 Conditions to Closing in Favor of CWII and Purchaser...... 11
(a) Representations and Warranties of IAC..................... 11
(b) IAC's Officers' Certificate............................... 11
(c) Governmental Consents, Authorizations, Etc................ 12
(d) Third Party Consents...................................... 12
(e) Approval.................................................. 12
(f) Certificate of Authorities................................ 12
(g) Corporate Records and Books of Account.................... 12
(h) Certificate of Merger..................................... 12
(i) Fairness Opinion.......................................... 12
(j) Other Matters............................................. 12
7. CLOSING AND TERMINATION................................... 13
7.1 Closing Date.............................................. 13
7.2 Termination............................................... 13
7.3 Effect of Termination..................................... 13
7.4 Extension; Waiver......................................... 13
8. INDEMNIFICATION........................................... 14
8.1 Indemnity by CWII and Purchaser........................... 14
8.2 Indemnity by IAC and the Stockholders..................... 14
8.3 Indemnification Notice.................................... 14
9. GENERAL PROVISIONS AND OTHER AGREEMENTS................... 15
9.1 Notices................................................... 15
9.2 Fees and Expenses......................................... 16
9.3 Interpretation............................................ 16
9.4 Counterparts.............................................. 16
9.5 Miscellaneous............................................. 16
9.6 Publicity................................................. 16
9.7 Invalid Provisions........................................ 16
9.8 Binding Effect............................................ 17
9.9 Captions.................................................. 17
9.10 Attorneys' Fees........................................... 17
9.11 Jurisdiction and Venue.................................... 17
9.12 Assignability............................................. 17
9.13 Entirety.................................................. 17
9.14 Amendment................................................. 17
9.15 Survival of Representations and Warranties................ 18
LIST OF EXHIBITS
Exhibit A - Right, Designations and Preferences of Preferred Stock
Exhibit B - Form of Certificate of Merger
Exhibit C - Ownership of IAC Common Stock
ii
PLAN AND AGREEMENT OF MERGER
----------------------------
THIS PLAN AND AGREEMENT OF MERGER (this "Agreement") is made as of October
20, 1998, by and among INTERCONNECT ACQUISITION CORPORATION, a Delaware
corporation ("IAC"), COMMUNICATIONS WORLD INTERNATIONAL, INC., a Colorado
corporation ("CWII"), IAC ACQUISITION CORPORATION, a Colorado corporation and a
wholly-owned subsidiary of CWII ("Purchaser"), XXXXX X. XXXXXXXXXX, a resident
of Arapahoe County, Colorado, XXXXXX XXXXX, a resident of Arapahoe County,
Colorado, XXXX XXXXXXX, a resident of Arapahoe County, Colorado, and XXXX XXXXX,
a resident of Collin County, Texas, (the foregoing individuals, collectively,
the "Stockholders" and each, a "Stockholder"), such individuals being all of the
stockholders of IAC.
In consideration of the mutual covenants and agreements contained herein,
the parties covenant and agree as follows:
1. DEFINITIONS
1.1 General Definitions. Unless otherwise stated in this Agreement, the
-------------------
following terms shall have the following meanings:
"Affiliate": Any Person that, directly or indirectly, controls, or is
---------
controlled by or under common control with, another Person. For the purposes of
this definition, "control" (including the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities or by
contract or otherwise.
"Certificate of Merger": The Certificate of Merger in the form attached hereto
---------------------
as Exhibit "B."
"Closing": As defined in Section 7.1 hereof.
-------
"Closing Date": As defined in Section 7.1 hereof.
------------
"CWII Preferred Stock": shall mean the Series I Convertible Preferred Stock,
--------------------
$1.00 par value per share, of CWII, the rights, designations and preferences of
which are described on Exhibit "A" attached hereto.
"Effective Date": As defined in Section 2.1(b) hereof.
--------------
"Governmental Body": Any court or any federal, state, municipal or other
-----------------
governmental department, commission, board, bureau, agency, authority or
instrumentality, domestic or foreign.
"IAC Common Stock": Common stock, $0.01 par value per share, of IAC.
----------------
PLAN AND AGREEMENT OF MERGER - Page 1
----------------------------
"Liens": shall mean all mortgages, deeds of trust, claims, liens, security
-----
interests, pledges, leases, conditional sale contracts, rights of first refusal,
options, charges, liabilities, obligations, agreements, easements, rights-of-
way, powers of attorney, limitations, reservations, restrictions and other
encumbrances of any kind.
"Merger": shall mean the merger of IAC with and into Purchaser in a transaction
------
qualifying as a tax-free reorganization under Section 368(a)(1)(A) of the Code.
"Operative Documents": All agreements, instruments, documents, schedules,
-------------------
exhibits and certificates executed and delivered by or on behalf of the
Stockholders, Purchaser, IAC or CWII at or before the Closing pursuant to this
Agreement.
"Order": Any order, writ, injunction, decree, judgment, award or determination
-----
of any Governmental Body.
"Permits": All permits, authorizations, certificates, approvals, registrations,
-------
variances, exemptions, rights-of-way, franchises, privileges, immunities,
grants, ordinances, licenses and other rights of every kind and character (a)
under any (1) federal, state, local or foreign statute, ordinance or regulation,
(2) Order or (3) contract with any Governmental Body or (b) granted by any
Governmental Body.
"Person": An individual, partnership, joint venture, corporation, company,
------
limited liability company, bank, trust, unincorporated organization,
Governmental Body or other entity or group.
"Proceeding": Any action, order, claim, suit, proceeding, litigation,
----------
investigation, inquiry, review or notice.
"Securities Act": shall mean the Securities Act of 1933.
--------------
"Stock Consideration": As defined in Section 2.2 hereof.
-------------------
"Stockholders Agreement": That certain Stockholders Agreement dated May 29,
----------------------
1998 by and among IAC and the Stockholders of IAC.
"Subsidiary" or "Subsidiaries" with respect to any corporation shall mean any
---------- ------------
other corporation of which at least a majority of the securities having by their
terms ordinary voting power to elect a majority of the Board of Directors of
such other corporation is at the time directly or indirectly owned or controlled
by such first corporation, or by such first corporation and one or more of its
Subsidiaries.
"Surviving Corporation": As defined in Section 2.1(a).
---------------------
"Taxes": Any federal, state, local or foreign income, sales, excise, real or
-----
personal property or other taxes, assessments, fees, levies, imposts, duties,
deductions or other charges of any nature
PLAN AND AGREEMENT OF MERGER - Page 2
----------------------------
whatsoever (including, without limitation, interest and penalties) imposed by
any law, rule or regulation.
"Third Party Consents": As defined in Section 6.3(f) hereof.
--------------------
"Threatened": Any matter or thing will be deemed to have been "Threatened" when
----------
used herein with respect to any party if that party has received notice, in
writing, from the Person to whom the threat is attributable, or such Person's
agents, which makes specific reference to and clearly identifies the matter or
thing being threatened.
"Transaction" or "Transactions": The consummation of the Merger and the
----------- ------------
performance of the other covenants and transactions described in this Agreement.
"Transaction Expenses": The expenses incurred in connection with the
--------------------
preparation, negotiation, execution and performance of this Agreement and the
Transactions, including all fees and expenses of counsel and representatives.
Other defined terms shall have the meanings ascribed to such terms elsewhere
herein.
2. MERGER
2.1 Terms of Merger. Subject to the terms and conditions set forth
---------------
herein, on the Closing Date, IAC shall be merged into Purchaser as described
below.
(a) Merger; Surviving Company. In accordance with the applicable laws
-------------------------
of the State of Delaware and the State of Colorado, upon the Effective Date
the separate existence of IAC shall thereupon cease, and Purchaser, as the
surviving corporation in the Merger (the "Surviving Corporation"), shall
continue its corporate existence under the laws of the State of Colorado.
The Surviving Corporation shall possess all of the rights, privileges,
immunities, powers, franchises and authority, whether of a public or of a
private nature, and be subject to all restrictions, disabilities and duties
of each of the constituent corporations, and all the rights, privileges,
immunities, powers, franchises and authority of each of the constituent
corporations, and all assets and property of every description, real,
personal, and mixed, and every interest therein, wherever located, and all
debts or other obligations belonging or due to either of the constituent
corporations on whatever account, as well as stock subscriptions and all
other choses in action or every other interest of or belonging to each of
such corporations shall be vested in the Surviving Corporation; and all
property, rights, privileges, immunities, powers, franchises and authority,
and all other interests, shall be thereafter as effectually the property of
the Surviving Corporation as they were of the constituent corporations; but
all rights of creditors and all Liens upon any property of either of the
constituent corporations shall be preserved unimpaired, and the Surviving
Corporation shall be liable for the obligations of each of the constituent
corporations and any claim existing, or action or proceeding
PLAN AND AGREEMENT OF MERGER - Page 3
----------------------------
pending, by or against either of the constituent corporations may be
prosecuted to judgment with right of appeal, as if the Merger had not taken
place.
(b) The Effective Date and Time. The Certificate of Merger shall be
---------------------------
filed with and recorded by the Secretary of State of Colorado and the
Secretary of State of Delaware concurrently with the Closing, and the
Merger shall be effective at midnight, local Denver time, on the date of
such filings (the "Effective Date").
(c) Registered Office and Agent. The registered agent and address of
---------------------------
the registered office of the Surviving Corporation in the State of Colorado
will be Xxxxx X. Xxxxxx at 0000 X. Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxx 00000.
(d) Certificate of Incorporation of Surviving Corporation. The
-----------------------------------------------------
Certificate of Incorporation of the Surviving Corporation shall be the
Certificate of Incorporation of Purchaser as in effect on the date hereof
without change, unless and until amended in accordance with applicable law.
(e) Bylaws of the Surviving Corporation. The Bylaws of the Surviving
-----------------------------------
Corporation shall be the Bylaws of Purchaser as in effect on the date
hereof without change, unless and until amended or repealed in accordance
with applicable law.
(f) Effect of Merger on Stock of Constituent Corporations. On the
-----------------------------------------------------
Effective Date, (i) each one hundred outstanding shares of IAC Common Stock
shall be converted into one (1) share of CWII Preferred Stock, and (ii)
each issued share of IAC Common Stock held in treasury by IAC shall be
returned and canceled and no shares of CWII Preferred Stock shall be issued
in respect thereof. On and after the Effective Date, all of the outstanding
certificates which prior to that time represented shares of IAC Common
Stock shall be deemed for all purposes to evidence ownership of and to
represent shares of CWII Preferred Stock into which the shares of IAC
Common Stock represented by such certificates have been converted, as
herein provided, and shall be so registered on the books and records of
CWII. The registered owners of all such outstanding stock certificates
shall, until such certificates shall have been surrendered for transfer or
conversion or otherwise accounted for to CWII, have and be entitled to
exercise any voting and other rights with respect to and to receive any
dividends and other distributions upon the shares of CWII Preferred Stock
evidenced by such outstanding certificates as above provided.
(g) Officers and Directors of Surviving Corporation. Upon the
-----------------------------------------------
Effective Date, the officers and directors of the Surviving Corporation
shall be the officers and directors of Purchaser in office at such date,
and such persons shall hold office in accordance with the Bylaws of the
Surviving Corporation or until their respective successors shall have been
appointed or elected. If, upon the Effective Date, a vacancy shall exist in
the Board of Directors of the Surviving Corporation, such vacancy shall be
filled in the manner provided by its Certificate of Incorporation and
Bylaws.
PLAN AND AGREEMENT OF MERGER - Page 4
----------------------------
(h) Approval by Stockholders; Effective Date. This Agreement and the
----------------------------------------
Merger contemplated hereby are subject to approval by the requisite vote of
the stockholders of IAC in accordance with applicable Delaware law. As
promptly as practicable after approval of this Agreement by the
stockholders of IAC in accordance with applicable law, duly authorized
officers of the respective parties shall make and execute a Certificate of
Merger and such other documents as shall be reasonably necessary to
consummate the Merger and shall cause such documents to be filed with the
Secretary of States of Delaware and Colorado, respectively, in accordance
with the laws of the States of Colorado and Delaware.
(i) Amendment. The Board of Directors of Purchaser and IAC may amend
---------
this Agreement at any time prior to the Effective Date, provided that an
amendment made subsequent to the approval of the Merger by the stockholders
of IAC shall not (i) alter or change the amount or kind of shares to be
received by exchange for or on conversion of all or any of the shares of
IAC Common Stock, (ii) alter or change any term of the Certificate of
Incorporation of the Surviving Corporation, or (iii) alter or change any of
the terms and conditions of this Agreement, if such alteration or change
would adversely affect the holders of IAC Common Stock.
(j) Termination of Merger. This Agreement may be terminated and the
---------------------
Merger abandoned at any time prior to the filing of a Certificate of Merger
with the Secretary of State of Colorado and the Secretary of State of
Delaware, whether before or after stockholder approval of this Agreement,
by the consent of the Board of Directors of IAC and Purchaser.
(k) Tax Free Reorganization. It is intended that the Merger will
-----------------------
qualify as a tax free reorganization within the meaning of Section
368(a)(1)(A) and (a)(1)(F) of the Internal Revenue Code of 1986, as
amended.
2.2 Further Assurances. At the Closing, and at all times thereafter as
------------------
may be reasonably necessary, the officers of IAC shall execute and deliver to
Purchaser such instruments of transfer as shall be reasonably necessary or
appropriate to vest in Purchaser title of the type specified herein to the
assets of IAC and to otherwise comply with the terms, purposes and intent of
this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF IAC
IAC hereby represents and warrants to CWII and Purchaser that the following are
true and correct as of the date of this Agreement and will be true and correct
(without limitation) through the Closing Date, regardless of what
investigations, if any, CWII shall have made prior hereto or prior to Closing:
PLAN AND AGREEMENT OF MERGER - Page 5
----------------------------
3.1 Organization; Qualification. IAC (a) is a corporation duly organized,
---------------------------
validly existing and in good standing under the laws of the State of Delaware,
(b) has all requisite power and authority to own and lease all of the properties
and assets it now owns and leases and to carry on its businesses as now being
conducted, and (c) is duly qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary.
3.2 Authority Relative to this Agreement. IAC has full power and
------------------------------------
authority (corporate and otherwise) to execute, deliver and perform this
Agreement (including, without limitation, execution, delivery and performance of
the Operative Documents to which it is a party) and to consummate the
Transactions. The execution and delivery by IAC of this Agreement and the
Operative Documents, and the consummation of the Transactions, have been duly
and validly authorized by IAC and no other actions on the part of IAC are
necessary with respect thereto. This Agreement and the Operative Documents have
been duly and validly executed and delivered by IAC, and constitute the legal,
valid and binding obligations of IAC, enforceable against it in accordance with
its terms. IAC will take all corporate action that is necessary for IAC to
complete the Transactions pursuant to this Agreement.
3.3 Capitalization.
--------------
(a) The authorized capital stock of IAC consists solely of One Million
(1,000,000) shares of common stock, $0.01 par value per share, of which One
Hundred Thousand (100,000) shares are issued and outstanding. As of the
date hereof, such shares of IAC Common Stock are the only shares of capital
stock of IAC outstanding. All such outstanding shares of IAC Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable. There are no outstanding options, warrants, rights,
subscriptions, claims of any character, agreements, obligations,
convertible or exchangeable securities or other commitments, contingent or
otherwise, relating to the capital stock of IAC, pursuant to which IAC is
or may become obligated to issue or exchange any share of capital stock.
There is not now any Person who holds shares of capital stock of IAC other
than as set forth on Exhibit "C" attached hereto.
(b) Other than the "Stockholders Agreement", there is no outstanding
subscription, option, warrant, call, right, agreement or commitment
(including any right of conversion or exchange under any outstanding
security or other instrument) entitling any person to purchase or otherwise
acquire from IAC any capital stock of IAC or any security convertible into
or exchangeable therefor, or any other right to acquire, any capital stock
of IAC or relating to the issuance, sale, delivery or transfer of Stock by
the Stockholders or IAC. Other than the Stockholders Agreement, there are
no outstanding contractual obligations of IAC to repurchase, redeem or
otherwise acquire any of its outstanding of IAC to repurchase, redeem or
otherwise acquire any of its outstanding capital stock.
3.4 Consents and Approvals. Except for the approval of the Merger by the
----------------------
stockholders of IAC, the execution, delivery and performance by IAC of this
Agreement and the
PLAN AND AGREEMENT OF MERGER - Page 6
----------------------------
Operative Documents and the consummation of the Transactions by it requires no
consent, approval, order or authorization of, action by or in respect of, or
registration or filing with, any Governmental Body or other Person.
3.5 No Violations. The execution, delivery and performance of this
-------------
Agreement and the Operative Documents by IAC, the consummation by IAC of the
Transactions and compliance by IAC with the provisions hereof does not and will
not (a) conflict with or result in any breach or violation of any provision of
the Certificate of Incorporation or Bylaws of IAC, (b) result in a default, or
give rise to any right of termination, cancellation or acceleration or loss
under any of the provisions of any note, bond, mortgage, indenture, license,
trust, agreement, lease or other instrument or obligation to which IAC is a
party or by which IAC may be bound, (c) result in the creation or imposition of
any Lien on any of the property of IAC, (d) violate any Order, statute, rule or
regulation applicable to IAC, or (e) violate any territorial restriction on IAC
or any noncompetition or similar arrangement.
3.6 No Brokers. IAC has not employed any broker, agent or finder or
----------
incurred any Liability for any brokerage fees, commissions or finders' fees in
connection with the Transactions.
3.7 No Liabilities. At Closing, IAC shall have no outstanding debts,
--------------
liabilities or obligations.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND CWII
Purchaser and CWII hereby represent and warrant to IAC and the Stockholders that
the following are true and correct as of the date of this Agreement and will be
true and correct through the Closing Date, regardless of what investigations, if
any, IAC or the Stockholders shall have made prior hereto or prior to the
Closing:
4.1 Organization; Qualification. Each of CWII and Purchaser (a) is a
---------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Colorado, (b) has all requisite power and authority to own and
lease all of the properties and assets it now owns and leases and to carry on
its businesses as now being conducted, and (c) is duly qualified or licensed to
do business as a foreign corporation and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary.
4.2 Authority Relative to this Agreement. Each of CWII and Purchaser has
------------------------------------
full power and authority (corporate and otherwise) to execute, deliver and
perform this Agreement (including, without limitation, execution, delivery and
performance of the Operative Documents to which it is a party) and to consummate
the Transactions. The execution and delivery by each of CWII and Purchaser of
this Agreement and the Operative Documents, and the consummation of the
Transactions, have been duly and validly authorized by CWII and Purchaser and no
other actions on the part of CWII or Purchaser are necessary with respect
thereto. This Agreement and the
PLAN AND AGREEMENT OF MERGER - Page 7
----------------------------
Operative Documents have been duly and validly executed and delivered by CWII
and Purchaser, and constitute the legal, valid and binding obligations of CWII
and Purchaser, enforceable against each of CWII and Purchaser in accordance with
its terms. CWII and Purchaser will take all corporate action that is necessary
for CWII and Purchaser to complete the Transactions pursuant to this Agreement.
4.3 Consents and Approvals. Except as set forth in or otherwise required
----------------------
by this Agreement or the Operative Documents, the execution, delivery and
performance by CWII and Purchaser of this Agreement and the consummation of the
Transactions by it requires no consent, approval, order or authorization of,
action by or in respect of, or registration or filing with, any Governmental
Body or other Person, other than the consent of Toshiba.
4.4 No Brokers. Neither CWII nor Purchaser has not retained any broker,
----------
agent or finder or incurred any Liability for any brokerage fees, commissions or
finders' fees in connection with the Transactions, other than the retention of
Century Capital by CWII for purposes of rendering a fairness opinion concerning
the Transactions.
4.5 CWII Stock; Authorized and Issued Shares. The shares of CWII Preferred
----------------------------------------
Stock to be issued or delivered by CWII in connection with the Merger have been
duly authorized for issuance and will, when issued and delivered as provided in
this Agreement, be duly and validly issued, fully paid and non-assessable, and
will be delivered to the Stockholders free and clear of all Liens. The
authorized capital stock of CWII consists of 2,000,000 shares of Common Stock,
no par value per share, and 2,700,000 shares of Preferred Stock, $1.00 par value
per share. As of September 30, 1998, there were 1,916,071 shares of Common
Stock issued and outstanding and 953,005 shares of Preferred Stock issued and
outstanding. Purchaser is a wholly-owned subsidiary of CWII. CWII is currently
engaged in an offering of convertible preferred stock and warrants to purchase
Common Stock.
4.6 No Violations. The execution, delivery and performance of this
-------------
Agreement and the Operative Documents by CWII and Purchaser, the consummation by
CWII and Purchaser of the Transactions and compliance by CWII and Purchaser with
the provisions hereof does not and will not (a) conflict with or result in any
breach or violation of any provision of the Certificate of Incorporation or
Bylaws of CWII or Purchaser, (b) result in a default, or give rise to any right
of termination, cancellation or acceleration or loss under any of the provisions
of any note, bond, mortgage, indenture, license, trust, agreement, lease or
other instrument or obligation to which CWII or Purchaser is a party or by which
CWII or Purchaser may be bound, (c) result in the creation or imposition of any
Lien on any of the property of CWII or Purchaser, (d) violate any Order,
statute, rule or regulation applicable to CWII or Purchaser, or (e) violate any
territorial restriction on CWII or Purchaser or any noncompetition or similar
arrangement.
5. ADDITIONAL AGREEMENTS
5.1 Agreement to Consummate. Subject to the terms and conditions herein
-----------------------
provided, each of the parties hereto agrees to use their best efforts to do all
things necessary, proper or
PLAN AND AGREEMENT OF MERGER - Page 8
----------------------------
advisable under applicable laws and regulations to consummate and make
effective, as soon as reasonably practicable, the Transactions contemplated by
the Operative Documents, including, but not limited to, the obtaining of all
consents, authorizations, orders and approvals required in connection therewith
and initiating or defending any legal action that is necessary or appropriate to
permit the Transactions to be consummated. At any time after the Closing Date,
if any further action is necessary, proper or advisable to carry out the
purposes of this Agreement, then, as soon as is reasonably practicable, each
party to this Agreement shall take, or cause its proper officers to take, such
action. No party to this Agreement shall take or cause to be taken any action
that would cause the representations or warranties expressed herein to be untrue
or incorrect on the Closing Date.
5.2 Agreement Regarding Brokers. Except for the fee payable to Century
---------------------------
Capital for rendering the fairness opinion discussed in Section 4.4 above, each
party agrees that it will pay or dispute, and hold the other party harmless
from, any claims of brokers or others for finder's or brokerage fees asserted as
a result of representations by such party to such brokers or others.
5.3 Filings. The parties will each make or cause to be made any filings
-------
and submissions under the laws of any jurisdiction, to the extent that such
filings are necessary to consummate the transactions contemplated hereby and
will take all actions necessary to consummate the transactions contemplated
hereby in a manner consistent with the applicable laws of such jurisdiction.
Each party will furnish to the other party such necessary information and
reasonable assistance as such other party may request in connection with its
preparation of necessary filings or submissions to any governmental entity.
6. CONDITIONS PRECEDENT TO CLOSING
6.1 General Conditions. Consummation of the Transactions shall be subject
------------------
to the fulfillment at the Closing Date of each of the following conditions:
(a) No Injunction. No court having jurisdiction shall have issued an
-------------
injunction preventing the consummation of the Transactions that shall not
have been stayed or dissolved prior to or on the Closing Date.
(b) Proceedings. All proceedings taken or to be taken in connection
-----------
with the Transactions, and all documents incident thereto shall be
reasonably satisfactory in form and substance to the parties and their
counsel, and the parties and their counsel shall have received all such
counterpart originals or certified or other copies of such documents as the
parties or their counsel may reasonably request.
(c) Legislation. No law or legally binding regulation shall have been
-----------
enacted that does or would prohibit, restrict or delay consummation of the
Transactions or any of the conditions to the consummation of the
Transactions.
PLAN AND AGREEMENT OF MERGER - Page 9
----------------------------
(d) Litigation. There shall be no effective Order of any nature
----------
(including any temporary restraining order) issued by a Governmental Body
of competent jurisdiction restraining or prohibiting consummation or
altering the terms of any of the Transactions, or actions seeking damages
based upon the foregoing.
6.2 Conditions to Closing in Favor of the Stockholders and IAC.
----------------------------------------------------------
Consummation of the Transactions shall be subject to the fulfillment, to the
reasonable satisfaction of IAC and the Stockholders, or their written waiver, at
or before the Closing Date, of each of the following conditions:
(a) Representations and Warranties of CWII. The representations,
--------------------------------------
warranties and statements of CWII and Purchaser contained in this Agreement
and the Operative Documents shall be complete and accurate as of the date
of this Agreement and shall also be complete and accurate at and as of the
Closing Date, except for changes contemplated by this Agreement, as if made
on the Closing Date; and CWII and Purchaser shall have performed or
complied with all agreements and covenants required by this Agreement to be
performed or complied with by it at or prior to the Closing Date.
(b) CWII's Officers' Certificate. CWII and Purchaser shall have
----------------------------
delivered to the Stockholders an Officers' Certificate, dated the Closing
Date, of CWII and Purchaser certifying to (a) the due adoption by the Board
of Directors of the resolutions approving the execution and delivery of
this Agreement, and the consummation of the Transactions, (b) the
incumbency of the President, Secretary and other officers of CWII and
Purchaser executing any of the Operative Documents, and (c) the
satisfaction of the items in subsection (a) above.
(c) Governmental Consents, Authorizations, Etc. All material
------------------------------------------
consents, authorizations, orders or approvals of, and filings or
registrations with, and any permits, licenses or other authorizations that
are required for, or in connection with, the execution and delivery of this
Agreement by CWII and Purchaser and the consummation by CWII and Purchaser
of the Transactions shall have been obtained or made.
(d) Closing Consideration. CWII shall have delivered to the
---------------------
Stockholders the shares of CWII Preferred Stock to be received by them in
connection with the Merger.
(e) Third Party Consents. CWII and Purchaser shall have delivered to
--------------------
IAC and the Stockholders copies of all Third Party Consents (including,
without limitation, the consent of Toshiba) necessary to permit the
consummation of the Transactions contemplated by this Agreement in a form
satisfactory to IAC and the Stockholders.
(f) Approval. The Board of Directors of Purchaser shall have approved
--------
this Agreement and the transactions contemplated hereby.
PLAN AND AGREEMENT OF MERGER - Page 10
----------------------------
(g) Certificate of Authorities. CWII and Purchaser shall have
--------------------------
furnished to IAC and the Stockholders (i) certificates of the Secretary of
State of each state in which CWII or Purchaser is organized or
incorporated, dated as of a date not more than five (5) business days prior
to the Closing Date, attesting to the incorporation and good standing of
CWII and Purchaser, (ii) a copy, certified by the Secretary of State of
each state in which CWII or Purchaser is organized or incorporated, as of a
date not more than five (5) business days prior to the Closing Date, of the
Certificate of Incorporation and all amendments thereto for CWII and
Purchaser, (iii) a copy, certified by the Secretary of CWII and Purchaser,
of the Bylaws of CWII and Purchaser, as amended and in effect as of the
Closing Date, and (iv) a copy, certified by the Secretary of CWII and
Purchaser, of resolutions duly adopted by the Board of Directors of CWII
and Purchaser duly authorizing the transactions contemplated in this
Agreement.
(h) Certificate of Merger. IAC and the Stockholders shall have
---------------------
received fully-executed Certificates of Merger and such other documents as
shall be reasonably necessary to consummate the Merger sufficient for
filing with the States of Delaware and Colorado in order to consummate the
Merger.
(i) Other Matters. CWII and Purchaser shall have delivered to IAC, in
-------------
form and substance reasonably satisfactory to counsel for IAC and the
Stockholders, such certificates and other evidence as IAC and the
Stockholders may reasonably request as to the satisfaction of the
conditions contained in this Section 6.2.
6.3 Conditions to Closing in Favor of CWII and Purchaser. Consummation of
----------------------------------------------------
the Transactions shall be subject to the fulfillment, to the reasonable
satisfaction of CWII and Purchaser, or their written waiver, at or before the
Closing Date of the following conditions:
(a) Representations and Warranties of IAC. The representations,
-------------------------------------
warranties and statements of IAC contained in this Agreement shall be
complete and accurate as of the date of this Agreement and shall also be
complete and accurate at and as of the Closing Date, except for changes
contemplated by this Agreement, as if made at and as of the Closing Date;
and IAC shall have performed or complied with all agreements and covenants
required by this Agreement to be performed or complied with by it at or
prior to the Closing Date.
(b) IAC's Officers' Certificate. IAC shall have delivered to CWII and
---------------------------
Purchaser an Officers' Certificate, dated the Closing Date, of IAC
certifying to (a) the due adoption by the Board of Directors and the
Stockholders of IAC of the resolutions approving the execution and delivery
of this Agreement, and the consummation of the Transactions, (b) the
incumbency of the President, Secretary and other officers of IAC executing
any of the Operative Documents, and (c) the satisfaction of the items in
subsection (a) above.
PLAN AND AGREEMENT OF MERGER - Page 11
----------------------------
(c) Governmental Consents, Authorizations, Etc. All material
------------------------------------------
consents, authorizations, orders or approvals of, and filings or
registrations with, and any permits, licenses or other authorizations that
are required for or in connection with, the execution and delivery of this
Agreement by the stockholders and the consummation by the Stockholders of
the Transactions shall have been obtained or made.
(d) Third Party Consents. IAC shall have delivered to CWII and
--------------------
Purchaser copies of all Third Party Consents, if any, necessary to permit
the consummation of the Transactions contemplated by this Agreement in a
form satisfactory to CWII.
(e) Approval. The Board of Directors of IAC and the stockholders of
--------
IAC each shall have approved this Agreement and the transactions
contemplated hereby.
(f) Certificate of Authorities. IAC shall have furnished to CWII and
--------------------------
Purchaser (i) certificates of the Secretary of State of each state in which
IAC is organized or incorporated, dated as of a date not more than five (5)
business days prior to the Closing Date, attesting to the incorporation and
good standing of IAC, (ii) a copy, certified by the Secretary of State of
each state in which IAC is organized or incorporated, as of a date not more
than five (5) business days prior to the Closing Date, of the Certificate
of Incorporation and all amendments thereto for IAC, (iii) a copy,
certified by the Secretary of IAC, of the Bylaws of IAC, as amended and in
effect as of the Closing Date, and (iv) a copy, certified by the Secretary
of IAC, of resolutions duly adopted by the Board of Directors of IAC duly
authorizing the transactions contemplated in this Agreement.
(g) Corporate Records and Books of Account. The respective corporate
--------------------------------------
seals, articles of incorporation, bylaws, stock certificates, stock
transfer ledgers, and corporate books and records of IAC, updated up to the
Closing Date, shall be delivered to CWII.
(h) Certificate of Merger. CWII shall have received from IAC fully-
---------------------
executed Certificates of Merger and such other documents as shall be
reasonably necessary to consummate the Merger sufficient for filing with
the States of Delaware and Colorado in order to consummate the Merger.
(i) Fairness Opinion. CWII shall have received a fairness opinion
----------------
with respect to the Merger in form and substance reasonably satisfactory to
CWII.
(j) Subscription Agreement. CWII shall have received a subscription
----------------------
agreement from the Stockholders in form and substance reasonably
satisfactory to CWII.
(k) Other Matters. IAC shall have delivered to CWII and Purchaser, in
-------------
form and substance reasonably satisfactory to counsel for CWII and
Purchaser, such certificates and other evidence as CWII may reasonably
request as to the satisfaction of the conditions contained in this Section
6.3.
PLAN AND AGREEMENT OF MERGER - Page 12
----------------------------
7. CLOSING AND TERMINATION
7.1 Closing Date. Subject to the right of CWII, Purchaser and the
------------
Stockholders of IAC to terminate this Agreement pursuant to Section 7.2 hereof,
the closing of the Transactions (the "Closing") shall, unless another date or
place is agreed to in writing by IAC and CWII, take place at the offices of
Xxxxxx X. Bearman, Bearman, Xxxxxxxxx & Xxxxxxx, 0000 Xxxxxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxx 00000-0000 at 10:00 a.m. on October _______, 1998 (the
"Closing Date") or such other place and date as all the parties may agree upon
in writing.
7.2 Termination. This Agreement may be terminated at any time prior to the
-----------
Closing Date:
(a) by written agreement of CWII, Purchaser, IAC and the Stockholders;
(b) by IAC and the Stockholders if any representation or warranty of
CWII or Purchaser or by CWII and Purchaser if any representation or
warranty of IAC contained herein shall have been incorrect or breached in
any material respect, as to which notice shall have been given to the
breaching party, and shall not have been cured or otherwise resolved to the
reasonable satisfaction of the other party on or before the Closing Date,
or by either CWII and Purchaser or IAC and the Stockholders if any
condition to the consummation of the Transactions contemplated hereunder
that must be fulfilled to its satisfaction has become impractical to be
fulfilled;
(c) by either CWII and Purchaser or IAC and the Stockholders if any
permanent injunction or other order of a court or other competent authority
preventing the consummation of the Transactions shall have become final and
non-appealable; or,
(d) by CWII and Purchaser or IAC and the Stockholders if the Closing
has not occurred by October _______, 1998; provided, however, that such
date may be extended by written agreement among the parties and provided,
further, that no party shall be permitted to terminate hereunder if such
party is in violation of this Agreement.
7.3 Effect of Termination. In the event of the termination of this
---------------------
Agreement as provided herein, this Agreement shall become wholly void and have
no further force and effect except as hereinafter provided; and there shall be
no Liability on the part of the Stockholders and IAC or CWII and Purchaser,
except to pay the fees and expenses as apportioned in Section 9.2 and except as
otherwise expressly provided herein. Nothing contained herein shall relieve any
party from liability for its breach of this Agreement.
7.4 Extension; Waiver. At any time prior to the Closing Date, any party
-----------------
hereto that is entitled to the benefits hereof (with respect to any such
corporate party by action taken by its Board of Directors or a duly authorized
officer), may (a) extend the time for the performance of any of the obligations
or other acts of any of the other parties hereto, (b) in whole or in part, waive
any inaccuracy in the representations and warranties of any of the other parties
hereto contained herein
PLAN AND AGREEMENT OF MERGER - Page 13
----------------------------
or in any exhibit or schedule hereto or in any document delivered pursuant
hereto, and (c) in whole or in part, waive compliance with any of the agreements
of any of the other parties hereto or conditions contained herein. Any agreement
on the part of any party hereto to any such extension or waiver shall only be
valid if same is set forth in an instrument in writing signed and delivered on
behalf of such party.
INDEMNIFICATION
8.1 Indemnity by CWII and Purchaser. CWII and Purchaser agree to indemnify
-------------------------------
and hold the Stockholders, IAC and IAC's officers, directors, agents, attorneys
and accountants harmless from any and all damages, losses (which shall include
any diminution in value, liabilities, joint or several), payments, obligations,
penalties, claims, litigation, demands, defenses, judgments, suits, proceedings,
costs, disbursements or expenses (including without limitation, fees,
disbursements and expenses of attorneys, accountants and other professional
advisors and of expert witnesses and costs of investigation and preparation) of
any kind or nature whatsoever (collectively "Damages"), directly or indirectly
resulting from, relating to or arising out of:
(a) any breach or nonperformance (partial or total) of or inaccuracy
in any representation or warranty or covenant or agreement of CWII or
Purchaser contained in this Agreement or any Operative Document which
survives the Closing hereof; and,
(b) CWII's or Purchaser's business conducted prior to the Closing, but
only with respect to a claim made by a third party..
8.2 Indemnity by IAC and the Stockholders. The Stockholders and IAC agree
-------------------------------------
to jointly and severally indemnify and hold CWII and Purchaser and CWII's and
Purchaser's officers, directors, agents, attorneys and accountants harmless from
any and all Damages directly or indirectly resulting from, relating to and
arising out of:
(a) any breach or nonperformance (partial or total) of or inaccuracy
in any representation or warranty or covenant or agreement of IAC contained
in this Agreement or any Operative Document which survives the Closing
hereof; and,
(b) IAC's business conducted prior to the Closing, but only with
respect to a claim made by a third party..
8.3 Indemnification Notice. If any Person intends to exercise its right to
----------------------
indemnification provided in this Article 8 (an "Indemnitee"), such Indemnitee
shall provide the party or parties from whom the indemnification will be sought
(the "Indemnitor") at least fifteen (15) days prior written notice (the
"Indemnification Notice") of such Indemnitee's intention to do so and the facts
or circumstances giving rise to the claim ("Indemnification Claim"). Nothing
contained herein shall preclude any Indemnitee from taking any actions deemed
reasonably necessary or appropriate in response to any third party claims during
such interim period. An Indemnification Claim may, at the option of Indemnitee,
be asserted as soon as any situation, event
PLAN AND AGREEMENT OF MERGER - Page 14
----------------------------
or occurrence has been noticed by Indemnitee regardless whether actual harm has
been suffered or out-of-pocket expenses incurred. During such fifteen (15) day
period, the Indemnitor shall be entitled to cure the defect or situation giving
rise to the Indemnification Claim to the satisfaction of Indemnitee. If the
Indemnitor is unwilling or unable to cure the defect giving rise to the
Indemnification Claim during such fifteen (15) period, Indemnitee may, on the
sixteenth (16th) day after the Indemnification Notice, seek indemnification as
provided in this Article 8.
9. GENERAL PROVISIONS AND OTHER AGREEMENTS
9.1 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed given if and when delivered personally or
transmitted by telex, facsimile (receipt confirmed) or telegram, mailed by
registered or certified mail (return receipt requested) or sent by a recognized
next business day courier to the following persons at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) If to IAC or the Stockholders:
Interconnect Acquisition Corporation
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, President
Facsimile: (000) 000-0000
with a copy to:
Xxxx, Xxxxxxxx & Xxxxxx, PLLC
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(b) If to CWII or Purchaser:
Communications World International, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
PLAN AND AGREEMENT OF MERGER - Page 15
----------------------------
with a copy to:
Bearman, Xxxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
9.2 Fees and Expenses. The Stockholders, IAC, Purchaser and CWII shall
-----------------
each pay all of their own fees, costs and expenses (including without
limitation, those of accountants, appraisers and attorneys) incurred in
connection with or related to the preparation, negotiation, execution, delivery,
satisfaction, compliance and consummation of this Agreement and the Transactions
contemplated hereby and the closing conditions hereunder.
9.3 Interpretation. The headings contained in this Agreement are for
--------------
reference purposes only and shall not affect the meaning or interpretation of
this Agreement. Terms such as "herein," "hereof," "hereinafter" refer to this
Agreement as a whole and not to the particular sentence or paragraph where they
appear, unless the context otherwise requires. Terms used in the plural include
the singular, and vice versa, unless the context otherwise requires.
9.4 Counterparts. This Agreement may be executed by facsimile in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.5 Miscellaneous. This Agreement (a) constitutes the entire agreement and
-------------
supersedes all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof;
(b) is not intended to and shall not confer upon any other person any rights or
remedies hereunder or otherwise with respect to the subject matter hereof,
except for rights that may expressly arise as a consequence of the Transactions;
(c) may not be assigned by operation of law or otherwise; (d) has been drafted
by all of the parties to this Agreement and should not be construed against any
of the parties hereto; and (e) shall be governed in all respects, including
validity, interpretation and effect by the substantive laws of the State of
Colorado without regard to conflict of law provisions.
9.6 Publicity. Prior to Closing, no party hereto shall issue any press
---------
release or make any other public statement, in either case relating to or
connected with or arising out of this Agreement or the matters contained herein,
without obtaining the prior written approval of the other parties to the
contents and the manner of presentation and publication thereof, which approval
shall not be unreasonably withheld.
9.7 Invalid Provisions. If any provision of this Agreement is held to be
------------------
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable. This Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof; and the remaining
PLAN AND AGREEMENT OF MERGER - Page 16
----------------------------
provisions of this Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or its severance
from this Agreement. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically as part hereof a
provision as similar in terms, but in any event no more restrictive than, such
illegal, invalid or unenforceable provision as may be possible and be legal,
valid and enforceable.
9.8 Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the parties hereto and their respective heirs, legal representatives,
successors and permitted assigns.
9.9 Captions. The captions, headings and arrangements used in this
--------
Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.
9.10 Attorneys' Fees. In the event that any Proceeding is commenced by any
---------------
party hereto for the purpose of enforcing any provision of this Agreement, the
party to such Proceeding may receive as part of any award, judgment, decision or
other resolution of such Proceeding its costs and attorneys' fees as determined
by the person or body making such award, judgment, decision or resolution.
Should any claim hereunder be settled short of the commencement of any such
Proceeding, the parties in such settlement may mutually agree to include as part
of the damages alleged to have been incurred reasonable costs of attorneys or
other professionals in investigation or counseling on such claim.
9.11 Jurisdiction and Venue. Any judicial proceedings brought by or
----------------------
against any party on any dispute arising out of this Agreement or any matter
related thereto shall be brought in the state or federal courts of Arapahoe
County, Colorado, and, by execution and delivery of this Agreement, each of the
parties accepts for itself the exclusive jurisdiction and venue of the aforesaid
courts as trial courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement after exhaustion of all
appeals taken (or by the appropriate appellate court if such appellate court
renders judgment).
9.12 Assignability. This Agreement may not be transferred, assigned,
-------------
pledged or hypothecated by any party hereto without the prior written consent of
the other parties to this Agreement.
9.13 Entirety. This Agreement and the documents executed and delivered
--------
pursuant hereto, executed on the date hereof or in connection herewith, contain
the entire agreement among the parties with respect to the matters addressed
herein and supersede all prior representations, inducements, promises or
agreements, oral or otherwise, which are not embodied herein or therein.
9.14 Amendment. This Agreement and the exhibits and schedules hereto may be
---------
amended by the parties hereto at any time prior to the Closing Date; provided,
however, that any
PLAN AND AGREEMENT OF MERGER - Page 17
----------------------------
amendment must be by an instrument or instruments in writing signed and
delivered on behalf of each of the parties hereto.
9.15 Survival of Representations and Warranties. The respective
------------------------------------------
representations and warranties of the parties contained in this Agreement, the
Operative Documents and any investigation shall survive the consummation of the
Transactions contemplated in this Agreement and shall continue in full force and
effect after the Closing for a period of two (2) years from the Closing, at
which time they shall expire, except as to claims made in respect thereof in
writing on or before the expiration of such period.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers.
IAC:
INTERCONNECT ACQUISITION CORPORATION
By:___________________________________
Xxxxx X. Xxxxxxxxxx, President
CWII:
COMMUNICATIONS WORLD INTERNATIONAL,
INC.
By:___________________________________
Printed Name:_________________________
Title:________________________________
PLAN AND AGREEMENT OF MERGER - Page 18
----------------------------
PURCHASER:
IAC ACQUISITION CORPORATION
By:___________________________________
Printed Name:_________________________
Title:________________________________
STOCKHOLDERS:
______________________________________
XXXXX X. XXXXXXXXXX
______________________________________
XXXXXX XXXXX
______________________________________
XXXX XXXXXXX
______________________________________
XXXX XXXXX
PLAN AND AGREEMENT OF MERGER - Page 19
----------------------------
